6-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

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FORM 6-K

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REPORT OF FOREIGN PRIVATE ISSUER

PURSUANT TO RULE 13A-16 OR 15D-16

UNDER THE SECURITIES EXCHANGE ACT OF 1934

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For the month of September 2022

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Commission File Number: 001-38799

SCIENJOY HOLDING CORPORATION

(Exact Name of Registrant as Specified in Its Charter)

Room 1118, 11^th^ Floor, Building 3,Wangzhou Rd. No.99, Liangzhu Street

Yuhang District, Hangzhou, Zhejiang

People’s Republic of China

(Address of principal executive office)

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F ☒ Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ☐

EXPLANATORY NOTE

Scienjoy Holding Corporation. (the “Company”) is furnishing this Form 6-K to provide the unaudited consolidated financial statements as of June 30, 2022 and for the six months ended June 30, 2022 and 2021 and incorporate such financial statements into the Company’s registration statements referenced below.

This Form 6-K is hereby incorporated by reference into the registration statements of the Company on Form S-8 (Registration Number 333-256373), Form F-3 (Registration Number 333-256714), Form F-3 (Registration Number 333-254818) and Form F-3 (Registration Number 333-259951), to the extent not superseded by documents or reports subsequently filed or furnished by the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended.

FORWARD-LOOKING INFORMATION

Certain statements made in this Form 6-K are “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this Form 6-K, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, are: the ability to manage growth; ability to identify and integrate other future acquisitions; the ability to obtain additional financing in the future to fund capital expenditures; fluctuations in general economic and business conditions; costs or other factors adversely affecting the Company’s profitability; litigation involving patents, intellectual property, and other matters; potential changes in the legislative and regulatory environment; a pandemic or epidemic. The forward-looking statements contained in this Form 6-K are also subject to other risks and uncertainties, including those more fully described in the Company’s filings with the Securities and Exchange Commission (“SEC”) from time to time. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Such information speaks only as of the date of this Form 6-K.

1

SIGNATURES

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

	Scienjoy Holding Corporation
Date: September 15, 2022	By:	/s/ Xiaowu He
	Name:	Xiaowu He
	Title:	Chief Executive Officer

2

EXHIBIT INDEX

Exhibit No.	Description
99.1	Unaudited Condensed Consolidated Financial Statements as of June 30, 2022 and for the six months ended June 30, 2022 and 2021.
99.2	Management’s Discussion and Analysis.
99.3	Press Release, dated September 15, 2022.

3

Exhibit 99.1

SCIENJOY HOLDING CORPORATION

INDEX TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL INFORMATION

	Page
Unaudited Condensed Consolidated Balance Sheets as of June 30, 2022 and December 31, 2021	F-2
Unaudited Condensed Consolidated Statements of Income and Comprehensive Income for the Six Months Ended June 30, 2022 and 2021	F-3
Unaudited Condensed Consolidated Statements of Changes in Shareholders’ Equity for the Six Months Ended June 30, 2022 and 2021	F-4
Unaudited Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2022 and 2021	F-5
Notes to the Unaudited Condensed Consolidated Financial Statements	F-6

F-1

SCIENJOY HOLDING CORPORATION

UNAUDITED CONDENSEDCONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except share and per share data or otherwise stated)

	As of<br><br> December 31,		As of June 30,
	2021		2022			2022
	RMB		RMB
ASSETS
Current assets
Cash and cash equivalents		240,947		175,428
Accounts receivable, net		206,307		378,452
Prepaid expenses and other current assets		165,409		84,570
Amounts due from related parties		1,059		1,052
Investment in marketable security		38,789		39,655
Total current assets		652,511		679,157
Property and equipment, net		1,674		2,147
Intangible assets, net		235,870		422,484
Goodwill		92,069		172,781
Long term investment		101,727		177,324
Long term deposits and other assets		1,152		1,209
Deferred tax assets		4,352		4,273
Right of use assets		-		11,158
Total non-current assets		436,844		791,376
TOTAL ASSETS		1,089,355		1,470,533
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities
Accounts payable		85,801		109,898
Accrued salary and employee benefits		24,533		12,229
Accrued expenses and other current liabilities		16,181		5,022
Current portion of contingent consideration – earn-out liability		10,638		12,901
Warrant liabilities		10,324		2,210
Income tax payable		8,282		10,043
Deferred revenue		65,405		122,324
Lease liabilities-current		-		4,597
Total current liabilities		221,164		279,224
Non-current liabilities
Deferred tax liabilities		58,746		61,945
Contingent consideration – earn-out liability		-		6,822
Lease liabilities-non-current		-		6,210
Total non-current liabilities		58,746		74,977
TOTAL LIABILITIES		279,910		354,201
Commitments and contingencies Shareholders’ equity*
Ordinary share, no par value, unlimited 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, 35,359,054 Class A ordinary shares and 2,925,058 Class B ordinary shares issued and outstanding as of June 30, 2022, respectively*
Class A ordinary shares		140,196		437,076
Class B ordinary shares		13,041		23,896
Shares to be issued		128,119		-
Statutory reserves		31,775		35,759
Retained earnings		479,199		626,115
Accumulated other comprehensive income		17,115		17,681
Total shareholders’ equity		809,445		1,116,631
Non-controlling interests		-		(299	)		)
Total equity		809,445		1,116,332
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY		1,089,355		1,470,533

All values are in US Dollars.

*	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-2

SCIENJOY

HOLDING CORPORATION

UNAUDITED

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(All amounts in thousands, except share and per share data or otherwise stated)

	For the three months ended								For the six months ended
	June 30,			June 30,			June 30,		June 30,			June 30,			June 30,
	2021			2022			2022		2021			2022			2022
	RMB			RMB			US		RMB			RMB			US
Livestreaming - consumable virtual items revenue		378,930			495,429					733,166			940,768
Livestreaming - time based virtual items revenue		8,570			6,917					17,668			14,382
Technical services and others		5,726			4,182					7,423			14,823
Total revenues		393,226			506,528					758,257			969,973
Cost of revenues		(313,297	)		(413,376	)		)		(598,189	)		(762,345	)		)
Gross profit		79,929			93,152					160,068			207,628
Operating expenses
Sales and marketing expenses		(1,480	)		(452	)		)		(2,584	)		(1,036	)		)
General and administrative expenses		(15,548	)		(15,406	)		)		(24,395	)		(34,514	)		)
Provision for doubtful accounts		(3,197	)		(3,353	)		)		(3,645	)		(3,094	)		)
Research and development expenses		(13,951	)		(18,313	)		)		(23,514	)		(35,128	)		)
Total operating expenses		(34,176	)		(37,524	)		)		(54,138	)		(73,772	)		)
Income from operations		45,753			55,628					105,930			133,856
Change in fair value of contingent consideration		35,323			6,050					23,545			10,790
Change in fair value of warrants liability		11,632			3,883					10,854			8,382
Change in fair value of investment		1,440			752					27,608			1,464
Interest income		693			755					1,431			1,251
Interest expense		(124	)		(13	)		)		(241	)		(13	)		)
Other income, net		102			26					102			86
Foreign exchange gain (loss), net		53			(513	)		)		(40	)		(453	)		)
Income before income taxes		94,872			66,568					169,189			155,363
Income tax benefits (expenses)		(2,819	)		807					(6,178	)		(4,762	)		)
Net income		92,053			67,375					163,011			150,601
Less: net loss attributable to noncontrolling interest		-			(299	)		)		-			(299	)		)
Net income attributable to the Company’s shareholders		92,053			67,674					163,011			150,900
Other comprehensive income:
Other comprehensive income - foreign currency translation adjustment		1,234			602					748			566
Comprehensive income		93,287			67,977					163,759			151,167
Less: comprehensive loss attributable to non-controlling interests		-			(299	)		)		-			(299	)		)
Comprehensive income attributable to the Company’s shareholders		93,287			68,276					163,759			151,466
Weighted average number of shares
Basic		30,756,702			38,602,936					30,669,789			37,122,362
Diluted		30,756,702			38,602,936					30,669,789			37,122,362
Earnings per share
Basic		2.99			1.75					5.32			4.06
Diluted		2.99			1.75					5.32			4.06

All values are in US Dollars.

*	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

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SCIENJOY

HOLDING CORPORATION

UNAUDITED

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(All amounts in thousands, except share and per share data or otherwise stated)

	Ordinary<br> shares					Shares to be			Statutory		Retained			Accumulated<br> other<br> comprehensive			Non-controlling		Total<br> shareholders’
	Shares^*^		Amount			issued			reserves		earnings			income			interests		equity
			RMB			RMB			RMB		RMB			RMB			RMB		RMB
Balance<br> as of December 31, 2020		27,037,302		(96,349	)		200,100			18,352		322,610			14,802			-		459,515
Net income		-		-			-			-		70,958			-			-		70,958
Issuance of shares for achievement<br> of earnout target		3,540,960		200,100			(200,100	)		-		-			-			-		-
Issuance shares for private<br> placement		28,230		1,338			-			-		-			-			-		1,338
Appropriation to statutory<br> reserves		-		-			-			4,912		(4,912	)		-			-		-
Foreign<br> currency translation adjustments		-		-			-			-		-			(486	)		-		(486	)
Balance<br> as of March 31, 2021		30,606,492		105,089			-			23,264		388,656			14,316			-		531,325
Net income												92,053								92,053
Issuance shares for private<br> placement		80,000		2,838			-			-		-			-			-		2,838
Exercise of warrants		48,149		4,340			-			-		-			-			-		4,340
Exercise of Unit Purchase<br> Option		110,000		9,112			-			-		-			-			-		9,112
Appropriation to statutory<br> reserves		-		-			-			2,632		(2,632	)		-			-		-
Foreign<br> currency translation adjustments		-		-			-			-		-			1,234			-		1,234
Balance<br> as of June 30, 2021		30,844,641		121,379			-			25,896		478,077			15,550			-		640,902
				Shares<br> to be			Statutory			Retained			Accumulated<br><br> other<br> comprehensive			Non-controlling			Total<br><br> shareholders’
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		Amount		issued			reserves			earnings			income			interests			equity
		RMB		RMB			RMB			RMB			RMB			RMB			RMB
Balance<br> as of December 31, 2021	30,844,641		153,237		128,119			31,775			479,199			17,115			-			809,445
Net<br> income	-		-		-			-			83,226			-			-			83,226
Issuance<br> shares for Weiliantong Acquisition	3,898,511		148,283		-			-			-			-			-			148,283
Share<br> base compensation	-		3,726		-			-			-			-			-			3,726
Appropriation<br> to statutory reserves	-		-		-			4,196			(4,196	)		-			-			-
Foreign<br> currency translation adjustments	-		-		-			-			-			(36	)		-			(36	)
Balance<br> as of March 31, 2022	34,743,152		305,246		128,119			35,971			558,229			17,079			-			1,044,644
Net<br> income	-		-		-			-			67,674			-			(299	)		67,375
Issuance<br> of shares for achievement of earnout target	3,540,960		128,119		(128,119	)		-			-			-			-			-
Share<br> base compensation	-		3,711		-			-			-			-			-			3,711
Appropriation<br> to statutory reserves	-		-		-			(212	)		212			-			-			-
Foreign<br> currency translation adjustments	-		-		-			-			-			602			-			602
Balance<br> as of June 30, 2022	38,284,112		437,076		-			35,759			626,115			17,681			(299	)		1,116,332
Balance<br> as of June 30, 2022 ()	38,284,112		65,253		-			5,339			93,477			2,640			(45	)		166,664

All values are in US Dollars.

*	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

UNAUDITED

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(All amounts in thousands, except share and per share data or otherwise stated)

	For the six months ended
	June 30,			June 30,			June 30,
	2021			2022			2022
	RMB			RMB
Cash flows from operating activities
Net income		163,011			150,601
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation of property and equipment		356			529
Amortization of intangible assets		2,044			3,557
Provision for doubtful accounts		3,645			3,101
Loss from disposal of property and equipment		2			1
Deferred tax benefit		(286	)		(629	)		)
Change in fair value of contingent consideration		(23,545	)		(10,790	)		)
Change in fair value of warrant liabilities		(10,854	)		(8,382	)		)
Change in fair value of investment		(27,608	)		(1,464	)		)
Share based compensation		-			7,437
Amortization of right-of-use assets		-			2,219
Changes in operating assets and liabilities
Accounts receivable		(5,528	)		(174,208	)		)
Prepaid expense and other current assets		(11,226	)		8,579
Long term deposits and other assets		(12	)		79
Accounts payable		(21,303	)		19,150
Deferred revenue		18,021			51,338
Accrued salary and employee benefits		(8,918	)		(14,308	)		)
Accrued expenses and other current liabilities		(2,334	)		(22,374	)		)
Income tax payable		3,837			1,761
Lease liabilities		-			(2,576	)		)
Net cash provided by operating activities		79,302			13,621
Cash flows from investing activities
Cash acquired from acquisition		-			9,707
Payment for Weiliantong Acquisition		-			(13,800	)		)
Payment for long term investment		(43,958	)		(75,000	)		)
Purchase of property and equipment and intangible assets		(578	)		(890	)		)
Net cash used in investing activities		(44,536	)		(79,983	)		)
Cash flows from financing activities
Net proceeds from private placement		15,284			-
Loan to related parties		12,310			-
Net cash provided by financing activities		27,594			-
Effect of foreign exchange rate changes on cash		(325	)		843
Net increase (decrease) in cash and cash equivalents		62,035			(65,519	)		)
Cash and cash equivalents at beginning of the year		224,768			240,947
Cash and cash equivalents at end of the year		286,803			175,428
Supplemental disclosures of cash flow information:
Income taxes paid		7,178			6,160
Supplemental non-cash investing and financing information:
Conversion of convertible notes and rights		13,452			-
Issuance of Class A ordinary shares for Weiliantong acquisition		-			148,283
Issuance of Class A ordinary shares for achievement of earnout target		200,100			117,264
Issuance of Class B ordinary shares for achievement of earnout target		-			10,855
Right-of-assets obtained in exchange for operating lease obligations		-			13,383

All values are in US Dollars.

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

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F-5

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SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED 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 RMB10,000 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-6

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED 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. In the six months ended June 30, 2022 and 2021, the COVID-19 pandemic did not have a material net impact on the Company’s financial positions and operating results. 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 RMB280,000 (approximately US$43,800)

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 RMB100 (US$15).

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 WXZH.

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, WXBJ established a wholly owned subsidiary Sixiang Yingyue (Shanghai) Technology Co., Ltd (“SXYY”), in Shanghai, PRC to provide information technology service.

F-7

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED 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 ofincorporation	Place ofincorporation	Percentage ofdirect/indirectownership	Principalactivities
Scienjoy Inc.	March 2, 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

F-8

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SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED 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 unaudited condensed consolidated financial statements have been prepared in accordance with the U.S. generally accepted accounting principles (“GAAP”) for interim financial information. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the six months ended June 30, 2021 and 2022 are not necessarily indicative of the results that may be expected for the full year. The information included in this interim report should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the financial statements and notes thereto included in Scienjoy Inc.’s annual financial statements for the fiscal year ended December 31, 2021 filed with the SEC on May 16, 2022.

The unaudited condensed 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.

F-9

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(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).

(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 six months ended June 30, 2022 are solely for the convenience of the reader and were calculated at the rate of US$1.00 = RMB 6.6981, representing the noon buying rate in The City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York on the last trading day of June 30, 2022. No representation is made that the RMB amounts represent or could have been, or could be, converted, realized or settled into US$ at that rate, or at any other rate.

(f)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.

F-10

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(g)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.

EquityInvestments 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.

Equityinvestments 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.

Equityinvestments 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.

(h)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.

F-11

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(h)Fair value of financial instruments (continued)

Contingentconsideration – 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 or RMB 190,000, 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 or RMB 235,000, the previous owners of Scienjoy Inc. will be entitled to receive 3,000,000 Class A ordinary shares of the Company. The Company met the two earnout criteria by December 31, 2020 and 2021, respectively.

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 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:

	June 30, <br> 2021	December 31,<br> 2021
Risk-free interest rate	0.38%	0.38%
Share price	$6.22	$5.68
Probability	20% - 50%	20%-50%
(ii)	Earn-out liability from BeeLive acquisition
---	---

In connection with the acquisition of BeeLive in August 2020, 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 336,600 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 460,600 in Year 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 580,900 in Year 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 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:

	June 30,<br> 2021	December 31,<br> 2021	June 30, <br><br>2022
Risk-free interest rate	0.38%	0.38%	2.49%
Share price	$6.22	$5.68	$3.27
Probability	20% - 50%	20% - 50%	20%-50%

F-12

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SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(h)Fair value of financial instruments (continued)

(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 in the binomial model are as follows:

	January 1,<br> 2022	June 30,<br> 2022
Risk-free interest rate	0.39-0.73%	2.52-2.86%
Share price	$5.13	$3.27
Probability	20% - 50%	20% - 50%

As of December 31, 2021, the aggregated contingent considerations for the earn-out liabilities were approximate RMB10,600, including current portion of earn-out liability of RMB10,600.

As of June 30, 2022, the aggregated contingent considerations for the earn-out liabilities were approximate RMB19,700, including current portion of earn-out liability of RMB12,900 and non-current portion of earn-out liability of RMB6,800.

The Company measures contingent consideration – earn-out liability at fair value on a recurring basis as of the dates of acquisition and June 30,2022. The following table presents the fair value hierarchy for assets and liabilities measured at fair value on a recurring basis:

	As of June 30, 2022
	Fair Value Measurement at the Reporting Date using
	Quoted price<br> in active<br> markets for<br> identical<br> assets<br> Level 1		Significant<br> other<br> observable<br> inputs<br> Level 2		Significant<br> unobservable<br> inputs<br> Level 3		Total
Earn-out liability from SPAC transaction	¥	-	¥	-	¥	-	¥	-
Earn-out liability from BeeLive acquisition		-		-		6,490		6,490
Earn-out liability from Weiliantong acquisition						13,233		13,233
	¥	-	¥	-	¥	19,723	¥	19,723

F-13

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(h)Fair value of financial instruments (continued)

	As of December 31, 2021
	Fair Value Measurement at the Reporting Date using
	Quoted price<br> in active<br> markets for<br> identical<br> assets<br> Level 1		Significant<br> other<br> observable<br> inputs<br> Level 2		Significant<br> unobservable<br> inputs<br> Level 3		Total
Earn-out liability from SPAC transaction	¥	-	¥	-	¥	-	¥	-
Earn-out liability from BeeLive acquisition		-		-		10,638		10,638
Earn-out liability from Weiliantong acquisition		-		-		-		-
Total	¥	-	¥	-	¥	10,638	¥	10,638

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. On June 2, 2022, the 3,540,960 earn-out shares were issued.

The Company did not transfer any assets or liabilities in or out of Level 3 during the years ended December 31, 2021 and the six months ended June 30, 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, 2021 and the six months ended June 30, 2022:

	Balance
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		(10,790	)
Balance at June 30, 2022	¥	19,723
Less: Contingent consideration – earn-out liability – non-current portion		(6,822	)
Contingent consideration – earn-out liability –current portion	¥	12,901

F-14

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(h)Fair value of financial instruments (continued)

Warrantliabilities

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:

	June 30,<br><br> 2021			December 31,<br><br>2021			June 30,<br><br> 2022
Risk-free interest rate		0.38	%		0.75	%		2.87	%
Share price	$	6.22		$	5.68		$	3.27
Volatility		54	%		53	%		62	%

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 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		(8,382	)
Exchange difference		268
Balance as of June 30, 2022	¥	2,210

F-15

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SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

2.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(i) 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.

Livestreaming

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-16

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

2. SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (CONTINUED)

(i) Revenue recognition (continued)

TechnicalServices and others

The Company generated technical revenues and others from providing technical development, advisory and others, which accounts for only approximately 1% or less of revenue for the six months ended June 30, 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 services were rendered and accepted by customers.

Practicalexpedients 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.

Revenueby types and platforms

The following table sets forth types of our revenue for the periods indicated:

	For the six months ended
	June 30,		June 30,		June 30,
	2021		2022		2022
Amounts in thousands of RMB and USD	RMB		RMB
Live streaming - consumable virtual items revenue		733,166		940,768
Live streaming - time based virtual item revenue		17,668		14,382
Technical services		7,423		14,823
Total revenue		758,257		969,973

All values are in US Dollars.

As of June 30, 2022, we operated four 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 Hongren Streaming. The following table sets forth our revenue by platforms for the periods indicated:

	For the six months ended
	June 30,		June 30,		June 30,
	2021		2022		2022
Amounts in thousands of RMB and USD	RMB		RMB
Showself		285,701		282,856
Lehai		109,895		130,411
Haixiu		166,117		167,450
Beelive		189,121		243,522
Hongren		-		130,911
Technical services		7,423		14,823
TOTAL		758,257		969,973

All values are in US Dollars.

Contractbalances

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-17

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(j) 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 are recorded as other income in the period the cash is received.

(k) 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.

(l) 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 June 30, 2022.

(m) Sales and marketing expenses

Sales and marketing expenses consist primarily of advertising and market promotion expenses. The advertising and market promotion expenses amounted to RMB2,602 and RMB1,061 (US$ 158) for the six months ended June 30, 2021 and 2022, respectively.

(n) 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 RMB6,515 and RMB9,272 (US$ 1,384) for the six months ended June 30, 2021 and 2022, respectively.

(o) 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 June 30, 2022. As of December 31, 2021 and June 30, 2022, the Company did not have any significant unrecognized uncertain tax positions.

F-18

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(p) 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.

(q) 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 are 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.

(r) 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 six months ended June 30, 2021 and 2022, there was no dilutive shares.

(s) 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. The Company operates and manages its business in PRC China as a single 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.

F-19

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

2. SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES (CONTINUED)

(t) 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.

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 January 1, 2020. The ASU requires a modified retrospective adoption method. The adoption of this guidance did 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.

F-20

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

(t) Recent accounting pronouncements(continued)

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 intraperiod 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 beginning in January 1, 2021. 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-21

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED 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 June 30, 2022, RMB238,792 and RMB172,616 (US$25,771), 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.

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 six months ended June 30, 2021 and 2022, no customer individually represents greater than 10% of the total revenue.

(d) Significant suppliers

For the six months ended June 30, 2021, one vendor accounted for 26.3% of the Company’s total purchases. As of June 30, 2021, one vendor accounted for 10.9% of the Company’s accounts payable. For the six months ended June 30, 2022, one vendor accounted for 10.4% of the Company’s total purchases. As of June 30, 2022, one vendor accounted for 11.1% of the Company’s accounts payable.

F-22

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

4. ACQUISITION

4.1Acquisition 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 RMB180,000 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”). 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 RMB13,800 cash to Yieryi. The total fair value of the Considerations was determined at RMB181,958, 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 RMB86,200 on behalf of Weilianton, consisting of RMB77,400 loans payable to Yieryi and RMB8,800 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
Cash acquired		9,497
Accounts receivable, net		937
Prepaid expenses and other current assets		893
Deferred tax assets-current		6,163
		17,490
Property and equipment, net		163
Intangible assets, net		190,021
Long term deposits and other non-current assets		136
Goodwill		75,742
Total assets		283,552
Current liabilities		101,594
Total liabilities		101,594
Total consideration		181,958

All values are in US Dollars.

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F-23

---

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

4. ACQUISITION (CONTINUED)

4.1Acquisition 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 six months ended June 30, 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:

	Forthe Six months endedJune 30, 2021		For<br>the <br>Six months <br>ended<br>June 30, <br>2021
	(Unaudited)		(Unaudited)
	RMB
Pro forma revenue		845,854
Pro forma gross profit		172,097
Pro forma income from operations		111,598
Pro forma net income		168,465

All values are in US Dollars.

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F-24

---

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

4. ACQUISITION (CONTINUED)

---

4.2 Acquisitionof 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 RMB10 (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
Cash acquired		168
Accounts receivable, net		97
Prepaid expenses and other current assets		15
Amounts due from related parties		6,563
		6,843
Intangible assets, net		100
Goodwill		4,971
Total assets		11,914
Current liabilities		11,814
Total liabilities		11,814
Total consideration		100

All values are in US Dollars.

The intangible assets are mainly attributable to a license acquired through the acquisition, which are generally amortized over 6 years.

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F-25

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SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED 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 <br> December<br> 31,			As of June 30,
	2021			2022			2022
	RMB			RMB
Accounts receivable		208,522			383,814
Less: allowance for doubtful accounts		(2,215	)		(5,362	)		)
Accounts receivable, net		206,307			378,452

All values are in US Dollars.

An analysis of the allowance for doubtful accounts is as follows:

	As of<br><br> December 31,			As of June 30,
	2021			2022		2022
	RMB			RMB
Balance, beginning of year		3,813			2,215
Additions (recovery)		(1,592	)		3,094
Exchange difference		(6	)		53
Balance, end of year		2,215			5,362

All values are in US Dollars.

Four unrelated distributors accounted for 34.4%,14.7%,12.1% and 11.0% of the Company’s accounts receivable as of June 30, 2022, respectively. Two unrelated distributors accounted for 23.7% and 20.6% of the Company’s accounts receivable as of December 31, 2021, respectively.

F-26

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED 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 <br> December<br> 31,		As of June 30,
	2021		2022		2022
	RMB		RMB
VAT recoverable		12,454		10,547
Prepaid expense		8,553		8,796
Prepayment for property and equipment		19,000		19,000
Investment disposal receivable (1)		30,000		30,000
Advance to Weiliantong (2)		86,858		-
Loan receivable (3)		8,000		15,000
Other receivables		544		1,227
Prepaid expenses and other current assets, net		165,409		84,570

All values are in US Dollars.

(1)	The<br>Company invested RMB 30,000 in Tianjing Yieryi Technology Co., Ltd (“TJ YEY”) for its 12% equity interest<br>on August 17, 2021. As part of the Framework Agreement signed on December 29, 2021 (Note 17), one of the shareholders of Yieryi bought<br>such equity interest back from the Company for RMB 30,000.
(2)	As<br>of December 31, 2021, the balance represented advance of RMB 86,858 to Beijing Weiliantong Technology Co., Ltd. (“Weiliantong”)<br>related to the acquisition (Note 17), which was offset against acquisition consideration as of June 30, 2022.
---	---
(3)	On October 20, 2021, the Company lent RMB80,000 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.<br> <br><br> <br>On April 11, 2022, the Company lent RMB7,000 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.
---	---

F-27

---

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

7. LONG TERM INVESTMENT

		Cost method<br> investments<br> without<br> readily<br> determinable<br> fair value(i)		Total
		RMB		RMB
Balance as of December 31, 2021		29,725		101,727
Additions	75,000		-		75,000
Share of loss in equity method investee	597		-		597
Disposal	-		-		-
Impairment	-		-		-
Balance as of June 30, 2022	147,599		29,725		177,324
Balance as of June 30, 2022 ()	22,036		4,438		26,474

All values are in US Dollars.

(i)	Investments of RMB 29,725 included the following items:<br> <br><br> <br>Investments of RMB 5,000 represented 1.76% equity investment in 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.<br> <br><br> <br>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.<br> <br><br> <br>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.<br> <br><br> <br>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.<br> <br><br> <br>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.
(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 and the company had shares of loss of RMB 2,998 for the year ended December 31, 2021. For the six months ended June 30, 2022, the Company further invested RMB 75,000 into Qingdao LLP and had shares of income of RMB 597.
	As of June 30, 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-28

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

8. LONG TERM DEPOSITS AND OTHER ASSETS

Long term deposits and other assets consist of the following:

	As of<br><br> December 31,		As of June 30,
	2021		2022		2022
	RMB		RMB
Rent deposits		418		940
Advertising deposits		734		269
Long term deposits and other assets		1,152		1,209

All values are in US Dollars.

9. 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.

On January 1, 2022, the ROU assets and related lease liabilities recognized were both RMB13,383. Total lease expense for the six months ended June 30, 2021 and 2022 amounted to RMB 2,775 and RMB 2,921, respectively.

Supplemental balance sheet information related to operating leases was as follows:

	June 30,<br><br>2022
	RMB
Right-of-use assets, net		11,158
Operating lease liabilities - current		4,597
Operating lease liabilities - non-current		6,210
Total operating lease liabilities		10,807

The weighted average remaining lease terms and discount rates for all of operating leases were as follows as of June 30, 2022:

Remaining lease term and discount rate:
Weighted average remaining lease term (years)	2.50 years
Weighted average discount rate	4.75 %

The following is a schedule of maturities of lease liabilities as of June 30, 2022:

Twelve months ending June 30,	RMB
2023		4,979
2024		4,297
2025		2,118
Total future minimum lease payments		11,394
Less: imputed interest		587
Present value of lease liabilities		10,807

F-29

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

10. INCOME TAXES

Enterpriseincome tax

BritishVirgin 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.

CaymanIslands

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.

HongKong

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 2022. 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, 2020, an enterprise which established in region of Holgus X and Kashgar Times is entitled to a preferential tax rate of 0% in five consecutive 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 tax-exempt from 2017 to 2021. Kashgar Times qualifies for the conditions and entitled for tax-exempt from 2016 to 2020. Holgus H qualifies for the conditions and entitled for tax-exempt from 2020 to 2025. Kashgar Lehong qualifies for the conditions and entitled for tax-exempt from 2020 to 2025. For the six months ended June 30, 2021 and 2022, total tax saving for the preferential tax rate were RMB 39,733 and RMB36,295 (US$5,419), respectively, the impacts on basic EPS were RMB1.3 and RMB1.0 (US$0.1), respectively, and the impacts on dilutive EPS were RMB1.3 and RMB1.0 (US$0.1), respectively.

F-30

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

10. INCOME TAXES (CONTINUED)

Uncertaintax 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 June 30, 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 six months ended June 30, 2021 and 2022, and also does not anticipate any significant increases or decreases in unrecognized tax benefits in the next 12 months from June 30, 2022.

The income tax expenses comprise:

	For the six months ended June 30,
	2021			2022			2022
	RMB			RMB
Current income tax expense		64,64			5,391
Deferred income tax expense (benefit)		(286	)		(629	)		)
Income tax expenses		6,178			4,762

All values are in US Dollars.

A reconciliation of the differences between the statutory tax rate and the effective tax rate for EIT for the six months ended June 30, 2021 and 2022 is as follows:

	For the six months ended June 30,
	2021			2022
Income tax computed at PRC statutory tax rate		25.0	%		25.0	%
Effect of tax-preferential entities		(23.5	)%		(23.4	)%
Non-deductible expenses		2.2	%		1.5	%
Income tax expense		3.7	%		3.1	%

The components of deferred taxes are as follows:

	As of<br><br> December 31,		As of June 30,
	2021		2022		2022
	RMB		RMB
Deferred tax assets:
Allowance for doubtful accounts		171		450
Net operating losses carried forward		4,181		3,823
		4,352		4,273

All values are in US Dollars.

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, 2021 and June 30, 2022 for the deferred tax assets.

The components of deferred liabilities are as follows:

	As of<br><br> December 31,		As of June 30,
	2021		2022		2022
	RMB		RMB
Deferred tax liabilities
Intangible assets acquired through acquisition		58,746		61,945
		58,746		61,945

All values are in US Dollars.

F-31

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

11.

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
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

For the six months ended June 30, 2021 and 2022, significant related party transactions were as follows:

		For the six months ended June 30,
		2021		2022		2022
		RMB		RMB
Sixiang Times (Beijing) Technology Co., Ltd.	Rental and service fees		531		-
ENMOLI INC	Interest expense		241		-
Dingsheng Taifu (Tianjin) Business Information Consulting Partnership (Limited Partnership)	Interest income		211		-

All values are in US Dollars.

As of December 31, 2021 and June 30, 2022, the amounts due from related parties are as follows:

	As of<br><br> December 31,
	2021		As of June 30,
	RMB		RMB
Amount due from related parties
Lavacano Holdings Limited		7		-
Dingsheng Taifu (Tianjin) Business Information Consulting Partnership (Limited Partnership). ^(1)^		1,052		1,052
Total		1,059		1,052

All values are in US Dollars.

1)	The<br>balance represented loan receivable balance from Dingsheng Taifu (Tianjin) Business Information Consulting Partnership (Limited Partnership).<br>The loan was interest free and due on December 31, 2022.

F-32

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

12. SHAREHOLDERS’ EQUITY

OrdinaryShares

The Company is authorized to issue an unlimited number of no-par value Class A ordinary shares and 2,925,058 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 RMB4,038 (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 RMB14,131 (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 RMB250 million (or equivalent to RMB175 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 RMB175 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 RMB664,670.

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 2,626,058 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 of total RMB159,200 worth share consideration (Note 4), which was calculated based on US$5.13 per share based on the 15 days average closing price of the Company’s Class A ordinary shares prior to the acquisition. The fair value of the shares issued approximated RMB127,000 (US$ 19,000) as part of the purchase consideration.

As of June 30, 2022, the Company had 35,359,054 Class A ordinary shares and 2,925,058 Class B ordinary shares issued and outstanding.

F-33

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

12. SHAREHOLDERS’

EQUITY (CONTINUED)

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 six months ended June 30, 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-34

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

12. SHAREHOLDERS’

EQUITY (CONTINUED)

Warrants(continued)

A summary of warrants activity for the six months ended June 30, 2022 is as follows:

	Number of<br> warrants			Weighted<br> average life	Expiration<br> dates
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
Exercised		-
Balance of warrants outstanding as of June 30, 2022		6,023,700		1.6 years	February 4, 2024
Balance of warrants exercisable as of June 30, 2022		6,023,700		1.6 years	February 4, 2024

As of June 30, 2022, the Company had warrants exercisable for 3,011,850 Class A ordinary shares with weighted average life of 1.6 years and expired on February 4, 2024.

UnitPurchase 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 June 30, 2022, the Company had UPO units exercisable for 530,000 Class A ordinary shares with weighted average life of 1.6 years and expiring on February 5, 2024.

LiabilityClassified 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-35

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

12. 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.

Dividend

Prior to the SPAC Transaction, Scienjoy Inc. declared a dividend of approximately RMB 333,090 by July 2018, of which approximately RMB228,500 (US$33,200) was paid in 2018 and approximately RMB104,590 (US$15,023) was subsequently paid in 2019, respectively.

Sharesto 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.

On June 2, 2022, the Company agreed to issue 1,024,792 shares to employees who achieved performance goals, the Company has not issued the above 1,024,792 shares as of June 30, 2022.

On June 30, 2022, the Company agreed to issue 239,322 shares to employees who achieved performance goals, the Company has not issued the above 239,322 shares as of June 30, 2022.

2021Equity 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 Financial Officer as Authorized Officer of ESOP Committee. The ESOP Committee approved the granting of 2,048,690 Restricted Share Units (“RSU”) under the 2021 Equity Incentive Plan. As of December 31, 2021, 2,053,783 RSU were issued and outstanding. 20,768 RSU was forfeited and 1,264,114 RSU was vested during six months ended June 30, 2022. As of June 30, 2022, 768,901 RSU were outstanding.

F-36

---

SCIENJOY HOLDING CORPORATION

NOTES TO UNAUDITEDCONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(All amounts in thousands, except share and per share data or otherwise stated)

13. 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 June 30, 2022, the Company had appointed RMB31,755 and RMB35,759 (US$5,339), 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 June 30, 2022, restricted net assets of the Company’s PRC subsidiaries and VIE were RMB240,092 and RMB411,889 (US$61,493).

14. COMMITMENTS AND CONTINGENCIES

(a) Capital and Other Commitments

The Company did not have significant capital and other commitments as of December 31, 2021 and June 30, 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.

15. SUBSEQUENT EVENTS

Management evaluated subsequent events of the Company through September 15, 2022, the date the 6K containing unaudited condensed consolidated financial statements were issued, and concluded that no subsequent events have occurred that would require recognition.

F-37

Exhibit 99.2

MANAGEMENT’SDISCUSSION AND ANALYSIS

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Youshould read the following discussion and analysis of our financial condition and results of operations in conjunction with our unauditedcondensed consolidated financial statements and the related notes. This discussion contains forward-looking statements that involve risksand uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-lookingstatements as a result of various factors..

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. As a result of the business combination, we became the holding company of Scienjoy 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 317.1 million registered users by the end of June 30, 2022, increased from 267.1 million registered users as of December 31, 2021.

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 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.

Pursuant to the Framework Agreement, the Acquisition requires both cash and share considerations (the “Considerations”). The Company is required to pay RMB180 million in its Class A ordinary shares, consisting of (1) the shares consideration of RMB20.8 million to Weilaijin (the “Weilaijin Share Consideration”), a shareholder of Yieryi, and (ii) the shares consideration of RMB159.2 million in its Class A ordinary shares to Wolter Global (the “Wolter Global Share Consideration”). 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 RMB13.8 million cash to Yieryi. The total fair value of the Considerations was determined at RMB182.0 million, based on a valuation performed by an independent valuation firm engaged by the Company.

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. 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.

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. In the six months ended June 30, 2022, the COVID-19 pandemic did not have a material net impact on the Company’s financial positions and operating results. 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.

KeyFactors Affecting Our Results of Operations

GeneralFactors

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
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●	Usage and penetration rate of mobile Internet and mobile payment
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●	Growth and competitive landscape of China’s mobile live streaming market, especially entertainment SHOW live streaming
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●	Governmental policies affecting China’s live streaming industry
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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.

SpecificFactors

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:

Ourability 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.

Ourability 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.

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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.

We intend to further explore overseas markets to expand our business and user base through both organic expansion and selective investments.

Ourability 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 ConsolidatedStatements of Income

	For the three months ended								For the six months ended
	June 30,			June 30,			June 30,		June 30,			June 30,			June 30,
	2021			2022			2022		2021			2022			2022
	RMB			RMB			US		RMB			RMB			US
Total revenues		393,226			506,528					758,257			969,973
Cost of revenues		(313,297	)		(413,376	)		)		(598,189	)		(762,345	)		)
Gross profit		79,929			93,152					160,068			207,628
Sales and marketing expenses		(1,480	)		(452	)		)		(2,584	)		(1,036	)		)
General and administrative expenses		(15,548	)		(15,406	)		)		(24,395	)		(34,514	)		)
Provision for doubtful accounts		(3,197	)		(3,353	)		)		(3,645	)		(3,094	)		)
Research and development expenses		(13,951	)		(18,313	)		)		(23,514	)		(35,128	)		)
Income from operations		45,753			55,628					105,930			133,856
Change in fair value of contingent consideration		35,323			6,050					23,545			10,790
Change in fair value of warrants liability		11,632			3,883					10,854			8,382
Change in fair value of investment		1,440			752					27,608			1,464
Interest income		693			755					1,431			1,251
Interest expense		(124	)		(13	)		)		(241	)		(13	)		)
Other income, net		102			26					102			86
Foreign exchange gain (loss), net		53			(513	)		)		(40	)		(453	)		)
Income before income taxes		94,872			66,568					169,189			155,363
Income tax benefits (expenses)		(2,819	)		807					(6,178	)		(4,762	)		)
Net income		92,053			67,375					163,011			150,601
Less: net loss attributable to noncontrolling interest		-			(299	)		)		-			(299	)		)
Net income attributable to the Company’s shareholders		92,053			67,674					163,011			150,900
Other comprehensive income:
Other comprehensive income - foreign currency translation adjustment		1,234			602					748			566
Comprehensive income		93,287			67,977					163,759			151,167
Less: comprehensive loss attributable to non-controlling interests		-			(299	)		)		-			(299	)		)
Comprehensive income attributable to the Company’s shareholders		93,287			68,276					163,759			151,466

All values are in US Dollars.

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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 three and six months ended June 30, 2021 and 2022, revenue from consumable virtual items represented over 96% 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 three months ended					For the six months ended
	June 30,		June 30,		June 30,	June 30,		June 30,		June 30,
	2021		2022		2022	2021		2022		2022
Amounts in thousands of RMB and USD	RMB		RMB			RMB		RMB
Live streaming - consumable virtual items revenue		378,930		497,330			733,166		940,768
Live streaming - time based virtual item revenue		8,570		6,917			17,668		14,382
Technical services and others		5,726		2,281			7,423		14,823
Total revenue		393,226		506,528			758,257		969,973

All values are in US Dollars.

As of June 30, 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 Hongren Streaming. The following table sets forth our revenue by platforms for the periods indicated:

	For the three months ended					For the six months ended
	June 30,		June 30,		June 30,	June 30,		June 30,		June 30,
	2021		2022		2022	2021		2022		2022
Amounts in thousands of RMB and USD	RMB		RMB			RMB		RMB
Showself		151,293		143,763			285,701		282,856
Lehai		54,205		73,404			109,895		130,411
Haixiu		83,314		84,763			166,117		167,450
Beelive		98,688		128,176			189,121		243,522
Hongren		-		74,141			-		130,911
Technical services and others		5,726		2,281			7,423		14,823
TOTAL		393,226		506,528			758,257		969,973

All values are in US Dollars.

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The total number of paying users at Showself Live, Lehai Live, Haixiu Live, Beelive Live and Hongren Live for the periods indicated is as following:

	For the three months ended				For the six months ended
	June 30,		June 30,		June 30,		June 30,
	2021		2022		2021		2022
Showself		104,026		94,925		194,213		153,203
Lehai		53,683		56,889		96,541		101,934
Haixiu		51,994		53,640		108,658		80,620
Beelive		49,096		33,791		77,650		59,793
Hongren		-		29,527		-		50,203
TOTAL		258,799		268,772		477,062		445,753

The ARPPU by Showself Live, Lehai Live, Haixiu Live, Beelive Live and Hongren live is as following (amounts in RMB):

	For the three months ended					For the six months ended
	June 30,		June 30,		June 30,	June 30,		June 30,		June 30,
	2021		2022		2022	2021		2022		2022
In RMB and USD	RMB		RMB			RMB		RMB
Showself		1,454		1,514			1,471		1,846
Lehai		1,010		1,290			1,138		1,279
Haixiu		1,602		1,580			1,529		2,077
Beelive		2,010		3,793			2,436		4,073
Hongren		-		2,511			-		2,608
Overall average		1,497		1,876			1,574		2,143

All values are in US Dollars.

Among five brands of live streaming platforms, Showself Live streaming contributed 34% to 41% 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 three months ended June 30, 2021 and 2022 was RMB1,497 and RMB1,876, respectively. The overall ARPPU for the six months ended June 30, 2021 and 2022 was RMB 1,574, RMB and RMB2,143, respectively.

Costof 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 three months ended					For the six months ended
	June 30,		June 30,		June 30,	June 30,		June 30,		June 30,
	2021		2022		2022	2021		2022		2022
Amounts in thousands of RMB and USD	RMB		RMB			RMB		RMB
Revenue sharing fees		266,855		372,050			510,002		681,068
User acquisition costs		32,666		30,116			57,904		55,396
Bandwidth related costs		2,471		3,438			4,739		6,265
Others		11,305		7,772			25,544		19,616
TOTAL		313,297		413,376			598,189		762,345

All values are in US Dollars.

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Revenuesharing 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% and 73% of revenues for the three months ended June 30, 2021 and 2022, respectively. Revenue sharing fees were 67% and 70% of revenues for the six months ended June 30, 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 39% for the three months ended June 30, 2022 compared to three months ended June 30, 2021 and increased by 34% for the six months ended June 30, 2022 compared to six months ended June 30, 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.

Useracquisition 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.

Bandwidthrelated 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 three months ended June 30, 2021 and 2022 and for the six months ended June 30, 2021 and 2022 other cost represented approximately 2% to 3% of related total revenue.

OperatingExpenses

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 three months ended								For the six months ended
	June 30,			June 30,			June 30,		June 30,			June 30,			June 30,
	2021			2022			2022		2021			2022			2022
Amounts in thousands of RMB and USD	RMB			RMB					RMB			RMB
Sales and marketing expenses		(1,480	)		(452	)		)		(2,584	)		(1,036	)		)
General and administrative expenses		(15,548	)		(15,406	)		)		(24,395	)		(34,514	)		)
Research and development expenses		(13,951	)		(18,313	)		)		(23,514	)		(35,128	)		)
Provision for doubtful accounts		(3,197	)		(3,353	)		)		(3,645	)		(3,094	)		)

All values are in US Dollars.

Salesand 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.

Generaland 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.

Researchand 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.

Provisionfor 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.

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Resultsof Operations

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ThreeMonths Ended June 30, 2022 Compared to Three Months Ended June 30, 2021

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**Revenue:**Total revenues increased by RMB113.3 million, or 29%, from RMB393.2 million for the three months ended June 30, 2021 to RMB506.5 million for the three months ended June 30, 2022. This increase was driven by more quality content are provided through our integrated multiple live streaming platforms including Hongren platforms we acquired in January 2022. For the three months ended June 30, 2022, the number of paying user was 268,772, increased slightly by 4% from 258,799 paying user for the three months ended June 30, 2021. Our paying ratio increased from 3.8% for the three months ended June 30, 2021 to 5.8% for the three months ended June 30, 2022. Our average ARPPU increased by 25%, from RMB 1,497 for the three months ended June 30, 2021 to RMB 1,876 for the for the three months ended June 30, 2022.

Costof revenues: Our cost of revenues increased by 32%, from RMB313.3 million for the three months ended June 30, 2021 to RMB413.4 million for the three months ended June 30, 2022. The increase was primarily attributable to a 39%, or RMB105.2 million, year-over-year increase in the Company’s revenue sharing fees and content costs, which was consistent with the growth of the Company’s overall live streaming operations for the three months ended June 30, 2022.

Grossprofit: Our gross profit for the three months ended June 30, 2022 increased by 17% to RMB93.2 million from RMB79.9 million for the three months ended June 30, 2021. Gross margin for the three months ended June 30, 2021 and 2022 was 20% and 18%. 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.

Totaloperating expenses: Total operating expenses for the three months ended June 30, 2022 increased by 10% to RMB37.5 million from RMB34.2 million for the three months ended June 30, 2021.

●	Sales and marketing expenses**:** Our sales and marketing expenses decreased by 69%, from RMB1.5 million for the three months ended June 30, 2021 to RMB0.5 million for the three months ended June 30, 2022. This decrease was mainly due to less promotional activities for the three months ended June 30, 2022.
●	General and administrative expenses**:** Our general and administrative expenses decreased by 1%, from RMB15.5 million for the three months ended June 30, 2021 to RMB15.4 million for the three months ended June 30, 2022. The decrease was primarily because we had less tax related to intercompany dividends offset by higher employee salary and welfare and amortization of intangible assets as compared to three months ended June 30, 2021
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●	Research and development expenses**:** Our research and development expenses increased from RMB14.0 million for the three months ended June 30, 2021 to RMB18.3 million for the three months ended June 30, 2022 due to the Company had share based compensation of RMB2.2 million for the three months ended June 30, 2022.
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●	Provision for doubtful accounts: Our provision for doubtful accounts for the three months ended June 30, 2022 was RMB3.4 million as compared to RMB3.2 million for the year three months ended June 30, 2021.
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Changein 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 Weiliantong on January 1, 2022, 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 three months ended June 30, 2022, the change in fair value of contingent consideration decreased by 83% to RMB6.1million from RMB35.3 million for the three months ended June 30, 2021.

**Changein 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 three months ended June 30, 2022, the change in fair value of warrant liabilities decreased by 67% to RMB3.9 million from RMB11.6 million for the three months ended June 30, 2021.

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Changein fair value of investment: Change in fair value of investment for the three months ended June 30, 2022 decreased by 48% to RMB 0.8 million from RMB1.4 million for the three months ended June 30, 2021. Change in fair value of investment is primarily related to investment in marketable securities. 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.

Netincome: As a result of the foregoing, net income decreased by 27%, from RMB92.1 million for the three months ended June 30, 2021 to RMB 67.4 million for the three months ended June 30, 2022.

SixMonths Ended June 30, 2022 Compared to Six Months Ended June 30, 2021

**Revenue:**Total revenues increased by RMB211.7 million, or 28%, from RMB758.3 million for the six months ended June 30, 2021 to RMB970.0 million for the six months ended June 30, 2022. This increase was driven by more quality content are provided through our integrated multiple live streaming platforms including Weiliantong platforms we acquired in January 2022. For the six months ended June 30, 2022, the number of paying user was 445,753, decreased slightly by 7% from 477,062 paying user for the six months ended June 30, 2021. Our paying ratio increased from3.6% for the six months ended June 30, 2021 to 4.9% for the six months ended June 30, 2022. Our average ARPPU increased by 36%, from RMB 1,574 for the six months ended June 30, 2021 to RMB2,143 for the for the six months ended June 30, 2022.

Costof revenues: Our cost of revenues increased by 27%, from RMB598.2 million for the six months ended June 30, 2021 to RMB762.3 million for the six months ended June 30, 2022. The increase was primarily attributable to a 34%, or RMB171.1 million, year-over-year increase in the Company’s revenue sharing fees and content costs, which was consistent with the growth of the Company’s overall live streaming operations. for the six months ended June 30, 2022.

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Grossprofit: Our gross profit for the six months ended June 30, 2022 increased by 30% to RMB207.6 million from RMB160.1 million for the six months ended June 30, 2021. Gross margin for the six months ended June 30, 2021 and 2022 were both 21%.

Totaloperating expenses: Total operating expenses for the six months ended June 30, 2022 increased by 36% to RMB73.8 million from RMB54.1 million for the six months ended June 30, 2021.

●	Sales and marketing expenses**:** Our sales and marketing expenses decreased by 60%, from RMB2.6 million for the six months ended June 30, 2021 to RMB1.0 million for the six months ended June 30, 2022. This decrease was mainly due to less promotional activities.
●	General and administrative expenses**:** Our general and administrative expenses increased by 41%, from RMB24.4 million for the six months ended June 30, 2021 to RMB34.5 million for the six months ended June 30, 2022. The increase was primarily caused by more consulting and professional fees due to the expansion of the Company, higher employee salary and welfare and amortization of intangible assets.
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●	Research and development expenses**:** Our research and development expenses increased from RMB23.5 million for the six months ended June 30, 2021 to RMB35.1 million for the six months ended June 30, 2022 due to increased R&D headcounts and the Company had share based compensation of RMB4.1 million for the six months ended June 30, 2022.
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●	Provision for doubtful accounts: Our provision for doubtful accounts for the six months ended June 30, 2022 was RMB3.1 million as compared to f RMB3.6 million for the year six months ended June 30, 2021.
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Changein 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 Weiliantong on January 1, 2022, 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 six months ended June 30, 2022, the change in fair value of contingent consideration decreased by 54% to RMB10.8 million from RMB23.5 million for the six months ended June 30, 2021.

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**Changein 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 six months ended June 30, 2022, the change in fair value of warrant liabilities decreased by 23% to RMB8.4 million from RMB10.9 million for the six months ended June 30, 2021.

Changein fair value of investment: Change in fair value of investment for the six months ended June 30, 2022 decreased by 95% to RMB 1.5 million from RMB27.6 million for the six months ended June 30, 2021.Change in fair value of investment is primarily related to investment in marketable securities. 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.

Netincome: As a result of the foregoing, net income decreased by 8%, from RMB163.0 million for the six months ended June 30, 2021 to RMB 150.6 million for the six months ended June 30, 2022.

RecentAccounting 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.

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 January 1, 2020. The ASU requires a modified retrospective adoption method. The adoption of this guidance did not have a material impact on the Company’s consolidated financial statements.

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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 intraperiod 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 beginning in January 1, 2021. 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

CashFlows 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.

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As of December 31, 2021 and June 30, 2022, RMB238,792 and RMB172,616, 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 June 30, 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 six months ended
	June 30,			June 30,			June 30,
	2021			2022			2022
Amounts in thousands of RMB	RMB			RMB
Net cash provided by operating activities		79,302			13,621
Net cash used in investing activities		(44,536	)		(79,983	)		)
Net cash provided by financing activities		27,594			-
Effect of foreign exchange rate changes on cash		(325	)		843
Net increase (decrease) in cash and cash equivalents		62,035			(65,519	)		)
Cash and cash equivalents at beginning of the year		224,768			240,947
Cash and cash equivalents at end of the year		286,803			175,428

All values are in US Dollars.

OperatingActivities

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 RMB13.6 million for the six months ended June 30, 2022. The difference between the net cash provided by operating activities and net income of RMB150.6 million was primarily attributable to non-cash adjustment of RMB4.4 million, an increase in deferred revenue of RMB51.3 million which will be recognized as revenue in the next twelve months, and an increase in account payables of RMB19.2 million, partially offset by an increase in accounts receivables of RMB174.2 due to growing revenue ,and a decrease in accrued expense and other payables of RMB22.4 million .

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Net cash provided by operating activities was RMB79.3million for the six months ended June 30, 2021. The difference between the net cash provided by operating activities and net income of RMB163.0 million was primarily attributable to non-cash adjustment of RMB56.2 million, an increase in deferred revenue of RMB18.0 million which will be recognized as revenue in the next twelve months, partially offset by a decrease in accounts payable of RMB21.3 million and an increase in prepaid expense and other current assets of RMB11.0 million.

InvestingActivities

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 RMB80.0 million for the six months ended June 30, 2022, primarily due to RMB75.0 million paid for long term investment and RMB13.8 million paid to the acquisition of Weiliantong, partially offset by RMB9.7 million cash acquired from the acquisition

Net cash used in investing activities amounted to RMB44.5 million for the six months ended June 30, 2021, primarily due to RMB44.0 million paid for long term investment and RMB0.6 million purchase of equipment.

FinancingActivities

No financing activities for the six months ended June 30, 2022

Net cash provided by financing activities amounted to RMB27.6 million for the six months ended June 30, 2021, primarily due to net proceeds RMB15.3 million from private placement and net proceeds RMB 12.3 million from related parties loans.

CapitalExpenditures.

For the six months ended June 30, 2021 and 2022, the Company’s capital expenditure amounted to RMB0.6 million and RMB0.9 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

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We prepare our financial statements in conformity with U.S. GAAP, which requires us to make judgments, estimates and assumptions. We continually evaluate 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.

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Businesscombinations

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 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 RMB280 million

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 RMB100,000.

Useof 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.

AccountsReceivable 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.

RevenueRecognition

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.

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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.

Livestreaming

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.

TechnicalServices and others

The Company generated technical revenues and others from providing technical development, advisory and others, 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.

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Practicalexpedients 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.

Contractbalances

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.

Fairvalue 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.
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●	Level 3 — inputs to the valuation methodology are unobservable.
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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.

Contingentconsideration – 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. The Company met the two earnout criteria by December 31, 2020 and 2021, respectively.

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 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:

	June 30, <br> 2021			December 31,<br> 2021
Risk-free interest rate		0.38	%		0.38	%
Share price	$	6.22		$	5.68

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(ii) Earn-out liability from BeeLive acquisition

In connection with the acquisition of BeeLive in August 2020, 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, 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, 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 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:

	June 30,<br> 2021	December 31,<br> 2021	June 30,<br> 2022
Risk-free interest rate	0.38%	0.38%	2.49%
Share price	$6.22	$5.68	$3.27
Probability	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 RMB280 million 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 RMB360 million 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 in the binomial model are as follows:

	January 1,<br> 2022	June 30,<br> 2022
Risk-free interest rate	0.39-0.73%	2.52-2.86%
Share price	$5.13	$3.27
Probability	20% - 50%	20% - 50%

As of December 31, 2021, the aggregated contingent considerations for the earn-out liabilities were approximate RMB10.6 million, including current portion of earn-out liability of RMB10.6 million.

As of June 30, 2022, the aggregated contingent considerations for the earn-out liabilities were approximate RMB19.7 million, including current portion of earn-out liability of RMB12.9 million and non-current portion of earn-out liability of RMB6.8 million.

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The Company measures contingent consideration – earn-out liability at fair value on a recurring basis as of the dates of acquisition and June 30,2022. The following table presents the fair value hierarchy for assets and liabilities measured at fair value on a recurring basis:

	As of June 30, 2022
	Fair Value Measurement at the Reporting Date using
	Quoted price<br> in active<br> markets for<br> identical<br> assets<br> Level 1		Significant<br> other<br> observable<br> inputs<br> Level 2		Significant<br> unobservable<br> inputs<br> Level 3		Total
Earn-out liability from SPAC transaction	¥	-	¥	-	¥	-	¥	-
Earn-out liability from BeeLive acquisition		-		-		6,490		6,490
Earn-out liability from Weiliantong acquisition						13,233		13,233
	As of December 31, 2021
---	---	---	---	---	---	---	---	---
	Fair Value Measurement at the Reporting Date using
	Quoted price<br> in active<br> markets for<br> identical<br> assets<br> Level 1		Significant<br> other<br> observable<br> inputs<br> Level 2		Significant<br> unobservable<br> inputs<br> Level 3		Total
Earn-out liability from SPAC transaction	¥	-	¥	-	¥	-	¥	-
Earn-out liability from BeeLive acquisition		-		-		10,638		10,638
Earn-out liability from Weiliantong acquisition		-		-		-		-
Total	¥	-	¥	-	¥	10,638	¥	10,638

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 RMB128.1 million 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. On June 2, 2022, the 3,540,960 earn-out shares were issued.

The Company did not transfer any assets or liabilities in or out of Level 3 during the years ended December 31, 2021 and the six months ended June 30, 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, 2021 and the six months ended June 30, 2022:

	Balance
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		(10,790	)
Balance at June 30, 2022	¥	19,723
Less: Contingent consideration – earn-out liability – non-current portion		(6,822	)
Contingent consideration – earn-out liability –current portion	¥	12,901

Warrantliabilities

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.

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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:

	June 30,<br> 2021			December 31,<br> 2021			June 30, <br> 2022
Risk-free interest rate		0.38	%		0.75	%		2.87	%
Share price	$	6.22		$	5.68		$	3.27
Volatility		54	%		53	%		62	%

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 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		(8,382	)
Exchange difference		268
Balance as of June 30, 2022	¥	2,210

IncomeTaxes

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 as of December 31, 2021 and June 30, 2022. As of December 31, 2021 and June 30, 2022, the Company did not have any significant unrecognized uncertain tax positions.

18

Exhibit 99.3

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Scienjoy Reports Second Quarter 2022 UnauditedFinancial Results

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Second Quarter 2022 Revenues up 28.8% Year Over Year

Second Quarter 2022 Adjusted Net Income up 35.6% Year Over Year

BEIJING, September 15, 2022 /PRNewswire/ -- Scienjoy Holding Corporation (“Scienjoy”, the “Company”, or “We”) (NASDAQ: SJ), a leading live entertainment mobile streaming platform in China, today announced its financial results for the second quarter and first half of fiscal year 2022 ended June 30, 2022.

Second Quarter 2022 Operating and Financial Highlights

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●	Total<br> net revenues increased by 28.8% to RMB506.5 million (US$75.6 million) for the three months ended June 30, 2022 from RMB393.2 million<br> in the same period of 2021.
●	Gross profit increased<br> by 16.5% to RMB93.2 million (US$13.9 million) for the three months ended June 30, 2022 from RMB79.9 million in the same period of<br> 2021.
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●	Net income was RMB67.4<br> million (US$10.1 million) for the three months ended June 30, 2022, compared to RMB92.1 million in the same period of 2021.
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●	Adjusted net income increased<br> by 35.6% to RMB61.2 million (US$9.1 million) for the three months ended June 30, 2022 from RMB45.1 million in the same period of<br> 2021.
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●	Total paying users increased<br> by 3.9% to 268,772 for the three months ended June 30, 2022 from 258,799 in the same period of 2021.
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●	Total number of active<br> broadcasters was 47,990 for the three months ended June 30, 2022, compared to 70,651 in the same period of 2021.
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First Half 2022 Operating and Financial Highlights

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●	Total net revenues increased<br> by 27.9% to RMB 970.0 million (US$144.8 million) for the six months ended June 30, 2022 from RMB758.3 million in<br> the same period of 2021.
●	Gross<br> profit increased by 29.7% to RMB207.6 million (US$40.0 million) for the six months ended June 30, 2022 from RMB160.1<br> million in the same period of 2021. Gross margin increased to 21.4% for the six months ended June 30, 2022 from 21.1% in the<br> same period of 2021.
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●	Net<br> income was RMB150.6 million (US$22.5 million) for the six months ended June 30, 2022, compared to RMB163.0 million in the<br> same period of 2021.
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●	Adjusted<br> net income increased by 8.0% to RMB138.9 million (US$20.8 million) for the six months ended June 30, 2022 from RMB128.6<br> million in the same period of 2021.
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●	Total<br> paying users were 445,753 for the six months ended June 30, 2022, compared to 477,062 in the same period of 2021.
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●	Total<br> number of active broadcasters was 86,715 for the six months ended June 30, 2022, compared to 202,359 in the same period of 2021.
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●	As<br> of June 30, 2022, the Company had RMB175.4 million (US$26.2 million) in cash and cash equivalents, compared to RMB240.9<br> million as of December 31, 2021.
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Mr. Victor He, Chairman and Chief Executive Officer of Scienjoy, commented, “We are pleased with our outstanding financial performance for the second quarter of 2022. Despite the challenging macro environment, I am very proud of the efforts our team has made in achieving these results. The key drivers of these results were the supply of high-quality content through our integrated live streaming platforms and the strong execution of our strategic plan. Our engaging content and high-functioning live streaming platforms positioned us well in growing our business and achieving sustainable development goals. To further complement our business growth, the development of the metaverse project with the investment in virtual reality, augmented reality, and artificial intelligence technologies remain our strategic priority. We believe building the metaverse will help us to seize the opportunity in the fast-evolving market and diversify our business model. We remain confident about our business fundamentals, strategic initiatives, and capabilities to build continued momentum toward our long-term growth objectives. Looking ahead to the remainder of 2022, we will continue to provide our users with an engaging and immersive experience and attractive content as we continue to contribute to the success of Scienjoy and generate values for our shareholders in the long term.”

Mr. Denny Tang, Chief Financial Officer of Scienjoy, added, “We had solid financial results for the second quarter of 2022 with an increase of 28.8% in revenue and 35.6% in adjusted net income as compared to the same period of last year. The solid financial performance demonstrated our ability to attract and maintain our users through the increased high-quality content. We continued to drive Scienjoy forward by implementing strategic initiatives to enrich content offerings, leveraging our technological capabilities to improve users’ experience on our live streaming platforms, and actively exploring potential opportunities to scale our business. We intend to take decisive actions to improve our cost structure, optimize our investment in advanced technologies and build profound relationships with our users efficiently. We believe executing our key initiatives will consolidate our market position, grow our users’ bases, and generate long-term value. As we look to the second half of the year, we remain focused on growing our business, creating additional revenue streams, and making plans for our next phase of growth to fulfill the demand of users.”

Second Quarter 2022 Financial Results

Total net revenues increased by 28.8% to RMB506.5 million (US$75.6 million) for the three months ended June 30, 2022 from RMB393.2 million in the same period of 2021. This increase was driven by more quality content are provided through our integrated multiple live streaming platforms including Hongren platforms we acquired in January 2022. For the three months ended June 30, 2022, the number of paying user was 268,772, increased slightly by 4% from 258,799 paying user for the three months ended June 30, 2021. Our paying ratio increased from 3.8% for the three months ended June 30, 2021 to 5.8% for the three months ended June 30, 2022. Our average ARPPU increased by 25%, from RMB 1,497 for the three months ended June 30, 2021 to RMB 1,876 for the for the three months ended June 30, 2022.

2

Cost of revenues increased by 31.9% to RMB413.4 million (US$61.7 million) for the three months ended June 30, 2022 from RMB313.3 million in the same period of 2021. The increase was primarily attributable to a 39%, or RMB105.2 million, year-over-year increase in the Company’s revenue sharing fees and content costs, which was consistent with the growth of the Company’s overall live streaming operations for the three months ended June 30, 2022.

Gross profitincreased by 16.5% to RMB93.2 million (US$13.9 million) for the three months ended June 30, 2022 from RMB79.9 million in the same period of 2021.

Total operating expenses increased by 9.8% to RMB37.5 million (US$5.6 million) for the three months ended June 30, 2022 from RMB34.2 million in the same period of 2021.

●	Sales<br> and marketing expenses decreased by 69.5% to RMB452,000 (US$67,000) for the three months ended June 30, 2022 from RMB1.5 million in<br> the same period of 2021, primarily due to fewer marketing activities.
●	General<br> and administrative expenses decreased by 0.9% to RMB15.4 million (US$2.3 million) for the three months ended June 30, 2022<br> from RMB15.5 million in the same period of 2021.
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●	Research<br> and development expenses increased by 31.3% to RMB18.3 million (US$2.7 million) for the three months ended June 30, 2022<br> from RMB14.0 million in the same period of 2021. The increase was due to the Company had share based compensation of RMB2.2<br> million for the three months ended June 30 2022, no such expenses were incurred in the same period of 2021.
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●	Provision<br> for doubtful accounts increased by 4.9% to RMB3.4 million (US$501,000) for the three months ended June 30, 2022 from RMB3.2 million<br> in the same period of 2021.
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Income from operations increased by 21.6% to RMB55.6 million (US$8.3 million) for the three months ended June 30, 2022 from RMB45.8 million in the same period of 2021.

Change in fair value of contingent considerationdecreased by 82.9% to RMB6.1 million (US$903,000) for the three months ended June 30, 2022 from RMB35.3 million in the same period of 2021. Change in fair value of contingent consideration is derived from the Company’s reverse recapitalization with Wealthbridge Acquisition Limited on May 7, 2020, acquisition of Beelive on August 10, 2020, and acquisition of Hongren 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.

Change in fair value of warrant liabilitiesdecreased by 66.6% to RMB3.9 million (US$580,000) for the three months ended June 30, 2022from RMB11.6 million in the same period of 2021. The Company’s warrants assumed from the SPAC acquisition that has 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.

Change in fair value of investment decreased by 47.8% to RMB752,000 (US$112,000) for the three months ended June 30, 2022 from 1.4 million in the same period of 2021. Change in fair value of investment is primarily related to investment in marketable securities. 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.

3

Net incomedecreased by 26.8% to RMB67.4 million (US$10.1 million) for the three months ended June 30, 2022 from RMB92.1 million in the same period of 2021.

Adjusted net incomeincreased by 35.6% to RMB61.2 million (US$9.1 million) for the three months ended June 30, 2022 from RMB45.1 million in the same period of 2021.

Basic and diluted net income per ordinary sharewere both RMB1.75(US$0.26) for the three months ended June 30, 2022. In comparison, basic and diluted net income per ordinary share were both RMB2.99 in the same period of 2021.

Adjusted basic and diluted net income perordinary share were both RMB1.58 (US$0.24) for the three months ended June 30, 2022. In comparison, adjusted basic and diluted net income per ordinary share were both RMB1.47 in the same period of 2021**.**

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First Half 2022 Financial Results

Total net revenues increased by 27.9% to RMB970.0 million (US$144.8 million) for the six months ended June 30, 2022 from RMB758.3 million in the same period of 2021. This increase was driven by more quality content are provided through our integrated multiple live streaming platforms including Weiliantong platforms we acquired in January 2022. For the six months ended June 30, 2022, the number of paying user was 445,753, decreased slightly by 7% from 477,062 paying user for the six months ended June 30, 2021. Our paying ratio increased from 3.6% for the six months ended June 30, 2021 to 4.9% for the six months ended June 30, 2022. Our average ARPPU increased by 36%, from RMB 1,574 for the six months ended June 30, 2021 to RMB2,143 for the for the six months ended June 30, 2022.

Cost of revenues increased by 27.4% to RMB762.3 million (US$113.8 million) for the six months ended June 30, 2022 from RMB598.2 million in the same period of 2021. The increase was primarily attributable to a 34%, or RMB171.1 million, year-over-year increase in the Company’s revenue sharing fees and content costs, which was consistent with the growth of the Company’s overall live streaming operations for the six months ended June 30, 2022.

Gross profit increased by 29.7% to RMB207.6 million (US$31.0 million) for the six months ended June 30, 2022 from RMB160.1 million in the same period of 2021.

Total operating expenses increased by 36.3% to RMB73.8 million (US$11.0 million) for the six months ended June 30, 2022 from RMB54.1 million in the same period of 2021.

●	Sales<br> and marketing expenses decreased by 59.9% to RMB1.0 million (US$155,000) for the six months ended June 30, 2022 from RMB2.6<br> million in the same period of 2021, primarily due to fewer marketing activities.
●	General<br> and administrative expenses increased by 41.5% to RMB34.5 million (US$5.2million) for the six months ended June 30, 2022<br> from RMB24.4 million in the same period of 2021. The increase was primarily caused by more consulting and professional<br> fees due to the expansion of the Company, higher employee salary and welfare and amortization of intangible assets.
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●	Research<br> and development expenses increased by 49.4% to RMB35.1 million (US$5.2 million) for the six months ended June 30, 2022<br> from RMB23.5 million in the same period of 2021. The increase was due to increased R&D headcounts and the Company had<br> share based compensation of RMB4.1 million for the first half of 2022
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●	Provision<br> for doubtful accounts for the six months ended June 30, 2022 decreased by 15.1% to RMB3.1 million (US$462,000) for the six months<br> ended June 30, 2022 from RMB3.6 million in the same period of 2021.
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Income from operations increased by 26.4% to RMB133.9 million (US$20.0 million) for the six months ended June 30, 2022 from RMB105.9 million in the same period of 2021.

4

Change in fair value of contingent considerationdecreased by 54.2% to RMB10.8 million (US$1.6 million) for the six months ended June 30, 2022from RMB23.5 million in the same period of 2021. Change in fair value of contingent consideration is derived from the Company’s reverse recapitalization with Wealthbridge Acquisition Limited on May 7, 2020, acquisition of Beelive on August 10, 2020, and acquisition of Hongren 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.

Change in fair value of warrant liabilitiesdecreased by 22.8% to RMB8.4 million (US$1.3 million) for the six months ended June 30, 2022 from RMB10.9 million in the same period of 2021. The Company’s warrants assumed from the SPAC acquisition that has 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.

Change in fair value of investment decreased by 94.7% to RMB1.5 million (US$219,000) for the six months ended June 30, 2022 from 27.6 million in the same period of 2021. Change in fair value of investment is primarily related to investment in marketable securities. 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 decreased by 7.6% to RMB150.6 million (US$22.5 million) for the six months ended June 30, 2022 from RMB163.0 million in the same period of 2021.

Adjusted net income increased by 8.0% to RMB138.9 million (US$20.8 million) for the six months ended June 30, 2022 from RMB128.6 million in the same period of 2021.

Basic and diluted net income per ordinaryshare were both RMB4.06(US$0.61) for the six months ended June 30, 2022. In comparison, basic and diluted net income per ordinary share were both RMB5.32 in the same period of 2021.

Adjusted basic and diluted net income perordinary share were both RMB3.74 (US$0.56) for the six months ended June 30, 2022. In comparison, adjusted basic and diluted net income per ordinary share were both RMB4.19 in the same period of 2021.

As of June 30, 2022, the Company had cash and cash equivalents of RMB175.4 million (US$26.2 million), which represented a decrease of 27.2% from RMB240.9 million as of December 31, 2021.

Business Outlook

The Company expects its total net revenues to be in the range of RMB 400 million to RMB 428 million in the third quarter of 2022. This forecast reflects the Company’s current and preliminary views on the market and operational conditions, which are subject to change, particularly with respect to the potential impact of COVID-19 on the economy in China and other markets around the world.

5

Recent Developments

On December 29, 2021, the Company has entered into an equity acquisition framework agreement (the “Agreement”) to acquire 100% equity interest in Beijing Weiliantong Tech Co., Ltd (“Weiliantong”), which holds Hongle.tv, and 100% equity interest in Golden Shield Enterprises Limited (“Golden Shield”), which holds the NFT business for a total consideration of RMB280 million (approximately US$43.8 million). The objective of the Agreement 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 transaction was closed on January 1, 2022.

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About Scienjoy Holding Corporation

Founded in 2011, Scienjoy is a leading mobile livestreaming platform in China, and its core mission is to build a livestreaming service ecosystem to delight and entertain users. With over 300 million registered users, Scienjoy currently operates five livestreaming platform brands, including Showself, Lehai, Haixiu, and BeeLive, which features both the Mifeng Chinese version and BeeLive International version, and Hongle.tv. Scienjoy uniquely combines a gamified business approach to livestreaming, in-depth knowledge of the livestreaming industry, and cutting-edge technologies such as blockchain, augmented reality (AR), virtual reality (VR), and big data, to create a unique user experience. Scienjoy is devoted to building a livestreaming Metaverse to provide users with the ultimate immersive experience, a social media network that transcends time and space, a digital community that spans virtual and physical reality, and a content-rich ecosystem. For more information, please visit http://ir.scienjoy.com/.

Use of Non-GAAP Financial Measures

Adjusted net income is calculated as net income adjusted for change in fair value of contingent consideration, change in fair value of warrant liability and share based compensation. Adjusted basic and diluted net income per ordinary share is non-GAAP net income (loss) attributable to ordinary shareholders divided by the weighted average number of ordinary shares used in the calculation of non-GAAP basic and diluted net income per ordinary share. The non-GAAP financial measures are presented to enhance investors’ overall understanding of the Company’s financial performance and should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. Investors are encouraged to review the reconciliation of the historical non-GAAP financial measures to its most directly comparable GAAP financial measures. As non-GAAP financial measures have material limitations as analytical metrics and may not be calculated in the same manner by all companies, they may not be comparable to other similarly titled measures used by other companies. In light of the foregoing limitations, you should not consider non-GAAP financial measures as a substitute for, or superior to, such metrics in accordance with US GAAP.

For more information on these non-GAAP financial measures, please see the table captioned “Reconciliations of Non-GAAP Results” near the end of this release. ****

6

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.6981 to US$1.00, the noon buying rate in effect on June 30, 2022, in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB amounts could have been, or could be, converted, realized or settled in U.S. dollars at that rate on June 30, 2022, or at any other rate. ****

Safe Harbor Statement

Certain statements made in this release are “forward looking statements” within the meaning of the “safe harbor” provisions of the United States Private Securities Litigation Reform Act of 1995. When used in this press release, the words “estimates,” “projected,” “expects,” “anticipates,” “forecasts,” “plans,” “intends,” “believes,” “seeks,” “may,” “will,” “should,” “future,” “propose” and variations of these words or similar expressions (or the negative versions of such words or expressions) are intended to identify forward-looking statements. These forward-looking statements are not guarantees of future performance, conditions or results, and involve a number of known and unknown risks, uncertainties, assumptions and other important factors, many of which are outside the Company’s control, that could cause actual results or outcomes to differ materially from those discussed in the forward-looking statements. Important factors, among others, are: the ability to manage growth; ability to identify and integrate other future acquisitions; the ability to obtain additional financing in the future to fund capital expenditures; fluctuations in general economic and business conditions; costs or other factors adversely affecting the Company’s profitability; litigation involving patents, intellectual property, and other matters; potential changes in the legislative and regulatory environment; a pandemic or epidemic. The forward-looking statements contained in this release are also subject to other risks and uncertainties, including those more fully described in the Company’s filings with the Securities and Exchange Commission (“SEC”) from time to time. The Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Such information speaks only as of the date of this release.

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Investor Relations Contacts

Denny Tang

Chief Financial Officer

Scienjoy Holding Corporation

+86-10-64428188

ir@scienjoy.com

Tina Xiao

Ascent Investor Relations

+1 (917) 609-0333

tina.xiao@ascent-ir.com

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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(All amounts in thousands, except share and per share data or otherwise stated)

	As of<br><br> December 31,		As of <br><br> June 30,
	2021		2022			2022
	RMB		RMB
ASSETS
Current assets
Cash and cash equivalents		240,947		175,428
Accounts receivable, net		206,307		378,452
Prepaid expenses and other current assets		165,409		84,570
Amounts due from related parties		1,059		1,052
Investment in marketable security		38,789		39,655
Total current<br> assets		652,511		679,157
Property and equipment, net		1,674		2,147
Intangible assets, net		235,870		422,484
Goodwill		92,069		172,781
Long term investment		101,727		177,324
Long term deposits and other assets		1,152		1,209
Deferred tax assets		4,352		4,273
Right of use assets		-		11,158
Total non-current<br> assets		436,844		791,376
TOTAL ASSETS		1,089,355		1,470,533
LIABILITIES AND SHAREHOLDERS’<br> EQUITY
Current liabilities
Accounts payable		85,801		109,898
Accrued salary and employee benefits		24,533		12,229
Accrued expenses and other current liabilities		16,181		5,022
Current portion of contingent consideration – earn-out<br> liability		10,638		12,901
Warrant liabilities		10,324		2,210
Income tax payable		8,282		10,043
Deferred revenue		65,405		122,324
Lease liabilities-current		-		4,597
Total current<br> liabilities		221,164		279,224
Non-current liabilities
Deferred tax liabilities		58,746		61,945
Contingent consideration – earn-out liability		-		6,822
Lease liabilities-non-current		-		6,210
Total non-current<br> liabilities		58,746		74,977
TOTAL LIABILITIES		279,910		354,201
Commitments and contingencies Shareholders’<br> equity*
Ordinary share, no par value, unlimited shares<br> authorized, 28,219,583 Class A ordinary shares and 2,625,058 Class B ordinary shares issued and outstanding as of<br> December 31, 2021, 35,359,054 Class A ordinary shares and 2,925,058 Class B ordinary shares issued and outstanding as of June 30,<br> 2022, respectively*
Class A ordinary shares		140,196		413,180
Class B ordinary shares		13,041		23,896
Shares to be issued		128,119		-
Statutory reserves		31,775		35,759
Retained earnings		479,199		626,115
Accumulated other comprehensive<br> income		17,115		17,681
Total shareholders’<br> equity		809,445		1,116,631
Non-controlling interests		-		(299	)		)
Total equity		809,445		1,116,332
TOTAL LIABILITIES<br> AND SHAREHOLDERS’ EQUITY		1,089,355		1,470,533

All values are in US Dollars.

8

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UNAUDITED CONDENSED CONSOLIDATED STATEMENTSOF INCOME AND COMPREHENSIVE INCOME

(All amounts in thousands, except share and per share data or otherwise stated)

	For the three months ended								For the six months ended
	June 30,			June 30,			June 30,		June 30,			June 30,			June 30,
	2021			2022			2022		2021			2022			2022
	RMB			RMB			US		RMB			RMB			US
Livestreaming - consumable virtual items revenue		378,930			495,429					733,166			940,768
Livestreaming - time based virtual items revenue		8,570			6,917					17,668			14,382
Technical services and others		5,726			4,182					7,423			14,823
Total revenues		393,226			506,528					758,257			969,973
Cost of revenues		(313,297	)		(413,376	)		)		(598,189	)		(762,345	)		)
Gross profit		79,929			93,152					160,068			207,628
Operating expenses
Sales and marketing expenses		(1,480	)		(452	)		)		(2,584	)		(1,036	)		)
General and administrative expenses		(15,548	)		(15,406	)		)		(24,395	)		(34,514	)		)
Provision for doubtful accounts		(3,197	)		(3,353	)		)		(3,645	)		(3,094	)		)
Research and development expenses		(13,951	)		(18,313	)		)		(23,514	)		(35,128	)		)
Total operating<br> expenses		(34,176	)		(37,524	)		)		(54,138	)		(73,772	)		)
Income from operations		45,753			55,628					105,930			133,856
Change in fair value of contingent consideration		35,323			6,050					23,545			10,790
Change in fair value of warrants liability		11,632			3,883					10,854			8,382
Change in fair value of investment		1,440			752					27,608			1,464
Interest income		693			755					1,431			1,251
Interest expense		(124	)		(13	)		)		(241	)		(13	)		)
Other income, net		102			26					102			86
Foreign exchange gain (loss), net		53			(513	)		)		(40	)		(453	)		)
Income before income taxes		94,872			66,568					169,189			155,363
Income tax benefits (expenses)		(2,819	)		807					(6,178	)		(4,762	)		)
Net income		92,053			67,375					163,011			150,601
Less: net loss attributable<br> to noncontrolling interest		-			(299	)		)		-			(299	)		)
Net income<br> attributable to the Company’s shareholders		92,053			67,674					163,011			150,900
Other comprehensive income:
Other comprehensive income - foreign<br> currency translation adjustment		1,234			602					748			566
Comprehensive income		93,287			67,977					163,759			151,167
Less: comprehensive loss attributable<br> to non-controlling interests		-			(299	)		)		-			(299	)		)
Comprehensive<br> income attributable to the Company’s shareholders		93,287			68,276					163,759			151,466
Weighted average number of shares
Basic		30,756,702			38,602,936					30,669,789			37,122,362
Diluted		30,756,702			38,602,936					30,669,789			37,122,362
Earnings per share
Basic		2.99			1.75					5.32			4.06
Diluted		2.99			1.75					5.32			4.06

All values are in US Dollars.

9

Reconciliations of Non-GAAP Results

(All amounts in thousands, except share and per share data or otherwise stated)

	For the three months ended							For the six months ended
	June 30,		June 30,			June 30,		June 30,		June 30,			June 30,
	2021		2022			2022		2021		2022			2022
	RMB		RMB			US		RMB		RMB			US
Net income		92,053		67,375					163,011		150,601
Less:
Change in fair value of contingent consideration		35,323		6,050					23,545		10,790
Change in fair value of warrants liability		11,632		3,883					10,854		8,382
Share based compensation		-		(3,711	)		)		-		(7,437	)		)
Adjusted net income<br> *		45,098		61,153					128,612		138,866
Adjusted net income per ordinary<br> share*
Basic		1.47		1.58					4.19		3.74
Diluted		1.47		1.58					4.19		3.74

All values are in US Dollars.

“Adjusted net income” is defined as net income excluding change in fair value of contingent consideration, change in fair value of warrant liability and share based compensation.

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