HHHHU Wealthbridge Acquisition Limited

NOTICE OF EXTRAORDINARY GENERAL MEETING OF
WEALTHBRIDGE ACQUISITION LIMITED SHAREHOLDERS

To Be Held on [●], 2020

To Wealthbridge Acquisition Limited (“Wealthbridge”) Shareholders:

An extraordinary general meeting of shareholders of Wealthbridge will be held at [●], on [●], 2020, at [●] a.m., for the following purposes:

Proposals 1 through 4 are sometimes collectively referred to herein as the “Proposals.”

As of [●], 2020, there were [●] ordinary shares of Wealthbridge issued and outstanding and entitled to vote. Only Wealthbridge shareholders who hold shares of record as of the close of business on [●], 2020 are entitled to vote at the extraordinary general meeting or any adjournment of the extraordinary general meeting. This proxy statement is first being mailed to shareholders on or about [●], 2020. Approval of the Business Combination Proposal, the Amendment Proposal, the Nasdaq Proposal, and the Business Combination Adjournment Proposal will each require the affirmative vote of the holders of a majority of the outstanding ordinary shares present in person or by proxy and entitled to vote at the extraordinary general meeting. Attending the extraordinary general meeting either in person or by proxy and abstaining from voting will have the same effect as voting against all the proposals and, assuming a quorum is present, broker non-votes will have no effect on the Business Combination Proposal, the Amendment Proposal, the Nasdaq Proposal, and the Adjournment Proposal.

Wealthbridge currently has an unlimited number of authorized shares of no par value per share.

Whether or not you plan to attend the extraordinary general meeting in person, please submit your proxy card without delay. Voting by proxy will not prevent you from voting your shares in person if you subsequently choose to attend the extraordinary general meeting. If you fail to return your proxy card and do not attend the meeting in person, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the extraordinary general meeting. You may revoke a proxy at any time before it is voted at the extraordinary general meeting by executing and returning a proxy card dated later than the previous one, by attending the extraordinary general meeting in person and casting your vote by ballot or by submitting a written revocation to Wealthbridge at Wealthbridge Acquisition Limited, Flat A, 6/F, Block A, Tonnochy Towers, No. 272 Jaffe Road, Wanchai, Hong Kong, Attention: Yongsheng Liu, Telephone: (86) 186-0217-2929, that is received by us before we take the vote at the extraordinary general meeting. If you hold your shares through a bank or brokerage firm, you should follow the instructions of your bank or brokerage firm regarding revocation of proxies.

Wealthbridge’s board of directors unanimously recommends that Wealthbridge shareholders vote “FOR” approval of each of the proposals.

By order of the Board of Directors,

[__________], 2020

TABLE OF CONTENTS

ANNEX A – SHARE EXCHANGE AGREEMENT

ANNEX B – FORM OF THIRD AMENDED AND RESTATED MEMORANDUM AND ARTICLES OF ASSOCIATION OF WEALTHBRIDGE

ANNEX C – ESCROW AGREEMENT

ANNEX D – REGISTRATION RIGHTS AGREEMENT

ANNEX E – VOTING AGREEMENT

QUESTIONS AND ANSWERS ABOUT THE PROPOSALS FOR Wealthbridge shareholders

Q: What is the purpose of this document?

A: Wealthbridge Acquisition Limited, a British Virgin Islands company, or Wealthbridge, and Scienjoy Inc., a Cayman Islands company, have agreed to a business combination under the terms of a share exchange agreement, dated as of October 28, 2019, which we refer to as the Share Exchange Agreement, by and among Wealthbridge Acquisition Limited, the Sellers, Scienjoy Inc., and the other related proposals. The consummation of the transactions contemplated by the Share Exchange Agreement relating to the business combination with Scienjoy are referred to as the Business Combination and the proposal to approve the Business Combination is referred to as the Business Combination Proposal. The Share Exchange Agreement is attached to this proxy statement as Annex A, and is incorporated into this proxy statement by reference. You are encouraged to read this proxy statement, including the section titled “Risk Factors” and all the annexes hereto.

Wealthbridge shareholders are being asked to consider and vote upon a proposal to adopt the Share Exchange Agreement pursuant to which, Wealthbridge will acquire all of the issued and outstanding shares and other equity interests of Scienjoy from the Sellers, and related proposals. The units that were issued in Wealthbridge’s initial public offering, or the Wealthbridge Units, each consists of one ordinary share of Wealthbridge, no par value per share, or the Wealthbridge Shares, one redeemable warrant, each redeemable warrant entitling the holder thereof to purchase one half of one Wealthbridge Share, or the Wealthbridge Warrants, and one right to receive one-tenth (1/10) of an ordinary share upon the consummation of an initial business combination, or the Wealthbridge Rights. Wealthbridge shareholders (except for holders of shares issued prior to Wealthbridge’s initial public offering (“initial shareholders”)) will be entitled to redeem their Wealthbridge ordinary shares for a pro rata share of the trust account net of taxes payable (currently anticipated to be no less than approximately $10.00 per share for shareholders).

The Wealthbridge Units, Wealthbridge Shares, Wealthbridge Warrants, and Wealthbridge Rights are currently listed on the Nasdaq Stock Market.

This proxy statement contains important information about the proposed Business Combination and the other matters to be acted upon at the extraordinary general meeting of Wealthbridge shareholders. You should read it carefully.

Q: What is being voted on?

A: Below are the proposals on which Wealthbridge shareholders are being asked to vote:

Q: Do any of Wealthbridge’s directors or officers have interests that may conflict with my interests with respect to the Business Combination?

A: Wealthbridge’s directors and officers may have interests in the Business Combination that are different from your interests as a shareholder. You should keep in mind the following interests of Wealthbridge’s directors and officers:

In May and July, 2018, 1,150,000 shares were sold to our initial shareholders. On October 15, 2018, Wealthbridge affected a 5 for 4 share split resulting in an aggregate of 1,437,500 ordinary shares outstanding to our initial shareholders, which we refer to throughout this proxy statement as the “insider shares,” for an aggregate purchase price of $25,100. Simultaneous with the consummation of the IPO, we consummated the private placement of 247,500 private Units (“Private Placement Units”) at a price of $10.00 per Private Placement Unit, generating total proceeds of $2,475,000. The Private Placement Units were purchased by Wealthbridge’s sponsor. The underwriters exercised the over-allotment and on February 20, 2019, Wealthbridge consummated the private sale of an additional 22,500 private units to its sponsor, generating gross proceeds of $225,000.

If Wealthbridge does not consummate the Business Combination by November 8, 2020, Wealthbridge will be required to voluntarily liquidate and subsequently dissolve and the securities held by Wealthbridge’s insiders will be worthless because such holders have agreed to waive their rights to any liquidation distributions.

Approval of the Business Combination Proposal, the Amendment Proposal, the Nasdaq Proposal and the Business Combination Adjournment Proposal will require the affirmative vote of the holders of a majority of the issued and outstanding ordinary shares of Wealthbridge present and entitled to vote at the extraordinary general meeting. As of the record date of the extraordinary general meeting of Wealthbridge shareholders, 1,707,500 shares held by Wealthbridge’s initial shareholders, or approximately 22.90% of the outstanding Wealthbridge ordinary shares, would be voted in favor of each of the Proposals.

In addition, the exercise of Wealthbridge’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the Business Combination may result in a conflict of interest when determining whether such changes or waivers are appropriate and in Wealthbridge shareholders’ best interests.

Q: When and where is the extraordinary general meeting of Wealthbridge shareholders?

A: The extraordinary general meeting of Wealthbridge shareholders will take place at [●] on [●], 2020, at [●] a.m.

Q: Who may vote at the extraordinary general meeting of shareholders?

A: Only holders of record of Wealthbridge ordinary shares as of the close of business on [●], 2020 may vote at the extraordinary general meeting of shareholders. As of [●], 2020, there were [●] Wealthbridge ordinary shares outstanding and entitled to vote. Please see “Extraordinary General Meeting of Wealthbridge Shareholders — Record Date; Who is Entitled to Vote” for further information.

Q: What is the quorum requirement for the extraordinary general meeting of shareholders?

A: Shareholders representing a majority of the Wealthbridge ordinary shares issued and outstanding as of the record date and entitled to vote at the extraordinary general meeting must be present in person or represented by proxy in order to hold the extraordinary general meeting and conduct business. This is called a quorum. Wealthbridge ordinary shares will be counted for purposes of determining if there is a quorum if the shareholder (i) is present and entitled to vote at the meeting, or (ii) has properly submitted a proxy card. In the absence of a quorum, shareholders representing a majority of the votes present in person or represented by proxy at such meeting may adjourn the meeting until a quorum is present. Broker non-votes will not be considered present for the purposes of establishing a quorum.

Q: What vote is required to approve the Proposals?

A: Approval of the Business Combination Proposal, the Amendment Proposal, the Nasdaq Proposal, and the Business Combination Adjournment Proposal will require the affirmative vote of the holders of a majority of the issued and outstanding ordinary shares of Wealthbridge present and entitled to vote at the extraordinary general meeting. Attending the extraordinary general meeting either in person or by proxy and abstaining from voting will have the same effect as voting against all the Proposals and each nominee for election as a director and, assuming a quorum is present, broker non-votes will have no effect on the Proposals.

Q: Are the proposals conditioned on one another?

A: Yes. The Business Combination Proposal is conditioned upon the approval of the Amendment Proposal and the Nasdaq Proposal. The Amendment Proposal is conditioned upon the approval of the Business Combination Proposal and the Nasdaq Proposal.

Q: How will the initial shareholders vote?

A: Wealthbridge’s initial shareholders, who as of [●], 2020 owned 1,707,500 Wealthbridge ordinary shares, or approximately 22.90% of the issued and outstanding Wealthbridge ordinary shares, have agreed to vote their respective ordinary shares acquired by them prior to the initial public offering in favor of the Business Combination Proposal and related proposals. Wealthbridge’s initial shareholders have also agreed that they will vote any shares they purchase in the open market in or after the IPO in favor of each of the Proposals.

Q: Am I required to vote in order to have my ordinary shares redeemed?

A: No. You are not required to vote in order to have the right to demand that Wealthbridge redeem your ordinary shares for cash equal to your pro rata share of the aggregate amount then on deposit in the trust account (before payment of deferred underwriting commissions and including interest earned on their pro rata portion of the trust account, net of taxes payable). These rights to demand redemption of Wealthbridge ordinary shares for cash are sometimes referred to herein as redemption rights. If the Business Combination is not completed, then holders of Wealthbridge ordinary shares electing to exercise their redemption rights will not be entitled to receive such payments.

Q: How do I exercise my redemption rights?

A: If you are a public shareholder and you seek to have your shares redeemed, you must (i) demand, no later than 5:00 p.m., Eastern time on [●], 2020 (two business days before the extraordinary general meeting), that Wealthbridge redeem your shares into cash; and (ii) submit your request in writing to Wealthbridge’s transfer agent, at the address listed at the end of this section and delivering your shares to Wealthbridge’s transfer agent physically or electronically using the DWAC system the business day prior to the vote at the meeting.

Any corrected or changed written demand of redemption rights must be received by Wealthbridge’s transfer agent the business day prior to the extraordinary general meeting. No demand for redemption will be honored unless the holder’s shares have been delivered (either physically or electronically) to the transfer agent the business day prior to the vote at the meeting.

Public shareholders may seek to have their shares redeemed regardless of whether they vote for or against the Business Combination and whether or not they are holders of Wealthbridge shares as of the Record Date. Any public shareholder who hold shares of Wealthbridge shares on or before [●], 2020 (two business days before the extraordinary general meeting) will have the right to demand that his, her or its shares be redeemed for a pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but not yet paid, at the consummation of the Business Combination).

Q: If my shares are held in “street name” by my bank, brokerage firm or nominee, will they automatically vote my shares for me?

A: No. Under the rules of various national and regional securities exchanges, your broker, bank or nominee cannot vote your shares with respect to non-discretionary matters unless you provide instructions on how to vote in accordance with the information and procedures provided to you by your broker, bank or nominee. Wealthbridge believes the Proposals are non-discretionary and, therefore, your broker, bank or nominee cannot vote your shares without your instruction. Broker non-votes will not be considered present for the purposes of establishing a quorum and will have no effect on the Proposals. If you do not provide instructions with your proxy, your bank, broker or other nominee may submit a proxy card expressly indicating that it is NOT voting your shares; this indication that a bank, broker or nominee is not voting your shares is referred to as a “broker non-vote.” Your bank, broker or other nominee can vote your shares only if you provide instructions on how to vote. You should instruct your broker to vote your Wealthbridge shares in accordance with directions you provide.

Q: How can I vote?

A: If you were a holder of record Wealthbridge ordinary shares on [●], 2020, the record date for the extraordinary general meeting of Wealthbridge shareholders, you may vote with respect to the applicable proposals in person at the extraordinary general meeting of Wealthbridge shareholders, or by submitting a proxy by mail so that it is received prior to 9:00 a.m. on [●], 2020, in accordance with the instructions provided to you under “Extraordinary General Meetings of Wealthbridge Shareholders.” If you hold your shares in “street name,” which means your shares are held of record by a broker, bank or other nominee, your broker or bank or other nominee may provide voting instructions (including any telephone or Internet voting instructions). You should contact your broker, bank or nominee in advance to ensure that votes related to the shares you beneficially own will be properly counted. In this regard, you must provide the record holder of your shares with instructions on how to vote your shares or, if you wish to attend the extraordinary general meeting of Wealthbridge shareholders and vote in person, obtain a proxy from your broker, bank or nominee.

Q: What if I abstain from voting or fail to instruct my bank, brokerage firm or nominee?

A: Wealthbridge will count a properly executed proxy marked “ABSTAIN” with respect to a particular Proposal as present for the purposes of determining whether a quorum is present at the extraordinary general meeting of Wealthbridge shareholders. For purposes of approval, an abstention on any Proposals will have the same effect as a vote “AGAINST” such Proposal.

Q: Can I change my vote after I have mailed my proxy card?

A: Yes. You may change your vote at any time before your proxy is voted at the extraordinary general meeting. You may revoke your proxy by executing and returning a proxy card dated later than the previous one, or by attending the extraordinary general meeting in person and casting your vote by ballot or by submitting a written revocation stating that you would like to revoke your proxy that we receive prior to the extraordinary general meeting. If you hold your shares through a bank, brokerage firm or nominee, you should follow the instructions of your bank, brokerage firm or nominee regarding the revocation of proxies. If you are a record holder, you should send any notice of revocation or your completed new proxy card, as the case may be, to:

Wealthbridge Acquisition Limited

Flat A, 6/F, Block A
Tonnochy Towers
No. 272 Jaffe Road
Wanchai, Hong Kong
Tel: (86) 186-0217-2929

Q: Should I send in my share certificates now?

A: Yes. Wealthbridge shareholders who intend to have their ordinary shares redeemed, by electing to have those ordinary shares redeemed for cash on the proxy card, should send their certificates by two business days before the extraordinary general meeting. Please see “Extraordinary General Meeting of Wealthbridge Shareholders — Redemption Rights” for the procedures to be followed if you wish to redeem your ordinary shares for cash.

Q: When is the Business Combination expected to occur?

A: Assuming the requisite shareholder approvals are received, Wealthbridge expects that the Business Combination will occur no later than [May 8], 2020.

Q: May I seek statutory appraisal rights or dissenter rights with respect to my shares?

A: No. Appraisal rights are not available to holders of Wealthbridge ordinary shares in connection with the proposed Business Combination. For additional information, see the sections entitled “Extraordinary General Meeting of Wealthbridge Shareholders — Appraisal Rights.”

Q: What happens if the Business Combination is not consummated?

A: If Wealthbridge does not consummate the Business Combination by the date that is 15 months from the closing of the IPO, or May 8, 2020, or 21 months from the closing of the IPO, or November 8, 2020, if Wealthbridge further extends the period of time to consummate a business combination, Wealthbridge’s officers must take all actions necessary in accordance with the British Virgin Islands Business Companies Act, 2004 (as the same may be amended and supplemented from time to time) (referred to herein as the “Companies Law”) to voluntarily liquidate and subsequently dissolve Wealthbridge as soon as reasonably practicable. Following dissolution, Wealthbridge will no longer exist as a company. In any liquidation, the funds held in the Trust Account, plus any interest earned thereon (net of taxes payable) will be distributed pro-rata to holders of Wealthbridge ordinary shares who acquired such ordinary shares in Wealthbridge’s IPO or in the aftermarket. If the Business Combination is not effected by the date that is 15 months from the closing of the IPO, or May 8, 2020, or by the date that is 21 months from the closing of the IPO, or November 8, 2020, if we further extend the period of time to consummate a business combination, the Wealthbridge Warrants and Rights will expire worthless. The estimated consideration that each Wealthbridge share would be paid at liquidation would be approximately $[●] per share for shareholders based on amounts on deposit in the Trust Account as of [●], 2020. The closing price of Wealthbridge’s ordinary shares on the Nasdaq Stock Market as of [●], 2020 was $[●]. Wealthbridge’s initial shareholders waived the right to any liquidation distribution with respect to any Wealthbridge ordinary shares held by them.

Q: What happens to the funds deposited in the Trust Account following the Business Combination?

A: Following the closing of the Business Combination, funds in the Trust Account will be released to Wealthbridge. Holders of Wealthbridge ordinary shares exercising redemption rights will receive their per share redemption price. The balance of the funds will be utilized to pay the expenses incurred during and the working capital after the Business Combination. As of [●], 2020, there was approximately $[●] in Wealthbridge’s Trust Account. Approximately $[●] per outstanding share issued in Wealthbridge’s initial public offering will be paid to the public investors. Any funds remaining in the Trust Account after such uses will be used for future working capital and other corporate purposes of the combined entity.

DELIVERY OF DOCUMENTS TO WEALTHBRIDGE shareholders

Pursuant to the rules of the SEC, Wealthbridge and services that it employs to deliver communications to its shareholders are permitted to deliver to two or more shareholders sharing the same address a single copy of the proxy statement, unless Wealthbridge has received contrary instructions from one or more of such shareholders. Upon written or oral request, Wealthbridge will deliver a separate copy of the proxy statement to any shareholder at a shared address to which a single copy of the proxy statement was delivered and who wishes to receive separate copies in the future. Shareholders receiving multiple copies of the proxy statement may likewise request that Wealthbridge deliver single copies of the proxy statement in the future. Shareholders may notify Wealthbridge of their requests by contacting Wealthbridge as follows:

Wealthbridge Acquisition Limited

Flat A, 6/F, Block A
Tonnochy Towers
No. 272 Jaffe Road
Wanchai, Hong Kong
Attn: Yongsheng Liu

Tel: (86) 186-0217-2929

RISK FACTORS

You should consider carefully the following risk factors, as well as the other information set forth in this proxy statement, before making a decision on the Business Combination.

Risks Factors Relating to Scienjoy’s Business and Industry

Scienjoy may fail to retain its existing users, keep them engaged or further grow its user base.

Scienjoy’s revenue primarily derives from live streaming services, and therefore Scienjoy’s ability to maintain and increase the size of its user base and user engagement level is critical to its success. If Scienjoy’s user base becomes smaller or its users become less active, it is probable that there would be less spending on the virtual gifts on Scienjoy’s platforms. Smaller user base or lower user engagement would make it difficult to retain top broadcasters. Consequently, the financial condition of Scienjoy would suffer a decline in revenue and Scienjoy’s business and results of operations will be materially and adversely impacted.

To continue to maintain and improve its existing user base and user engagement, Scienjoy must ensure that Scienjoy adequately and timely identifies and responds to changes in user preferences, attract and retain enough popular broadcasters, and offer new and attractive features and content. There is no guarantee that Scienjoy could meet all of these goals. A number of factors could negatively affect user growth, and engagement, including if:

Scienjoy’s revenue growth is primarily dependent on paying users and revenue per paying user. If Scienjoy fails to continue to grow or maintain its paying user base or fails to continue to increase revenue per paying user, its live streaming revenue may not increase, which may materially and adversely affect its results of operations and financial condition.

Whether Scienjoy can continue to increase its paying ratio amongst its users or revenue per paying user depends on many factors, and many of them are out of its control. Scienjoy expects that its business will continue to be heavily dependent on revenue collected from paying users in the near future. Any decline in the number of paying users or revenue per paying user may materially and adversely affect Scienjoy’s results of operations and financial condition.

Scienjoy relies on a single monetization model.

Mobile live streaming platforms use three basic categories of revenue sharing models to monetize their live streaming operations: gift model, advertise model, and shopping model. Scienjoy currently mainly uses the gift model, generating its revenue from virtual gifts purchased by its users. Although Scienjoy intends to diversify its revenue sharing models, such as by generating revenue from advertisement, there is no guarantee Scienjoy will succeed. Therefore, decreases in revenues generated from the gift model will materially and adversely affect Scienjoy’s business, results of operations and financial condition.

Scienjoy may fail to offer attractive content on its platforms.

High quality live streaming content is important for Scienjoy to attract, maintain and increase its user base and user engagement. Scienjoy’s content library is constantly evolving and growing. However, if Scienjoy fails to expand and diversify its content offerings, identify trending and popular genres, or maintain the quality of its content, Scienjoy may experience decreasing viewership and user engagement, which may materially and adversely affect its financial conditions and results of operations.

In addition, Scienjoy largely relies on its broadcasters to create high-quality and fun live streaming content. Scienjoy has in place a comprehensive incentive mechanism to encourage broadcasters and talent agencies to supply content that is attractive to viewers. Also, talent agencies cooperating with Scienjoy may guide or influence broadcasters to develop content that is well received by viewers. However, if Scienjoy fails to identify the latest trends and timely guide broadcasters and talent agencies accordingly, its viewer number may decline and its results of operations and financial condition may be materially and adversely affected.

Failure to attract, cultivate, and retain top broadcasters may materially and negatively affect Scienjoy’s user engagement and thus its business and operations.

The majority of Scienjoy’s revenue is from sale of virtual gifts to users. The charisma and the high-quality content of top broadcasters are primary contributors to user stickiness, and is difficult to be replicated by other less popular broadcasters.

Although Scienjoy has made efforts to support top broadcasters in order to retain them, there is no guarantee that they will choose to stay with Scienjoy. Top broadcasters tend to receive more offers with attractive terms than the other broadcasters and some of them may choose to move to other platforms. Their departure may cause a corresponding decline in Scienjoy’s user base.

Periodically, Scienjoy may face legal disputes with competing platforms from which Scienjoy attracts some top broadcasters. Although Scienjoy is not the primary target of these legal disputes, broadcasters involved may be subject to fines or even injunctions, which may render Scienjoy’s investment in recruiting them meaningless. Conversely, some of Scienjoy’s top broadcasters have left Scienjoy platforms for competing platforms despite still being in a contractual relationship with Scienjoy, which have raised legal disputes. Even if Scienjoy prevails in all such legal disputes, the departures of any top broadcaster may still have a negative impact on user engagement and reputation. To retain top broadcasters, Scienjoy must devise better compensation schemes, improve its monetization capabilities, and help the top broadcasters reach a wider audience. Although Scienjoy strives to improve in these respects, there is no guarantee that the broadcasters will not leave Scienjoy platforms.

In terms of broadcaster cultivation, Scienjoy cannot guarantee that the performance metrics Scienjoy uses to track promising broadcasters will enable Scienjoy to identify future top broadcasters. Some of the broadcasters Scienjoy identifies as promising may turn out to be underperforming, and Scienjoy may also fail to spot truly promising broadcasters in the early stages of their career. In addition to a waste of resources, either one of these scenarios could prevent Scienjoy from cultivating top broadcasters, which could weaken its core competitive strength against competing platforms and thus cause an outflow of users to those platforms.

If Scienjoy fails to implement an effective revenue sharing fee policy, it may lose its broadcasters and its results of operations and financial condition may be materially and negatively affected.

Scienjoy pays revenue sharing fees to the broadcasters and talent agencies as compensation, which are determined based on a percentage of revenue from virtual gift sales that are attributed to the broadcasters’ live streaming performance. Failure to implement a satisfactory revenue sharing fee policy may result in undesired departures of broadcasters. For example, in 2017 and 2018 Scienjoy lowered its revenue sharing percentage for its broadcasters, resulting in departures of a large number of its broadcasters from Scienjoy’s platforms. As a result, Scienjoy’s revenue was adversely affected. Since then, Scienjoy adjusted its revenue sharing fee policy to increase the sharing percentage for broadcasters. However, there is no guarantee that Scienjoy’s current and future revenue sharing fee policy will keep its broadcasters satisfied over an extended period of time.

Scienjoy partners with various talent agencies to manage its broadcasters. If Scienjoy is not able to maintain its relationship with talent agencies, its operations may be materially and adversely affected.

Scienjoy works with talent agencies to manage and organize broadcasters on its platforms. Cooperation with talent agencies increases Scienjoy’s operational efficiency in terms of discovering, supporting, and managing broadcasters in a more organized and structured manner, and turning amateur broadcasters into full-time broadcasters. If Scienjoy fails to maintain its relationship with many of the talent agencies Scienjoy is currently working with, Scienjoy may not be able to retain or attract broadcasters.

Failure to effectively manage the growth of Scienjoy and control its periodic spending to maintain such growth may materially and adversely affect Scienjoy’s brand, and its business and results of operations may be materially and adversely affected.

Scienjoy’s rapid growth has placed, and continues to place, a significant strain on its management and resources. Scienjoy may need to establish and expand its capacities in all aspects of its business, such as operations, research and development, sales and marketing, and general administration, in order to meet the increasing needs from a rapidly evolving market. Scienjoy cannot assure you that its current level of growth will be sustainable. Scienjoy believes that its continued growth will depend on its ability to attract and retain viewers and top broadcasters, to develop an infrastructure to service and support an expanding body of viewers and broadcasters, to explore new monetization avenues, and to convert non-paying users to paying users and increase user engagement levels. Scienjoy cannot assure you that Scienjoy will be successful in any of the above.

Scienjoy expects its costs and expenses to continue to increase in the future as Scienjoy anticipates that Scienjoy will need to continue to implement, from time to time, a variety of new and upgraded operational, informational and financial systems, procedures and controls on an as-needed basis, including the continued improvement of its accounting and other internal management systems. Scienjoy will also need to expand, train, manage and motivate its workforce and manage its relationships with viewers, talent agencies, broadcasters, and other business partners. All of these endeavors involve risks and will require substantial management efforts and skills and significant additional expenditures. Scienjoy expects to continue to invest in its infrastructure in order to provide its services rapidly and reliably to viewers and broadcasters. Continued growth could end up straining Scienjoy’s ability to maintain reliable service levels for all of its viewers and broadcasters, to develop and improve its operational, financial, legal and management controls, and to enhance its reporting systems and procedures. Managing the growth of Scienjoy will require significant expenditures and the allocation of valuable management resources. If Scienjoy fails to achieve the necessary level of efficiency in its organization as Scienjoy grows, its business, results of operations, and financial condition could be harmed.

Scienjoy may fail to successfully implement its monetization strategies.

Scienjoy’s streaming platforms are free to access, and Scienjoy generates revenues primarily from live streaming and sales of virtual gifts. As a result, Scienjoy’s revenue is affected by its ability to increase user engagement and convert non-paying users into paying users, which in turn depends on its ability to retain quality broadcasters, innovate attractive content, and offer virtual gifts and other services. If Scienjoy is not successful in enhancing its ability to monetize its existing services or developing new approaches to monetization, Scienjoy may not be able to maintain or increase its revenues and profits or recover any associated costs. Scienjoy monitors market developments and may adjust its monetization strategies accordingly from time to time, which may result in decreases of its overall revenue or revenue contributions from some monetization channels. In addition, Scienjoy may in the future introduce new services to diversify its revenue streams, including services with which Scienjoy has little or no prior development or operating experience. If these new or enhanced services fail to engage customers or platform partners, Scienjoy may fail to generate sufficient revenues to justify its investments, and its business and operating results and financial condition may suffer as a result.

Scienjoy’s past growth may not be indicative of its future performance due to Scienjoy’s limited operation history with a relatively new business model in a relatively new market.

Scienjoy commenced business operations in 2012 and has experienced growth in the number of active and paying users and total revenue since 2014 (despite a decline in 2017 and 2018 due to Scienjoy’s lowering its revenue sharing percentage for its broadcasters). However, Scienjoy’s past growth may not be indicative of its future performance, as the markets for Scienjoy’s live streaming platforms and the related products and services are relatively new and rapidly developing. Scienjoy must adapt itself to overcome challenges in a constantly evolving new market, especially in terms of converting non-paying users to paying users, maintaining a stable paying user base and attracting new paying users. Scienjoy’s business plan relies heavily upon an expanding user base and the resulting increased revenue from live streaming, as well as its ability to explore other monetization avenues. However, Scienjoy’s past experience and performance would not guarantee any future success of Scienjoy if Scienjoy is not able to adapt rapidly to the evolving market.

As live streaming industry in China is relatively young, there are few proven methods of projecting user demand or available industry standards on which Scienjoy can rely. Currently Scienjoy derives its revenue primarily from sales of virtual gifts on its platforms. Although Scienjoy intends to expand its monetization avenue, Scienjoy cannot assure you that its attempts to monetize its viewers and broadcasters will continue to be successful, profitable or accepted, and therefore the income potential of its business is difficult to gauge.

Scienjoy’s growth prospects should be considered in light of the risks and uncertainties that fast-growing early-stage companies with limited operating histories in evolving industries may encounter, including, among others, risks and uncertainties regarding its ability to

Addressing these risks and uncertainties will require significant capital expenditures and allocation of valuable management and employee resources. If Scienjoy fails to successfully address any of the above risks and uncertainties, the size of its user base, its revenue and operating margin may decline.

Scienjoy mainly competes with other established entertainment live streaming platforms. If Scienjoy is unable to compete effectively, its business and operating results may be materially and adversely affected.

Since running a successful live streaming platform requires capital outlay and a large team of quality broadcasters who remain in short supply due to the fact that most have signed contracts with existing platforms, there are high entry barriers for the entertainment live streaming industry. As a result, Scienjoy’s major competitors are streaming platforms with an established presence in the industry. Scienjoy must compete with these established players for user traffic and quality broadcasters and the competition remains intense.

In order to remain competitive, Scienjoy may be required to spend additional resources, which may adversely affect its profitability. Scienjoy believes that its ability to compete effectively depends upon many factors both within and beyond its control, including:

Furthermore, if Scienjoy is involved in disputes with any of its competitors that result in negative publicity to Scienjoy, such disputes, regardless of their veracity or outcome, may harm Scienjoy’s reputation or brand image and in turn lead to reduced number of viewers and broadcasters. Scienjoy’s competitors may unilaterally decide to adopt a wide range of measures targeted at it, including approaching its top broadcasters or attacking its platforms. Any legal proceedings or measures Scienjoy takes in response to competition and disputes with its competitors may be expensive, time-consuming, and disruptive to its operations and divert its management’s attention.

If Scienjoy fails to compete effectively against other entertainment medium, its results of operations and financial condition may be materially and adversely affected.

Scienjoy’s users have a vast array of entertainment choices. Other forms of entertainment, such as traditional PC and console games, online video services, social media, as well as more traditional mediums such as television, movies, and sports events, are much more well-established in mature markets and may be perceived by users to offer greater variety, affordability, interactivity, and enjoyment. Scienjoy’s platforms compete against these other forms of entertainment for discretionary time and spending of its users. If Scienjoy is unable to sustain sufficient interest of users in its platforms in comparison to other forms of entertainment, including new forms of entertainment that may emerge in the future, its business model may no longer be viable.

Scienjoy may fail to expand its business into overseas markets successfully.

Scienjoy’s business objective includes expanding its business into overseas markets in Southeast Asia, the Middle East and South America. As Scienjoy continues to expand its international footprint, it will be increasingly susceptible to the risks associated with international operations. Scienjoy has a limited operating history outside of China and the ability to manage its international operations successfully requires significant resources and management attention and is subject to particular challenges of supporting a rapidly growing business in an environment of diverse cultures, languages, customs, legal systems, alternative dispute systems and economic, political and regulatory systems. In addition, Scienjoy expects to incur significant costs associated with expanding its international operations, including hiring personnel internationally. The risks and challenges associated with doing business internationally and its international expansion include:

Scienjoy’s business depends on a strong brand, and any failure to maintain, protect, and enhance its brand would hurt its ability to retain or expand its user base, or its ability to increase their level of engagement.

Scienjoy operates three platforms under the brands “Showself” (秀色直播),“Lehai”(乐嗨) and “Haixiu” (嗨秀). Scienjoy’s business and financial performance is highly dependent on the strength and the market perception of its brands and services. A well-recognized brand is critical to increasing Scienjoy’s user base and, in turn, facilitating its efforts to monetize its services and enhancing its attractiveness to users. From time to time, Scienjoy conducts marketing activities across various media to enhance its brand image and to guide public perception of its brands and services. In order to create and maintain brand awareness and brand loyalty, to influence public perception and to retain existing and attract new mobile users, customers and platform partners, Scienjoy may need to substantially increase its marketing expenditures. Since Scienjoy operates in a highly competitive market, brand maintenance and enhancement directly affect its ability to maintain its market position. In addition, Scienjoy must exercise strict quality control of its platforms to ensure that its brand image is not tarnished by substandard products or services. Any misuse of Scienjoy’s platforms and any governmental adverse actions against Scienjoy’s platforms may harm its brand and reputation.

Scienjoy must also find ways to distinguish its platforms from those of its competitors. If for any reason Scienjoy is unable to maintain and enhance its brand recognition, or if Scienjoy incurs excessive expenses in this effort, its business, results of operations, and prospects may be materially and adversely affected.

Scienjoy’s core values of focusing on user experience and user satisfaction first and acting for the long-term may conflict with the short-term operating results of its business.

At this time Scienjoy is mainly focusing on user experience and satisfaction, which Scienjoy believes is essential to its success and serves the best, long-term interests of its company and its shareholders. Scienjoy may adopt strategies that Scienjoy thinks will benefit its users, even if such strategies may negatively impact its operating results in the short-term. Scienjoy believes that a high quality user experience on its platforms helps Scienjoy expand and maintain its current user base and create better monetizing potential in the long-term.

If Scienjoy fails to obtain or maintain the required licenses and approvals or if Scienjoy fails to comply with laws and regulations applicable to its industry, Scienjoy’s business, results of operations, and financial condition may be materially and adversely affected.

In order to conduct and develop business in China, Scienjoy has obtained the following valid licenses through its PRC variable interest entities: ICP License for provision of Internet information services, Internet Culture Operation License for online performance and music, entertainment and game product provision, Commercial Performance License for providing streamer agency services and License for producing radio and television program.

However, the Internet industry is highly regulated in China. Due to the uncertainties of interpretation and implementation of existing and future laws and regulations, the licenses Scienjoy currently holds may be deemed insufficient by governmental authorities. In addition, as all licenses are subject to periodic renewal, even though Scienjoy has successfully renewed such licenses in the past, there is no guarantee that Scienjoy will be able to continue to do so in the future. These uncertainties may in the future restrain Scienjoy’s ability to expand its business scope and may subject Scienjoy to fines or other regulatory actions by relevant regulators if its practice is deemed as violating relevant laws and regulations. As Scienjoy develops and expands its business scope, Scienjoy may need to obtain additional qualifications, permits, approvals, or licenses. Moreover, Scienjoy may be required to obtain additional licenses or approvals if the PRC government adopts more stringent policies or regulations for its industry. If Scienjoy fails to obtain, hold, or maintain any of the required licenses or permits or fails to make the necessary filings on time or at all, Scienjoy may be subject to various penalties, such as confiscation of the net revenues that have been generated through the deemed unlicensed activities, the imposition of fines, and the discontinuation or restriction of its operations. Any such penalties may disrupt Scienjoy’s operations and materially and adversely affect its results of operations and financial condition. 

Scienjoy may be subject to intellectual property infringement claims or other allegations by third parties for information or content displayed on, retrieved from or linked to its platforms, or distributed to its users, or for proprietary information appropriated by former employees, which may materially and adversely affect Scienjoy’s business, financial condition, and prospects.

Companies in the Internet, technology, and media industries are frequently involved in intellectual property infringement litigation. In China, the validity, enforceability, and scope of protection of intellectual property rights in Internet-related industries, especially in the evolving live streaming industry, are uncertain. Scienjoy has been and may in the future be subject to intellectual property infringement claims or other allegations by third parties for information or content displayed on, retrieved from or linked to, recorded, stored or make accessible on its platforms, or otherwise distributed to its users, including in connection with the music, movies, video and games played, recorded or make accessible on its platforms during streaming. For example, Scienjoy faces, from time to time, allegations that Scienjoy has featured pirated or illegally downloaded music and movies on its platforms, and that Scienjoy has infringed on the trademarks and copyrights of third parties, including its competitors, or allegations that Scienjoy is involved in unfair trade practices. As Scienjoy faces increasing competition and as litigation becomes a more common method for resolving commercial disputes in China, Scienjoy faces a higher risk of being the subject of intellectual property infringement claims or other legal proceedings.

Scienjoy permits broadcasters to upload text and graphics to its platforms and permits users to share them. Scienjoy platforms also permit broadcasters or users to choose their username and profile photo. Under relevant PRC laws and regulations, online service providers, which provide storage space for users to upload content or links to other services or content, could be held liable for copyright infringement under various circumstances, including situations where the online service provider knows or should reasonably have known that the relevant content uploaded or linked to on its platforms infringes upon the copyright of others and the online service provider failed to take necessary actions to prevent such infringement.

Scienjoy has implemented internal control measures to ensure that the design of its platforms and the content that is streamed on its platforms does not infringe on valid intellectual properties, such as patents and copyrights held by third parties. Scienjoy also licenses certain intellectual properties from third parties to implement certain functions available on its platforms.

Some of Scienjoy’s employees were previously employed at other competing companies, including Scienjoy’s current and potential competitors. To the extent that these employees are involved in the development of content or technology similar to that of Scienjoy at their former employers, Scienjoy may become subject to claims that such employees or Scienjoy may have appropriated proprietary information or intellectual properties of the former employers of its employees. If Scienjoy fails to successfully defend such claims, its results of operations may be materially and adversely affected.

Defending claims is costly and can impose a significant burden on its management and employees, and there can be no assurances that favorable final outcomes will be obtained in all cases. Such claims, even if they do not result in liability, may harm Scienjoy’s reputation. Any resulting liability or expenses, or changes required to its platforms to reduce the risk of future liability, may have a material adverse effect on Scienjoy’s business, financial condition, and prospects.

Unauthorized use of Scienjoy’s intellectual property and the expenses incurred in protecting its intellectual property rights may materially and adversely affect Scienjoy’s business.

Scienjoy considers its copyrights, trademarks, and other intellectual properties to be critical to its success, and relies on a combination of trademark and copyright laws, trade secrets protection, restrictions on disclosure and other agreements that restrict the use of its intellectual property to protect these rights. Although Scienjoy enters into confidentiality agreements and intellectual property ownership agreements with its employees, these confidentiality agreements could be breached and Scienjoy might not have adequate remedies for any breach. As a result, Scienjoy’s proprietary technology, know-how or other intellectual property could otherwise become known to third parties. In addition, third parties may independently discover trade secrets and proprietary information, limiting Scienjoy’s ability to assert any trade secret rights against such parties.

The measures Scienjoy uses to protect its proprietary rights may not be adequate to prevent the infringement or misappropriation of its intellectual property. In addition, Scienjoy cannot assure you that any of its trademark applications will ultimately proceed to registration or will result in registration with adequate scope for its business. Some of Scienjoy’s pending applications or registrations may be successfully challenged or invalidated by others. If its trademark applications are not successful, Scienjoy may have to use different marks for affected products or services, or seek to enter into arrangements with any third parties who may have prior registrations, applications, or rights, which might not be available on commercially reasonable terms, if at all.

Enforcement of intellectual property laws in China has historically been lacking, primarily because of ambiguities in the laws and difficulties in enforcement. Accordingly, intellectual property rights protection in China may not be as effective as in other jurisdictions with a more developed legal framework regulating intellectual property rights. Policing unauthorized use of Scienjoy’s proprietary technology, trademarks, and other intellectual property is difficult and expensive, and litigation may be necessary in the future to enforce its intellectual property rights. Future litigation could result in substantial costs and diversion of its resources, and could disrupt its business, as well as materially adversely affect its results of operations and financial condition.

Some of Scienjoy’s products and services contain open source software, which may pose a particular risk to Scienjoy’s proprietary software, products, and services in a manner that negatively affects its business.

Scienjoy uses open source software in some of its products and services and will continue to use open source software in the future. There is a risk that open source software licenses could be construed in a manner that imposes unanticipated conditions or restrictions on Scienjoy’s ability to provide or distribute its products or services. Additionally, Scienjoy may face claims from third parties claiming ownership of, or demanding release of, the open source software or derivative works that Scienjoy developed using such software. These claims could result in litigation and could require Scienjoy to make its software source code freely available, purchase a costly license, or cease offering the implicated products or services unless and until Scienjoy can re-engineer them to avoid infringement. This re-engineering process could require significant additional research and development resources, and Scienjoy may not be able to complete it successfully.

Furthermore, because any software source code Scienjoy contributes to open source projects is publicly available, Scienjoy’s ability to protect its intellectual property rights with respect to such software source code may be limited or lost entirely. As a result, Scienjoy may be unable to prevent its competitors or others from using such software source code contributed by Scienjoy.

Scienjoy’s content monitoring system may not be effective in preventing misconduct by its users and misuse of its platforms.

Scienjoy operates entertainment live streaming platforms that provide real-time streaming and interactions. Because Scienjoy does not have full control over how and what broadcasters or viewers will use its platforms to communicate, Scienjoy’s platforms may be misused by individuals or groups of individuals to engage in immoral, disrespectful, fraudulent or illegal activities. Scienjoy has implemented control procedures to detect and block illegal or inappropriate content and illegal or fraudulent activities conducted through the misuse of its platforms, but such procedures may not prevent all such content from being broadcasted or posted or activities from being carried out. Moreover, real time streaming renders it harder for Scienjoy to filter illegal or inappropriate speeches, conduct, and behavior from its platforms prior to airing. As a result, Scienjoy may face civil lawsuits or other actions initiated by the affected viewer, or governmental or regulatory actions against Scienjoy. In response to allegations of illegal or inappropriate activities conducted through Scienjoy’s platforms, PRC government authorities may intervene and hold Scienjoy liable for non-compliance with PRC laws and regulations concerning the dissemination of information on the Internet and subject Scienjoy to administrative penalties or other sanctions, such as requiring Scienjoy to restrict or discontinue some of the features and services provided on its websites and mobile applications, or even revoke its licenses or permits to provide Internet content services. Scienjoy endeavors to ensure all broadcasters are in compliance with relevant regulations, but Scienjoy cannot guarantee that all broadcasters will comply with all PRC laws and regulations. Therefore, Scienjoy’s live streaming service may be subject to investigations or subsequent penalties if content displayed on its platforms is deemed to be illegal or inappropriate under PRC laws and regulations.

As of the date of this proxy statement, Scienjoy’s platform “Showself” (秀色直播) has, since its operation commencement in 2014, received 5 administrative penalties from Beijing Cultural Market Administrative Enforcement Department, all of which are minor penalties of fine, for the inappropriate conducts of broadcasters. The other two platforms of Scienjoy, “Haixiu” (嗨秀秀场) and “Lehai” (乐嗨秀场), received 1 and 2 administrative penalties, respectively, from the same Department for the same reason. All above mentioned defects have been timely remedied by the platforms and all remedial measures have been reported to the Department for its review and approval.

Scienjoy may be held liable for information or content displayed on, retrieved from or linked to its platforms, or distributed to its users if such content is deemed to violate any PRC laws or regulations, and PRC authorities may impose legal sanctions on Scienjoy.

Scienjoy’s users are able to exchange information, generate content and engage in various other online activities on Scienjoy’s live streaming platforms. Scienjoy requires its broadcasters and users to agree to its terms of use upon account registration. The terms of use set out types of content strictly prohibited on Scienjoy’s platforms. However, signing the terms of use does not guarantee the broadcasters and users will comply with these terms.

In addition, because a majority of the video and audio communications on Scienjoy’s platforms is conducted in real time, the content generated by Scienjoy’s broadcasters and users on air cannot be filtered before they are streamed on Scienjoy’s platforms. Therefore, users may engage in illegal conversations or activities, including the publishing of inappropriate or illegal content on its platforms that may be unlawful under PRC laws and regulations.

Although Scienjoy has also developed a robust content monitoring system and uses its best efforts to monitor content on its platforms, Scienjoy cannot detect every incident of inappropriate content on its platforms due to the immense quantity of user-generated content. As such, government authorities may hold Scienjoy liable for inappropriate or illegal content on its platforms and may subject Scienjoy to fines or other disciplinary actions, including in serious cases suspension or revocation of the licenses necessary to operate its platforms, if Scienjoy is deemed to have facilitated the appearance of inappropriate content placed by third parties on its platforms under PRC laws and regulations.

Application stores may temporarily take down Scienjoy’s applications if the content were deemed to violate relevant PRC laws or regulations.

Meanwhile, Scienjoy may face claims for defamation, libel, negligence, copyright, patent or trademark infringement, other unlawful activities or other theories and claims based on the nature and content of the information delivered on or otherwise accessed through its platforms. Defending any such actions could be costly and require significant time and attention of the management and other resources, which would materially and adversely affect its business.

The complexity, uncertainties, and changes in PRC regulation of the Internet industry and companies may materially and adversely affect Scienjoy’s business and financial condition.

The Internet industry is highly regulated in China, including foreign ownership of, and the licensing and permit requirements pertaining to, companies in the Internet industry. These Internet-related laws and regulations are relatively new and evolving, and their interpretation and enforcement involve significant uncertainty. As a result, sometimes it may be difficult to evaluate the legal risks involved in certain actions or omissions. Issues, risks, and uncertainties relating to PRC regulation of the Internet business include, but are not limited to, the following:

Increases in the costs of content on Scienjoy’s platforms may have an adverse effect on its business, results of operations, and financial condition.

To maintain and increase user base and user paying ratio, Scienjoy must continue offering attractive and engaging content on its platforms. Scienjoy provides such content mainly through its broadcasters. In order to attract and retain top broadcasters, Scienjoy needs to have an attractive revenue sharing policy and provide marketing resources to support them. If competitor platforms offer higher compensation, costs for Scienjoy to retain its broadcasters may increase. As Scienjoy’s business and user base further expand, Scienjoy also needs to continue updating and producing content and activities to meet the more diversified interest of a larger user group. Scienjoy also needs to innovate the content on its platforms to capture and follow the market trends, resulting in higher costs of the contents on its platforms. If Scienjoy is not able to continue to retain its broadcasters and produce high quality content on its platforms at commercially acceptable costs, its business, financial condition, and results of operations would be adversely impacted.

Scienjoy’s failure to anticipate or successfully implement new technologies could render its proprietary technologies or platforms unattractive or obsolete, and reduce its revenues and market share.

Scienjoy’s technological capabilities and infrastructure underlying its live streaming platforms are critical to its success. The Internet industry is subject to rapid technological changes and innovation. Scienjoy needs to anticipate the emergence of new technologies and assess their market acceptance. Scienjoy also needs to invest significant resources, including financial resources, in research and development to keep pace with technological advances in order to make its development capabilities, its platforms and its services competitive in the market. However, development activities are inherently uncertain, and Scienjoy might encounter practical difficulties in commercializing its development results. Scienjoy’s significant expenditures on research and development may not generate corresponding benefits. Given the fast pace with which the Internet technology has been and will continue to be developed, Scienjoy may not be able to timely upgrade its streaming technology, its engines or the software framework for its platforms’ development in an efficient and cost-effective manner, or at all. New technologies in programming or operations could render its technologies, its platforms or products or services that Scienjoy is developing or expects to develop in the future obsolete or unattractive, thereby limiting its ability to recover related product development costs, outsourcing costs and licensing fees, which could result in a decline in its revenues and market share.

The proper functioning of Scienjoy’s platforms is essential to its business. Any disruption to Scienjoy’s IT systems could materially affect its ability to maintain the satisfactory performance of its platforms.

Disruptive and malfunctioned platforms will drive away frustrated users of Scienjoy and reduce Scienjoy’s user base. Smooth and proper functioning of Scienjoy’s platforms relies on Scienjoy’s IT systems. However, Scienjoy’s technology or infrastructure may not function properly at all times. Any system interruptions caused by telecommunications failures, computer viruses, hacking or other attempts to harm Scienjoy’s systems could result in the unavailability or slowdown of Scienjoy’s platforms and limit the attractiveness of content provided on its platforms. Scienjoy’s servers may also be vulnerable to computer viruses, physical or electronic break-ins and similar disruptions, which could lead to system interruptions, website or mobile app slowdown or unavailability or loss of data. Any of such occurrences could cause severe disruption to Scienjoy’s daily operations. As a result, Scienjoy’s business and results of operations may be materially and adversely affected and its market share could decline.

Any compromise to the cyber security of Scienjoy’s platforms could materially and adversely affect its business, reputation, and results of operations.

On November 7, 2016, the Standing Committee of the National People’s Congress released the PRC Cyber Security Law, which took effect on June 1, 2017. The PRC Cyber Security Law requires network operators to fulfill certain obligations to safeguard security in the cyberspace and enhance network information management.

Scienjoy’s products and services are generally provided through the Internet and involve the storage and transmission of users’ information. Any security breach would expose Scienjoy to a risk of loss of information and result in litigation and potential liability. As the techniques used to obtain unauthorized access, disable or degrade Internet services or sabotage operating systems change frequently and often are not recognized until launched against a target, Scienjoy may not be able to anticipate such techniques or implement adequate preventative measures. Upon a security breach, Scienjoy’s technical team will be notified immediately and coordinate with the local support staff to diagnose and solve the technical problems. As of the date of this statement, Scienjoy has not experienced any material incidents of security breach.

Despite the security measures Scienjoy has implemented, its facilities, systems, procedures, and those of its third-party providers, may be vulnerable to security breaches, act of vandalism, software viruses, misplaced or lost data, programming or human errors or other similar events which may disrupt its delivery of services or expose the confidential information of its users and others. If an actual or perceived breach of its security occurs, the market perception of the effectiveness of its security measures could be harmed, and Scienjoy may lose current and potential users and be exposed to legal and financial risks, including legal claims, regulatory fines and penalties, which in turn could adversely affect its business, reputation, and results of operations.

Concerns about the collection, use, and disclosure of personal data and other privacy-related and security matters could deter customers and users from using Scienjoy’s services and adversely affect its reputation and business.

Concerns about Scienjoy’s practices with regard to the collection, use, or disclosure of personal information or other privacy-related and security matters, even if unfounded, could damage its reputation and operations. The PRC Constitution, the PRC Criminal Law, the General Principles of the PRC Civil Law and the PRC Cyber Security Law protect individual privacy in general, which require certain authorization or consent from Internet users prior to collection, use, or disclosure of their personal data and also protection of the security of the personal data of such users. In particular, Amendment 7 to the PRC Criminal Law prohibits institutions, companies, and their employees in the telecommunications and other industries from selling or otherwise illegally disclosing a citizen’s personal information obtained during the course of performing duties or providing services. Scienjoy’s internal policy requires its employees to protect the personal data of its users, and employees who violate such policy are subject to disciplinary actions, including dismissal. While Scienjoy strives to comply with all applicable data protection laws and regulations, as well as its own privacy policies, any failure or perceived failure to comply may result in proceedings or actions against Scienjoy by government entities or private individuals, which could have an adverse effect on its business. Moreover, failure or perceived failure to comply with applicable laws and regulations related to the collection, use, or sharing of personal information or other privacy-related and security matters could result in a loss of confidence in Scienjoy by customers and users, which could adversely affect its business, results of operations and financial condition.

Scienjoy’s operations depend on the performance of the Internet infrastructure and fixed telecommunications networks in China, which may experience unexpected system failure, interruption, inadequacy, or security breaches.

Almost all access to the Internet in China is maintained through state-owned telecommunication operators under the administrative control and regulatory supervision of the Ministry of Industry and Information Technology, or the MIIT. Moreover, Scienjoy primarily relies on a limited number of telecommunication service providers to provide Scienjoy with data communications capacity through local telecommunications lines and Internet data centers to host its servers. Scienjoy has limited access to alternative networks or services in the event of disruptions, failures or other problems with China’s Internet infrastructure or the fixed telecommunications networks provided by telecommunication service providers. Web traffic in China has experienced significant growth during the past few years. Effective bandwidth and server storage at Internet data centers in large cities such as Beijing are scarce. With the expansion of its business, Scienjoy may be required to upgrade its technology and infrastructure to keep up with the increasing traffic on its platforms. Scienjoy cannot assure you that the Internet infrastructure and the fixed telecommunications networks in China can support the demands associated with the continued growth in Internet usage. If Scienjoy cannot increase its capacity to deliver its online services, Scienjoy may not be able to satisfy the increases in traffic Scienjoy anticipates from its expanding user base, and the adoption of its services may be hindered, which could adversely impact its business and profitability.

In addition, Scienjoy has no control over the costs of the services provided by telecommunication service providers. If the prices Scienjoy pays for telecommunications and Internet services rise significantly, its results of operations may be materially and adversely affected. Furthermore, if Internet access fees or other charges to Internet users increase, some users may be prevented from accessing the mobile Internet and thus cause the growth of mobile Internet users to decelerate. Such deceleration may adversely affect Scienjoy’s ability to continue to expand its user base.

Scienjoy uses third-party services and technologies in connection with its business, and any disruption to the provision of these services and technologies to Scienjoy could result in adverse publicity and a slowdown in the growth of its users, which could materially and adversely affect its business, results of operations, and financial condition.

Scienjoy’s business depends upon services and software provided by third parties. For example, Scienjoy’s user data is encrypted and saved on the storage cloud provided by a third-party cloud services company. Scienjoy is relying on the security measures of such third party cloud services company for data protection, and its disaster recovery system to minimize the possibility of data loss or breach ability. If such third-party cloud services company has a system disruption and is not able to recover quickly, Scienjoy’s business and operations may be adversely affected.

Scienjoy’s overall network relies on broadband connections provided by third-party operators and Scienjoy expects this dependence on third parties to continue. The networks maintained and services provided by such third parties are vulnerable to damage or interruption, which could impact Scienjoy’s results of operations. See “—Scienjoy’s operations depend on the performance of the Internet infrastructure and fixed telecommunications networks in China, which may experience unexpected system failure, interruption, inadequacy or security breaches.”

Scienjoy also sells a significant portion of its products and services through third-party online payment systems. If any of these third-party online payment systems suffers security breaches, users may lose confidence in such payment systems and refrain from purchasing Scienjoy’s virtual gifts online, in which case its results of operations would be negatively impacted.

Scienjoy exercises no control over the third parties with whom Scienjoy has business arrangements. For some of services and technologies such as online payment systems, Scienjoy relies on a limited number of third-party providers with limited access to alternative networks or services in the event of disruptions, failures, or other problems. If such third parties increase their prices, fail to provide their services effectively, terminate their service or agreements, or discontinue their relationships with us, Scienjoy could suffer service interruptions, reduced revenues or increased costs, any of which may have a material adverse effect on its business, results of operations, and financial condition.

User growth and engagement depend upon effective interoperation with operating systems, networks, mobile devices, and standards that Scienjoy does not control.

Scienjoy offers access to its platforms across a variety of PC and mobile operating systems and devices. Scienjoy is dependent on the interoperability of its services with popular mobile devices and mobile operating systems that Scienjoy does not control, such as Windows, Android, and iOS. Any such operating systems or devices that decide to degrade the functionality of Scienjoy’s services or give preferential treatment to competitive services could adversely affect usage of Scienjoy’s services. In order to deliver high quality services, it is important that Scienjoy’s services work well across a range of mobile operating systems, networks, mobile devices, and standards that Scienjoy does not control. Scienjoy may not be successful in developing relationships with key participants in the mobile industry or in developing services that operate effectively with these operating systems, networks, devices and standards. Any difficulties for users and broadcasters in accessing and using Scienjoy’s platforms would harm Scienjoy’s user growth and user engagement and in turn would adversely affect Scienjoy’s results of operations and financial condition.

Scienjoy relies on its mobile application and PC application to provide services to its users and broadcasters which, if inaccessible, may have material adverse impact on its business and results of operations.

Scienjoy relies on third-party mobile application and PC application distribution channels such as Apple’s App Store, various Android application stores, and websites to distribute its applications to users and broadcasters. Scienjoy expects a substantial number of downloads of its mobile applications and PC applications will continue to be derived from these distribution channels. The promotion, distribution, and operation of Scienjoy’s applications are subject to such distribution platforms’ standard terms and policies for application developers, and such distribution channels have discretion to determine whether Scienjoy complies with their terms and policies. If any of such distribution channels determines to take down Scienjoy’s applications or terminate its relationship with Scienjoy, Scienjoy’s business, results of operations, and financial condition may be materially and adversely affected.

On August 28, 2019, Scienjoy’s App “Showself” (秀色直播) was removed from Apple’s App Store by Apple Inc.(“Apple”). In an email of the same date, Apple alleged that Scienjoy had violated the Apple Developer Program License Agreement and Apple terminated Scienjoy’s status as an Apple developer as well as the Apple Developer Agreement itself. No factual explanation was provided in Apple’s email for the alleged violation. Scienjoy has been actively reaching out to Apple to resolve this issue but no further explanation has been provided by Apple yet. Scienjoy’s App “Showself” (秀色直播) is still in suspension as of the date of this Proxy Statement. The incident had caused Scienjoy significant decrease in the number of downloads of its App “Showself” (秀色直播). Based on the statistics and data for the four (4) months since the removal date until December 31, 2019, without taking into consideration of any other factors that may affect Scienjoy’s operations and solely as a result of this suspension, the annualized decrease of Scienjoy’s number of users is estimated to be approximately between 2% and 3% and the annualized decrease of revenue is estimated to be approximately 10%. Scienjoy cannot guarantee that additional apps will not be taken down from Apple or other third-party distribution channels in the future, which may disrupt Scienjoy’s operations and have a material adverse effect on its business and results of operations.

Continuing efforts of Scienjoy’s executive officers, key employees, and qualified personnel are essential to Scienjoy’s business and the loss of their services may adversely and negatively impact Scienjoy’s business and results of operations.

Scienjoy’s future success depends substantially on the continued efforts of its executive officers and key employees. If one or more of its executive officers or key employees were unable or unwilling to continue their services with Scienjoy, Scienjoy might not be able to replace them easily, in a timely manner, or at all. Since live streaming industry is characterized by high demand and intense competition for talent, Scienjoy cannot assure you that Scienjoy will be able to attract or retain qualified staffs or other highly skilled employees. In addition, as Scienjoy is relatively young, its ability to train and integrate new employees into its operations may not meet the growing demands of its business, which may materially and adversely affect its ability to grow its business and hence its results of operations.

If any of its executive officers or key employees joins a competitor or forms a competing company, Scienjoy may lose users, know-how and key professionals and staff members. Each of its executive officers and key employees has entered into an employment agreement and a non-compete agreement with Scienjoy. However, certain provisions under the non-compete agreement may be deemed invalid or unenforceable under PRC law. If any dispute arises between its executive officers and key employees and Scienjoy, Scienjoy cannot assure you that Scienjoy would be able to enforce these non-compete agreements in China, where these executive officers reside, in light of uncertainties with China’s legal system.

Scienjoy is subject to risks relating to litigation.

Scienjoy has been involved in and may be subject to litigation and claims of various types, including litigation alleging infringement of intellectual property rights and unfair competition, claims and disputes involving broadcasters, customers, its employees and suppliers. Litigation is expensive, subjects Scienjoy to the risk of significant damages, requires significant management time and attention and could have a material and adverse effect on Scienjoy’s business, results of operations, and financial condition.

Scienjoy was once sued by another company alleging that Scienjoy’s promotion team had used such company’s brand name as a keyword in a search engine promotion scheme for Scienjoy’s three platforms “Showself” (秀色直播), “Lehai” (乐嗨秀场), and “Haixiu” (嗨秀秀场). Scienjoy and the alleging company reached a settlement agreement that Scienjoy would buy the alleging company’s technical service for a price of RMB 600,000 (roughly USD 83,934). Moreover, in a separate lawsuit, Scienjoy’s platform “Lehai” (乐嗨秀场) was sued for unfair competition. The judge hasn’t made a decision in this lawsuit as of the date of this proxy statement. Scienjoy may also face litigations and claims in the future, which may require substantial management efforts and skills and significant additional expenditures, and which could adversely affect its business, results of operations, and financial condition.

Scienjoy may be the subject of allegations, harassing, or other detrimental conduct by third parties, which could harm its reputation and cause it to lose market share, users, and customers.

Scienjoy has been subject to allegations by third parties, negative Internet postings and other adverse public exposure on its business, operations and staff compensation. Scienjoy may also become the target of harassment or other detrimental conduct by third parties or disgruntled former or current employees. Such conduct may include complaints, anonymous or otherwise, to regulatory agencies, media or other organizations. Scienjoy may be subject to government or regulatory investigation or other proceedings as a result of such third-party conduct and may be required to spend significant time and incur substantial costs to address such third-party conduct, and there is no assurance that Scienjoy will be able to conclusively refute each of the allegations within a reasonable period of time or at a commercially reasonable cost, or at all. Additionally, allegations, directly or indirectly against Scienjoy, may be posted on the Internet, including social media platforms by anyone, whether or not related to Scienjoy, on an anonymous basis. Any negative publicity on Scienjoy or its management can be quickly and widely disseminated. Social media platforms and devices immediately publish the content of their subscribers and participants post, often without filters or checks on the accuracy of the content posted. Information posted may be inaccurate and adverse to Scienjoy, and it may harm Scienjoy’s reputation, business or prospects. The harm may be immediate without affording Scienjoy an opportunity for redress or correction. Scienjoy’s reputation may be negatively affected as a result of the public dissemination of negative and potentially false information about its business and operations, which in turn may cause Scienjoy to lose market share, users or customers.

Negative publicity may materially and adversely affect Scienjoy’s brand, reputation, business, and growth prospects.

Negative publicity involving Scienjoy, its broadcasters, its users, its management, its live streaming platforms, or its business model may materially and adversely harm Scienjoy’s brand and its business. Scienjoy cannot assure you that Scienjoy will be able to defuse negative publicity about Scienjoy, its management and/or its services to the satisfaction of its investors, users and broadcasters, customers and platform partners. There has been negative publicity about Scienjoy and the misuse of its services, which has adversely affected its brand, public image, and reputation. Such negative publicity, especially when it is directly addressed against Scienjoy, may also require Scienjoy to engage in defensive media campaigns. This may cause Scienjoy to increase its marketing expenses and divert its management’s attention and may adversely impact its business and results of operations.

Contractual disputes with Scienjoy’s talent agencies may harm its reputation, and may be costly or time-consuming to resolve.

Scienjoy enters into contractual arrangements with talent agencies. Pursuant to these contracts, talent agencies are responsible for recruiting and training broadcasters and providing content for Scienjoy’s platforms. Scienjoy shares with the talent agencies a certain percentage of the revenue generated by the broadcasters they manage. Talent agencies will in turn enter into compensation arrangement with the broadcasters they manage. From time to time, there may be contractual disputes between broadcasters and talent agencies, and/or between talent agencies and Scienjoy. Any such disputes may not only be costly and time-consuming to solve, but may also be detrimental to the quality of the content produced by the broadcasters, or even causing broadcasters to leave Scienjoy’s platforms.

Scienjoy enters into exclusivity agreements with certain of its top broadcasters, pursuant to which such top broadcasters agree not to work for other live streaming platforms in exchange for additional support and resources from Scienjoy. Although these top broadcasters are required to pay a certain amount of fees if they breach the exclusivity agreements, Scienjoy cannot guarantee that such exclusivity agreements will be an effective measure to deter these top broadcasters from leaving Scienjoy’s platforms.

Key performance metrics used by Scienjoy, such as QAUs, paying users, ARPPU and paying ratio, may overstate the number of active and paying users that Scienjoy has, which may lead to an inaccurate interpretation of Scienjoy’s revenue metrics and its business operations by Scienjoy’s management and by investors, and may even misleadingly affect management’s business judgment of Scienjoy’s operations.

For performance tracking purposes, Scienjoy monitors metrics such as the number of registered user accounts, active users, and paying users. Scienjoy calculates certain operating metrics in the following ways: (a) the number of registered users, which refers to the number of users that has registered and logged onto its platforms at least once since registration; (b) the number of active users, which refers to the number of users that has visited its platforms through PC or mobile app at least once in a given period; (c) the number of paying users, which refers to the number of users that has purchased virtual currencies on its platforms at least once in a given period. The actual number of individual users, however, is likely to be lower than that of registered users, active users, and paying users potentially significantly, due to various reasons such as fraudulent representation or improper registration. Some of the user accounts may also be created for specific purposes such as to increase virtual gifting for certain performers in various contests, but the number of registered users, active users, and paying users do not exclude user accounts created for such purposes. Scienjoy has limited ability to validate or confirm the accuracy of information provided during the user registration process to ascertain whether a new user account created was actually created by an existing user who is registering duplicative accounts. The respective number of its registered users, active users, and paying users may overstate the number of individuals who register on Scienjoy’s platforms, sign onto its platforms, purchase virtual gifts or other products and services on its platforms, which may lead to an inaccurate interpretation of its operating metrics. Additionally, a user needs to register a separate account for each Scienjoy’s platform to access such platform. When calculating the total numbers of MAUs and QAUS of Scienjoy as a whole, a user with multiple accounts with Scienjoy may be counted more than once and such numbers may be higher than the actual numbers of users. Additionally, Scienjoy is able to measure unique users only to the extent that these users are registered using the same identification method. Since Scienjoy allows a user to register an account on Scienjoy’s platforms with the user’s mobile number, Wechat account or QQ account, Scienjoy’s ability to identify unique users is limited.  

If the tracked growth in the number of its registered users, active users, and paying users is higher than the actual growth in the number of individuals registered, active, or paying users, its user engagement level, sales, and business may not grow as quickly as Scienjoy expects. In addition, such overstatement may cause inaccurate evaluation of Scienjoy’s operations by Scienjoy’s management and by investors, which may also materially and adversely affect its business and results of operations.

The security of operations of, and fees charged by, third-party online payment platforms may have a material adverse effect on Scienjoy’s business and results of operations.

Currently, Scienjoy uses third-party online payment platforms, such as China UnionPay, WeChat Pay, and Alipay, to receive a large part of the cash proceeds from sales of its products and services through direct purchases on Scienjoy’s platforms. Any scheduled or unscheduled interruption in the ability of Scienjoy’s users to use these and other online payment platforms could adversely affect Scienjoy’s payment collection, and in turn, its revenue. In addition, in online payment transactions, secure transmission of user information, such as debit and credit card numbers and expiration dates, personal information and billing addresses, over public networks, is essential to user privacy protection and maintaining their confidence in Scienjoy’s platforms.

Scienjoy does not have control over the security measures of its third-party payment platforms, and their security measures may not be adequate at present or may not be adequate with the expected increased usage of online payment platforms. Scienjoy could be exposed to litigation and possible liability if online transaction safety of its users is compromised in transactions involving payments for its products and services, which could harm Scienjoy’s reputation and its ability to attract users and may materially adversely affect its business. Scienjoy also relies on the stability of such payment transmissions to ensure the continued payment services provided to its users. If any of these third-party online payment platforms fails to process or ensure the security of users’ payments for any reason, Scienjoy’s reputation will be damaged and Scienjoy may lose its paying users and discourage the potential purchases, which in turn, will materially and adversely affect its business, financial condition, and prospects.

Scienjoy’s users may suffer third-party fraud when purchasing Scienjoy’s virtual currency and Scienjoy may suffer fraud when selling virtual currency to users.

Scienjoy offers its users multiple options to purchase its virtual currency. Users can purchase these virtual currencies directly on web streaming portal, make in-app purchases using third-party payment channels including China Union Pay, WeChat pay, Alipay and Apple’s App Store. Users can also purchase virtual currencies through third-party sales agencies officially authorized by Scienjoy. Other than the above-mentioned purchase channels, there are no other means to purchase Scienjoy’s virtual currency. However, from time to time, certain third parties fraudulently claim that they are sales agencies authorized by Scienjoy and users can purchase Scienjoy’s virtual currency through them. If Scienjoy’s users choose to purchase Scienjoy’s virtual currency from such unauthorized third parties, they may suffer losses from such fraudulent activities by third parties. Although Scienjoy is not directly responsible for the losses in such case, its user experience may be adversely affected and users may choose to leave Scienjoy’s platforms as a result. Such fraudulent activities by third parties might also generate negative publicity, disputes, or even legal claims. The measures Scienjoy takes in response to such negative publicity, disputes, or legal claims may be expensive, time consuming, and disruptive to its operations and divert its management’s attention. Additionally, there is a risk that even Scienjoy’s duly authorized third-party sales agencies may fail to deliver virtual currencies to users after users make payment. In this case, Scienjoy is responsible to deliver such virtual currencies to users. Scienjoy may in turn demand payment from the authorized third-party sale agencies but there is no guarantee that Scienjoy may recover the full payment.

Restrictions on virtual currency may adversely affect Scienjoy’s revenues.

Due to the relatively short history of virtual currencies in China, the regulatory framework governing the industry is still under development. On June 4, 2009, the Ministry of Culture and the Ministry of Commerce jointly issued Notice on the Strengthening of the Administration of Online Game Virtual Currency (the “Virtual Currency Notice”), which defines what a virtual currency is and requires that entities obtain the approval from the competent culture administrative department before issuing virtual currency and engaging in transactions using virtual currencies in connection with online games. The Virtual Currency Notice regulates that virtual currency may only be used to purchase services and products provided by the online service provider that issues the virtual currency, and also prohibits businesses that issue online game virtual currency from issuing virtual currency to game players through means other than purchases with legal currency, and from setting game features that involve the direct payment of cash or virtual currency by players for the chance to win virtual gifts or virtual currency based on random selection through a lucky draw, wager, or lottery. These restrictions on virtual currency may result in lower sales of online virtual currency.

Currently, the PRC government has not promulgated any specific rules, laws, or regulations to directly regulate virtual currencies, except for the above-mentioned Virtual Currency Notice. Although the term “virtual currency” is widely used in live streaming industry, Scienjoy believes that the “virtual currency” used in its live streaming communities does not fall into a “virtual currency” as defined under the Virtual Currency Notice, and Scienjoy is not subject to any online game virtual currency laws or regulations for its live streaming business. Scienjoy has obtained the approval from the competent culture administrative department for issuing a virtual currency for online games (which is set forth in the Internet Culture Operation Licenses that Scienjoy has acquired). So far, Scienjoy has not issued any virtual currency for online games as defined under the Virtual Currency Notice. However, due to the uncertainties of the interpretation and implementation of the law and regulation, Scienjoy cannot assure you that the PRC regulatory authorities will not take a different view, in which case Scienjoy may be required to obtain additional approvals or licenses or change its current business model and may be subject to fines or other penalties, which could adversely affect its business.

Scienjoy’s results of operations are subject to quarterly fluctuations due to seasonality.

Scienjoy experiences seasonality in its business, reflecting seasonal fluctuations in Internet usage. For example, the number of active users tends to be higher during the last quarter of the year while lower near Chinese New Year season. Furthermore, the number of paying users of Scienjoy’s online live streaming platforms correlate with the marketing campaigns and promotional activities Scienjoy conducts which may coincide with popular western or Chinese festivals. As a result, comparing its operating results on a period-to-period basis may not be meaningful.

Scienjoy does not currently have business insurance to cover its main assets and business. Any uninsured occurrence of business disruption, litigation, or natural disaster could expose Scienjoy to significant costs, which could have an adverse effect on its results of operations.

Scienjoy currently does not have any business liability or disruption insurance to cover its operations. Any uninsured occurrence of business disruption, litigation, or natural disaster, or significant damages to Scienjoy’s uninsured equipment or facilities could disrupt its business operations, requiring Scienjoy to incur substantial costs and divert its resources, which could have an adverse effect on its results of operations and financial condition.

If Scienjoy fails to implement and maintain an effective system of internal controls, Scienjoy may be unable to accurately report its results of operations, meet its reporting obligations or prevent fraud, and investor confidence and the market price of its shares may be materially and adversely affected.

Prior to the Business Combination, Scienjoy is a private company with limited accounting personnel and other resources to address its internal controls and procedures. Scienjoy lacks sufficient skilled staff with U.S. GAAP knowledge for the purpose of financial reporting and lacks formal accounting policies and procedures manual to ensure proper financial reporting to comply with U.S. GAAP and SEC requirements. Scienjoy cannot assure you that the measures that have been or will be adopted by Scienjoy may fully address the material weakness or other deficiencies in its internal control over financial.

Upon the completion of this Business Combination, Scienjoy will become a public company in the United States subject to the Sarbanes-Oxley Act of 2002. Section 404 of the Sarbanes-Oxley Act of 2002, or Section 404, will require that Scienjoy include a report of management on its internal control over financial reporting in its annual report beginning with its annual report for the year ending December 31, 2020. In addition, once Scienjoy ceases to be an “emerging growth company” as such term is defined in the JOBS Act, its independent registered public accounting firm must attest to and report on the effectiveness of its internal control over financial reporting. Scienjoy’s management may conclude that its internal control over financial reporting is not effective. Moreover, even if its management concludes that its internal control over financial reporting is effective, its independent registered public accounting firm, after conducting its own independent testing, may issue a report that is qualified if it is not satisfied with its internal controls or the level at which its controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from Scienjoy.

If Scienjoy fails to maintain the adequacy of its internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, Scienjoy may not be able to conclude on an ongoing basis that Scienjoy has effective internal control over financial reporting. If Scienjoy fails to achieve and maintain an effective internal control environment, Scienjoy could suffer material misstatements in its financial statements and fail to meet its reporting obligations, which would likely cause investors to lose confidence in its reported financial information. This could in turn limit Scienjoy’s access to capital markets, harm its results of operations and lead to a decline in the trading price of its shares. Additionally, ineffective internal control over financial reporting could expose Scienjoy to increased risk of fraud or misuse of corporate assets and subject it to potential delisting from the stock exchange on which Scienjoy is listed, regulatory investigations and civil or criminal sanctions. Scienjoy may also be required to restate its financial statements from prior periods.

Scienjoy expects to grant share-based awards in the future, which may have an adverse effect on its future profit.

Scienjoy expects to adopt share incentive plans that permit granting of share-based compensation to employees, directors, and consultants in the future after this Business Combination to incentivize their performance and align their interests with that of Scienjoy. As a result, its expenses associated with share-based compensation may increase, which may have an adverse effect on its results of operations.

Non-compliance on the part of Scienjoy’s employees or third parties involved in Scienjoy’s business could adversely affect its business.

Scienjoy’s compliance controls, policies, and procedures may not protect Scienjoy from acts committed by its employees, agents, contractors, or collaborators that violate the laws or regulations of the jurisdictions in which Scienjoy operates, which may adversely affect its business.

In addition, Scienjoy’s business partners or other third parties involved in its business through its business partners (such as contractors, talent agencies, or other third parties entered into business relationship with Scienjoy’s third- party business partners) may be subject to regulatory penalties or punishments because of their regulatory compliance failures, which may, directly or indirectly, disrupt Scienjoy’s business. When Scienjoy enters into a business relationship with a third party partner, Scienjoy cannot be certain whether such third party business partner has infringed or will infringe any other third parties’ legal rights or violate any regulatory requirements or rule out the likelihood of incurring any liabilities imposed on Scienjoy due to any regulatory failures by such third party business partner. In addition, for those third parties actively involved in Scienjoy’s business through Scienjoy’s business partners, Scienjoy cannot assure you that Scienjoy’s business partners will be able to supervise and administrate those third parties. The legal liabilities and regulatory actions on Scienjoy’s business partners or other third parties involved in its business may affect Scienjoy’s business activities and reputation and in turn, its results of operations.

Scienjoy may not be able to ensure compliance with United States economic sanctions laws.

The U.S. Department of the Treasury’s Office of Foreign Assets Control, or OFAC, administers laws and regulations that generally prohibit U.S. persons and, in some instances, foreign entities owned or controlled by U.S. persons, from conducting activities or transacting business with certain countries, governments, entities or individuals that are targets of U.S. economic sanctions. Scienjoy does not and will not use any of its funds for any activities or business with any country, government, entity, or individual in violation of U.S. economic sanctions.

While Scienjoy believes that Scienjoy has been, and that Scienjoy continues to be, in compliance with applicable U.S. economic sanctions, current safeguards employed by Scienjoy may fail to prevent broadcasters and users located in countries that are targets of U.S. economic sanctions from accessing Scienjoy’s platforms. Non-compliance with applicable U.S. economic sanctions could subject Scienjoy to adverse media coverage, investigations, and severe administrative, civil and possibly criminal sanctions, expenses related to remedial measures, and legal expenses, which could materially adversely affect Scienjoy’s business, results of operations, financial condition and reputation.

Spammers and malicious software and applications may affect user experience, which could reduce Scienjoy’s ability to attract users and materially and adversely affect its business, results of operations, and financial condition.

Spammers may use Scienjoy’s streaming platforms to send spam messages to users, which may affect user experience. As a result, users may reduce using Scienjoy’s products and services or stop using them altogether. In spamming activities, spammers typically create multiple user accounts for the purpose of sending a high volume of repetitive messages. Although Scienjoy attempts to identify and delete accounts created for spamming purposes, Scienjoy may not be able to effectively eliminate all spam messages from its platforms in a timely fashion. Any spamming activities could have a material and adverse effect on Scienjoy’s business, results of operations, and financial condition.

In addition, malicious software and applications may interrupt the operations of Scienjoy’s websites, Scienjoy’s PC clients or mobile apps and pass on such malware to its users which could adversely hinder user experience. Although Scienjoy has been successfully blocking these attacks in the past, Scienjoy cannot guarantee that this will always be the case, and in the incident if users experience a malware attack by using Scienjoy’s platforms, users may associate the malware with Scienjoy’s websites, Scienjoy’s PC clients or mobile apps, and Scienjoy’s reputation, business, and results of operations would be materially and adversely affected.

Scienjoy’s leased property interests may be defective and its right to lease the properties affected by such defects may be challenged, which could adversely affect its business.

Under PRC laws, all lease agreements are required to be registered with local housing authorities. Scienjoy leases several premises in China. Scienjoy cannot assure whether or not all landlords of these premises have registered the relevant lease agreements with the government authorities, or have completed registration of their ownership rights to the premises. Furthermore, Scienjoy cannot assure that some of the premises do not have a defective title. Scienjoy may be subject to monetary fines due to failure by the landlords to complete the required registrations.

Scienjoy may also be forced to relocate its operations if the landlords do not obtain valid title to or complete the required registrations with local housing authorities in a timely manner or at all. Scienjoy might not be able to locate desirable alternative sites for its operations in a timely and cost-effective manner which may adversely affect its business.

Future strategic alliances or acquisitions may have a material and adverse effect on Scienjoy’s business, reputation, and results of operations.

Scienjoy may enter into strategic alliances, including joint ventures or minority equity investments, with various third parties to further its business purpose from time to time. These alliances could subject Scienjoy to a number of risks, including risks associated with sharing proprietary information, non-performance by the third party and increased expenses in establishing new strategic alliances, any of which may materially and adversely affect Scienjoy’s business. Scienjoy may have limited ability to monitor or control the actions of these third parties and, to the extent any of these strategic third parties suffers negative publicity or harm to their reputation from events relating to their business, Scienjoy may also suffer negative publicity or harm to its reputation by virtue of its association with any such third party.

In addition, when appropriate opportunities arise, Scienjoy may acquire additional assets, products, technologies or businesses that are complementary to its existing business. In addition to possible shareholders’ approval, Scienjoy may also have to obtain approvals and licenses from relevant government authorities for the acquisitions and to comply with any applicable PRC laws and regulations, which could result in increased delay and costs, and may derail Scienjoy’s business strategy if it fails to do so. Furthermore, past and future acquisitions and the subsequent integration of new assets and businesses into Scienjoy’s own require significant attention from Scienjoy’s management and could result in a diversion of resources from its existing business, which in turn could have an adverse effect on its business operations. Acquired assets or businesses may not generate the expected financial results. Acquisitions could result in the use of substantial amounts of cash, potentially dilutive issuances of equity securities, the occurrence of significant goodwill impairment charges, amortization expenses for other intangible assets and exposure to potential unknown liabilities of the acquired business. Moreover, the costs of identifying and consummating acquisitions may be significant.

The coronavirus outbreak in China may weaken the users’ spending on Scienjoy’s platforms.

The coronavirus outbreak has caused significant disruptions to business operations and economic activities in China and will likely have a negative impact in China’s economy at least in the short term. We expect that Chinese consumers spending momentum may weaken, in general. As a result, the users of Scienjoy’s platform may be unwilling to pay for live streaming shows.

Risk Factors Relating to Scienjoy’s Corporate Structure

Scienjoy relies on contractual arrangements with Zhihui Qiyuan (Scienjoy VIE) and its registered shareholders for Scienjoy’s operations in China, which may not be as effective in providing operational control as direct ownership.

Due to PRC restrictions or prohibitions on foreign ownership of Internet and other related businesses in China, Scienjoy operates its business in China through Scienjoy VIEs, in which it has no ownership interest. Scienjoy relies on a series of contractual arrangements with Zhihui Qiyuan (Scienjoy VIE) and its registered shareholders, including the powers of attorney, to control and operate business of the Scienjoy VIEs (namely, Zhihui Qiyuan and its subsidiaries). These contractual arrangements are intended to provide Scienjoy with effective control over its the Scienjoy VIEs and allow Scienjoy to obtain economic benefits from them. See “Corporate History and Structure—Contractual Arrangements with Scienjoy VIE and Its Respective Registered Shareholders” for more details about these contractual arrangements. In particular, Scienjoy’s ability to control the Scienjoy VIEs depends on the powers of attorney, pursuant to which Sixiang Wuxian (its indirect wholly-owned subsidiary in China) can vote on all matters requiring shareholder approval in the Scienjoy VIEs. Scienjoy believes these powers of attorney are legally enforceable but may not be as effective as direct equity ownership.

Any failure by Zhihui Qiyuan (Scienjoy VIE) and its registered shareholders to perform their obligations under Scienjoy’s contractual arrangements with them would have a material adverse effect on Scienjoy’s business.

Scienjoy relies on a series of contractual arrangements with Zhihui Qiyuan (Scienjoy VIE) and its registered shareholders, including the powers of attorney, to control and operate business of the Scienjoy VIEs. If Zhihui Qiyuan or its shareholders fail to perform their respective obligations under the contractual arrangements, Scienjoy may incur substantial costs and expend substantial resources to enforce its rights. Scienjoy may also have to rely on legal remedies under PRC laws, including seeking specific performance or injunctive relief, and claiming damages, which it cannot assure you will be effective under PRC laws.

All these contractual arrangements are governed by and interpreted in accordance with PRC law, and disputes arising from these contractual arrangements will be resolved through arbitration in China. However, the legal system in China, particularly as it relates to arbitration proceedings, is not as developed as the legal system in many other jurisdictions, such as the United States. There are very few precedents and little official guidance as to how contractual arrangements in the context of a VIE should be interpreted or enforced under PRC law. There remain significant uncertainties regarding the ultimate outcome of arbitration should legal action become necessary. These uncertainties could limit Scienjoy’s ability to enforce these contractual arrangements. In addition, arbitration awards are final and can only be enforced in PRC courts through arbitration award recognition proceedings, which could cause additional expenses and delays. In the event Scienjoy is unable to enforce these contractual arrangements or Scienjoy experiences significant delays or other obstacles in the process of enforcing these contractual arrangements, it may not be able to exert effective control over the Scienjoy VIEs and may lose control over the assets owned by the Scienjoy VIEs. As a result, it may be unable to consolidate the financial results of such entities in its combined and consolidated financial statements, its ability to conduct its business may be negatively affected, and its operations could be severely disrupted, which could materially and adversely affect its results of operations and financial condition.

If the PRC government deems that the agreements that establish the structure for operating Scienjoy’s businesses in China do not comply with PRC regulations on foreign investment in Internet and other related businesses, or if these regulations or their interpretation change in the future, Scienjoy could be subject to severe penalties or be forced to relinquish its interests in those operations, and may need to reorganize its current corporate structure to comply with PRC laws and regulations.

PRC laws and regulations impose certain restrictions or prohibitions on foreign ownership of companies that engage in Internet and other related businesses (usually defined as “value-added telecommunication business” under relevant PRC authorities), including the provision of Internet content and online service operations, which fell under the catalogue of negative list published and updated by PRC Ministry of Commerce from time to time. Specifically, foreign ownership is prohibited in industries of online audio and video program services and Internet cultural business (excluding music), foreign ownership of an Internet content provider may not exceed 50%, and the major foreign investor is required to have a record of good performance and operating experience in managing value-added telecommunications business. Scienjoy is a company registered in the Cayman Islands and Sixiang Wuxian (its indirect wholly-owned subsidiary in China) is a foreign-invested enterprise (or called “wholly foreign-owned enterprise”, the “WFOE”) under PRC laws and regulations. To comply with PRC laws and regulations, Scienjoy has to conduct its business in China mainly through Sixiang Wuxian and Zhihui Qiyuan (Scienjoy VIE) and their respective subsidiaries, based on a series of contractual arrangements by and among Sixiang Wuxian, Zhihui Qiyuan, and its registered shareholders. As a result of these contractual arrangements, Scienjoy exerts control over the Scienjoy VIEs (namely, Zhihui Qiyuan and its subsidiaries) and consolidate their financial results in Scienjoy’s financial statements under U.S. GAAP. Scienjoy VIEs (namely, Zhihui Qiyuan and its subsidiaries) hold the licenses, approvals, and key assets that are essential for its operations.

In the opinion of Scienjoy’s PRC counsel, Feng Yu Law Firm, based on its understanding of the relevant PRC laws and regulations, each of the contracts among Sixiang Wuxian, Zhihui Qiyuan and its registered shareholders is valid, binding, and enforceable in accordance with its terms. However, Scienjoy has been further advised by its PRC counsel that there are substantial uncertainties regarding the interpretation and application of current or future relevant PRC laws and regulations. Thus, the PRC government may ultimately take a view contrary to the opinion of its PRC counsel. In addition, PRC government authorities may deem that foreign ownership is directly or indirectly involved in each of Scienjoy VIEs’ shareholding structure. If Scienjoy’s group companies (including Scienjoy’s WFOE and its subsidiaries and Scienjoy VIEs) are found in violation of any PRC laws or regulations, or if the contractual arrangements among Sixiang Wuxian, Zhihui Qiyuan and its registered shareholders are determined as illegal or invalid by the PRC court, arbitral tribunal or regulatory authorities, the relevant governmental authorities would have broad discretion in dealing with such violation, including, without limitation:

The imposition of any of these penalties may result in a material and adverse effect on Scienjoy’s ability to conduct its business operations. In addition, if the imposition of any of these penalties causes Scienjoy to lose the rights to direct the activities of its consolidated affiliated entities or the right to receive their economic benefits, Scienjoy would no longer be able to consolidate their financial results.

Scienjoy may lose the ability to use and enjoy assets held by the Scienjoy VIEs that are important to its business if its VIEs declare bankruptcy or become subject to a dissolution or liquidation proceeding.

Scienjoy VIEs hold certain assets that are important to Scienjoy’s operations, including the ICP License, SP License, the Internet Culture Operation Permit, the Commercial Performance License, and Radio and Television Program Production and Operating Permit. Under Scienjoy’s contractual arrangements, the shareholders of the Scienjoy VIEs may not voluntarily liquidate the Scienjoy VIEs or approve them to sell, transfer, mortgage, or dispose of their assets or legal or beneficial interests in the business in any manner without its prior consent. However, in the event that the shareholders breach this obligation and voluntarily liquidate the Scienjoy VIEs, or the Scienjoy VIEs declare bankruptcy, or all or part of their assets become subject to liens or rights of third-party creditors, Scienjoy may be unable to continue some or all of its business activities, which could materially and adversely affect its business, results of operations, and financial condition. Furthermore, if the Scienjoy VIEs undergo a voluntary or involuntary liquidation proceeding, their shareholders or unrelated third-party creditors may claim rights to some or all of its assets, hindering Scienjoy’s ability to operate its business, which could materially and adversely affect its business, financial condition, and results of operations.

Contractual arrangements may be subject to scrutiny by the PRC tax authorities. A finding that Scienjoy owes additional taxes could negatively affect its financial condition and the value of your investment.

Pursuant to applicable PRC laws and regulations, arrangements and transactions among related parties may be subject to audit or challenge by PRC tax authorities. Scienjoy may be subject to adverse tax consequences if the PRC tax authorities determine that the contractual arrangements among Sixiang Wuxian, Zhihui Qiyuan, and its registered shareholders are not on an arm’s length basis and therefore constitute favorable transfer pricing. As a result, the PRC tax authorities could require that Scienjoy VIEs adjust their taxable income upward for PRC tax purposes. Such an adjustment could increase Scienjoy VIEs’ tax expenses without reducing the tax expenses of Sixiang Wuxian, subject the Scienjoy VIEs to late payment fees and other penalties for under-payment of taxes, and result in the loss of any preferential tax treatment Sixiang Wuxian may have. As a result, Scienjoy’s consolidated results of operations may be adversely affected.

Scienjoy’s shareholders or the shareholders of the Scienjoy VIEs may have potential conflicts of interest with Scienjoy, which may materially and adversely affect its business.

The shareholders of the Scienjoy VIEs include persons who are also its shareholders or affiliates of its shareholders, and, in some cases, its directors or officers. Conflicts of interest may arise between the roles of them as shareholders, directors or officers of Scienjoy and as shareholders of the Scienjoy VIEs. For individuals who are also its directors and officers, Scienjoy relies on them to abide by the laws of the Cayman Islands, which provide that directors and officers owe a fiduciary duty to Scienjoy to act in good faith and in its best interest and not to use their positions for personal gain. The registered shareholders of Zhihui Qiyuan (Scienjoy VIE) have executed powers of attorney to appoint Sixiang Wuxian (Scienjoy’s WFOE) or a person designated by Sixiang Wuxian to vote on their behalf and exercise voting rights as the registered shareholders of Zhihui Qiyuan. Scienjoy cannot assure you that when conflicts arise, these shareholders will act in the best interest of Scienjoy or that conflicts will be resolved in its favor. The legal frameworks of China and the Cayman Islands do not provide guidance on resolving conflicts in the event of a conflict with another corporate governance regime. If Scienjoy cannot resolve any conflicts of interest or disputes between it and these shareholders, it would have to rely on legal proceedings, which may be expensive, time-consuming, and disruptive to its operations. There is also substantial uncertainty as to the outcome of any such legal proceedings.

Additionally, Scienjoy relies on its shareholders and the registered shareholders of Zhihui Qiyuan to secure, both at the internal and external level, all the necessary approvals, permits, filings or other formalities and proceedings in relation to their respective investment in Scienjoy and/or the Scienjoy VIEs. Scienjoy cannot assure you that its shareholders, registered shareholders of Zhihui Qiyuan and the Scienjoy VIEs have obtained all of such necessary approvals, permits, filings or other formalities and proceedings. The failure to obtain such approvals, permits, filings or other formalities and proceedings may adversely affect Scienjoy’s business and results of operation.

Scienjoy may rely on dividends paid by its PRC subsidiaries to fund cash and financing requirements. Any limitation on the ability of its PRC subsidiaries to pay dividends to Scienjoy could have a material adverse effect on its ability to conduct its business and to pay dividends to holders of the ordinary shares and its ordinary shares.

Scienjoy and its Hong Kong subsidiary are holding companies, and Scienjoy may rely on dividends to be paid by its PRC subsidiaries for its cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to the holders of the ordinary shares a and service any debt it may incur. If Scienjoy’s PRC subsidiaries incur debt on their own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other distributions to Scienjoy.

Under PRC laws and regulations, a wholly foreign-owned enterprise in China, such as Sixiang Wuxian, may pay dividends only out of its accumulated profits as determined in accordance with PRC accounting standards and regulations. In addition, according to current effective PRC laws and regulations regarding foreign investment which may be updated following the effectiveness of PRC Foreign Investment Law, a wholly foreign-owned enterprise is required to set aside at least 10% of its after-tax profits each year, after making up previous years’ accumulated losses, if any, to fund certain statutory reserve funds, until the aggregate amount of such fund reaches 50% of its registered capital. At the discretion of the board of directors of the wholly foreign-owned enterprise, it may allocate a portion of its after-tax profits based on PRC accounting standards to staff welfare and bonus funds. These reserve funds and staff welfare and bonus funds are not distributable as cash dividends. Any limitation on the ability of Scienjoy’s PRC subsidiaries to pay dividends or make other distributions to Scienjoy could materially and adversely limit its ability to grow, make investments or acquisitions that could be beneficial to its business, pay dividends, or otherwise fund and conduct its business.

Substantial uncertainties exist with respect to whether the foreign investor’s controlling PRC onshore variable interest entities via contractual arrangements will be recognized as “foreign investment” and how it may impact the viability of Scienjoy’s current corporate structure and operations.

On March 15, 2019, the National People’s Congress of the PRC adopted the PRC Foreign Investment Law, which will come into force on January 1, 2020. The PRC Foreign Investment Law defines the “foreign investment” as the investment activities in China conducted directly or indirectly by foreign investors in the following manners: (i) the foreign investor, by itself or together with other investors establishes a foreign invested enterprises in China; (ii) the foreign investor acquires shares, equities, asset tranches, or similar rights and interests of enterprises in China; (iii) the foreign investor, by itself or together with other investors, invests and establishes new projects in China; (iv) the foreign investor invests through other approaches as stipulated by laws, administrative regulations or otherwise regulated by the State Council. The PRC Foreign Investment Law keeps silent on how to define and regulate the “variable interest entities,” while adding a catch-all clause that “other approaches as stipulated by laws, administrative regulations or otherwise regulated by the State Council” can fall into the concept of “foreign investment,” which leaves uncertainty as to whether the foreign investor’s controlling PRC onshore variable interest entities via contractual arrangements will be recognized as “foreign investment.” Pursuant to the PRC Foreign Investment Law, PRC governmental authorities will regulate foreign investment by applying the principle of pre-entry national treatment together with a “negative list,” which will be promulgated by or promulgated with approval by the State Council or its authorized governmental department such as Ministry of Commerce. Foreign investors are prohibited from making any investments in the industries which are listed as “prohibited” in such negative list; and, after satisfying certain additional requirements and conditions as set forth in the “negative list,” are allowed to make investments in the industries which are listed as “restricted” in such negative list. For any foreign investor that fails to comply with the negative list, the competent authorities are entitled to ban its investment activities, require such investor to take measures to correct its non-compliance and impose other penalties.

The Internet content service, Internet audio-visual program services and online culture activities that Scienjoy conducts through its consolidated variable interest entities are subject to foreign investment restrictions/prohibitions set forth in the Special Administrative Measures (Negative List) for the Access of Foreign Investment (2019) issued by Ministry of Commerce.

The PRC Foreign Investment Law leaves leeway for future laws, administrative regulations or provisions of the State Council and its departments to provide for contractual arrangements as a form of foreign investment. It is therefore uncertain whether Scienjoy’s corporate structure will be seen as violating foreign investment rules as Scienjoy is currently using the contractual arrangements to operate certain businesses in which foreign investors are currently prohibited from or restricted to investing. Furthermore, if future laws, administrative regulations or provisions of the State Council and its departments mandate further actions to be taken by companies with respect to existing contractual arrangements, Scienjoy may face substantial uncertainties as to whether it can complete such actions in a timely manner, or at all. If Scienjoy fails to take appropriate and timely measures to comply with any of these or similar regulatory compliance requirements, its current corporate structure, corporate governance and business operations could be materially and adversely affected.

If the custodians or authorized persons of Scienjoy’s controlling non-tangible assets, including chops and seals, fail to fulfill their responsibilities, or misappropriate or misuse these assets, Scienjoy’s business and operations may be materially and adversely affected.

In China, a company chop or seal serves as the legal representation of the company towards third parties even when unaccompanied by a signature. Each legally registered company in China is required to maintain a company chop, which must be registered with the local Public Security Bureau. In addition to this mandatory company chop, companies may have several other chops which can be used for specific purposes. The chops of Scienjoy’s PRC subsidiaries and the Scienjoy VIEs are generally held securely by the personnel designated or approved by Scienjoy in accordance with its internal control procedures. To the extent those chops are not kept safe, are stolen, or are used by unauthorized persons or for unauthorized purposes, the corporate governance of these entities could be severely and adversely compromised and those corporate entities may be bound to abide by the terms of any documents so chopped, even if they were chopped by an individual who lacked the requisite power and authority to do so. If any of Scienjoy’s authorized personnel obtains, misuses, or misappropriates its chops for whatever reason, it could experience disruptions in its operations. Scienjoy may also have to take corporate or legal action, which could require significant time and resources to resolve while distracting management from its operations. Any of the foregoing could adversely affect its business and results of operations.

Risk Factors Relating to Doing Business in China

Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to you and Scienjoy.

The PRC legal system is based on written statutes where prior court decisions have limited value as precedents. Scienjoy’s PRC subsidiaries and Scienjoy VIEs, in particular Sixiang Wuxian, a wholly foreign-owned enterprises, are subject to laws and regulations applicable to foreign-invested enterprises as well as various Chinese laws and regulations generally applicable to companies incorporated in China. However, since these laws and regulations are relatively new and the PRC legal system continues to rapidly evolve, the interpretations of many laws, regulations, and rules are not always uniform, and enforcement of these laws, regulations, and rules involves uncertainties.

From time to time, Scienjoy may have to resort to administrative and court proceedings to enforce its legal rights. However, since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection Scienjoy may receive. Furthermore, the PRC legal system is based in part on government policies and internal rules that may have retroactive effect. As a result, Scienjoy may not be aware of its violation of these policies and rules until sometime after the violation. Such uncertainties, including uncertainty over the scope and effect of its contractual, property (including intellectual property) and procedural rights, could materially and adversely affect Scienjoy’s business and impede its ability to continue its operations.

Regulation and censorship of information disseminated over the mobile and Internet in China may adversely affect Scienjoy’s business and subject Scienjoy to liability for streaming content or content posted on its platforms.

Internet companies in China are subject to a variety of existing and new rules, regulations, policies, and license and permit requirements. In connection with enforcing these rules, regulations, policies, and requirements, relevant government authorities may suspend services by, or revoke licenses of, any Internet or mobile content service provider that is deemed to provide illicit content online or on mobile devices, and such activities may be intensified in connection with any ongoing government campaigns to eliminate prohibited content online. For example, in 2016, the Office of the Anti-Pornography and Illegal Publications Working Group, the Cyberspace Administration of China, the Ministry of Industry and Information Technology, the Ministry of Culture and the Ministry of Public Security jointly launched a “Clean Up the Internet 2016” campaign. Based on publicly available information, the campaign aims to eliminate pornographic information and content in the Internet information services industry by, among other things, holding liable individuals and corporate entities that facilitate the distribution of pornographic information and content. Publicly traded Chinese Internet companies voluntarily initiated self-investigations to filter and remove content from their websites and cloud servers.

Scienjoy endeavors to eliminate illicit content from its platforms. Scienjoy has made substantial investments in resources to monitor content that broadcasters generate on its platforms and the way in which its users engage with each other through its platforms. Scienjoy uses a variety of methods to ensure its platforms remain a healthy and positive experience for its users. Although Scienjoy employs these methods to filter content posted on its platforms, Scienjoy cannot be sure that its internal content control efforts will be sufficient to remove all content that may be viewed as indecent or otherwise non-compliant with PRC law and regulations. Government standards and interpretations as to what constitutes illicit online content or behavior are subject to interpretation and may change in a manner that could render Scienjoy’s current monitoring efforts insufficient. The Chinese government has wide discretion in regulating online activities and, irrespective of its efforts to control the content on its platforms, government campaigns and other actions to reduce illicit content and activities could subject Scienjoy to negative press or regulatory challenges and sanctions, including fines, suspension or revocation of its licenses to operate in China or a suspension or ban on its mobile or online platform, including suspension or closure of one or more parts of or its entire business. Further, Scienjoy’s senior management could be held criminally liable if Scienjoy is deemed to be profiting from illicit content on its platforms. Although Scienjoy’s business and operations have not been materially and adversely affected by government campaigns or any other regulatory actions in the past, there is no assurance that Scienjoy’s business and operations will be immune from government actions or sanctions in the future. If government actions or sanctions are brought against Scienjoy, or if there are widespread rumors that government actions or sanctions have been brought against Scienjoy, Scienjoy’s reputation could be harmed and Scienjoy may lose users and customers. As a result, Scienjoy’s revenues and results of operations may be materially and adversely affected and the value of its ordinary shares could be dramatically reduced.

Adverse changes in global or China’s economic, political or social conditions or government policies could have a material adverse effect on Scienjoy’s business, results of operations and financial condition.

Scienjoy’s revenues are substantially sourced from China. Accordingly, Scienjoy’s results of operations, financial condition and prospects are influenced by economic, political, and legal developments in China. Economic reforms begun in the late 1970s have resulted in significant economic growth. However, any economic reform policies or measures in China may from time to time be modified or revised. China’s economy differs from the economies of most developed countries in many respects, including with respect to the amount of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. While the PRC economy has experienced significant growth in the past 40 years, growth has been uneven across different regions and among different economic sectors and the rate of growth has been slowing.

China’s economic conditions are sensitive to global economic conditions. The global financial markets have experienced significant disruptions since 2008 and the United States, Europe, and other economies have experienced periods of recession. The global macroeconomic environment is facing new challenges and there is considerable uncertainty over the long-term effects of the expansionary monetary and fiscal policies adopted by the central banks and financial authorities of some of the world’s leading economies. Recent international trade disputes, including tariff actions announced by the United States, the PRC, and certain other countries, and the uncertainties created by such disputes may cause disruptions in the international flow of goods and services and may adversely affect the Chinese economy as well as global markets and economic conditions. There have also been concerns about the economic effect of military conflicts and political turmoil or social instability in the Middle East, Europe, Africa, and other places. Any severe or prolonged slowdown in the global economy may adversely affect the Chinese economy which in turn may adversely affect Scienjoy’s business and operating results.

The PRC government exercises significant control over China’s economic growth through strategically allocating resources, controlling the payment of foreign currency-denominated obligations, setting monetary policy and providing preferential treatment to particular industries or companies. Although the PRC economy has grown significantly in the past decade, that growth may not continue, as evidenced by the slow-down of the growth of the PRC economy since 2012. Any adverse changes in economic conditions in China, in the policies of the PRC government or in the laws and regulations in China could have a material adverse effect on the overall economic growth of China. Such developments could adversely affect Scienjoy’s business and operating results, lead to a reduction in demand for its services and adversely affect its competitive position.

Currently, there is no law or regulation specifically governing virtual asset property rights and therefore it is not clear what liabilities, if any, live streaming platform operators may have for virtual assets.

While participating on its platforms, Scienjoy’s users acquire, purchase, and accumulate some virtual assets, such as gifts or certain status. Such virtual assets can be important to users and have monetary value and, in some cases, are sold for actual money. In practice, virtual assets can be lost for various reasons, often through other users’ unauthorized use of another user account and occasionally through data loss caused by delay of network service, network crash, or hacking activities. Currently, there is no PRC law or regulation specifically governing virtual asset property rights. As a result, there is uncertainty as to who the legal owner of virtual assets is, whether and how the ownership of virtual assets is protected by law, and whether an operator of live streaming platform such as Scienjoy would have any liability, whether in contract, tort or otherwise, to users or other interested parties, for loss of such virtual assets. Based on recent PRC court judgments, the courts have typically held online platform operators liable for losses of virtual assets by platform users and ordered online platform operators to return the lost virtual items to users or pay damages and losses. In case of a loss of virtual assets, Scienjoy may be sued by its users and held liable for damages, which may negatively affect its reputation and business, results of operations, and financial condition.

Under the PRC enterprise income tax law, Scienjoy may be classified as a PRC “resident enterprise,” which could result in unfavorable tax consequences to Scienjoy and its shareholders and have a material adverse effect on its results of operations and the value of your investment.

Under the PRC enterprise income tax law that became effective on January 1, 2008 and other related rules and regulations published by PRC State Taxation Administration, an enterprise established outside the PRC with “de facto management bodies” within the PRC is considered a “resident enterprise” for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income. On April 22, 2009, the State Taxation Administration, or the SAT, issued the Circular Regarding the Determination of Chinese-Controlled Overseas Incorporated Enterprises as PRC Tax Resident Enterprise on the Basis of De Facto Management Bodies, or SAT Circular 82, which provides certain specific criteria for determining whether the “de facto management body” of a PRC-controlled enterprise that is incorporated offshore is located in China. Further to SAT Circular 82, on August 3, 2011, the State Taxation Administration issued the Administrative Measures of Enterprise Income Tax of Chinese-Controlled Offshore Incorporated Resident Enterprises (Trial), or SAT Bulletin 45, which became effective on September 1, 2011, to provide more guidance on the implementation of SAT Circular 82.

According to SAT Circular 82, an offshore incorporated enterprise controlled by a PRC enterprise or a PRC enterprise group will be considered a PRC tax resident enterprise by virtue of having its “de facto management body” in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following conditions are met: (a) the senior management and core management departments in charge of its daily operations function have their presence mainly in the PRC; (b) its financial and human resources decisions are subject to determination or approval by persons or bodies in the PRC; (c) its major assets, accounting books, company seals, and minutes and files of its board and shareholders’ meetings are located or kept in the PRC; and (d) not less than half of the enterprise’s directors or senior management with voting rights habitually reside in the PRC. SAT Bulletin 45 provides further rules on residence status determination, post-determination administration as well as competent tax authorities procedures.

Although SAT Circular 82 and SAT Bulletin 45 apply only to offshore incorporated enterprises controlled by PRC enterprises or PRC enterprise group and not those controlled by PRC individuals or foreigners, the determination criteria set forth therein may reflect SAT’s general position on how the term “de facto management body” could be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises, individuals, or foreigners.

Scienjoy does not meet all of the conditions set forth in SAT Circular 82. Therefore, Scienjoy believes that Scienjoy should not be treated as a “resident enterprise” for PRC tax purposes even if the standards for “de facto management body” prescribed in the SAT Circular 82 applied to Scienjoy. For example, Scienjoy’s minutes and files of the resolutions of its board of directors and the resolutions of its shareholders are maintained outside the PRC.

However, it is possible that the PRC tax authorities may take a different view. If the PRC tax authorities determine that Scienjoy or any Hong Kong subsidiary is a PRC resident enterprise for PRC enterprise income tax purposes, its world-wide income could be subject to PRC tax at a rate of 25%, which could reduce Scienjoy’s net income. In addition, Scienjoy will also be subject to PRC enterprise income tax reporting obligations. Although dividends paid by one PRC tax resident to another PRC tax resident should qualify as “tax-exempt income” under the enterprise income tax law, Scienjoy cannot assure you that dividends paid by its PRC subsidiary to Scienjoy or any of its Hong Kong subsidiaries will not be subject to a 10% withholding tax if Scienjoy or its Hong Kong subsidiary were treated as a PRC resident enterprise. The PRC foreign exchange control authorities, which enforce the withholding tax on dividends, and the PRC tax authorities have not yet issued guidance with respect to the processing of outbound remittances to entities that are treated as resident enterprises for PRC enterprise income tax purposes.

If Scienjoy is treated as a resident enterprise, non-PRC resident shareholders may also be subject to PRC withholding tax on dividends paid by Scienjoy and PRC tax on gains realized on the sale or other disposition of Scienjoy’s ordinary shares, if such income is sourced from within the PRC. The tax would be imposed at the rate of 10% in the case of non-PRC resident enterprise shareholders and 20% in the case of non-PRC resident individual holders. In the case of dividends, Scienjoy would be required to withhold the tax at source. Any PRC tax liability may be reduced under applicable tax treaties or similar arrangements, but it is unclear whether a non-PRC shareholders company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that Scienjoy is treated as a PRC resident enterprise. Although Scienjoy’s holding company is incorporated in the Cayman Islands, it remains unclear whether dividends received and gains realized by its non-PRC resident shareholders will be regarded as income from sources within the PRC if Scienjoy is classified as a PRC resident enterprise. Any such tax will reduce the returns on your investment in Scienjoy.

There are uncertainties with respect to indirect transfers of PRC taxable properties outside a public stock exchange.

Scienjoy faces uncertainties on the reporting and consequences on private equity financing transactions, private share transfers and share exchange involving the transfer of shares in Scienjoy by non-resident investors. According to the Notice on Several Issues Concerning Enterprise Income Tax for Indirect Share Transfer by Non-PRC Resident Enterprises, issued by the State Taxation Administration on February 3, 2015, or SAT Circular 7, an “indirect transfer” of assets of a PRC resident enterprise, including a transfer of equity interests in a non-PRC holding company of a PRC resident enterprise, by non-PRC resident enterprises may be re-characterized and treated as a direct transfer of PRC taxable properties, if such transaction lacks reasonable commercial purpose and was undertaken for the purpose of reducing, avoiding or deferring PRC enterprise income tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax, and tax filing or withholding obligations may be triggered, depending on the nature of the PRC taxable properties being transferred. According to SAT Circular 7, “PRC taxable properties” include assets of a PRC establishment or place of business, real properties in the PRC, and equity investments in PRC resident enterprises, in respect of which gains from their transfer by a direct holder, being a non-PRC resident enterprise, would be subject to PRC enterprise income taxes. When determining if there is a “reasonable commercial purpose” of the transaction arrangement, features to be taken into consideration include: whether the main value of the equity interest of the relevant offshore enterprise derives from PRC taxable properties; whether the assets of the relevant offshore enterprise mainly consists of direct or indirect investment in China or if its income mainly derives from China; whether the offshore enterprise and its subsidiaries directly or indirectly holding PRC taxable properties have a real commercial nature which is evidenced by their actual function and risk exposure; the duration of existence of the business model and organizational structure; the replicability of the transaction by direct transfer of PRC taxable properties; and the tax situation of such indirect transfer outside China and its applicable tax treaties or similar arrangements. In respect of an indirect offshore transfer of assets of a PRC establishment or place of business of a foreign enterprise, the resulting gain is to be included with the annual enterprise filing of the PRC establishment or place of business being transferred, and would consequently be subject to PRC enterprise income tax at a rate of 25%. Where the underlying transfer relates to PRC real properties or to equity investments in a PRC resident enterprise, which is not related to a PRC establishment or place of business of a non-resident enterprise, a PRC enterprise income tax at 10% would apply, subject to available preferential tax treatment under applicable tax treaties or similar arrangements, and the party who is obligated to make the transfer payments has the withholding obligation. Where the payer fails to withhold any or sufficient tax, the transferor shall declare and pay such tax to the competent tax authority by itself within the statutory time limit. Late payment of applicable tax will subject the transferor to default interest. Currently, SAT Circular 7 does not apply to the sale of shares by investors through a public stock exchange where such shares were acquired in a transaction on a public stock exchange.

Scienjoy cannot assure you that the PRC tax authorities will not, at their discretion, adjust any capital gains and impose tax return filing and withholding or tax payment obligations and associated penalties with respect to any internal restructuring, and its PRC subsidiary may be requested to assist in the filing. Any PRC tax imposed on a transfer of Scienjoy’s shares not through a public stock exchange, or any adjustment of such gains would cause Scienjoy to incur additional costs and may have a negative impact on the value of your investment in Scienjoy.

Implementation of the new labor laws and regulations in China may adversely affect Scienjoy’s business and results of operations.

Pursuant to the labor contract law that took effect in January 2008, its implementation rules that took effect in September 2008 and its amendment that took effect in July 2013, employers are subject to stricter requirements in terms of signing labor contracts, minimum wages, paying remuneration, determining the term of employees’ probation and unilaterally terminating labor contracts. Due to lack of detailed interpretative rules and uniform implementation practices and broad discretion of the local competent authorities, it is uncertain as to how the labor contract law and its implementation rules will affect Scienjoy’s current employment policies and practices. Scienjoy’s employment policies and practices may violate the labor contract law or its implementation rules, and Scienjoy may thus be subject to related penalties, fines, or legal fees. Compliance with the labor contract law and its implementation rules may increase Scienjoy’s operating expenses, in particular its personnel expenses. In the event that Scienjoy decides to terminate some of its employees or otherwise change its employment or labor practices, the labor contract law and its implementation rules may limit its ability to affect those changes in a desirable or cost-effective manner, which could adversely affect Scienjoy’s business and results of operations. On October 28, 2010, the Standing Committee of the National People’s Congress promulgated the PRC Social Insurance Law, or the Social Insurance Law, which became effective on July 1, 2011. According to the Social Insurance Law and related rules and regulations, employees must participate in pension insurance, work-related injury insurance, medical insurance, unemployment insurance, and maternity insurance and the employers must, together with their employees or separately, pay the social insurance premiums for their employees. If the company has not fully paid such social insurance based on employee’s actual salaries, it may face relevant authorities’ investigation and examination, and subject to penalties or fines.

Scienjoy expects its labor costs to increase due to the implementation of these laws and regulations, as updated from time to time. As the interpretation and implementation of these laws and regulations are still evolving and become stricter, PRC tax authorities, for example, may become the governmental agencies for collection and examination of each company’s withholding and payment of social insurance after 2019 according to related rules and policies. Scienjoy cannot assure you that its employment practice will at all times be deemed in full compliance with labor-related laws and regulations in China, which may subject Scienjoy to labor disputes or government investigations. If Scienjoy’s PRC subsidiaries are deemed to have violated relevant labor laws and regulations, they can be required to provide additional compensation to their employees and Scienjoy’s business, results of operations, and financial condition could be materially and adversely affected.

Further, labor disputes, work stoppages or slowdowns at Scienjoy or any of its third-party service providers could significantly disrupt Scienjoy’s daily operation or its expansion plans and have a material adverse effect on Scienjoy’s business.

China’s M&A Rules and certain other PRC regulations establish complex procedures for certain acquisitions of Chinese companies by foreign investors, which could make it more difficult for Scienjoy to pursue growth through acquisitions in China.

The Regulations on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the M&A Rules, and other recently adopted regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time consuming and complex. For example, the M&A Rules require that PRC Ministry of Commerce (or previously called “MOFCOM”) be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i) any important industry is concerned, (ii) such transaction involves factors that impact or may impact national economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC time-honored brand. Moreover, the PRC Anti-Monopoly Law promulgated by the Standing Committee of the National People’s Congress effective as of August 1, 2008 and its related rules and regulations require that transactions which are deemed concentrations and involve parties with specified turnover thresholds (i.e., during the previous fiscal year, (i) the total global turnover of all operators participating in the transaction exceeds RMB10 billion and at least two of these operators each had a turnover of more than RMB 400 million within China, or (ii) the total turnover within China of all the operators participating in the concentration exceeded RMB 2 billion, and at least two of these operators each had a turnover of more than RMB 400 million within China) must be cleared by the anti-monopoly enforcement authority before they can be completed. In addition, on February 3, 2011, the General Office of the State Council promulgated a Notice on Establishing the Security Review System for Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, also known as Circular 6, which officially established a security review system for mergers and acquisitions of domestic enterprises by foreign investors. Further, MOFCOM promulgated the Regulations on Implementation of Security Review System for the Merger and Acquisition of Domestic Enterprises by Foreign Investors, effective as of September 1, 2011, to implement Circular 6. Under Circular 6, a security review is required for mergers and acquisitions by foreign investors having “national defense and security” concerns and mergers and acquisitions by which foreign investors may acquire the “de facto control” of domestic enterprises with “national security” concerns. Under the foregoing MOFCOM regulations, MOFCOM will focus on the substance and actual impact of the transaction when deciding whether a specific merger or acquisition is subject to security review. If MOFCOM decides that a specific merger or acquisition is subject to a security review, it will submit it to the Inter-Ministerial Panel, an authority established under Circular 6 led by the National Development and Reform Commission, and MOFCOM under the leadership of the State Council, to carry out security review. The regulations prohibit foreign investors from bypassing the security review by structuring transactions through trusts, indirect investments, leases, loans, control through contractual arrangements or offshore transactions. There is no explicit provision or official interpretation stating that the merging or acquisition of a company engaged in the Internet content or mobile games business requires security review, and there is no requirement that acquisitions completed prior to the promulgation of the Security Review Circular are subject to MOFCOM review. In addition, following the effectiveness of the PRC Foreign Investment Law, Scienjoy cannot assure that aforementioned foreign M&A rules, regulations and policies will have extensive and substantial changes.

In the future, Scienjoy may grow its business by acquiring complementary businesses. Complying with the requirements of the above-mentioned regulations and other relevant rules to complete such transactions could be time-consuming, and any required approval processes, including obtaining approval from MOFCOM or its local counterparts may delay or inhibit Scienjoy’s ability to complete such transactions. Scienjoy believes that it is unlikely that its business would be deemed to be in an industry that raises “national defense and security” or “national security” concerns. However, MOFCOM or other government agencies may publish explanations in the future determining that Scienjoy’s business is in an industry subject to the security review, in which case its future acquisitions in China, including those by way of entering into contractual control arrangements with target entities, may be closely scrutinized or prohibited.

PRC regulations relating to offshore investment activities by PRC residents may limit the ability of Sixiang Wuxian (Scienjoy’s indirect wholly-owned subsidiary in China) to increase its registered capital or distribute profits to Scienjoy or otherwise expose Scienjoy to liability and penalties under PRC law.

The State Administration of Foreign Exchange (SAFE) promulgated the Circular on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, in July 2014 and related rules and regulations that require PRC residents or entities to register with SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing. In addition, such PRC residents or entities must update their SAFE registrations when the offshore special purpose vehicle undergoes material events relating to any change of basic information (including change of such PRC citizens or residents, name, and operation term), increases or decreases in investment amount, transfers or exchanges of shares, or mergers or divisions. According to the Notice on Further Simplifying and Improving Policies for the Foreign Exchange Administration of Direct Investment released on February 13, 2015 by the SAFE, local banks will examine and handle foreign exchange registration for overseas direct investment, including the initial foreign exchange registration and amendment registration, under SAFE Circular 37 from June 1, 2015.

If Scienjoy’s shareholders or beneficial owners who are PRC residents or entities (as applicable) do not complete their registration with the local SAFE branches, Scienjoy’s PRC subsidiary (in particular, the WFOE) may be prohibited from distributing their profits and proceeds from any reduction in capital, share transfer or liquidation to Scienjoy, and Scienjoy may be restricted in its ability to contribute additional capital to its PRC subsidiary (in particular, the WFOE). Moreover, failure to comply with the SAFE registration described above could result in liability under PRC laws for evasion of applicable foreign exchange restrictions. However, Scienjoy may not at all times be fully aware or informed of the identities of all its shareholders or beneficial owners that are required to make such registrations, and Scienjoy cannot compel its beneficial owners to comply with SAFE registration requirements. As a result, Scienjoy cannot assure you that all of its shareholders or beneficial owners who are PRC residents or entities have complied with, and will in the future make or obtain any applicable registrations or approvals required by SAFE regulations. Failure by such shareholders or beneficial owners to comply with SAFE regulations, or failure by Scienjoy to amend the foreign exchange registrations of its PRC subsidiary (in particular, the WFOE), could subject Scienjoy to fines or legal sanctions, restrict its overseas or cross-border investment activities, limit its subsidiaries’ ability to make distributions or pay dividends or affect its ownership structure, which could adversely affect its business and prospects.

PRC regulation of direct investment and loans by offshore holding companies to PRC entities may delay or limit Scienjoy to make additional capital contributions or loans to its PRC subsidiaries.

Scienjoy is an offshore holding company conducting its operations in China through its PRC subsidiaries and the Scienjoy VIEs. Scienjoy may make loans to its PRC subsidiary and the Scienjoy VIEs or it may make additional capital contributions to its PRC subsidiaries.

Any capital contributions or loans that Scienjoy, as an offshore entity, makes to its PRC subsidiaries (in particular, the WFOE), are subject to PRC regulations. For example, none of its loans to a PRC subsidiary (in particular, the WFOE) can exceed the difference between its total amount of investment and its registered capital approved under relevant PRC laws, or certain amount calculated based on elements including capital or net assets and the cross-border financing leverage ratio and the loans must be registered with the local branch of SAFE and the competent departments of State Development and Reform Commission in case of any external debts of more than one year. Scienjoy’s capital contributions to its PRC subsidiaries (in particular, the WFOE) must be approved by or filed with the MOFCOM, SAFE, or their respective local counterpart.

On March 30, 2015, SAFE issued the Circular on the Reforming of the Management Method of the Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, or SAFE Circular 19, which took effect on June 1, 2015. Under SAFE Circular 19, a foreign-invested enterprise, within the scope of business, may choose to convert its registered capital from foreign currency to RMB on a discretionary basis, and the RMB capital so converted can be used for equity investments within PRC, provided that such usage shall fall into the scope of business of the foreign-invested enterprise, which will be regarded as the reinvestment of foreign-invested enterprise.

In light of the various requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, Scienjoy cannot assure you that it will be able to complete the necessary registration or obtain the necessary approval on a timely basis, or at all. If it fails to complete the necessary registration or obtain the necessary approval, its ability to make loans or equity contributions to its PRC subsidiaries (in particular, the WFOE) may be negatively affected, which could adversely affect the liquidity of its PRC subsidiaries and their ability to fund their working capital and expansion projects and meet their obligations and commitments.

Fluctuations in exchange rates could have a material adverse effect on Scienjoy’s results of operations and the value of your investment.

The value of the RMB against the U.S. dollar and other currencies is affected by changes in China’s political and economic conditions and by China’s foreign exchange policies, among other things. In July 2005, the PRC government changed its decades-old policy of pegging the value of the RMB to the U.S. dollar, and the RMB appreciated more than 20% against the U.S. dollar over the following three years. Between July 2008 and June 2010, this appreciation halted and the exchange rate between the RMB and the U.S. dollar remained within a narrow band. Since June 2010, the RMB has fluctuated against the U.S. dollar, at times significantly and unpredictably. On November 30, 2015, the Executive Board of the International Monetary Fund (IMF) completed the regular five-year review of the basket of currencies that make up the Special Drawing Right, or the SDR, and decided that with effect from October 1, 2016, RMB is determined to be a freely usable currency and will be included in the SDR basket as a fifth currency, along with the U.S. dollar, the Euro, the Japanese yen and the British pound. In the fourth quarter of 2016, the RMB has depreciated significantly in the backdrop of a surging U.S. dollar and persistent capital outflows of China. With the development of the foreign exchange market and progress towards interest rate liberalization and RMB internationalization, the PRC government may in the future announce further changes to the exchange rate system and Scienjoy cannot assure you that the RMB will not appreciate or depreciate significantly in value against the U.S. dollar in the future. It is difficult to predict how market forces or PRC or U.S. government policies may impact the exchange rate between the RMB and the U.S. dollar in the future.

There remains significant international pressure on the Chinese government to adopt a flexible currency policy to allow the RMB to appreciate against the U.S. dollar, especially under the current circumstance of the Sino-US trade conflicts. Significant revaluation of the RMB may have a material adverse effect on your investment. Substantially all of Scienjoy’s revenues and costs are denominated in RMB. Any significant revaluation of RMB may materially and adversely affect Scienjoy’s revenues, earnings, and financial position. To the extent that Scienjoy needs to convert U.S. dollars into RMB for capital expenditures and working capital and other business purposes, appreciation of the RMB against the U.S. dollar would have an adverse effect on the RMB amount Scienjoy would receive from the conversion. Conversely, a significant depreciation of the RMB against the U.S. dollar may significantly reduce the U.S. dollar equivalent of Scienjoy’s earnings or the US dollar amount available to Scienjoy.

Very limited hedging options are available in China to reduce Scienjoy’s exposure to exchange rate fluctuations. To date, Scienjoy has not entered into any hedging transactions in an effort to reduce its exposure to foreign currency exchange risk. While Scienjoy may decide to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited and Scienjoy may not be able to adequately hedge its exposure or at all. In addition, Scienjoy’s currency exchange losses may be magnified by PRC exchange control regulations that restrict its ability to convert RMB into foreign currency.

Governmental control of currency conversion may limit Scienjoy’s ability to utilize its revenues effectively and affect the value of your investment.

The PRC government imposes control on the convertibility of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China. Scienjoy receives substantially all of its revenues in RMB. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments, and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior SAFE approval by complying with certain procedural requirements, but may be subject to internal rules of related PRC subsidiary’s bank (in particular, the WFOE’s capital funds account open in bank), which is also under the monitor of SAFE. Therefore, Scienjoy’s PRC subsidiaries (in particular, the WFOE) is able to pay dividends in foreign currencies to Scienjoy without prior approval from SAFE, but should still comply with bank’s related rules. However, approval from or registration with appropriate government authorities (including formalities in the bank) is required where RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC government may also at its discretion restrict access to foreign currencies for current account transactions in the future. If the foreign exchange control system prevents Scienjoy from obtaining sufficient foreign currencies to satisfy its foreign currency demands, Scienjoy may not be able to pay dividends in foreign currencies to its shareholders.

Failure to comply with PRC regulations regarding the registration requirements for employee stock ownership plans or share option plans may subject the PRC plan participants or Scienjoy to fines and other legal or administrative sanctions.

Pursuant to SAFE Circular 37, PRC residents who participate in share incentive plans in overseas non-publicly-listed companies may submit applications to SAFE or its local branches for the foreign exchange registration with respect to offshore special purpose companies. In the meantime, Scienjoy’s directors, executive officers, and other employees who are PRC citizens or who are non-PRC residents residing in PRC for a continuous period of not less than one year, subject to limited exceptions, and who have been granted incentive share awards by Scienjoy, may follow the Circular on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly-Listed Company, or the SAFE Circular 7, promulgated by the SAFE in 2012. Pursuant to the SAFE Circular 7, PRC citizens and non-PRC citizens who reside in China for a continuous period of not less than one year who participate in any stock incentive plan of an overseas publicly listed company, subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be the PRC subsidiaries of such overseas listed company, and complete certain other procedures. In addition, an overseas entrusted institution must be retained to handle matters in connection with the exercise or sale of stock options and the purchase or sale of shares and interests. Scienjoy and its executive officers and other employees who are PRC citizens or who reside in the PRC for a continuous period of not less than one year and who have been granted options will be subject to these regulations when Scienjoy becomes an overseas listed company upon the completion of this Business Combination. Failure to complete the SAFE registrations may subject them to fines and legal sanctions, and may also limit Scienjoy’s ability to contribute additional capital into its PRC subsidiaries and limit its PRC subsidiaries’ ability to distribute dividends to Scienjoy. Scienjoy also faces regulatory uncertainties that could restrict its ability to adopt additional incentive plans for its directors, executive officers, and employees under PRC law.

The SAT has issued certain circulars concerning equity incentive awards. Under these circulars, Scienjoy’s employees working in China who exercise share options or are granted restricted shares or restricted units will be subject to PRC individual income tax. Sixiang Wuxian, Scienjoy’s wholly-owned subsidiary in China, has obligations to file documents related to employee share options, restricted shares, or restricted units with relevant tax authorities, and to withhold individual income taxes of those employees. If Scienjoy’s employees fail to pay or Scienjoy fails to withhold their income taxes according to relevant laws and regulations, Scienjoy may face sanctions imposed by the tax authorities or other PRC governmental authorities.

Risk Factors Relating to Wealthbridge’s Business

Wealthbridge will be forced to liquidate the trust account if it cannot consummate a business combination by the date that is 15 months from the closing of the IPO, or May 8, 2020, or 21 months from the closing of the IPO, or November 8, 2020, if we further extend the period of time to consummate a business combination. In the event of a liquidation, Wealthbridge’s public shareholders will receive $10.00 per share (plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations) and the Wealthbridge rights and warrants will expire worthless.

If Wealthbridge is unable to complete a business combination by the date that is 15 months from the closing of the IPO, or May 8, 2020, or 21 months from the closing of the IPO, or November 8, 2020, if we further extend the period of time to consummate a business combination, and is forced to liquidate, the per-share liquidation distribution will be $10.00 (plus any pro rata interest earned on the funds held in the Trust Account and not previously released to the Company to pay its tax obligations). Furthermore, there will be no distribution with respect to the Wealthbridge rights and warrants, which will expire worthless as a result of Wealthbridge’s failure to complete a business combination.

You must tender your Wealthbridge ordinary shares in order to validly seek redemption at the extraordinary general meeting of shareholders.

In connection with tendering your shares for redemption, you must elect either to physically tender your share certificates to Wealthbridge’s transfer agent in each case two business days prior to the extraordinary general meeting, or to deliver your ordinary shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, which election would likely be determined based on the manner in which you hold your ordinary shares. The requirement for physical or electronic delivery two business days prior to the extraordinary general meeting ensures that a redeeming holder’s election to redeem is irrevocable once the Business Combination is consummated. Any failure to observe these procedures will result in your loss of redemption rights in connection with the vote on the Business Combination.

If third parties bring claims against Wealthbridge, the proceeds held in trust could be reduced and the per-share liquidation price received by Wealthbridge’s shareholders may be less than $10.00.

Wealthbridge’s placing of funds in trust may not protect those funds from third party claims against Wealthbridge. Although Wealthbridge has received from many of the vendors, service providers (other than its independent accountants) and prospective target businesses with which it does business executed agreements waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of Wealthbridge’s public shareholders, they may still seek recourse against the trust account. Additionally, a court may not uphold the validity of such agreements. Accordingly, the proceeds held in trust could be subject to claims which could take priority over those of Wealthbridge’s public shareholders. If Wealthbridge liquidates the trust account before the completion of a business combination and distributes the proceeds held therein to its public shareholders, Oriental has contractually agreed that it will be liable to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by us for services rendered or contracted for or products sold to us, but only if such a vendor or prospective target business does not execute such a waiver. However, Wealthbridge cannot assure you that they will be able to meet such obligation. Therefore, the per-share distribution from the trust account for our shareholders may be less than $10.00 due to such claims.

Additionally, if Wealthbridge is forced to file a bankruptcy case or a petition to wind up is filed against it in the British Virgin Islands court by a shareholder or a creditor which is not dismissed, the proceeds held in the trust account could be subject to applicable liquidation proceedings, and may be included in Wealthbridge’s estate and subject to the claims of third parties with priority over the claims of its shareholders. To the extent any liquidation or insolvency claims deplete the trust account, Wealthbridge may not be able to return $10.00 to our public shareholders.

Any distributions received by Wealthbridge shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, Wealthbridge was unable to pay its debts as they fell due in the ordinary course of business.

Wealthbridge’s Amended and Restated Memorandum and Articles of Association provides that it will continue in existence only until the date that is 15 months from the closing of the IPO, or May 8, 2020, or 21 months from the closing of the IPO, or November 8, 2020, if we further extend the period of time to consummate a business combination. If Wealthbridge is unable to consummate a transaction within the required time periods, upon notice from Wealthbridge, the trustee of the trust account will distribute the amount in its trust account to its public shareholders. Concurrently, Wealthbridge shall pay, or reserve for payment, from funds not held in trust, its liabilities and obligations, although Wealthbridge cannot assure you that there will be sufficient funds for such purpose. If there are insufficient funds held outside the trust account for such purpose, Oriental have contractually agreed that, if it liquidates prior to the consummation of a business combination, they will be liable to ensure that the proceeds in the trust account are not reduced by the claims of target businesses or claims of vendors or other entities that are owed money by Wealthbridge for services rendered or contracted for or products sold to it, but only if such a vendor or prospective target business does not execute such a waiver.

Thereafter, Wealthbridge’s sole business purpose will be to wind up and dissolve through a voluntary liquidation procedure under the Companies Law. In such a situation under the Companies Law, a liquidator would be appointed and would give at least 21 days’ notice to creditors of his intention to make a distribution by notifying known creditors (if any) and by placing a public advertisement in the British Virgin Islands Official Gazette, although in practice this notice requirement need not necessarily delay the distribution of assets as the liquidator may be satisfied that no creditors would be adversely affected as a consequence of a distribution before this time period has expired. As soon as the affairs of Wealthbridge are fully wound-up, the liquidator must lay his final report and accounts before a final general meeting which must be called by a public notice at least one month before it takes place. After the final meeting, the liquidator must make a return to the Registrar confirming the date on which the meeting was held and three months after the date of such filing Wealthbridge is dissolved. It is Wealthbridge’s intention to liquidate the trust account to its public shareholders as soon as reasonably possible and Wealthbridge’s insiders have agreed to take any such action necessary to liquidate the trust account and to wind up the affairs and dissolve Wealthbridge as soon as reasonably practicable if Wealthbridge does not complete a business combination within the required time period. Pursuant to Wealthbridge’s Amended and Restated Memorandum and Articles of Association, failure to consummate a business combination by May 8, 2020 (or November 8, 2020 if we further extend the time to complete a business combination) will trigger an automatic winding up of Wealthbridge. However, the liquidator may determine that he or she requires additional time to evaluate creditors’ claims (particularly if there is uncertainty over the validity or extent of the claims of any creditors). Also, a creditor or shareholder may file a petition with the British Virgin Islands court which, if successful, may result in our liquidation being subject to the supervision of that court. Such events might delay distribution of some or all of our assets to our public shareholders.

If Wealthbridge is forced to enter into an insolvent liquidation under the BVI Insolvency Act, any distributions received by Wealthbridge shareholders could be viewed as an unlawful payment if it was proved that immediately following the date on which the distribution was made, Wealthbridge was unable to pay its debts as they fall due in the ordinary course of business. As a result, a liquidator could seek to recover all amounts received by Wealthbridge’s shareholders. Furthermore, Wealthbridge’s board may be viewed as having breached their fiduciary duties to its creditors and/or may have acted in bad faith, and thereby exposing itself and Wealthbridge to claims of damages, by paying public shareholders from the trust account prior to addressing the claims of creditors. Wealthbridge cannot assure you that claims will not be brought against it for these reasons.

If Wealthbridge’s due diligence investigation of Scienjoy was inadequate, then shareholders of Wealthbridge following the Business Combination could lose some or all of their investment.

Even though Wealthbridge conducted a due diligence investigation of Scienjoy, it cannot be sure that this diligence uncovered all material issues that may be present inside Scienjoy or its business, or that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of Scienjoy and its business and outside of its control will not later arise.

All of Wealthbridge’s officers and directors own Wealthbridge ordinary shares and Wealthbridge warrants and rights which will not participate in liquidation distributions and, therefore, they may have a conflict of interest in determining whether the business combination is appropriate.

All of Wealthbridge’s officers and directors own an aggregate of [1,437,500] shares and [270,000] units of Wealthbridge. Such individuals have waived their right to redeem these shares (including shares underlying the units), or to receive distributions with respect to these shares (including shares underlying the units) upon the liquidation of the trust account if Wealthbridge is unable to consummate a business combination. Accordingly, the Wealthbridge ordinary shares, as well as the Wealthbridge units purchased by our officers or directors, will be worthless if Wealthbridge does not consummate a business combination. Based on a market price of $[___] per ordinary share of Wealthbridge on [_______], 2020, $[___] per warrant on [_______], 2020, and $[___] per right on [_______], 2020, the value of these shares, rights, warrants and units was approximately $[___] million. The Wealthbridge ordinary shares acquired prior to the IPO, as well as the Wealthbridge units will be worthless if Wealthbridge does not consummate a business combination. Consequently, our directors’ and officers’ discretion in identifying and selecting Scienjoy as a suitable target business may result in a conflict of interest when determining whether the terms, conditions and timing of the Business Combination are appropriate and in Wealthbridge’s shareholders’ best interest.

Wealthbridge is requiring shareholders who wish to redeem their ordinary shares in connection with a proposed business combination to comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline for exercising their rights.

Wealthbridge is requiring public shareholders who wish to redeem their ordinary shares to either tender their certificates to our transfer agent at any time at or prior to the Extraordinary General Meeting or to deliver their shares to the transfer agent electronically using the Depository Trust Company’s, or DTC, DWAC (Deposit/Withdrawal At Custodian) System. In order to obtain a physical certificate, a shareholder’s broker and/or clearing broker, DTC and Wealthbridge’s transfer agent will need to act to facilitate this request. It is Wealthbridge’s understanding that shareholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. However, because we do not have any control over this process or over the brokers or DTC, it may take significantly longer than two weeks to obtain a physical stock certificate. While we have been advised that it takes a short time to deliver shares through the DWAC System, we cannot assure you of this fact. Accordingly, if it takes longer than Wealthbridge anticipates for shareholders to deliver their ordinary shares, shareholders who wish to redeem may be unable to meet the deadline for exercising their redemption rights and thus may be unable to redeem their ordinary shares.

Wealthbridge will require its public shareholders who wish to redeem their ordinary shares in connection with the Business Combination to comply with specific requirements for redemption described above, such redeeming shareholders may be unable to sell their securities when they wish to in the event that the Business Combination is not consummated.

If Wealthbridge requires public shareholders who wish to redeem their ordinary shares in connection with the proposed Business Combination to comply with specific requirements for redemption as described above and the Business Combination is not consummated, Wealthbridge will promptly return such certificates to its public shareholders. Accordingly, investors who attempted to redeem their ordinary shares in such a circumstance will be unable to sell their securities after the failed acquisition until Wealthbridge has returned their securities to them. The market price for Wealthbridge’s ordinary shares may decline during this time and you may not be able to sell your securities when you wish to, even while other shareholders that did not seek redemption may be able to sell their securities.

Wealthbridge’s initial shareholders, including its officers and directors, control a substantial interest in Wealthbridge and thus may influence certain actions requiring a shareholder vote.

Wealthbridge’s initial shareholders, including all of its officers and directors, collectively own approximately [22.90]% of its issued and outstanding ordinary shares. However, if a significant number of shareholders vote, or indicate an intention to vote, against the Business Combination, Wealthbridge’s officers, directors, initial shareholders or their affiliates could make such purchases in the open market or in private transactions in order to influence the vote. Wealthbridge’s initial shareholders have agreed to vote any shares they own in favor of the Business Combination.

If Wealthbridge’s security holders exercise their registration rights with respect to their securities, it may have an adverse effect on the market price of Wealthbridge’s securities.

Wealthbridge’s initial shareholders are entitled to make a demand that it registers the resale of their insider shares at any time commencing three months prior to the date on which their shares may be released from escrow. Additionally, the purchasers of the private units and our initial shareholders, officers and directors are entitled to demand that we register the resale of the shares underlying the private units private warrants and private rights and any securities our initial shareholders, officers, directors or their affiliates may be issued in payment of working capital loans made to us at any time after we consummate a business combination. If such persons exercise their registration rights with respect to all of their securities, then there will be an additional [1,734,500]  shares of Wealthbridge ordinary shares eligible for trading in the public market. The presence of these additional ordinary shares trading in the public market may have an adverse effect on the market price of Wealthbridge’s securities.

Wealthbridge will not obtain an opinion from an unaffiliated third party as to the fairness of the Business Combination to its shareholders.

Wealthbridge is not required to obtain an opinion from an unaffiliated third party that the price it is paying is fair to its public shareholders from a financial point of view. Wealthbridge’s public shareholders therefore, must rely solely on the judgment of Wealthbridge’s board of directors.

If the Business Combination’s benefits do not meet the expectations of financial or industry analysts, the market price of Wealthbridge’s securities may decline.

The market price of Wealthbridge’s securities may decline as a result of the Business Combination if:

Accordingly, investors may experience a loss as a result of decreasing share prices.

Wealthbridge’s directors and officers may have certain conflicts in determining to recommend the acquisition of Scienjoy, since certain of their interests, and certain interests of their affiliates and associates, are different from, or in addition to, your interests as a shareholder.

Wealthbridge’s management and directors have interests in and arising from the Business Combination that are different from, or in addition to, your interests as a shareholder, which could result in a real or perceived conflict of interest. These interests include the fact that certain of the Wealthbridge ordinary shares owned by Wealthbridge’s management and directors, or their affiliates and associates, would become worthless if the Business Combination Proposal is not approved and Wealthbridge otherwise fails to consummate a business combination prior to its liquidation date.

Wealthbridge will incur significant transaction costs in connection with transactions contemplated by the Share Exchange Agreement.

Wealthbridge will incur significant transaction costs in connection with the Business Combination. If the Business Combination is not consummated, Wealthbridge may not have sufficient funds to seek an alternative business combination and may be forced to voluntarily liquidate and subsequently dissolve.

Risk Factors Relating to the Business Combination

Wealthbridge and Scienjoy have incurred and expect to incur significant costs associated with the Business Combination. Whether or not the Business Combination is completed, the incurrence of these costs will reduce the amount of cash available to be used for other corporate purposes by Wealthbridge if the Business Combination is completed or by Wealthbridge if the Business Combination is not completed.

Wealthbridge and Scienjoy expect to incur significant costs associated with the Business Combination. Whether or not the Business Combination is completed, Wealthbridge expects to incur approximately $[500,000] in expenses, which do not include an aggregate of $6,232,000 of fees payable to the underwriter and to an independent third party that acted as an advisor to the Business Combination (these fees are expected to be paid through the issuance of an aggregate of 623,200 ordinary shares, valued of $10.00 per share). These expenses will reduce the amount of cash available to be used for other corporate purposes by Wealthbridge if the Business Combination is completed or by Wealthbridge if the Business Combination is not completed.

In the event that a significant number of Wealthbridge’s ordinary shares are redeemed, its stock may become less liquid following the Business Combination.

If a significant number of Wealthbridge’s ordinary shares are redeemed, Wealthbridge may be left with a significantly smaller number of shareholders. As a result, trading in the shares of the company following the Business Combination may be limited and your ability to sell your shares in the market could be adversely affected. Nasdaq may not list Wealthbridge’s shares on its exchange, which could limit investors’ ability to make transactions in Wealthbridge’s securities and subject Wealthbridge to additional trading restrictions.

Wealthbridge will be required to meet the initial listing requirements to be listed on the Nasdaq Stock Market. Wealthbridge may not be able to meet those initial listing requirements. Even if Wealthbridge’s securities are so listed, Wealthbridge may be unable to maintain the listing of its securities in the future.

If Wealthbridge fails to meet the initial listing requirements and Nasdaq does not list its securities on its exchange, Wealthbridge could face significant material adverse consequences, including:

Wealthbridge may waive one or more of the conditions to the Business Combination without resoliciting shareholder approval for the Business Combination.

Wealthbridge may agree to waive, in whole or in part, some of the conditions to its obligations to complete the Business Combination, to the extent permitted by applicable laws. The board of directors of Wealthbridge will evaluate the materiality of any waiver to determine whether amendment of this proxy statement and resolicitation of proxies is warranted. In some instances, if the board of directors of Wealthbridge determines that a waiver is not sufficiently material to warrant resolicitation of shareholders, Wealthbridge has the discretion to complete the Business Combination without seeking further shareholder approval. For example, it is a condition to Wealthbridge’s obligations to close the Business Combination that there be no restraining order, injunction or other order restricting Scienjoy’s conduct of its business, however, if the board of directors of Wealthbridge determines that any such order or injunction is not material to the business of Scienjoy, then the board may elect to waive that condition and close the Business Combination.

There will be a substantial number of Wealthbridge’s ordinary shares available for sale in the future that may adversely affect the market price of Wealthbridge’s ordinary shares.

Wealthbridge currently has an unlimited number of authorized shares of a single class each with no par value. The shares to be issued in the business combination to the post-Business Combination shareholders, will be subject to certain restrictions on sale and cannot be sold for 365 calendar days from the date of the Business Combination with a few exceptions. After the expiration of this restricted period, there will then be an additional approximately 16,400,000 shares that are eligible for trading in the public market. The availability of such a significant number of securities for trading in the public market may have an adverse effect on the market price of Wealthbridge’s shares.

Wealthbridge’s shareholders will experience immediate dilution as a consequence of the issuance of ordinary shares as consideration in the Business Combination. Having a minority share position may reduce the influence that Wealthbridge’s current shareholders have on the management of Wealthbridge.

After the Business Combination, assuming no redemptions of ordinary shares for cash, Wealthbridge’s current public shareholders will own approximately 25.0% of Wealthbridge, Wealthbridge’s current directors, officers and affiliates will own approximately 6.9% of Wealthbridge, and the Sellers will own approximately 64.9% of Wealthbridge. Assuming redemption by holders of 4,764,503 of Wealthbridge’s ordinary shares, Wealthbridge public shareholders will own approximately 7.6% of Wealthbridge, Wealthbridge’s current directors, officers and affiliates will own approximately 8.5% of Wealthbridge, and the Sellers will own approximately 79.9% of Wealthbridge. Upon consummation of the Business Combination, Scienjoy will be a wholly-owned subsidiary of Wealthbridge.

Wealthbridge is an “emerging growth company” and the reduced disclosure requirements applicable to emerging growth companies may make its securities less attractive to investors.

Wealthbridge is an “emerging growth company,” as defined in the JOBS Act. It may remain an “emerging growth company” until the fiscal year ended [December 31, 2024]. However, if its non-convertible debt issued within a three-year period exceeds $1.0 billion or an annual revenue exceeds $1.07 billion, or the market value of its ordinary shares that are held by non-affiliates exceeds $700 million on the last day of the second fiscal quarter of any given fiscal year, Wealthbridge would cease to be an emerging growth company as of the following fiscal year. As an emerging growth company, Wealthbridge is not required to comply with the auditor attestation requirements of section 404 of the Sarbanes-Oxley Act, has reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and is exempt from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. Additionally, as an emerging growth company, Wealthbridge has elected to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As such, Wealthbridge’s financial statements may not be comparable to companies that comply with public company effective dates. As a result, potential investors may be less likely to invest in our securities.

Lavacano will control the outcome of shareholder actions in Wealthbridge.

Upon completion of the Business Combination, assuming none of the outstanding warrants has been exercised, Lavacano will hold 52.31% of Wealthbridge’s ordinary shares. Lavacano’s voting power gives it the power to control actions that require shareholder approval under British Virgin Islands law, our memorandum and articles of association and Nasdaq requirements, including the election and removal of a majority of our board of directors, approval of significant mergers and acquisitions and other business combinations, and changes to our memorandum and articles of association. Further, Wealthbridge’s amended and restated memorandum and articles of association to be adopted upon completion of the Business Combination, lists an extensive list of reserved matters which cannot be enacted without the consent of the Sellers.

Lavacano’s control may cause transactions to occur that might not be beneficial to direct or indirect holders of Scienjoy’s ordinary shares following the Business Combination and may prevent transactions that would be beneficial to you. For example, Lavacano’s voting control may prevent a transaction involving a change of control of us, including transactions in which you as a holder of our ordinary shares might otherwise receive a premium for your securities over the then-current market price. In addition, Lavacano is not prohibited from selling a controlling interest in us to a third party and may do so without your approval and without providing for a purchase of your ordinary shares. If Lavacano is acquired or otherwise undergoes a change of control, any acquirer or successor will be entitled to exercise the voting control and contractual rights of Lavacano, and may do so in a manner that could vary significantly from that of Lavacano.

Following the Business Combination, we may become a “controlled company” within the meaning of the Nasdaq Stock Market Rules and, as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.

Following the Business Combination, assuming none of the outstanding warrants has been exercised, we will be a “controlled company’’ as defined under the Nasdaq Stock Market Rules because Lavacano controls more than 50% of our voting rights. For so long as we remain a controlled company under that definition, we are permitted to elect to rely, and will rely, on certain exemptions from corporate governance rules, including:

As a result, you will not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements.

Following the Business Combination, we may become a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we will be exempt from certain provisions applicable to U.S. domestic public companies.

If Wealthbridge becomes a “foreign private issuer”, as defined in Rule 36-4 promulgated under the Exchange Act (“Foreign Private Issuer”), following the consummation of the Business Combination, Wealthbridge will be exempt from certain provisions of the securities rules and regulations in the United States that are applicable to United States domestic issuers, including:

Accordingly, the information we will be required to file with or furnish to the SEC as a Foreign Private Issuer is less extensive and less frequent as compared to the information required to be filed with the SEC by U.S. domestic issuers.

In addition, if we become a foreign private issuer whose securities are listed on the Nasdaq Capital Market, we will be permitted to follow certain home country corporate governance practices in lieu of the requirements of the Nasdaq Rules pursuant to Nasdaq Rule 5615(a)(3). Certain corporate governance practices in the British Virgin Islands, which is our home country, may differ significantly from the Nasdaq corporate governance listing standards. If Wealthbridge becomes a Foreign Private Issuer following the consummation of the Business Combination, we expect to follow British Virgin Islands corporate governance practices in lieu of the corporate governance requirements of the Nasdaq that listed companies must have: (i) a majority of independent directors; (ii) a nominating/corporate governance committee composed entirely of independent directors; and (iii) a compensation committee composed entirely of independent directors. Therefore, if we become a Foreign Private Issuer, our shareholders may be afforded less protection than they otherwise would enjoy under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers.  

Wealthbridge’s contemplated dual-class share structure with different voting rights and conversion of certain ordinary shares will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of ordinary shares may view as beneficial. 

If Wealthbridge becomes a Foreign Private Issuer following the consummation of the Business Combination, Wealthbridge plans to use its reasonable best efforts to adopt a dual-class share structure, which includes reclassification of existing ordinary shares into class A ordinary shares with one vote per share and authorization and issuance of class B ordinary shares with ten votes per share. Additionally, together with the adoption of a dual-class share structure, part of the ordinary shares held by Lavacano will be converted into class B ordinary shares. While the adoption of a dual-class structure requires Wealthbridge shareholders approval, Lavacano will be holding more than fifty percent of the voting rights post Business Combination and it is likely that the proposal to adopt a dual-class structure will be approved. Adoption of the dual-class structure and the conversion of certain ordinary shares held by Lavacano into class B ordinary shares will result in further concentration of ownership held by Lavacano. Consequently, Lavacano will have considerable influence over matters such as decisions regarding mergers, consolidations and the sale of all or substantially all of Wealthbridge’s assets, election of directors and other significant corporate actions. Lavacano may also take actions that are not in the best interest of Wealthbridge or Wealthbridge’s other shareholders. In addition to limiting your ability to influence corporate matters, this concentration of ownership may discourage, delay or prevent a change in control of Wealthbridge, which could have the effect of depriving Wealthbridge’s other shareholders of the opportunity to receive a premium for their shares as part of a sale of Wealthbridge and may reduce the price of Wealthbridge’s ordinary shares.  

Wealthbridge’s contemplated dual-class structure of ordinary shares may adversely affect the trading market for Wealthbridge’s ordinary shares. 

S&P Dow Jones and FTSE Russell have recently announced changes to their eligibility criteria for inclusion of shares of public companies on certain indices, including the S&P 500, to exclude companies with multiple classes of shares and companies whose public shareholders hold no more than 5% of total voting power from being added to such indices. In addition, several shareholder advisory firms have announced their opposition to the use of multiple class structures. As a result, the dual class structure of Wealthbridge’s ordinary shares may prevent the inclusion of Wealthbridge’s ordinary shares in such indices and may cause shareholder advisory firms to publish negative commentary about Wealthbridge’s corporate governance practices or otherwise seek to cause Wealthbridge to change Wealthbridge’s capital structure. Any such exclusion from indices could result in a less active trading market for Scienjoy’s ordinary shares. Any actions or publications by shareholder advisory firms critical of Wealthbridge’s corporate governance practices or capital structure could also adversely affect the value of Wealthbridge’s ordinary shares.  

The appointed Temporary Receiver of Link Motion Inc. (f/k/a NQ Mobile Inc.) may bring an action to restore Link Motion Inc.’s senior position in the Showself businesses, which may result in claims against us if we acquire Scienjoy.  

On December 13, 2018, a shareholder plaintiff filed a derivative lawsuit on behalf of, and against Link Motion Inc. (“LKM”) and three individual defendants, including the chairman of the board of directors of LKM, in the United States District Court for Southern District of New York. In this lawsuit, the shareholder plaintiff alleged certain wrong doing by the individual defendants in connection with the sales of LKM’s corporation assets, including the sale of a 65% equity interest in the Showself businesses (currently is conducted via Zhihui Qiyuan) to Tongfang Investment Fund Series SPC (“TF”) pursuant to a share purchase agreement dated as of March 30, 2017. On February 1, 2019, the court issued a Preliminary Injunction Order which preliminarily enjoins the defendants to take corrective action as necessary to restore LKM’s senior position in the underlying assets of the Showself businesses and appointed a temporary receiver for LKM during the pendency of this action. The temporary receiver has certain statutory powers and specified delineated powers, including but not limited to, commence, continue and/or control any action on behalf of LKM in the U.S., the PRC, or elsewhere. Although Scienjoy believes that its equity securities are owned by the Sellers, if we acquire Scienjoy, it is possible that we could be sued in connection with these ongoing proceedings, which could be costly to defend, and a judgment against us could result in significant damages. As of the date of this proxy statement and to Wealthbridge’s knowledge, the temporary receiver has yet brought any claims in any jurisdiction to restore LKM’s 65% equity interest in the Showself businesses. However we cannot guarantee that such claims will not be brought in the future.

Certain provisions of the Third Amended and Restated Memorandum and Articles of Association may be deemed to have an antitakeover effect.  

The Third Amended and Restated Memorandum and Articles of Association may have the effect of delaying, deferring or preventing or rendering more difficult a change in control of Wealthbridge that a shareholder might consider in his or her best interest, including the following:  

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This proxy statement contains forward-looking statements. Forward-looking statements provide our current expectations or forecasts of future events. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Words or phrases such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “will” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. Examples of forward-looking statements in this proxy statement include, but are not limited to, statements regarding our disclosure concerning Scienjoy’s operations, cash flows, financial position and dividend policy.

Forward-looking statements appear in a number of places in this proxy statement including, without limitation, in the sections entitled “Dividend Policy,” “Management’s Discussion and Analysis of Financial Conditions and Results of Operations of Scienjoy Inc.,” and “Scienjoy Inc.’s Business”. The risks and uncertainties include, but are not limited to:

Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements for many reasons, including the factors described in “Risk Factors” in this proxy statement. Accordingly, you should not rely on these forward-looking statements, which speak only as of the date of this proxy statement. We undertake no obligation to publicly revise any forward-looking statement to reflect circumstances or events after the date of this proxy statement or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks we describe in the reports we will file from time to time with the Securities and Exchange Commission after the date of this proxy statement.

CAPITALIZATION

The following table sets forth the capitalization on unaudited, historical basis of each of Scienjoy and Wealthbridge as of September 30, 2019 and after giving effect to the Business Combination, assuming (i) that no holders of Wealthbridge ordinary shares exercise their redemption rights and (ii) that the maximum number of holders of Wealthbridge ordinary shares have properly exercised their redemption rights. 

(in thousands)

EXTRAORDINARY GENERAL MEETING OF WEALTHBRIDGE SHAREHOLDERS

General

We are furnishing this proxy statement to the Wealthbridge shareholders as part of the solicitation of proxies by our board of directors for use at the extraordinary general meeting of Wealthbridge shareholders to be held on [●], 2020 and at any adjournment or postponement thereof. This proxy statement is first being furnished to our shareholders on or about [●], 2020 in connection with the vote on the Business Combination Proposal, the Amendment Proposal, the Nasdaq Proposal, and the Business Combination Adjournment Proposal. This document provides you with the information you need to know to be able to vote or instruct your vote to be cast at the extraordinary general meeting.

Date, Time and Place

The extraordinary general meeting of shareholders will be held on [●], 2020 at [●] a.m., at the offices of Loeb & Loeb LLP, 345 Park Avenue, New York, NY 10154, or such other date, time and place to which such meeting may be adjourned or postponed.

Purpose of the Extraordinary General Meeting of Wealthbridge Shareholders

At the extraordinary general meeting of shareholders, we are asking holders of Wealthbridge ordinary shares to approve the following proposals:

Recommendation of Wealthbridge’s Board of Directors

Wealthbridge’s board of directors:

Wealthbridge’s board of directors have interests that may be different from or in addition to your interests as a shareholder. See “The Business Combination Proposal — Interests of Certain Persons in the Business Combination” in this proxy statement for further information.

Record Date; Who is Entitled to Vote

We have fixed the close of business on [●], 2020, as the “record date” for determining those Wealthbridge shareholders entitled to notice of and to vote at the extraordinary general meeting. As of the close of business on [●], 2020, there were [●] ordinary shares of Wealthbridge outstanding and entitled to vote. Each holder of Wealthbridge ordinary shares is entitled to one vote per share on each of the Business Combination Proposal, the Amendment Proposal, the Nasdaq Proposal, and the Business Combination Adjournment Proposal.

As of [●], 2020, Wealthbridge’s initial shareholders, either directly or beneficially, owned and were entitled to vote [1,707,500] ordinary shares, or approximately [22.90]% of Wealthbridge’s outstanding ordinary shares. With respect to the Business Combination, Wealthbridge’s initial shareholders have agreed to vote their respective ordinary shares acquired by them in favor of the Business Combination Proposal and related proposals. They have indicated that they intend to vote their shares, as applicable, “FOR” each of the other proposals, although there is no agreement in place with respect to these proposals.

Quorum and Required Vote for Shareholder Proposals

A quorum of Wealthbridge shareholders is necessary to hold a valid meeting. A quorum will be present at the extraordinary general meeting of Wealthbridge shareholders if a majority of the Wealthbridge ordinary shares issued and outstanding and entitled to vote at the extraordinary general meeting is represented in person or by proxy. Abstentions present in person and by proxy will count as present for the purposes of establishing a quorum but broker non-votes will not.

Approval of the Business Combination Proposal, the Amendment Proposal, the Nasdaq Proposal, and the Business Combination Adjournment Proposal will require the affirmative vote of the holders of a majority of the issued and outstanding ordinary shares of Wealthbridge present and entitled to vote at the extraordinary general meeting. Attending the extraordinary general meeting either in person or by proxy and abstaining from voting will have the same effect as voting against all the Proposals and, assuming a quorum is present, broker non-votes will have no effect on the voting on Proposals.

Voting Your Shares

Each Wealthbridge ordinary share that you own in your name entitles you to one vote for each Proposal on which such shares are entitled to vote at the extraordinary general meeting. Your proxy card shows the number of ordinary shares that you own.

There are two ways to ensure that your Wealthbridge ordinary shares, as applicable, are voted at the extraordinary general meeting:

IF YOU RETURN YOUR PROXY CARD WITHOUT AN INDICATION OF HOW YOU WISH TO VOTE, YOUR SHARES WILL BE VOTED IN FAVOR OF THE BUSINESS COMBINATION PROPOSAL (AS WELL AS THE OTHER PROPOSALS). IN ORDER TO REDEEM YOUR SHARES, YOU MUST TENDER YOUR SHARES TO OUR TRANSFER AGENT AT LEAST TWO BUSINESS DAYS PRIOR TO THE EXTRAORDINARY GENERAL MEETING. YOU MAY TENDER YOUR SHARES FOR REDEMPTION BY EITHER DELIVERING YOUR SHARE CERTIFICATE TO THE TRANSFER AGENT OR BY DELIVERING YOUR SHARES ELECTRONICALLY USING THE DEPOSITORY TRUST COMPANY’S DEPOSIT/WITHDRAWAL AT CUSTODIAN (“DWAC”) SYSTEM. IF THE BUSINESS COMBINATION IS NOT COMPLETED, THEN THESE TENDERED SHARES WILL NOT BE REDEEMED FOR CASH AND WILL BE RETURNED TO THE APPLICABLE SHAREHOLDER. IF YOU HOLD THE SHARES IN STREET NAME, YOU WILL NEED TO INSTRUCT THE ACCOUNT EXECUTIVE AT YOUR BROKER OR BANK TO WITHDRAW THE SHARES FROM YOUR ACCOUNT IN ORDER TO EXERCISE YOUR REDEMPTION RIGHTS.

Revoking Your Proxy

If you give a proxy, you may revoke it at any time before it is exercised by doing any one of the following:

Who Can Answer Your Questions About Voting Your Shares

If you have any questions about how to vote or direct a vote in respect of your ordinary shares, you may call [●], our proxy solicitor, at [●], or Wealthbridge at +(86) 186-0217-2929.

No Additional Matters May Be Presented at the Extraordinary General Meeting

This extraordinary general meeting has been called only to consider the approval of the Business Combination. Under Wealthbridge’s Amended and Restated Memorandum and Articles of Association, other than procedural matters incident to the conduct of the extraordinary general meeting, no other matters may be considered at the extraordinary general meeting if they are not included in the notice of the extraordinary general meeting.

Redemption Rights

Pursuant to Wealthbridge’s Amended and Restated Memorandum and Articles of Association, a holder of Wealthbridge’s ordinary shares may demand that Wealthbridge redeem such ordinary share for cash in connection with a business combination. You may not elect to redeem your shares prior to the completion of a business combination.

If you are a public shareholder and you seek to have your shares redeemed, you must (i) demand, no later than 5:00 p.m., Eastern time on [*], 2020 (two business days before the extraordinary general meeting), that Wealthbridge redeem your shares into cash; and (ii) submit your request in writing to Wealthbridge’s transfer agent, at the address listed at the end of this section and delivering your shares to Wealthbridge’s transfer agent physically or electronically using the DWAC system at least two business days prior to the vote at the meeting. In order to validly request redemption, you must either make a request for redemption on the proxy card or separately send a request in writing to Wealthbridge’s transfer agent. The proxy card or separate request must be signed by the applicable shareholder in order to validly request redemption. A shareholder is not required to submit a proxy card or vote in order to validly exercise redemption rights.

You may tender the ordinary shares for which you are electing redemption by two business days before the extraordinary general meeting by either:

Wealthbridge shareholders will be entitled to redeem their Wealthbridge ordinary shares for a full pro rata share of the trust account (currently anticipated to be no less than approximately $[10.00] per share) net of taxes payable.

Any corrected or changed written demand of redemption rights must be received by Wealthbridge’s transfer agent two (2) business days prior to the extraordinary general meeting. No demand for redemption will be honored unless the holder’s shares have been delivered (either physically or electronically) to the transfer agent at least two (2) business days prior to the vote at the meeting.

Public shareholders may seek to have their shares redeemed regardless of whether they vote for or against the Business Combination and whether or not they are holders of ordinary shares as of the Record Date. Any public shareholder who holds shares of Wealthbridge on or before [*], 2019 (two business days before the extraordinary general meeting) will have the right to demand that his, her or its shares be redeemed for a pro rata share of the aggregate amount then on deposit in the trust account, less any taxes then due but not yet paid, at the consummation of the Business Combination.

In connection with tendering your shares for redemption, you must elect either to physically tender your share certificates to Wealthbridge’s transfer agent or deliver your shares to the transfer agent electronically using The Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, in each case, by two business days prior to the extraordinary general meeting.

Through the DWAC system, this electronic delivery process can be accomplished by contacting your broker and requesting delivery of your shares through the DWAC system. Delivering shares physically may take significantly longer. In order to obtain a physical stock certificate, a shareholder’s broker and/or clearing broker, DTC, and Wealthbridge’s transfer agent will need to act together to facilitate this request. There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC system. The transfer agent will typically charge the tendering broker $45 and the broker would determine whether or not to pass this cost on to the redeeming holder. It is Wealthbridge’s understanding that shareholders should generally allot at least two weeks to obtain physical certificates from the transfer agent. Wealthbridge does not have any control over this process or over the brokers or DTC, and it may take longer than two weeks to obtain a physical stock certificate. Shareholders who request physical stock certificates and wish to redeem may be unable to meet the deadline for tendering their ordinary shares before exercising their redemption rights and thus will be unable to redeem their ordinary shares.

In the event that a shareholder tenders its ordinary shares and decides prior to the consummation of the Business Combination that it does not want to redeem its ordinary shares, the shareholder may withdraw the tender. In the event that a shareholder tenders ordinary shares and the business combination is not completed, these ordinary shares will not be redeemed for cash and the physical certificates representing these ordinary shares will be returned to the shareholder promptly following the determination that the Business Combination will not be consummated. Wealthbridge anticipates that a shareholder who tenders ordinary shares for redemption in connection with the vote to approve the Business Combination would receive payment of the redemption price for such ordinary shares soon after the completion of the Business Combination.

If properly demanded by Wealthbridge’s public shareholders, Wealthbridge will redeem each share into a pro rata portion of the funds available in the Trust Account, calculated as of two business days prior to the anticipated consummation of the Business Combination. As of the record date, this would amount to approximately $10.00 per share, plus interest less taxes payable. If you exercise your redemption rights, you will be exchanging your Wealthbridge ordinary shares for cash and will no longer own the ordinary shares. If Wealthbridge is unable to complete the Business Combination by the date that is 15 months from the closing of the IPO, or May 8, 2020, or 21 months from the closing of the IPO, or November 8, 2020, if we further extend the period of time to consummate a business combination, it will voluntarily liquidate and subsequently dissolve and public shareholders would be entitled to receive approximately $10.00 per share, plus interest less taxes payable, upon such liquidation.

Notwithstanding the foregoing, a holder of the public shares, together with any affiliate of his or her or any other person with whom he or she is acting in concert or as a “group” (as defined in Section 13(d)-(3) of the Securities Exchange Act of 1934 (the “Exchange Act”) will be restricted from seeking redemption rights with respect to more than 20% of the ordinary shares.

If too many public stockholders exercise their redemption rights, we may not be able to meet certain condition, and as a result, would not be able to proceed with the Business Combination.

Tendering Ordinary Share Certificates in connection with Redemption Rights

Wealthbridge is requiring the Wealthbridge public shareholders seeking to exercise their redemption rights, whether they are record holders or hold their shares in “street name,” to either tender their certificates to Wealthbridge’s transfer agent, or to deliver their shares to the transfer agent electronically using Depository Trust Company’s DWAC (Deposit/Withdrawal At Custodian) System, at the holder’s option prior to two business days immediately preceding the extraordinary general meeting. There is a nominal cost associated with the above-referenced tendering process and the act of certificating the shares or delivering them through the DWAC System. The transfer agent will typically charge the tendering broker $45.00 and it would be up to the broker whether to pass this cost on to the redeeming holder. However, this fee would be incurred regardless of whether Wealthbridge requires holders seeking to exercise redemption rights to tender their ordinary shares. The need to deliver ordinary shares is a requirement of exercising redemption rights regardless of the timing of when such delivery must be effectuated.

Any request for redemption, once made, may be withdrawn at any time up to two business days immediately preceding the extraordinary general meeting. Furthermore, if a shareholder delivered his certificate for redemption and subsequently decided prior to the date immediately preceding the extraordinary general meeting not to elect redemption, he may simply request that the transfer agent return the certificate (physically or electronically).

A redemption payment will only be made in the event that the proposed Business Combination is consummated. If the proposed Business Combination is not completed for any reason, then public shareholders who exercised their redemption rights would not be entitled to receive the redemption payment. In such case, Wealthbridge will promptly return the share certificates to the public shareholder.

Appraisal Rights

Appraisal rights are not available to holders of Wealthbridge ordinary shares in connection with the proposed Business Combination.

Proxies and Proxy Solicitation Costs

We are soliciting proxies on behalf of our board of directors. This solicitation is being made by mail but also may be made by telephone or in person. Wealthbridge and its directors, officers and employees may also solicit proxies in person, by telephone or by other electronic means. Any solicitation made and information provided in such a solicitation will be consistent with the written proxy statement and proxy card. [[●], a proxy solicitation firm that Wealthbridge has engaged to assist it in soliciting proxies, will be paid its customary fee of approximately $[●] and out-of-pocket expenses.]

Wealthbridge will ask banks, brokers and other institutions, nominees and fiduciaries to forward its proxy materials to their principals and to obtain their authority to execute proxies and voting instructions. Wealthbridge will reimburse them for their reasonable expenses.

If you send in your completed proxy card, you may still vote your shares in person if you revoke your proxy before it is exercised at the extraordinary general meeting.

Wealthbridge Initial Shareholders

In May and July, 2018, 1,150,000 shares were sold to our initial shareholders. On October 15, 2018, Wealthbridge affected a 5 for 4 share split resulting in an aggregate of 1,437,500 ordinary shares outstanding to our initial shareholders, which we refer to throughout this proxy statement as the “insider shares,” for an aggregate purchase price of $25,100. Simultaneous with the consummation of the IPO, we consummated the private placement of 247,500 Private Placement Units” at a price of $10.00 per Private Placement Unit, generating total proceeds of $2,475,000. The Private Placement Units were purchased by Wealthbridge’s sponsor. The underwriters exercised the over-allotment and on February 20, 2019, Wealthbridge consummated the private sale of an additional 22,500 private units to its sponsor, generating gross proceeds of $225,000.

Pursuant to a registration rights agreement between us and our initial shareholders, those shareholders are entitled to certain registration rights with respect to the Wealthbridge rights held by them, as well as the underlying securities. The holders of these securities are entitled to make up to two demands that Wealthbridge register such securities. The holders of the initial shares can elect to exercise these registration rights at any time commencing three months prior to the date on which these ordinary shares are to be released from escrow. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a business combination. Wealthbridge will bear the expenses incurred in connection with the filing of any such registration statements.

THE BUSINESS COMBINATION PROPOSAL

The discussion in this proxy statement of the Business Combination and the principal terms of the Share Exchange Agreement, is subject to, and is qualified in its entirety by reference to, the Share Exchange Agreement. The full text of the Share Exchange Agreement is attached hereto as Annex A, which is incorporated by reference herein.

General Description of the Business Combination

Business Combination with Scienjoy; Business Combination Consideration

On the closing date of the transactions contemplated by the Share Exchange Agreement, the Sellers will sell to Wealthbridge, and Wealthbridge will purchase from the Sellers, all of the issued and outstanding shares and other equity interests in and of Scienjoy, and Wealthbridge will issue 16,400,000 of its ordinary shares to the Sellers, among which 1.64 million ordinary shares of Wealthbridge are to be issued and held in escrow to satisfy any indemnification obligations of the Sellers. The issuance of shares of Wealthbridge to the Sellers is being consummated on a private placement basis, pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended. The aggregate value of the initial consideration to be paid by Wealthbridge in the business combination is approximately $164 million (calculated as follows: 16,400,000 ordinary shares of Wealthbridge to be issued to the Sellers, multiplied by $10.00 (the deemed value of the shares in the Share Exchange Agreement). Additionally, the Sellers may be entitled to receive earnout shares as follows: (1) if Scienjoy’s net income before tax for the year ended December 31, 2019 is greater than or equal to either US$20,900,000 or RMB 140,000,000 the Sellers will be entitled to receive 3,000,000 ordinary shares of Wealthbridge (subject to the reclassification of the ordinary shares of Wealthbridge as described in more details in the Voting Agreement); (2) if Scienjoy’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 Sellers will be entitled to receive 3,000,000 ordinary shares of Wealthbridge (subject to the reclassification of the ordinary shares of Wealthbridge as described in more details in the Voting Agreement); and (3) if Scienjoy’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 Sellers will be entitled to receive 3,000,000 ordinary shares of Wealthbridge (subject to the reclassification of the ordinary shares of Wealthbridge as described in more details in the Voting Agreement).

Notwithstanding the net income before tax achieved by the post-transaction company for any period, the Sellers will receive (i) 3,000,000 earnout shares if the share price of Wealthbridge is higher than $15.00 for any sixty days in any period of ninety consecutive trading days during an twelve month period following the closing; (ii) 3,000,000 earnout shares if the share price of Wealthbridge is higher than $20.00 for any sixty days in any period of ninety consecutive trading days between the 13th month and 24th month following the Closing, and (iii) 3,000,000 earnout shares if the share price of Wealthbridge is higher than $25.00 for any sixty days in any period of ninety consecutive trading between the 25th month and 36th month following the Closing.

Wealthbridge currently has an unlimited number of authorized shares of no par value.

After the Business Combination, assuming no redemptions of ordinary shares for cash, Wealthbridge’s current public shareholders will own approximately 25.0% of Wealthbridge, Wealthbridge’s current directors, officers and affiliates will own approximately 6.9% of Wealthbridge, and the Sellers will own approximately 64.9% of Wealthbridge. Assuming redemption by holders of 4,764,503 of Wealthbridge’s ordinary shares, Wealthbridge public shareholders will own approximately 7.6% of Wealthbridge, Wealthbridge’s current directors, officers and affiliates will own approximately 8.5% of Wealthbridge, and the Sellers will own approximately 79.9% of Wealthbridge. Upon consummation of the Business Combination, Scienjoy will be a wholly-owned subsidiary of Wealthbridge.

Assuming the Business Combination Proposal is approved, the parties to the transaction expect to close the Business Combination on [●], 2020.

Background of the Business Combination

Wealthbridge was incorporated as a blank check company on May 2, 2018, under the laws of the British Virgin Islands, for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities, which we refer to as a “target business.” Wealthbridge’s efforts to identify a prospective target business were not limited to any particular industry or geographic region.

Wealthbridge completed its IPO on February 8, 2019 of 5,000,000 units, with each unit consisting of one Ordinary Share, no par value, one redeemable Warrant and one Right to receive one-tenth of an ordinary share upon consummation of an initial business combination. Simultaneous with the consummation of the IPO, we consummated the private placement of 247,500 Private Placement Units at a price of $10.00 per Private Placement Unit, generating total proceeds of $2,475,000. The Private Placement Units were purchased by Wealthbridge’s sponsor. The underwriters in the IPO exercised the over-allotment option and, on February 20, 2019, the underwriters purchased 750,000 over-allotment option Units, which were sold at an offering price of $10.00 per Unit, generating gross proceeds of $7,500,000. Simultaneously with the sale of the over-allotment Units, Wealthbridge consummated the private sale of an additional 22,500 Private Units to its sponsor, generating gross proceeds of $225,000.

After deducting the underwriting discounts and commissions and the offering expenses, a total of $57,500,000 was deposited into a trust account established for the benefit of Wealthbridge’s public shareholders, and the remaining proceeds became available to be used to provide for business, legal and accounting due diligence on prospective business combinations and continuing general and administrative expenses. [As of December 31, 2019], we have approximately $[●] of unused net proceeds that were not deposited into the trust fund to pay future general and administrative expenses. The net proceeds deposited into the trust fund remain on deposit in the trust fund earning interest. As of [December 31, 2019], there was $[●] held in the trust fund (including $[●] of accrued interest which we can withdraw to pay taxes).

In accordance with Wealthbridge’s Amended and Restated Memorandum and Articles of Association, the amounts held in the trust account may only be used by Wealthbridge upon the consummation of a business combination, except that there can be released to Wealthbridge, from time to time, any interest earned on the funds in the trust account that it may need to pay its tax obligations. The remaining interest earned on the funds in the trust account will not be released until the earlier of the completion of a business combination and Wealthbridge’s liquidation. Wealthbridge executed a definitive agreement on October 28, 2019 and it must voluntarily liquidate unless a business combination is consummated by the date that is 15 months from the closing of the IPO, or May 8, 2020, or 21 months from the closing of the IPO, or November 8, 2020, if we further extend the period of time to consummate a business combination.

Promptly after the IPO, the officers and directors of Wealthbridge commenced the process of locating potential targets. Over the course of Wealthbridge’s search for target companies, Wealthbridge management evaluated in excess of 25 target companies. Wealthbridge entered into advanced discussions with the following four (4) targets in different industries, including a $200 million aviation leasing company, a $300 million aviation manufacturer, a $150 million outsourcing software as a service (“SAAS”) business, and a $200 million film production business, but did not proceed with these targets for the reasons indicated:

On March 10 , 2019, Wealthbridge was contacted by Mr. Jian Liu, a representative of China Fuhua Hong Kong Financial Group Limited (“Fuhua”), a financial services company in Hong Kong, China. Mr. Yongsheng Liu, the Chief Executive Officer of Wealthbridge, spoke with Mr. Jian Liu and entered into an engagement letter engaging Fuhua to introduce potential targets to Wealthbridge.

On March 14, 2019, Mr. Jian Liu arranged for Mr. Yongsheng Liu and Mr. Xiaowu He, the Chief Executive Officer of Scienjoy, to have a conference call. Mr. Yongsheng Liu described the SPAC structure and a possible timeline with Mr. Xiaowu He, and Mr. Xiaowu He introduced Scienjoy’s business model and general financial information to Mr. Yongsheng Liu.

On March 20, 2019, Scienjoy and Wealthbridge executed a non-disclosure agreement.

On March 22, 2019, Scienjoy sent draft financial statements and due diligence documents to Wealthbridge. Subsequently, on April 4, 2019, Mr. Yongsheng Liu and Mr. Jining Li, one of Wealthbridge’s directors, and Mr. Xiaowu He from Scienjoy held a meeting at Hong Kong to discuss the potential business combination opportunity. During the meeting, Wealthbridge introduced the SPAC structure to Mr. Xiaowu He, CEO of Scienjoy, and Scienjoy’s team presented its business model and advised Wealthbridge that it was considering an initial public offering.

From April 5, 2019 to April 9, 2019, Mr. Yongsheng Liu had several phone calls with Mr. Jack Liu, the senior vice president of our financial advisor Chardan Capital Markets, LLC (“Chardan”), to update Chardan on Wealthbridge’s progress and to discuss a potential transaction with Scienjoy.

On April 6, 2019, Mr. Yongsheng Liu met with Mr. Jining Li to review Scienjoy’s business model. After reviewing the model, they believed that Scienjoy’s business model would be easy to understand by investors. In addition, they noted that NASDAQ has many successful live streaming companies listed on the exchange. Following this meeting, Mr. Yongsheng Liu discussed Scienjoy with Wealthbridge’s members of the Board of Directors, who agreed that Scienjoy would be a good potential target.

From April 9, 2019 to April 24, 2019, the Wealthbridge team and Scienjoy team held a number of telephone conferences to discuss a letter of intent (“LOI”). On April 12, 2019, Wealthbridge sent an initial draft of LOI for Scienjoy’s review. The LOI provided for, among other things, the issuance at closing of 16 million shares of Wealthbridge, with an additional 9 million earnout shares being issued if certain targets were met, and Scienjoy paying Wealthbridge $250,000 in the event that Scienjoy breached any LOI entered into between the parties.

On April 14, 2019, Mr. Yongsheng Liu and Mr. Xiaowu He had phone call to negotiate the terms of the earnout shares and the deposit.

On April 26, 2019, Mr. Yongsheng Liu signed the negotiated LOI on behalf of Wealthbridge. On April 27, 2019, Mr. Xiaowu He counter-signed the LOI on behalf of Scienjoy. The signed LOI provided for issuance at closing of 16.4 million Wealthbridge shares, with an additional 9 million earnout shares being issued if certain targets were met, and also that Scienjoy agreed to pay $200,000 initial deposit and $500,000 second deposit to cover the expenses of the Business Combination.

On May 6, 2019, the Wealthbridge team met with Scienjoy’s team in Scienjoy’s Beijing office to begin the due diligence process.

From May 8, 2019 to May 29, 2019, Mr. Yongsheng Liu from Wealthbridge, Mr. Xiaowu He from Scienjoy and Mr. Jack Liu from Chardan held multiple calls to discuss which firm to hire to act as Scienjoy’s auditor. On May 22, 2019, Mr. Yongsheng Liu, on behalf of Wealthbridge, engaged Loeb & Loeb LLP (“Loeb”), as legal counsel. On June 3, 2019, Scienjoy engaged Friedman LLP as its auditing firm.

On June 5, 2019, Mr. Yongsheng Liu, Ms. Xiaoyan Tang, Wealthbridge’s CFO, and other management members of Wealthbridge’s team held a conference call to report to Wealthbridge’s board of directors the results of the due diligence process and the progress of the transaction with Scienjoy.

From June 10, 2019 to June 14, 2019, Mr. Yongsheng Liu and Mr. Jining Li, one of Wealthbridge’s directors, went to New York to meet with the professionals involved in the transaction to discuss the process for completing the transaction.

On June 10, 2019, Mr. Yongsheng Liu and Mr. Jining Li met with the team at Chardan at their New York office to discuss the transaction process, potential investors for the transaction, and the impact of the trade war between China and the U.S. on a transaction with Scienjoy. Also on the same day, Mr. Yongsheng Liu met with Loeb to discuss the details of the Share Exchange Agreement, to learn more about NASDAQ requirements, and the progress of legal due diligence of Scienjoy.

On June 11, 2019, Mr. Yongsheng Liu met with an investment bank and a hedge fund to discuss potential investor interests in Scienjoy.

On June 12, 2019, Wealthbridge’s team met with Loeb to discuss due diligence and the progress on the Share Exchange Agreement.

On June 18, 2019, Wealthbridge’s team met with Scienjoy’s team. Scienjoy updated Wealthbridge on the progress of the audit, and the parties negotiated the terms of a definitive agreement between Wealthbridge and Scienjoy, including the number of directors for a board, Scienjoy’s presentations and warranties, equity financing and etc.

On June 19, 2019, a meeting was held in Scienjoy’s Beijing office, Ms. Xiaoyan Tang and Mr. Xiaowu He discussed the progress on the audit.

On June 25, 2019, a conference call was held among Loeb’s team, Wealthbridge’s team, Mr. Xiaoyin Wang, Scienjoy’s legal advisor, and Scienjoy’s PRC counsel. Among the items discussed were the proposed timeline for the potential business combination and an update on the due diligence process.

From July 5, 2019 to July 26, 2019, members of the management teams of Wealthbridge and Scienjoy met with serval potential investors in China.

On July 30, 2019, Mr. Yongsheng Liu and Loeb discussed the structure of Scienjoy and certain terms of the potential business combination.

On August 4, 2019, Loeb sent a draft of the Share Exchange Agreement to the management team of Wealthbridge.

On August 7, 2019, Mr. Yongsheng Liu and Loeb discussed certain terms of the draft Share Exchange Agreement.

On August 8, 2019, Wealthbridge sent an initial version of the Share Exchange Agreement to Scienjoy for Scienjoy’s review.

On August 22, 2019, Mr. Yongsheng Liu and Mr. Xiaowu He had a conference call to update each other on various aspects of the deal, including auditing, legal due diligence, and certain terms of the Share Exchange Agreement.

From September 9, 2019 to September 13, 2019, Mr. Yongsheng Liu had a number of meetings in New York, including with Loeb, Friedman and Chardan, to discuss the status, terms and documents for the potential business combination, including the Share Exchange Agreement, Scienjoy’s Financial Statements and production of a draft proxy statement.

On September 17, 2019, Mr. Yongsheng Liu and Mr. Xiaowu He held a conference call to discuss plans for a roadshow.

On September 26, 2019, Mr. Yongsheng Liu and Mr. Xiaowu He held a meeting at Scienjoy’s Beijing office to negotiate certain terms of the Share Exchange Agreement, including board of directors, termination fee, share exchange price, earnout payment, trust extension, escrow of a portion of the shares being issued at closing and indemnification.

From October 8, 2019 to October 25, 2019, there were multiple conference calls and emails among the representatives of Wealthbridge, Scienjoy, Loeb, and JunHe Law Offices LLC to discuss and negotiate certain outstanding provisions of the Share Exchange Agreement, including the termination fee, board of directors, and indemnification obligations.

On October 25, 2019, the management teams of both Wealthbridge and Scienjoy agreed to present the Share Exchange Agreement to their respective Boards of Directors.

On October 27, 2018, Wealthbridge’s Board held a special board meeting to review the transaction with Scienjoy. At this meeting, Wealthbridge’s Board of Directors approved the transaction and authorized Wealthbridge to enter into the definitive agreement with Scienjoy for the purpose of consummating a business combination.

On October 28, 2019, the Share Exchange Agreement was signed by both parties.

On November 1, 2019, the signing of the Share Exchange Agreement by Wealthbridge and Scienjoy was announced to the public. Wealthbridge filed a Current Report on Form 8-K in the meanwhile including the press release and a copy of the Share Exchange Agreement.

Wealthbridge’s Board’s Reasons for the Approval of the Business Combination

Before reaching its decision, the Wealthbridge’s Board reviewed the results of Wealthbridge management’s due diligence investigation, and the due diligence investigations of Wealthbridge’s third party legal advisors. On October 27, 2019, Wealthbridge’s Board unanimously approved the Share Exchange Agreement and the transactions contemplated thereby, determined that the Business Combination is in the best interests of Wealthbridge shareholders, directed that the agreements be submitted to Wealthbridge’s shareholders for approval and adoption, and recommended that Wealthbridge’s shareholders approve and adopt the agreements and transactions contemplated thereby.

Prior to reaching the decision to approve the agreements and the transaction, our board of directors received information from its legal advisors and third-party resources. We retained Chardan Capital Markets, LLC (“Chardan”) as our financial advisor, which also served as the lead underwriter of our initial public offering in 2019. Chardan is an independent, fully licensed, FINRA-registered, global investment bank and its range of services include capital raising, merger and acquisition advisory, strategic advisory, equity research, corporate access and institutional trading. It is also a bank that underwrites, advises, manages, and sponsors special purpose acquisition companies (SPACs). Chardan has been an underwriter in 35 SPAC offerings from 2016 to 2019, and also has acted as buyside M&A, capital markets, and financial advisor in 9 SPAC business combination in 2018 and 2019. Wealthbridge’s board mainly considered the following factors during our selection of financial advisor and finally decided to retain Chardan as our financial advisor: 1) the financial advisor should have extensive M&A transaction experience and be able to offer support during negotiation and deal structuring; 2) the financial advisor should be familiar with the SPAC transaction process and could advise the company on a plan to complete the business combination transaction; and 3) the financial advisor should have extensive experience working with public company clients.

Mr. Yongsheng Liu and other management members had a number of conference calls with Mr. Jack Liu, the senior vice president of Chardan to discuss the reasonableness of the valuation and compensation offered by Scienjoy; however no written communications or written reports as to the valuation of Scienjoy were produced by our financial advisor.  According to Chardan, the valuation offered by Scienjoy, compared to DOYU and HUYA, the most direct comparable companies due to the similar revenue model and sector focus, the same geographical location coverage, and the fact that they are all listed on major U.S. listing exchanges, is favorable. See “Favorable Valuation” below for further information.

Since Wealthbridge’s IPO in February of 2019, our management team and board of directors have been conducting a search for potential business combination partners. Wealthbridge’s management and the board of directors considered a wide variety of factors in connection with its evaluation of the Business Combination but did not find it to be practical to quantify or assign weights to the specific factors in reaching its final decision. In considering the Business Combination with Scienjoy and prior to reaching the final decision, our management team and the board of directors reviewed the results of the business and financial due diligence conducted by our management and third party legal and financial advisors, which included:

After reviewing the results of the business and financial due diligence listed above, our management team and the board of directors determined to proceed with a transaction with Scienjoy for the following reasons:

As early as 2005, live-streaming culture began in China when public video streaming services were repurposed by users to host public live streaming performances online. Today, millions of audience are watching anchors or hosts perform live entertainment streaming shows online each night on various live-streaming platforms. Scienjoy focuses on show-room live-streaming where hosts sing and dance in front of a webcam. As its popularity grew, live-streaming sessions have shifted to become a new form of social media, allowing the creation of social connections between hosts and audiences. Audience members that are reluctant to integrate into traditional social settings are provided with a new means of developing social connections.

Show-room live-streaming companies generate revenue from virtual item sales to audience members that gift these virtual items to anchors or hosts. These recipients of the virtual gifts then sell the virtual gift items at a discount back to the live streaming company to generate revenue. Purchasing virtual gifts is becoming increasingly accepted and popular among live streaming audience. Given the strong cultural and extensive support in China, as well as the history of live streaming, the board of directors of Wealthbridge found Scienjoy uniquely and attractively positioned in a promising and high potential industry.

Online live entertainment streaming, according to a Frost & Sullivan report, accounts for 29% of the entire mobile live streaming market in China and its market size is estimated to grow from $1.9 billion in 2018 to $5.4 billion in 2022, representing a compound annual growth rate, or CAGR, of 29.8%.

Since its inception in 2011, Scienjoy has developed deep video streaming industry knowledge and expertise and established itself as a pioneer in video technology. Scienjoy developed its proprietary set of end-to-end (broadcaster-to-user) mobile video streaming solutions. Other advanced video technologies developed by Scienjoy include mobile-compatible animation engine technology, event-driven asynchronous business processing mechanism, linearly expanding deployment of servers, modular service development and assembly, high-throughput parallel messaging service clusters, and spam filtering based on machine learning. Scienjoy has invested heavily in augmented reality, virtual reality, artificial intelligence, big data mining technology, and physics engine technology.

Scienjoy is a leading live entertainment streaming social platform in China with 184.98 million registered users as of June 30, 2019. Its Quarter Active User (QAU) for the quarter ended June 30, 2019 was 11.4 million, as compared to 3.7 million at KuGou and 2.5 million at MOMO, two other live entertainment streaming competitors in China. Scienjoy’s annual ARPPU was approximately RMB1,406 for the year ended December 31, 2018. According to iResearch, in 2018, live streaming annual ARPPU in China was RMB574, which takes into account both the game-centric and non-game centric live streaming platforms.

Scienjoy’s founding team, Mr. Xiaowu He, Mr. Bo Wan, Mr. Wesley Lu, currently hold positions of CEO, COO and EVP, respectively, at the company. The seasoned executive team not only have established a common vision but also demonstrated their strong conviction of the business by investing together each considerable time and energy at strategic level.

The board of Wealthbridge took note of the post-Closing ownership structure whereby the existing owner of Scienjoy agreed to: (i) accept all of their financial consideration for the Business Combination in equity; and (ii) a six to twelve-month lock-up period with respect to the equity consideration received from the Business Combination.

The board of Wealthbridge believes that Scienjoy is well-positioned for future growth via bolt-on acquisitions as Wealthbridge believes that the live streaming market in China will undergo a consolidation. After the Business Combination and public listing, Scienjoy will be able to leverage public equity currency to pursue acquisitions.

Wealthbridge’s board, in consultation with its financial advisor, determined to use a public comparable company analysis to determine Wealthbridge’s value. Among various valuation metrics, we believe that EV/Sales and P/E multiple, or Price-to-Earning ratio, reflects the value of Scienjoy and its comparable companies in the live streaming space. Between the two valuation metrics, Wealthbridge believes that P/E is likely to be perceived by public market investors as the most relevant valuation metric for Scienjoy.

In arriving at its valuation conclusion, our financial advisor reviewed all 6 Chinese companies that are currently listed publicly and offer live streaming as one of their core products. They are Inke Limited (HKSE: 03700), JOYY Inc.(NASDAQ:YY), Bilibili Inc, (NASDAQ: BILI), Douyu International Holdings Limited (NASDAQ: DOYU), Huya Inc. (NYSE: HUYA), and Momo Inc. (NASDAQ: MOMO). Among these 6 comparable companies, all but Inke Limited are listed in the U.S. stock exchanges. Inke is currently listed on Hong Kong stock exchange and appears to be the only company in the list that has reported a negative year over year revenue growth. Inke and JOYY compete directly with Scienjoy in the live entertainment streaming business while BILI, DOYU, HUYA and MOMO are more focused on live game streaming. YY, HUYA and MOMO are the only 3 companies that reported positive net earnings.

Among the potentially comparable companies identified by our financial advisor, Wealthbridge placed less emphasis on Inke due to its negative growth trend. Wealthbridge’s board did not view JOYY and MOMO as most relevant comparable companies as streaming revenue only accounts for a small percentage of their total revenue. Wealthbridge’s board consequently focused on HUYA and DOYU, two Chinese live streaming companies that recently completed their IPOs in the U.S. Wealthbridge determined that these two pure play streaming companies are the most direct comparable companies due to the similar revenue model and sector focus, and the same geographical location coverage, and the fact that they are all listed on major U.S. listing exchanges. Wealthbridge’s board also considered a number of other factors. For example, in terms of user spending and profit margin, Scienjoy’s paying users have higher average spending than those of HUYA and DOYU, and as a result Scienjoy achieves a higher net income margin. Wealthbridge’s board recognized that HUYA and DOYU have greater scale in terms of revenue, registered users, active users and paying users. Therefore, it concluded that Scienjoy’s smaller scale compared to HUYA and DOYU should lead to a modest discounted valuation multiple, although this was offset by the premium associated with its higher profit margins.

Scienjoy, after Business Combination with Wealthbridge, will have a pro forma equity market value of approximately $250 million at closing, or approximately 1.9x estimated 2019 sales or 12.6x 2019 estimated net income, assuming no redemptions. Compared to the 2.7x EV/Sales of DOYU and 4.0x EV/Sales or 74.4x P/E of HUYA, Scienjoy’s equity is being valued at a 29% discount to DOYU and 83% discount (based on P/E) or 53% discount (based on EV/Sales) to HUYA.

In making its recommendation, the board of Wealthbridge also considered, among other things, the following negative factors relating to the Business Combination:

The board of Wealthbridge concluded that the potential benefits that it expects its shareholders to achieve as a result of the Business Combination outweighs the potential negative factors described above. Accordingly, the board of Wealthbridge unanimously determined that the Share Exchange Agreement and the Business Combination are advisable, fair to, and in the best interests of, its shareholders.

Other Considerations

The board of directors focused its analysis on whether the Business Combination is likely to generate a return for its shareholders that is greater than if the trust were to be liquidated. Our board of directors unanimously concluded that the Share Exchange Agreement with Scienjoy is in the best interests of the Wealthbridge shareholders. The board of directors did not obtain a fairness opinion on which to base its assessment. Because of the financial skills and background of its members, the board of directors believes it was qualified to perform the analysis discussed in this section.

Recommendation of Wealthbridge’s Board of Directors

After careful consideration, Wealthbridge’s Board determined that the Business Combination with Scienjoy is in the best interests of Wealthbridge and its shareholders. On the basis of the foregoing, Wealthbridge’s Board has approved and declared advisable the Business Combination with Scienjoy and recommends that you vote or give instructions to vote “FOR” each of the Business Combination Proposal and the other proposals.

The board of directors recommends a vote “FOR” each of the Business Combination Proposal and the other proposals — Wealthbridge’s board of directors have interests that may be different from, or in addition to your interests as a shareholder. See “The Business Combination Proposal — Interests of Certain Persons in the Acquisition” in this proxy statement for further information.

Interests of Certain Persons in the Business Combination

When you consider the recommendation of the board of directors in favor of adoption of the Business Combination Proposal and other proposals, you should keep in mind that the directors and officers of Wealthbridge have interests in the Business Combination that are different from, or in addition to, your interests as a shareholder, including:

(1) Jining Li and Yongsheng Liu jointly own, and Jining Li controls, Oriental Holdings Limited, our sponsor.

(2) Consists of shares owned by Oriental Holdings Limited, our sponsor.

Such ordinary shares and units had an aggregate market value of approximately $[●] based on the last sale price of Wealthbridge’s ordinary shares of $[●] and Wealthbridge’s units of $[●], on the Nasdaq Capital Market as of the Record Date;

As a result, the financial interest of Wealthbridge’s officers, directors and initial shareholders or their affiliates could influence its officers’ and directors’ motivation in selecting Scienjoy as a target and therefore there may be a conflict of interest when it determined that the Business Combination is in the shareholders’ best interest; 

Anticipated Accounting Treatment

The Business Combination will be accounted for as a reverse merger in accordance with U.S. GAAP. Under this method of accounting, Wealthbridge will be treated as the “acquired” company for financial reporting purposes. This determination was primarily based on the holders of Scienjoy expecting to have a majority of the voting power of the post-combination company, Scienjoy senior management comprising substantially all of the senior management of the post-combination company, the relative size of Scienjoy compared to Wealthbridge, and Scienjoy operations comprising the ongoing operations of the post-combination company. Accordingly, for accounting purposes, the Business Combination will be treated as the equivalent of Scienjoy issuing stock for the net assets of Wealthbridge, accompanied by a recapitalization. The net assets of Wealthbridge will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination will be those of Scienjoy.

Regulatory Approvals

The Business Combination and the other transactions contemplated by the Share Exchange Agreement are not subject to any additional federal or state regulatory requirements or approvals, including the Hart-Scott Rodino Antitrust Improvements Act of 1976.

THE SHARE EXCHANGE AGREEMENT

The following is a summary of the material provisions of the Share Exchange Agreement, a copy of which is attached as Annex A to this proxy statement. You are encouraged to read the Share Exchange Agreement in its entirety for a more complete description of the terms and conditions of the Acquisition.

Business Combination with Scienjoy; Acquisition Consideration

Upon the closing of the transactions contemplated in the Share Exchange Agreement, Wealthbridge will acquire 100% of the issued and outstanding securities of Scienjoy, in exchange for approximately 16.4 million ordinary shares of Wealthbridge, among which 1.64 million ordinary shares of Wealthbridge are to be issued and held in escrow to satisfy any indemnification obligations of the Sellers. Additionally, the Sellers may be entitled to receive earnout shares as follows: (1) if Scienjoy’s net income before tax for the year ended December 31, 2019 is greater than or equal to either US$20,900,000 or RMB 140,000,000 the Sellers will be entitled to receive 3,000,000 ordinary shares of Wealthbridge (subject to the reclassification of the ordinary shares of Wealthbridge as described in more details under Section “Voting Agreement” below); (2) if Scienjoy’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 Sellers will be entitled to receive 3,000,000 ordinary shares of Wealthbridge (subject to the reclassification of the ordinary shares of Wealthbridge as described in more details under Section “Voting Agreement” below); and (3) if Scienjoy’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 Sellers will be entitled to receive 3,000,000 ordinary shares of Wealthbridge (subject to the reclassification of the ordinary shares of Wealthbridge as described in more details under Section “Voting Agreement” below).

Notwithstanding the net income before tax achieved by the post-transaction company for any period, the Sellers will receive (i) 3,000,000 earnout shares if the share price of Wealthbridge is higher than $15.00 for any sixty days in any period of ninety consecutive trading days during an twelve month period following the closing; (ii) 3,000,000 earnout shares if the share price of Wealthbridge is higher than $20.00 for any sixty days in any period of ninety consecutive trading days between the 13th month and 24th month following the Closing, and (iii) 3,000,000 earnout shares if the share price of Wealthbridge is higher than $25.00 for any sixty days in any period of ninety consecutive trading between the 25th month and 36th month following the Closing.

We refer to this transaction as the “Business Combination.”

Representations and Warranties

In the Share Exchange Agreement, Scienjoy makes certain representations and warranties (with certain exceptions set forth in the disclosure schedule to the Share Exchange Agreement) relating to, among other things: (a) proper corporate organization of Scienjoy and its subsidiaries and other companies in which it is a minority shareholder and similar corporate matters; (b) authorization, execution, delivery and enforceability of the Share Exchange Agreement and other transaction documents; (c) absence of conflicts; (d) capital structure and title to units; (e) accuracy of constitutional documents and corporate records; (f) required consents and approvals; (g) financial information; (h) absence of certain changes or events; (i) title to assets and properties; (j) material contracts; (k) insurance; (l) licenses and permits; (m) compliance with laws, including those relating to foreign corrupt practices and money laundering; (n) ownership of intellectual property; (o) customers and suppliers; (p) employment and labor matters; (q) taxes and audits; (r) environmental matters; (s) brokers and finders; (t) that Scienjoy is not an investment company; and (u) other customary representations and warranties.

In the Share Exchange Agreement, Wealthbridge makes certain representations and warranties relating to, among other things: (a) proper corporate organization and similar corporate matters; (b) authorization, execution, delivery and enforceability of the Share Exchange Agreement and other transaction documents; (c) litigation; (d) brokers and finders; (e) capital structure; (f) validity of share issuance; (g) minimum trust fund amount; and (h) validity of Nasdaq Stock Market listing; (i) SEC filing requirements; (j) certain business practices; (k) compliance with laws, including those relating to foreign corrupt practices and money laundering.

Conduct Prior to Closing; Covenants

Each of Scienjoy and Wealthbridge has agreed to operate the business in the ordinary course, consistent with past practices, prior to the closing of the Acquisition (with certain exceptions) and not to take certain specified actions without the prior written consent of the other party.

The Share Exchange Agreement also contains covenants providing for:

Conditions to Closing

General Conditions

Consummation of the Share Exchange Agreement and the Acquisition is conditioned on, among other things, (i) the absence of any order, stay, judgment or decree by any government agency making the Acquisition illegal or otherwise preventing the Acquisition; (ii) Wealthbridge receiving approval from its shareholders to the Acquisition, and (iii) Wealthbridge remaining its listing on Nasdaq and the additional listing application for the closing payment shares being approved by Nasdaq.

Scienjoy and the Sellers’s Conditions to Closing

The obligations of the Sellers and Scienjoy to consummate the transactions contemplated by the Share Exchange Agreement, in addition to the conditions described above, are conditioned upon each of the following, among other things:

Wealthbridge’s Conditions to Closing

The obligations of Wealthbridge to consummate the transactions contemplated by the Share Exchange Agreement, in addition to the conditions described above in the first paragraph of this section, are conditioned upon each of the following, among other things:

Termination

The Share Exchange Agreement may be terminated and/or abandoned at any time prior to the closing, whether before or after approval of the proposals being presented to Wealthbridge’s shareholders, by:

Indemnification

Until the one year anniversary of the date of the Share Exchange Agreement, Scienjoy and Sellers agreed to indemnify Wealthbridge and its affiliates from any damages arising from any breach, inaccuracy or nonfulfillment or the alleged breach, inaccuracy or nonfulfillment of any of the representations, warranties and covenants of Scienjoy and the Sellers contained in the Share Exchange Agreement or any of the additional agreements or any certificate or other writing delivered pursuant to the Share Exchange Agreement. The indemnification applies only to amounts (in aggregate) in excess of $50,000, and the indemnification obligations are capped at the value of 1,640,000 shares that are being held in escrow. Such indemnification can only be satisfied with the cancellation of Wealthbridge ordinary shares.

The foregoing summary of the Share Exchange Agreement does not purport to be complete and is qualified in its entirety by reference to the actual agreement, which is filed as Annex A hereto.

In addition to the Share Exchange agreement, the following agreements will be entered into in connection with the closing of the business combination.

Escrow Agreement

In connection with the Acquisition, Wealthbridge, the Sellers and an escrow agent will enter into an Escrow Agreement pursuant to which Wealthbridge will deposit 1,640,000 of its ordinary shares, representing 10% of the aggregate amount of shares to be issued to the Sellers pursuant to the Acquisition, to secure the indemnification obligations of the Sellers as contemplated by the Share Exchange Agreement. The form of Escrow Agreement that was attached as an exhibit to the Share Exchange Agreement is attached to this proxy statement as Annex C.

Registration Rights Agreement 

In connection with the Acquisition, Wealthbridge and the Sellers will enter into a Registration Rights Agreement to provide for the registration of the ordinary shares being issued to the Sellers in connection with the Acquisition. The Sellers will be entitled to (i) make a written demand for registration under the Securities Act of all or part of the closing payment shares (up to a maximum of two demands in total), and (ii) “piggy-back” registration rights with respect to registration statements filed following the consummation of the Acquisition. Wealthbridge will bear the expenses incurred in connection with the filing of any such registration statements. The form of Registration Agreement that was attached as an exhibit to the Share Exchange Agreement is attached to this proxy statement as Annex D.

Voting Agreement

In connection with the Acquisition, Wealthbridge, Oriental Holdings Limited (Wealthbridge’s sponsor) and the Sellers will enter into a six year Voting Agreement, which will provide that, (i) after the closing of the Acquisition and as promptly as practicable following the determination that the combined company qualifies as a Foreign Private Issuer, each voting party agrees to vote to reclassify the Wealthbridge ordinary shares into class A and class B ordinary shares and convert a certain amount of class A ordinary shares to class B ordinary shares, as described in Section 9.8 of the Share Exchange Agreement; and (ii) the Sellers will have the right to designate five (5) persons that the parties to the Voting Agreement must vote in favor of in connection with an election of directors and Oriental Holdings Limited will have the right to designate two (2) directors that the parties to the Voting Agreement must vote in favor of in connection with an election of directors. The form of Voting Agreement that was attached as an exhibit to the Share Exchange Agreement is attached to this proxy statement as Annex E.

Lock-Up Agreements

In connection with the Acquisition, Wealthbridge will enter into a Lock-Up Agreement with each Seller with respect to certain lock-up arrangements, which will provide that each Seller will not, within 365 calendar days from the Closing of the Acquisition, offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any of the shares issued in connection with the Acquisition, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of such shares, whether any of these transactions are to be settled by delivery of any such shares, in cash, or otherwise. However, the Sellers will be allowed to transfer any of the lock-up shares (other than the escrow shares while they are held in the escrow account) under the situations specified in the Lock-Up Agreement. The form of Lock-Up Agreements that were attached as an exhibit to the Share Exchange Agreement is attached to this proxy statement as Annex F.

THE AMENDMENT PROPOSAL

Purpose of the Amendment Proposal

In connection with the transactions contemplated by the Share Exchange Agreement, Wealthbridge and Scienjoy have agreed that post-closing, Wealthbridge will change its name to “Scienjoy Holding Corporation” in order to represent the business of the combined company after the closing of the Business Combination.

Required Vote

Approval of the Amendment Proposal requires the affirmative vote of the majority of the issued and outstanding ordinary shares present and entitled to vote at the extraordinary general meeting.

Board Recommendation

The board of directors recommends a vote “FOR” adoption of the Amendment Proposal.

THE NASDAQ PROPOSAL

Background and Overview

Under the terms of the Share Exchange Agreement, Wealthbridge is required to issue more than 20% of its issued and outstanding ordinary shares to the Sellers in a private placement transaction. Because of the issuance of in excess of 20% of the outstanding ordinary shares of Wealthbridge, we are required to obtain shareholder approval in order to comply with Nasdaq Listing Rules 5635(a) and (d).

Under Nasdaq Listing Rule 5635(a), shareholder approval is required prior to the issuance of securities in connection with the acquisition of another company if such securities are not issued in a public offering and (A) such securities have, or will have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding before the issuance of ordinary shares (or securities convertible into or exercisable for ordinary shares); or (B) the number of ordinary shares to be issued is or will be equal to or in excess of 20% of the number of ordinary shares outstanding before the issuance of the stock or securities.

Under Nasdaq Listing Rule 5635(d), shareholder approval is required for a transaction other than a public offering involving the sale, issuance or potential issuance by an issuer of ordinary shares (or securities convertible into or exercisable for ordinary shares) at a price that is less than the greater of book or market value of the stock if the number of ordinary shares to be issued is or may be equal to 20% or more of the ordinary shares, or 20% or more of the voting power, outstanding before the issuance.