Scienjoy Holding Corporation Reports Interim Nine months ended September 30, 2021 Unaudited Financial Results

BEIJING,Nov. 22,2021 -- Scienjoy Holding Corporation ("Scienjoy",the "Company",or "We") (NASDAQ: SJ),a leading live entertainment mobile streaming platform in China,today announced its unaudited financial results for the nine months ended September 30,2021.

Nine Months 2021 Operating and Financial Highlights

Total net revenues for the nine months ended September 30,2021 increased by 52.5% to RMB1,171.2 million (US$181.8 million) from RMB767.8 million in the same period of 2020.

Gross profit for the nine months ended September 30,2021 increased by 27.4% to RMB232.4 million (US$36.1 million) from RMB182.4 million in the same period of 2020.

Net income for the nine months ended September 30,2021 increased by 7.7% to RMB237.5 million (US$36.9 million) from RMB220.5 million in the same period of 2020.

Adjusted net income for the nine months ended September 30,2021 increased by 37.5% to RMB182.6 million (US$28.3 million) from RMB132.8 million in the same period of 2020.

Total paying users for the nine months ended September 31,2021 decreased by 10.8% to 648,465 from 727,385 in the same period of 2020.

Active broadcasters for the nine months ended September 31,2021 increased by 28.2% to 250,497 from 195,422 in the same period of 2020.

As of September 30,2021,the Company had RMB291.9 million (US$45.3 million) in cash and cash equivalents,which represented an increase of 29.9% from RMB224.8 million as of December 31,2020.

Mr. Victor He,Chairman and Chief Executive Officer of Scienjoy,commented,"Scienjoy has continued to achieve outstanding financial and operational results in the first nine months of 2021. Our revenues and adjusted net income for the nine months of 2021 are close to the full year results of fiscal year 2020,which reflect tremendous growth in our business. We have made significant progress on improving operating efficiency through refined operations and continued to invest and adopt extensive cutting-edge technologies to improve overall users' experience. The rapid growth number of active broadcasters has proved our strong capabilities in addressing increasing demands for livestreaming. Looking forward,we are committed to building the metaverse in the livestreaming field,by using Artificial Intelligence (AI),Augmented Reality (AR),Virtual Reality (VR),Mixed Reality (MR),big data,and blockchain to upgrade the fundamental elements of livestreaming settings and expand the offerings of livestreaming content. With the continuous development and application of advanced technologies,we aim to fulfill the fast-evolving expectations of our users and broadcasters,which are building an interactive connection between users and broadcasters and customizing their own experiences with a vast variety of contents and features. We remain optimistic and believe that we are well positioned to continue to capture the opportunity in the rapidly expanding and evolving market for live entertainment mobile streaming."

Mr. Denny Tang,Chief Financial Officer of Scienjoy,added,"We continued to deliver strong financial results in the first nine months of 2021 as we focused on investing in technologies to improve our platform and delivering the attractive experiences to our users and broadcasters. The significant increase in revenue and adjusted net income demonstrated the attractiveness of our platform. Looking ahead,we will still be dedicated to facilitating user growth,enhancing monetization and developing our technologies and ambition in building metaverse in livestreaming. We are confident that we will continue to generate significant revenue and provide greater value to our shareholders in the long term."

Nine Months 2021 Financial Results

Total net revenuesfor the nine months ended September 30,171.2 million (US$181.8 million) from RMB767.8 million in the same period of 2020,because more quality content are provided through our integrated multiple live streaming platforms including Beelive platforms we acquired in September 2020 and our ARPPU for the nine months ended September 30,2021 increased by 70% comparing to the same period of last year,partially offset by decrease in number of paying users.

Cost of revenuesfor the nine months ended September 30,2021increased by 60.4% to RMB938.8 million (US$145.7 million) from RMB585.4 million in the same period of 2020. The increase was primarily attributable to a 58.7%,or RMB297.0 million,year-over-year increase in the Company's revenue sharing fees and content costs,which was consistent with the 28.2% year-over-year increase in active broadcasters as well as the growth of the Company's overall live streaming operations for the nine months ended September 30,2021. In addition,the Company incurred share based compensation of RMB3.4 million for the nine months ended September 30,2021 and no such expense incurred in the same period of last year.

Gross profitfor the nine months ended September 30,2021 increased by 27.4% to RMB232.4 million (US$36.1 million) from RMB182.4 million in the same period of 2020.

Total operating expensesfor the nine months ended September 30,2021increased to RMB85.6 million (US$13.3 million) from RMB41.5 million in the same period of 2020.

Sales and marketing expenses for the nine months ended September 30,2021 kept constant at RMB3.7 million (US$0.6 million) as compared to the same period of 2020.

General and administrative expenses for the nine months ended September 30,2021 significantly increased to RMB38.6 million (US6.0 million) from RMB19.7 million in the same period of 2020.The increase was primarily because we had a share based compensation of RMB3.6 Million (US$0.6 million) and higher listing-related professional fees,employee salary and welfare and amortization of intangible assets as compared to the same period of 2020.

Research and development expenses for the nine months ended September 30,2021 increased by 91.6% to RMB39.8 million (US$6.2 million) from RMB20.8 million in the same period of 2020. The increase was due to higher R&D headcount and the Company had share based compensation of RMB5.4 million (US$0.8 million) in the first nine months ended September 30,2021.

Provision for doubtful accounts for the nine months ended September 30,2021 was RMB3.4 million (US$0.5 million) as compared to a recovery for doubtful accounts of RMB2.7 million in the same period of 2020

Income from operationsfor the nine months ended September 30,2021increased by 4.2% to RMB146.8 million (US$22.8 million) from RMB140.9 million in the same period of 2020.

Change in fair value of contingent considerationfor the nine months ended September 30,2021decreased by 48.1% to RMB45.5 million (US$7.1 million) from RMB87.6 million in the same period of 2020. Change in fair value of contingent consideration is derived from the Company's reverse recapitalization with Wealthbridge Acquisition Limited on May 7,2020,and acquisition of BeeLive on August 10,which involved payments of future contingent consideration upon the achievement of certain financial performance targets and specific market price levels. Earn out liabilities are recorded for the estimated fair value of the contingent consideration on the merger date. The fair value of the contingent consideration is re-measured at each reporting period,and the change in fair value is recognized as either income or expense.

Change in fair value of warrants liability for the nine months ended September 30,2021 amount to RMB21.8 million (US$3.4 million). The Company's warrants assumed from SPAC acquisition that have complex terms,such as a clause in which the warrant agreements contain a cash settlement provision whereby the holders could settle the warrants for cash upon a fundamental transaction that is considered outside of the control of management are considered to be a derivative that are recorded as a liability at fair value. The warrant derivative liability is adjusted to its fair value at the end of each reporting period,with the change being recorded as other expense or gain.

Change in fair value of investment in marketable securityfor the nine months ended September 30,2021 amount to RMB27.6 million (US$4.3 million) In January 2021,the Company,through its wholly owned subsidiary,Scienjoy Inc.,purchased from Cross Wealth Investment Holding Limited,an entity related to two directors of the Company,606,061 ordinary shares of Goldenbridge Acquisition Limited ("Goldenbridge") for an aggregated consideration of US$2 million. Goldenbridge was formed as a special purpose acquisition company. The investment was classified as investment in marketable security,which is adjusted to its fair value at the end of each reporting period,with the change being recorded as other expense or gain.

Net incomefor the nine months ended September 30,2021 increased by 7.7% to RMB237.5 million (US$36.9 million)from RMB220.5 million in the same period of 2020.

Adjusted net income for the nine months ended September 30,2021 increased by 37.5% to RMB182.6 million (US$28.3 million) from RMB132.8 million in the same period of 2020.

Basic and diluted net income per ordinary share for the nine months ended September 30,2021 were both RMB7.73 (US$1.20). In comparison,basic and diluted net income per ordinary share for the nine months ended September 30,2020 were both RMB10.14,respectively.

Adjusted basic and diluted net income per ordinary sharefor the nine months ended September 30,2021 were both RMB5.94 (US$0.92). In comparison,both adjusted basic and diluted net income per ordinary share for the nine months ended September 30,2020 were RMB6.11.

As of September 30,the Company hadcash and cash equivalentsof RMB291.9 million (US$45.3 million) compared to RMB224.8 million as of December 31,2020.

Business Outlook

The Company expects its total net revenues to be in the range of RMB393 million to RMB455 million in the fourth quarter of 2021. This forecast reflects the Company's current and preliminary views on the market and operational conditions,which are subject to change,particularly in respect to the potential impact of COVID-19 on the economy in China and other markets around the world.

About Scienjoy HoldingCorporation Limited

Founded in 2011,Scienjoy is a leading mobile livestreaming platform in China,and its core mission is to build a livestreaming service ecosystem to delight and entertain users. With approximately 250 million registered users,Scienjoy currently operates four livestreaming platform brands,including Showself,Lehai,Haixiu,and BeeLive,which features both the Mifeng Chinese version and BeeLive International version. Scienjoy uniquely combines a gamified business approach to livestreaming,in-depth knowledge of the livestreaming industry,and cutting-edge technologies such as blockchain,augmented reality (AR),virtual reality (VR),and big data,to create a unique user experience. Scienjoy is devoted to building a livestreaming Metaverse to provide users with the ultimate immersive experience,a social media network that transcends time and space,a digital community that spans virtual and physical reality,and a content-rich ecosystem. For more information,please visithttp://ir.scienjoy.com/.

Use of Non-GAAP Financial Measures

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

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

Exchange Rate Information

This announcement contains translations of certain RMB amounts into U.S. dollars at a specified rate solely for the convenience of the reader. Unless otherwise noted,all translations from RMB to U.S. dollars are made at a rate of RMB6.4434 to US$1.00,the noon buying rate in effect on September 30,in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB amounts could have been,or could be,converted,realized or settled in U.S. dollars at that rate on September30,or at any other rate.

Safe Harbor Statement

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

Investor Relations Contact

Ray Chen

VP,Investor relations

Scienjoy Inc.

+86-10-64428188

ray.chen@scienjoy.com

Tina Xiao

Ascent Investor Relations

+1 (917) 609-0333

tina.xiao@ascent-ir.com

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

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

Asof December31

Asof September 30

2020

2021

2021

RMB

RMB

US$

ASSETS

Current assets

Cash and cash equivalents

224,768

291,879

45,299

Accounts receivable,net

228,214

228,478

35,459

Prepaid expenses and other current assets

13,753

26,750

4,151

Amounts due from related parties

7

13,007

2,019

Investment in marketable security

-

40,606

6,302

Total current assets

466,742

600,720

93,230

Property and equipment,net

1,356

1,475

229

Intangible assets,net

239,634

236,686

36,733

Goodwill

92,069

92,069

14,289

Long term investments

5,000

53,000

8,225

Long term deposits and other non-current assets

1,382

12,139

1,884

Deferred tax assets– non-current

5,654

5,147

799

Total non-current assets

345,095

400,516

62,159

TOTAL ASSETS

811,837

1,001,236

155,389

LIABILITIES AND SHAREHOLDERS' EQUITY

LIABILITIES

Current liabilities:

Accounts payable

67,089

35,406

5,496

Accrued salary and employee benefits

18,141

12,155

1,886

Accrued expenses and other current liabilities

12,358

7,365

1,143

Current portion of contingent consideration – earn-out liability

92,183

52,783

8,192

Income tax payable

8,581

11,245

1,745

Loan payables - related parties

-

11,468

1,780

Deferred revenue

49,567

70,744

10,979

Warrants liabilities

29,558

5,090

790

Total current liabilities

277,477

206,256

32,011

Non-current liabilities

Deferred tax liabilities - non current

59,729

58,992

9,155

Contingent consideration – earn-out liability

15,116

8,175

1,269

Total non-current liabilities

74,845

67,167

10,424

TOTAL LIABILITIES

352,322

273,423

42,435

Commitments and contingencies

Shareholders' equity

Ordinary share,no par value,unlimited shares authorized,27,037,302 and

30,844,642 shares issued and outstanding as of December 31,2020 and September

30,respectively

(96,349)

133,719

20,753

Shares to be issued

200,100

-

-

Statutory reserves

18,352

28,824

4,473

Retained earnings

322,610

549,643

85,303

Accumulated other comprehensive income

14,802

15,627

2,425

Total shareholder's equity

459,515

727,813

112,954

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

811,389

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

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

For nine months ended

September30,

September30,

2020

2021

2021

RMB

RMB

US$

Live streaming - consumable virtual items revenue

743,882

1,133,248

175,877

Live streaming - time based virtual items revenue

20,431

25,527

3,962

Technical services

3,491

12,416

1,927

Total revenues

767,804

1,171,191

181,766

Cost of revenues

(585,379)

(938,797)

(145,699)

Gross profit

182,425

232,394

36,067

Operating expenses

Sales and marketing expenses

(3,739)

(3,746)

(581)

General and administrative expenses

(19,739)

(38,606)

(5,992)

Recovery (provision) for doubtful accounts

2,746

(3,405)

(528)

Research and development expenses

(20,770)

(39,793)

(6,176)

Total operating expenses

(41,502)

(85,550)

(13,277)

Income from operations

140,923

146,844

22,790

Interest income

2,154

1,882

293

Other income (expenses),net

(4,778)

(84)

(13)

Foreign exchange (loss) gain,net

983

(34)

(5)

Change in fair value of contingent consideration

87,648

45,463

7,056

Change in fair value of warrants liability

-

21,830

3,388

Change in fair value of investment in marketable security

-

27,648

4,291

Income before income taxes

226,930

243,549

37,800

Income tax benefit (expenses)

(6,465)

(6,044)

(938)

Net income

220,465

237,505

36,862

Other comprehensive income - foreign currency translation adjustment

5,282

825

128

Comprehensive income attributable to the Company's shareholders

225,747

238,330

36,990

Weighted average number of shares:

Basic and diluted

21,746,691

30,728,931

30,931

Earnings per share:

Basic and diluted

10.14

7.73

1.20

Reconciliations of Non-GAAP Results

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

For the nine months ended

September30,

2020

2021

2021

RMB

RMB

US$

Net income

220,862

Less:

Change in fair value of contingent consideration

87,388

Share based compensation

-

(12,367)

(1,919)

Adjusted net income*

132,817

182,579

28,337

Adjusted net incomeper ordinary share

Basic and diluted

6.11

5.94

0.92

"Adjusted net income" is defined as net income excluding change in fair value of contingent consideration,change in fair value of warrant liability and share based compensation. For more information,refer to "Use of Non-GAAP Financial Measures" and "Reconciliations of Non-GAAP Results" at the end of this press release.

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