As filed with the Securities and Exchange Commission
on October 1, 2021
Registration No.
UNITED STATES
SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM F-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT
OF 1933
SCIENJOY HOLDING CORPORATION
(Exact Name of Registrant
as Specified in Its Charter)
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British
Virgin Islands
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N/A
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(State or Other Jurisdiction
of
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(I.R.S. Employer
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Incorporation or Organization)
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Identification Number)
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3rd Floor,
JIA No.34, Shenggu Nanli
Chaoyang District, Beijing
100029,
China
(86) 10–6642 8188
+86 10 6442 8188
(Address, Including Zip
Code, and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
Cogency Global Inc.
122 East 42nd
Street, 18th Floor
New York, NY 10168
(800) 221-0102
(Name, Address, Including
Zip Code, and Telephone Number, Including Area Code, of Agent For Service)
Copies to
Lan Lou, Esq.
Jun He Law Offices LLC
Suite 1919, 630 Fifth
Avenue
New York, NY 10111
(646) 367-1744
Fax: (212) 703-8720
Approximate date of commencement of proposed sale to the public:
From time to time on or after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following box. ☐
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection
with dividend or interest reinvestment plans, check the following box. ☒
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number
of the earlier effective registration statement for the same offering. ☐
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. ☐
If this Form is a registration statement pursuant to General Instruction
I.C. or a post-effective amendment thereto that shall become effective upon filing with the Commission pursuant to Rule 462(e) under
the Securities Act, check the following box. ☐
If this Form is a post-effective amendment to a registration statement
filed pursuant to General Instruction I.C. filed to register additional securities or additional classes of securities pursuant to Rule
413(b) under the Securities Act, check the following box. ☐
Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933.
Emerging growth company ☒
If an emerging growth company that prepares its financial statements
in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act. ☐
† The term “new or revised financial accounting standard”
refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5,
2012.
CALCULATION OF REGISTRATION FEE
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Title of Each Class of Securities to be Registered
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Amount to be
Registered
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Proposed
Maximum
Offering
Price Per
Share
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Proposed
Maximum
Aggregate
Offering
Price (2)
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Amount of
Registration
Fee
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Primary Offering by Scienjoy Holding Corporation
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Ordinary shares, no par value (3)
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(1)
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Preferred shares (3)
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(1)
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Debt securities (3)
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(1)
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Warrants (3)
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(1)
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Rights (3)
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(1)
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Units (3)
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(1)
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Subtotal of Primary Offering
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$
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250,000,000.00
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(4)
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$
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23,175.00
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Secondary Offering by Selling Shareholders
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Ordinary shares, no par value
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4,492,650
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(5)
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$
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16,937,390.50
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(6)
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$
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1,847.86
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Total for Primary and Secondary Offerings
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$
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266,937,390.50
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$
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25,022.86
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(1)
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The
registrant is registering an indeterminate number of securities for offer and sale from time to time at indeterminate prices, which shall
have an aggregate offering price not to exceed US$250,000,000. In addition, pursuant to Rule 416(a) under the Securities Act of 1933,
as amended, this registration statement shall be deemed to cover any additional number of securities that may be issued from time to
time to prevent dilution as a result of a distribution, split, combination or similar transaction. Securities registered hereunder may
be sold separately, or together with other securities registered hereunder.
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(2)
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Includes
consideration to be received by the Registrant, if applicable, for registered securities that are issuable upon exercise, conversion,
or exchange of other registered securities.
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(3)
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Pursuant
to General Instruction II.C. of Form F-3, the table lists each of the classes of securities being registered and the aggregate proceeds
to be raised, but does not specify by each class information as to the amount to be registered, proposed maximum offering price per unit,
and proposed maximum aggregate offering price.
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(4)
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Estimated
solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
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(5)
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With
respect to the Secondary Offering, the proposed maximum offering price per ordinary share will be determined from time to time in connection
with, and at the time of, sale by the holders of such securities named in the registration statement.
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(6)
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Estimated
at $ 3.77 per share, the average of the high and low prices of the ordinary shares as reported on the Nasdaq Capital Market on September
27, 2021, solely for the purpose of calculating the registration fee in accordance with Rule 457(c) under the Securities Act.
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The Registrant hereby amends this Registration Statement on such
date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically
states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933,
as amended, or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting
pursuant to such Section 8(a), may determine.
The information in this prospectus is
not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities
in any jurisdiction where the offer or sale is not permitted.
SUBJECT TO COMPLETION
DATED October 1, 2021
PRELIMINARY PROSPECTUS
SCIENJOY HOLDING CORPORATION
Up to US$250,000,000 of
Ordinary Shares
Class A Preferred Shares
Debt Securities
Warrants
Rights
Units
4,492,650 Ordinary Shares Offered by the Selling
Shareholder
We may, from time to time, in one or more offerings,
offer and sell up to US$250,000,000 of any combination, together or separately, of our ordinary shares, no par value, Class A preferred
shares, debt securities, warrants, rights, and units, or any combination thereof as described in this prospectus. In this prospectus,
references to the term “securities” refers collectively to our ordinary shares, Class A preferred shares, debt securities,
warrants, rights, and units. The prospectus supplement for each offering of securities will describe in detail the plan of distribution
for that offering. For general information about the distribution of the securities offered, please see “Plan of Distribution”
in this prospectus.
In addition, selling shareholders named in this
prospectus or their transferees may, from time to time in one or more offerings, offer and sell up to 4,492,650 of our ordinary shares.
We will not receive any proceeds from the sale of our ordinary shares by selling shareholders, but we may pay certain registration and
offering fees and expenses associated with the registration and sale of those securities. See “Selling Shareholders.”
The prospectus provides a general description
of the securities we or the selling shareholders may offer. We will provide the specific terms of the securities offered in one or more
supplements to this prospectus. We may also authorize one or more free writing prospectuses to be provided to you in connection with
these offerings. The prospectus supplement and any related free writing prospectus may add, update or change information contained in
this prospectus. You should carefully read this prospectus, the applicable prospectus supplement and any related free writing prospectus,
as well as the documents incorporated by reference herein or therein, before you invest in any of our securities.
The aggregate market value of our outstanding
ordinary shares held by non-affiliates, or public float, as of September 30, 2021, was approximately US$64,198,643, which was calculated
based on 14,860,797 ordinary shares held by non-affiliates and US$4.32 per ordinary share, which was the closing price of our ordinary
shares on Nasdaq on September 30, 2021. During the 12 calendar months prior to and including the date of this prospectus, we have sold
108,230 ordinary shares pursuant to General Instruction I.B.5 of Form F-3.
We may, from time to time, offer and sell these
securities and selling shareholders may, from time to time, offer the ordinary shares through public or private transactions, directly
or through one or more underwriters, dealers, brokers and agents, on or off the NASDAQ Capital Market, or NASDAQ, at prevailing market
prices or at privately negotiated prices. If any underwriters, dealers, brokers or agents are involved in the sale of any of these securities,
the appliable prospectus supplement will set forth the name of the underwriter, dealer, broker or agent and any applicable fees, commissions
or discounts.
Our ordinary shares are traded on the NASDAQ
Capital Market (“NASDAQ”) under the symbol “SJ”. On September 30, 2021, the closing price for our ordinary shares
was $4.32 per share as reported on NASDAQ.
Investing in our securities involves
certain risks. You should review carefully the risks and uncertainties referenced under the heading “Risk Factors” on
page 3 of this prospectus as well as those contained in the applicable prospectus supplement and any related free writing prospectus
and in the other documents that are incorporated by reference into this prospectus.
We are both an “emerging growth company”
and a “foreign private issuer” as defined under the federal securities laws and, as such, will be subject to reduced public
company reporting requirements.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The date of this prospectus
is , 2021.
TABLE OF CONTENTS
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement
on Form F-3 that we have filed with the Securities and Exchange Commission, or the SEC, using a “shelf” registration process,
for the purpose of registering the securities discussed herein. Under this shelf registration process, we may, at any time and from time
to time, sell any combination of the securities described in this prospectus in one or more offerings up to a total aggregate offering
price of $250,000,000, and the selling shareholders referred to in this prospectus may
sell up to an aggregate amount of 4,492,650 ordinary shares in one or more offerings. Specific information about the offering may also be included in a prospectus
supplement, which may update or change information included in this prospectus. You should read both this prospectus and any prospectus
supplement, including the documents referred to in the section entitled “Incorporation by Certain Information by Reference,”
together with the additional information described under the heading “Where You Can Find More Information.”
We may, from time to time, offer and sell these
securities and selling shareholders may, from time to time, offer the ordinary shares through public or private transactions, directly
or through one or more underwriters, dealers, brokers and agents, on or off NASDAQ, at prevailing market prices or at privately negotiated
prices. See “Plan of Distribution.”
You should rely only on the information contained
in or incorporated by reference in this prospectus, and in any amendment or supplement to this prospectus or any free writing prospectus
prepared by or on our behalf. Neither we nor the selling shareholders have authorized any other person to provide you with different
or additional information. Neither we nor the selling shareholders take responsibility for, nor can we provide assurance as to the reliability
of, any other information that others may provide. Neither we nor the selling shareholders are making an offer to sell these securities
in any jurisdiction where the offer or sale is not permitted. You should assume that the information in this prospectus, any applicable
prospectus supplement or any related free writing prospectus is accurate only as of the date on the front of the document and that any
information incorporated by reference is accurate only as of the date of the document incorporated by reference, regardless of the time
of delivery of this prospectus, any applicable prospectus supplement or any related free writing prospectus, or any sale of a security,
unless we indicate otherwise. Our business, financial condition, results of operations and/or prospects may have changed since those
dates.
This prospectus contains summaries of certain
provisions contained in some of the documents described herein, but reference is made to the actual documents for complete information.
All of the summaries are qualified in their entirety by the actual documents. Copies of some of the documents referred to herein have
been filed, will be filed or will be incorporated by reference as exhibits to the registration statement of which this prospectus is
a part, and you may obtain copies of those documents as described below under the heading “Where You Can Find More Information.”
No offer of the securities will be made in any
jurisdiction where the offer is not permitted.
EXPLANATORY NOTE
As used in this prospectus, unless the context
otherwise requires:
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references
to the terms “Company,” “we,” “us” and “our” refer to Scienjoy Holding Corporation and,
where applicable, our wholly-owned subsidiaries;
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the
term “Business Combination” refers to the Company’s acquisition of Scienjoy Inc. on May 7, 2020 and related transactions;
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the
term “Scienjoy” refers to Scienjoy Inc. and its subsidiaries and VIE entities for all periods prior to the Business Combination
and refers to the Company for all periods following the Business Combination;
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the
term “VIE Entities” refers to to Scienjoy’s variable interest entities, Zhihui Qiyuan (Beijing) Technology, Co. Ltd.
(智汇启源(北京)科技有限公司) or Zhihui Qiyuan, a limited liability
company organized and existing under the laws of the PRC, and Zhihui Qiyuan’s subsidiaries, including Hai Xiu (Beijing) Technology
Company Co. Ltd., Beijing Le Hai Technology Co. Ltd., Beijing Sixiang Shiguang Technology Co. Ltd., Sixiang Mifeng (Tianjin) Technology
Co., Ltd (formerly known as Tianjin Guangju Dingfei Technology Co., Ltd.), Changxiang Infinite Technology (Beijing) Co., Ltd., Lixiaozhi
(Chongqing) Internet Technology Co., Ltd., and ZhiHui QiYuan (HaiNan) Investment Co,. Ltd., each such company formed under PRC Law. Each
of the VIEs is consolidated into our consolidated financial statements in accordance with U.S. GAAP as if they were its wholly-owned
subsidiaries; and
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the
term “Share Exchange Agreement” refers to the Share Exchanged Agreement, dated October 28, 2019, by and among Scienjoy, the
Company, Lavacano Holdings Limited, and WBY Entertainment Holdings Ltd.
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This prospectus contains information and statistics
relating to China’s economy and its entertainment live streaming industry derived from various publications issued by market research
companies and PRC governmental entities, which have not been independently verified by us. The information in such sources may not be
consistent with other information compiled in or outside China.
Translations of balances in our consolidated
balance sheets, consolidated statements of income and consolidated statements of cash flows from RMB into USD (or “US$”)
as of and for the year ended December 31, 2020 are solely for the convenience of the reader and were calculated at the rate of US$1.00
= RMB6.5250, representing the noon buying rate in The City of New York for cable transfers of RMB as certified for customs purposes by
the Federal Reserve Bank of New York on the last trading day of December 31, 2020.
Translations of balances in our consolidated
balance sheets, consolidated statements of income and consolidated statements of cash flows from RMB into USD (or “US$”)
as of and for the year ended December 31, 2019 are solely for the convenience of the reader and were calculated at the rate of US$1.00
= RMB6.96, representing the noon buying rate in The City of New York for cable transfers of RMB as certified for customs purposes by
the Federal Reserve Bank of New York on the last trading day of December 28, 2019.
No representation is made that the RMB amounts
represent or could have been, or could be, converted, realized or settled into US$ at that rate, or at any other rate.
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain statements in this prospectus may constitute
“forward-looking statements” for purposes of the federal securities laws. Our forward-looking statements include, but are
not limited to, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding
the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances,
including any underlying assumptions, are forward-looking statements. The words “anticipate,” “believe,” “continue,”
“could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,”
“possible,” “potential,” “predict,” “project,” “should,” “would”
and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not
forward-looking. Forward-looking statements in this prospectus may include, for example, statements about:
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our goals and strategies;
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our ability to attract
new users and talent to our platform;
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our future business development,
financial condition and results of operations;
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the expected growth in,
and market size of, the mobile live streaming platforms;
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expected changes in our
revenue, costs or expenditures;
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our ability to continue
to source and offer new and attractive products and services;
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our expectations regarding
demand for and market acceptance of our brands, platforms and services;
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our expectations regarding
growth in our user base and level of user engagement;
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our ability to attract,
retain and monetize users;
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our ability to continue
to develop new technologies and/or upgrade our existing technologies;
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growth of and trends
of competition in our industry;
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government policies and
regulations relating to our industry; and
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general economic and
business conditions in the markets we have businesses.
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For additional information regarding known material
factors that could affect our operating results and performance, please read the section entitled “Risk Factors” in this
prospectus, in “Item 3. Key Information—3.D. Risk Factors” in our annual report on Form 20-F for the fiscal year ended
December 31, 2020 filed on May 3, 2021, and in any applicable prospectus supplement, as well as all risk factors described in the documents
incorporated by reference herein. Should one or more of the risks or uncertainties described in this prospectus made in connection therewith
occur, or should underlying assumptions prove incorrect, actual results and plans could different materially from those expressed in
any forward-looking statements.
SUMMARY
This summary highlights selected information
and does not contain all of the information that is important to you. This summary is qualified in its entirety by the more detailed
information included in or incorporated by reference into this prospectus. Before making your investment decision with respect to our
securities, you should carefully read this entire prospectus, any applicable prospectus supplement and the documents referred to in “Where
You Can Find More Information” and “Documents Incorporated by Reference.”
Our Company
We were originally a blank check company incorporated
on May 2, 2018 as a British Virgin Islands company limited by shares and incorporated for the purpose of effecting a merger, capital
stock exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more
target businesses. On May 7, 2020, we consummated our Business Combination pursuant to the Share Exchange Agreement and acquired 100%
issued and outstanding equity interests of Scienjoy Inc., which resulted in Scienjoy Inc. becoming our wholly-owned subsidiary.
Following our Business Combination, we changed
our name from Wealthbridge Acquisition Limited to “Scienjoy Holding Corporation” and continued the listing of our ordinary
shares on NASDAQ under the symbol “SJ”.
Business Overview
We are a leading provider of mobile live streaming
platforms in China and focuses on interactive show live streaming from broadcasters to users. We traditionally operate on three primary
platforms (Showself Live Streaming, Lehai Live Streaming, and Haixiu Live Streaming), each using our own mobile applications and providing
live streaming entertainment from professional “broadcasters” to the end-user. In September 2020, we acquired two additional
mobile live streaming platforms, namely the BeeLive Chinese (MiFeng) and the BeeLive International, through the BeeLive Acquisition.
On our mobile live streaming platforms, users can interact directly with broadcasters and other users in the live streaming video room.
Users can also play simple and fun games using virtual currencies within the video rooms while watching live streaming of a broadcaster.
We have 192,389 active show broadcasters for the year ended December 31, 2020. We had approximately 250.0 million registered users by
the end of December 31, 2020. For the year ended December 31, 2020, the number of paying users was approximately 904,568, increased 30%
from 697,475 paying users in fiscal 2019. We have 202,359 active show broadcasters for the first half of 2021. We had approximately 260.0
million registered users by the end of first half of 2021. For the first half of 2021, the number of paying users was approximately 477,062,
increased 10.2% from 433,058 paying users in the first half of 2020.
While users have free access to all real time
video rooms, revenue is primarily generated through sales of our virtual currency. Users can purchase virtual currency on our platforms
and can use such virtual currency to buy virtual items for broadcasters to show their support. We share revenues generated on the platforms
with talents agencies, which in turn share revenues with broadcasters.
Among other competitive strength, we adopt a
multi-platform live streaming strategy, use big data analysis to understand market trend and users’ preferences, and offer innovative
product features designed to improve the user experience, such as a range of online games for users while watching live streaming. Our
business objective is to further strengthen our position in the mobile show live streaming industry and to leverage our existing position
to expand our business into other related industries in China and overseas markets.
Company Information
Our principal executive offices are located at
3rd Floor, JIA No. 34, Shenggu Nanli, Chaoyang District, Beijing, P.R. China, 100029, and our telephone number is (86) 10–6642
8188. Our website is www.scienjoy.com. The information found on our website is not part of this prospectus.
OFFER STATISTICS AND EXPECTED TIMETABLE
We may from time to time, offer and sell any
combination of the securities described in this prospectus (as may be detailed in a prospectus supplement) up to a total dollar amount
of US$250,000,000 in one or more offerings. The selling securityholders may sell from time to time pursuant to this prospectus up to
4,492,650 ordinary shares . The actual price per share of the shares that we or the selling shareholders will offer, or per security
of the securities that we will offer, pursuant hereto will depend on a number of factors that may be relevant as of the time of offer.
The securities offered under this prospectus may be offered separately, together, or in separate series, and in amounts, at prices, and
on terms to be determined at the time of sale. See “Plan of Distribution.” We will keep the registration statement of which
this prospectus is a part effective until such time as all of the securities covered by this prospectus have been disposed of pursuant
to and in accordance with such registration statement.
RISK FACTORS
Investing in our securities involves risks. Before
making an investment decision, you should carefully consider the risks described under “Risk Factors” in the applicable prospectus
supplement and under the heading “Item 3. Key Information—3.D. Risk Factors” in our annual report on Form 20-F for
the fiscal year ended December 31, 2020, which is incorporated in this prospectus by reference, as updated by our subsequent filings
under the Exchange Act that are incorporated herein by reference, together with all of the other information appearing in this prospectus
or incorporated by reference into this prospectus and any applicable prospectus supplement, in light of your particular investment objectives
and financial circumstances. In addition to those risk factors, there may be additional risks and uncertainties of which management is
not aware or focused on or that management deems immaterial. Our business, financial condition, or results of operations could be materially
adversely affected by any of these risks. The trading price of our securities could decline due to any of these risks, and you may lose
all or part of your investment.
Substantial uncertainties exist with
respect to whether the foreign investor’s controlling PRC onshore variable interest entities via contractual arrangements will
be recognized as “foreign investment” and how it may impact the viability of our current corporate structure and operations.
On March 15, 2019, the
National People’s Congress of the PRC adopted the PRC Foreign Investment Law, which took force on January 1, 2020, and replaced
three existing laws regulating foreign investment in China, namely the PRC Equity Joint Venture Law, the PRC Cooperative Joint Venture
Law and Wholly Foreign-owned Enterprise Law, together with their implementation rules and ancillary regulations. The PRC Foreign Investment
Law defines the “foreign investment” as the investment activities in China conducted directly or indirectly by foreign investors
in the following manners: (i) the foreign investor, by itself or together with other investors establishes a foreign-invested enterprise
in China; (ii) the foreign investor acquires shares, equities, asset tranches, or similar rights and interests of enterprises in China;
(iii) the foreign investor, by itself or together with other investors, invests and establishes new projects in China; (iv) the foreign
investor invests through other approaches as stipulated by laws, administrative regulations or otherwise regulated by the State Council.
The PRC Foreign Investment Law keeps silent on how to define and regulate the “variable interest entities,” while adding a
catch-all clause that “other approaches as stipulated by laws, administrative regulations or otherwise regulated by the State Council”
can fall into the concept of “foreign investment,” which leaves uncertainty as to whether the foreign investor’s controlling
PRC onshore variable interest entities via contractual arrangements will be recognized as “foreign investment.” Pursuant to
the PRC Foreign Investment Law, PRC governmental authorities will regulate foreign investment by applying the principle of pre-entry national
treatment together with a “negative list,” which will be promulgated by or promulgated with approval by the State Council
or its authorized governmental department such as Ministry of Commerce. Foreign investors are prohibited from making any investments in
the industries which are listed as “prohibited” in such negative list; and, after satisfying certain additional requirements
and conditions as set forth in the “negative list,” are allowed to make investments in the industries which are listed as
“restricted” in such negative list. For any foreign investor that fails to comply with the negative list, the competent authorities
are entitled to ban its investment activities, require such investor to take measures to correct its non-compliance and impose other penalties.
The latest version of
the “negative list,” namely, the Special Management Measures (Negative List) for the Access of Foreign Investment (2020),
which became effective on July 23, 2020, provides that foreign investment is prohibited in providing the Internet content service, Internet
audio-visual program services and online culture activities that we conduct through our consolidated variable interest entities. These
operations are subject to foreign investment restrictions/prohibitions set forth in the Special Administrative Measures (Negative List)
for the Access of Foreign Investment (2020) issued by the Ministry of Commerce.
The PRC Foreign Investment
Law leaves leeway for future laws, administrative regulations or provisions of the State Council and its departments to provide for contractual
arrangements as a form of foreign investment. It is therefore uncertain whether our corporate structure will be seen as violating foreign
investment rules as we are currently using the contractual arrangements to operate certain businesses in which foreign investors are
currently prohibited from or restricted to investing. Furthermore, if future laws, administrative regulations or provisions of the State
Council and its departments mandate further actions to be taken by companies with respect to existing contractual arrangements, we may
face substantial uncertainties as to whether we can complete such actions in a timely manner, or at all. If we fail to take appropriate
and timely measures to comply with any of these or similar regulatory compliance requirements, our current corporate structure, corporate
governance and business operations could be materially and adversely affected.
Uncertainties in the interpretation and
enforcement of PRC laws and regulations could limit the legal protections available to you and us.
The PRC legal system is based on written statutes
where prior court decisions have limited value as precedents. Unlike the common law system, prior court decisions may be cited for reference
but have limited precedential value. Our PRC subsidiaries and the Scienjoy VIEs, in particular WX, a wholly foreign-owned enterprise,
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. Therefore, if the applicable regulations change or are interpreted differently, it is possible that
Scienjoy VIEs’ existing operations or the contractual arrangements constituting part of the VIE structure is not in full compliance
with relevant laws and regulations in the future
From time to time, we may have to resort to administrative
and court proceedings to enforce our legal rights. However, since PRC administrative and court authorities have significant discretion
in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and
court proceedings and the level of legal protection we may receive. Furthermore, the PRC legal system is based in part on government policies
and internal rules that may have retroactive effects. As a result, we may not be aware of our violation of these policies and rules until
sometime after the violation. Such uncertainties, including uncertainty over the scope and effect of our contractual, property (including
intellectual property) and procedural rights, could materially and adversely affect our business and impede our ability to continue our
operations.
In addition, the PRC
government has recently announced its plans to enhance its regulatory oversight of Chinese companies listing overseas. The Opinions on
Intensifying Crack Down on Illegal Securities Activities issued on July 6, 2021, called for the extraterritorial application of China’s
securities laws. As the Opinions on Intensifying Crack Down on Illegal Securities Activities were recently issued, there are great uncertainties
with respect to the interpretation and implementation thereof. The Chinese government may promulgate relevant laws, internal rules and
regulations that may impose additional and significant obligations and liabilities on overseas-listed Chinese companies regarding data
security, cross-border data flow, and compliance with China’s securities laws. These laws and regulations can be complex and stringent,
and many are subject to change and uncertain interpretation, which could result in claims, change to our data and other business practices,
regulatory investigations, penalties, increased cost of operations, or declines in user growth or engagement, or otherwise affect our
business. Any action taken by PRC regulatory authorities under such laws and regulations could significantly limit or completely hinder
the Company’s ability to offer future securities to Investors and cause the value of such securities to significantly decline or
be worthless.
Our business might be subject to various evolving PRC laws and
regulations regarding data privacy and cybersecurity. Failure of cybersecurity and data security compliance could subject us to penalties,
damage its reputation and brand, and harm its business and results of operations.
We face challenges with respect to data privacy
and regulations since we are currently engaging in providing live streaming platforms, which could consist of personal information that
will be analyzed and used.
Regulatory
requirements on cybersecurity and data privacy in China are constantly evolving and can be subject to varying interpretations or significant
changes, resulting in uncertainties about the scope of Our responsibilities in that regard. On June 10, 2021, the Standing Committee
of the National People’s Congress promulgated the PRC Data Security Law, which will take effect in September 2021. The Data Security
Law provides for a security review procedure for the data activities that may affect national security. Furthermore, Measures for Cybersecurity
Review, which became effective on June 1, 2020, set forth the cybersecurity review mechanism for critical information infrastructure
operators, and provided that critical information infrastructure operators who intend to purchase internet products and services that
affect or may affect national security shall be subject to a cybersecurity review. On July 10, 2021, the Cyberspace Administration of
China published the Measures for Cybersecurity Review (Revised Draft for Comments), which further restates and expands the applicable
scope of the cybersecurity review. Pursuant to the draft measures, critical information infrastructure operators that intend to purchase
internet products and services and data processing operators engaging in data processing activities that affect or may affect national
security must be subject to the cybersecurity review. The draft measures further stipulate that if an operator has personal information
of over one million users and intends to be listed in a foreign country, it must be subject to the cybersecurity review. As of
now, it is uncertain under PRC regulations whether the data gathering and usage by us will affect national security. Even though our
current data activities do not fall under the scope of cybersecurity review, it is also uncertain whether the cybersecurity review will
be further expanded. Failure of cybersecurity and data security compliance could subject us to penalties, damage its reputation and brand,
and harm its business and results of operations.
Regulation requirements on personal information
protection in China are also constantly evolving and can be subject to varying
interpretations or significant changes, resulting in uncertainties about the scope of our responsibilities in that regard. On August
20, 2021, the Standing Committee of the National People’s Congress promulgated the PRC Personal Information Protection Law, which
will take effect in November 2021. The Personal Information Protection Law provides that any entity involving processing of personal
information (“Personal Information Processer”) shall take various measures to prevent the disclosure, modification or losing
of the personal information processed by such entity, including but not limited to formulating related internal management system and
standard of operation, conducting classified management of personal information, taking safety technology measures to encrypt and de-identify
the processed personal information, providing regular safety training and education for staff and formulating personal information safety
emergency accident plan. The Personal Information Protection Law further provides that Personal Information Processer shall conduct a
prior evaluation of the impact of personal information protection before the occurrence of various situations, including but not limited
to processing of sensitive personal information (personal information that, once leaked or illegally used, may lead to discrimination
against an individual or serious harm to an individual’s personal or property safety, including information on an individual’s
race, ethnicity, religious beliefs, personal biological characteristics, medical health, financial accounts, personal whereabouts), using
personal information to make automated decisions, and providing personal information to any overseas entity. Our business involves the
processing of personal information of users, which may be deemed as sensitive personal information. If we do not take measures to review
and improve its mechanism in protecting personal information after the new Personal Information Protection Law takes effect, failure
of personal information protection compliance could subject us to penalties, damage its reputation and brand, and harm its business and
results of operations.
CAPITALIZATION AND INDEBTEDNESS
Our capitalization will be set forth in the applicable
prospectus supplement or in a report on Form 6-K subsequently furnished to the SEC and specifically incorporated by reference into this
prospectus.
DILUTION
If required, we will
set forth in a prospectus supplement the following information regarding any material dilution of the equity interests of investors purchasing
securities in an offering under this prospectus:
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the
net tangible book value per share of our equity securities before and after the offering;
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the
amount of the increase in such net tangible book value per share attributable to the cash payments made by purchasers in the offering;
and
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the
amount of the immediate dilution from the public offering price which will be absorbed by such purchasers.
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USE OF PROCEEDS
We will retain broad discretion over the use
of the net proceeds from the sale of the securities offered hereby. Unless otherwise specified in any prospectus supplement, we currently
intend to use the net proceeds from the sale of our securities offered under this prospectus for general corporate purposes, which may
include capital expenditures, working capital, and other business opportunities.
We will not receive any proceeds from the sale
of the ordinary shares offered by the selling securityholders pursuant to this prospectus. The selling securityholders will receive
all of the net proceeds from the sale of any securities offered by them under this prospectus. The selling securityholders will bear
any underwriting discounts and commission and expenses incurred by them for brokerage, accounting, tax, legal services or any other expenses
incurred by the selling securityholders in disposing of these securities. We will bear all other costs, fees and expenses incurred in
effecting the registration of the securities covered by this prospectus.
DIVIDENDS AND DIVIDEND
POLICY
Since inception, we have not declared or paid
any dividends on our ordinary shares. We do not have any present plans to pay any dividends on our ordinary shares in the foreseeable
future. We intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.
The determination to pay dividends will be made
at the discretion of our board of directors and may be based on a number of factors, including our future operations and earnings, capital
requirements and surplus, general financial condition, contractual and legal restrictions and other factors that the board of directors
may deem relevant for a company formed under the laws of the British Virgin Islands and all of operations are currently in the PRC.
Subject to the Companies Law of the British Virgin
Islands and our amended and restated memorandum and articles of association, our directors may declare dividends at a time and amount
they think fit if they are satisfied, on reasonable grounds, that, immediately after distribution of the dividend, the value of our assets
will exceed our liabilities and we will be able to pay our debts as they fall due.
In order for us to distribute any dividends to
our shareholders, we currently would have to have dividends distributed by our PRC subsidiaries. Certain payments from our PRC subsidiaries
to us may be subject to PRC withholding income tax. In addition, regulations in the PRC currently permit payment of dividends of a PRC
company only out of accumulated distributable after-tax profits as determined in accordance with its articles of association and the
accounting standards and regulations in China. Each of our PRC subsidiaries is required to set aside at least 10% of its after-tax profit
based on PRC accounting standards every year to a statutory common reserve fund until the aggregate amount of such reserve fund reaches
50% of the registered capital of such subsidiary. Such statutory reserves are not distributable as loans, advances or cash dividends.
SELLING SECURITYHOLDERS
Beneficial Ownership
This prospectus relates, in part, to the offer
and sale by the selling securityholders named herein, or their permitted transferees, of up to 4,492,650 ordinary shares.
The following table sets forth the number of
securities being offered by the selling securityholders, including their donees, pledgees, transferees or other successors-in-interest,
subject to the transfer restrictions described in this prospectus. The following table also sets forth the number of shares known to
us. The selling securityholders are not making any representation that any securities covered by this prospectus will be offered for
sale. The selling securityholders reserve the right to accept or reject, in whole or in part, any proposed sale of the securities. For
purposes of the table below, we assume that all of the securities covered by this prospectus will be sold.
Beneficial ownership is determined in accordance
with the rules of the SEC and includes voting or investment power with respect to the ordinary shares and the right to acquire such voting
or investment power within 60 days through the exercise of any option, warrant or other right. Unless otherwise indicated below, to our
knowledge, all persons named in the table have sole voting and investment power with respect to the ordinary shares beneficially owned
by them. The inclusion of any shares of ordinary shares in this table does not constitute an admission of beneficial ownership for the
person named below.
The percentages in the table are based on 30,844,641
shares of ordinary shares as of September 21, 2021. In calculating this percentage for a particular holder, we treated as outstanding
the number of our ordinary shares issuable upon exercise of that particular holder’s options, warrants or other rights and did
not assume exercise of any other holder’s options, warrants or other rights.
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Ordinary Shares
Beneficially Owned
Prior to Offering
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Ordinary
Shares to
be Sold
Pursuant to this
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Ordinary Shares
Beneficially
Owned After
Offering
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Name of Selling Security Holders
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Shares
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%
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Prospectus
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Shares
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%
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WBY Entertainment Holdings LTD. (1) (2)
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4,492,650
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14.57
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%
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4,492,650
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0
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0
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%
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(1)
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Mr. Bo Wan has voting and dispositive power over the shares owned
by WBY Entertainment Holdings Ltd. Mr. Bo Wan is a director and Chief Operating Officer of the Company.
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(2)
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The address of WBY Entertainment Holdings Ltd. is Vistra Corporate
Services Centre, Wickhams Cay II, Road Town, Tortola, VG1110, British Virgin Islands.
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The selling shareholders and intermediaries through
whom such securities are sold may be deemed “underwriters” within the meaning of the Securities Act with respect to the ordinary
shares offered by this prospectus, and any profits realized or commissions received may be deemed underwriting compensation.
Additional selling shareholders not named in this
prospectus will not be able to use this prospectus for resales until they are named in the table above by prospectus supplement or post-effective
amendment. Transferees, successors and donees of identified selling shareholders will not be able to use this prospectus for resales
until they are named in the table above by prospectus supplement or post-effective amendment. If required, we will add transferees, successors
and donees by prospectus supplement in instances where the transferee, successor or donee has acquired its ordinary shares from holders
named in this prospectus after the effective date of this prospectus.
DESCRIPTION OF SHARE CAPITAL
The following summary of the material terms
of our securities is not intended to be a complete summary of the rights and preferences of such securities. We urge you to our Memorandum
and Articles of Association, as amended and restated from time to time (our “Memorandum and Articles of Association”) in
its entirety for a complete description of the rights and preferences of our securities. The summary below is also qualified by reference
to the provisions of the BVI Business Companies Act, 2004 as amended (the “BVI Act”).
General
We are a company incorporated in the British
Virgin Islands as a BVI business company (with company number 1977965) whose registered office is at Clarence Thomas Building, Road Town,
Tortola, British Virgin Islands, and our affairs are governed by our Memorandum and Articles of Association and the laws of the British
Virgin Islands. For the purposes of the BVI Act, there are no limitations on the business that we may carry on.
Pursuant to our Memorandum and Articles of Association,
we shall issue registered shares only. We are not authorized to issue bearer shares, convert registered shares to bearer shares or exchange
registered shares for bearer shares. We are currently authorized to issue an unlimited number of shares of a single class, each with
no par value. Shares may be issued in one or more series of shares as the directors may by Resolution of Directors determine from time
to time. As of September 21, 2021, 30,844,642 ordinary shares are issued and outstanding.
Ordinary Shares
Pursuant to our Memorandum and Articles of Association,
holders of ordinary shares do not have any conversion, preemptive or other subscription rights and there will be no sinking fund provisions
applicable to the ordinary shares.
Each ordinary share confers upon the shareholder:
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the right to one vote at a meeting of the Shareholders
or on any resolution of shareholders;
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the right to an equal share in any dividend paid by
us; and
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the right to an equal share in the distribution of
our surplus assets on our liquidation.
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Class A Preferred
Shares
Our
Memorandum and Articles of Association authorizes our board of directors to establish from time to time one or more series of Class A
preferred shares and to determine, with respect to any series of preferred shares, the terms and rights of that series, including:
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the designation of the series;
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the number of shares of the
series;
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the dividend rights, dividend
rates, conversion rights, and voting rights; and
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the rights and terms of redemption
and liquidation preferences.
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Our board of directors
may issue preferred shares without action by our shareholders to the extent authorized but unissued. Issuance of these shares may dilute
the voting power of holders of ordinary shares.
You should refer to
the prospectus supplement relating to the series of Class A preferred shares being offered for the specific terms of that series, including:
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title of the series and the
number of shares in the series;
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the price at which the preferred
shares will be offered;
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the dividend rate or rates
or method of calculating the rates, the dates on which the dividends will be payable, whether or not dividends will be cumulative or
noncumulative, and, if cumulative, the dates from which dividends on the preferred shares being offered will cumulate;
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the voting rights, if any,
of the holders of preferred shares being offered;
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the provisions for a sinking
fund, if any, and the provisions for redemption, if applicable, of the preferred shares being offered, including any restrictions on
the foregoing as a result of arrearage in the payment of dividends or sinking fund installments;
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the liquidation preference
per share;
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the terms and conditions, if
applicable, upon which the preferred shares being offered will be convertible into our ordinary shares, including the conversion price,
or the manner of calculating the conversion price, and the conversion period;
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the terms and conditions, if
applicable, upon which the preferred shares being offered will be exchangeable for debt securities, including the exchange price, or
the manner of calculating the exchange price, and the exchange period;
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any listing of the preferred
shares being offered on any securities exchange;
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a discussion of any material
federal income tax considerations applicable to the preferred shares being offered;
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the relative ranking and preferences
of the preferred shares being offered as to dividend rights and rights upon liquidation, dissolution, or the winding up of our affairs;
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any limitations on the issuance
of any class or series of preferred shares ranking senior or equal to the series of preferred shares being offered as to dividend rights
and rights upon liquidation, dissolution, or the winding up of our affairs; and
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any additional rights, preferences,
qualifications, limitations, and restrictions of the series.
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Issuance of Class A preferred shares may
dilute the voting power of holders of ordinary shares.
Existing Warrants
As of September 21, 2021, we have 6,023,700 warrants
outstanding (“Existing Warrants”). All Existing Warrants are governed by that certain Warrant Agreement, dated February 5,
2019, by and between Continental Stock Transfer & Trust Company and us (the “Warrant Agreement”). The following summary
of certain provisions relating to our warrants s does not purport to be complete and is subject to, and is qualified in its entirety
by reference to, the Warrant Agreement.
Each Existing Warrant entitles the registered
holder to purchase one-half (1/2) of one ordinary share at a price of $11.50 per share, subject to adjustment as discussed below, at
any time commencing on the later of the completion of an initial business combination and 12 months from the date of the IPO Registration
Statement. Pursuant to the Warrant Agreement, an Existing Warrant holder may exercise its Existing Warrants only for a whole number of
shares. This means that only an even number of Existing Warrants may be exercised at any given time by a Warrant holder. However, except
as set forth below, other than the Oriental Warrants, no Existing Warrants will be exercisable for cash unless we have an effective and
current registration statement covering the ordinary shares issuable upon exercise of the warrants and a current prospectus relating
to such ordinary shares. Notwithstanding the foregoing, if a registration statement covering the ordinary shares issuable upon exercise
of the Existing Warrants is not effective within 90 days from the consummation of our initial business combination, Warrant holders may,
until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective
registration statement, exercise Existing Warrants on a cashless basis. The Existing Warrants will expire on the earlier to occur of
(i) five years from the effective date of the IPO Registration Statement at 5:00 p.m., Eastern Standard Time and (ii) the date fixed
for redemption of Existing Warrants as provided in the Warrant Agreement. We may extend the duration of the Existing Warrants by delaying
the expiration date; provided, however, that we will provide written notice of not less than 10 days to registered holders of such extension
and that such extension shall be identical in duration among all of the then outstanding Existing Warrants.
We may call the outstanding Existing Warrants
for redemption (excluding the warrants issued to Oriental Holdings Limited and the warrants issued to Chardan Capital Markets, LLC ),
in whole and not in part, at a price of $0.01 per warrant:
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at
any time while the Existing Warrants are exercisable;
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upon
not less than 30 days’ prior written notice of redemption to each Existing Warrant holder;
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if,
and only if, the reported last sale price of the ordinary shares equals or exceeds $16.50 per share, for any 20 trading days within a
30 trading day period ending on the third business day prior to the notice of redemption to Existing Warrant holders; and
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if,
and only if, (i) there is a current registration statement in effect with respect to the ordinary shares underlying such Existing Warrants
at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date
of redemption, or (ii) the cashless exercise of the Existing Warrants pursuant to the Warrant Agreement is exempt from the registration
requirements under the Securities Act.
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The right to exercise will be forfeited unless
the Existing Warrants are exercised prior to the date specified in the notice of redemption. On and after the redemption date, a record
holder of an Existing Warrant will have no further rights except to receive the redemption price for such holder’s warrant upon
surrender of such warrant.
If we call the Existing Warrants for redemption
as described above, our management will have the option to require all holders that wish to exercise Existing Warrants to do so on a
“cashless basis.” In such event, each holder would pay the exercise price by surrendering the whole Warrants for that number
of ordinary shares equal to the quotient obtained by dividing (x) the product of the number of ordinary shares underlying the warrants,
multiplied by the difference between the exercise price of the Existing Warrants and the “fair market value” (defined below)
by (y) the fair market value. The “fair market value” shall mean the volume weighted average price of the ordinary shares
for the 20 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of
Existing Warrants.
Our redemption rights provided under the Warrant
Agreement apply only to outstanding Existing Warrants (excluding the warrants issued to Oriental Holdings Limited and the warrants issued
to Chardan Capital Markets, LLC). To the extent a person holds rights to purchase Existing Warrants, such purchase rights shall not be
extinguished by redemption. However, once such purchase rights are exercised, we may redeem the Existing Warrants issued upon such exercise
provided that the criteria for redemption is met.
The Existing Warrants were and will be issued
in registered form under the Warrant Agreement. The Warrant Agreement provides that the terms of the Existing Warrants may be amended
without the consent of any holder to cure any ambiguity or correct any defective provision, but requires the approval, by written consent
or vote, of the holders of a majority of the then outstanding Existing Warrants in order to make any change that adversely affects the
interests of the registered holders in any material respect.
The exercise price and number of ordinary shares
issuable on exercise of the Existing Warrants may be adjusted in certain circumstances including in the event of a share capitalizations,
extraordinary dividend or our recapitalization, reorganization, merger or consolidation.
The Existing Warrants may be exercised upon surrender
of the Existing Warrants on or prior to the expiration date at the offices of the warrant agent with the subscription form, as set forth
in the Existing Warrants, duly executed, accompanied by full payment of the exercise price, by certified or official bank check payable
to us, for the number of Existing Warrants being exercised. The Existing Warrant holders do not have the rights or privileges of holders
of ordinary shares and any voting rights until they exercise their Existing Warrants and receive ordinary shares. After the issuance
of ordinary shares upon exercise of the warrants, each holder will be entitled to one vote for each share held of record on all matters
to be voted on by shareholders.
Except as described above, no Existing Warrants
will be exercisable and we will not be obligated to issue ordinary shares unless at the time a holder seeks to exercise such warrant,
a prospectus relating to the ordinary shares issuable upon exercise of the Warrants is current and the ordinary shares have been registered
or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the Existing Warrants. Under
the terms of the Warrant Agreement, we have agreed to use our best efforts to meet these conditions and to maintain a current prospectus
relating to the ordinary shares issuable upon exercise of the Existing Warrants until the expiration of the Existing Warrants. However,
we cannot assure you that we will be able to do so and, if the prospectus relating to the ordinary shares issuable upon the exercise
of the Warrants is not current or if the ordinary shares is not qualified or exempt from qualification in the jurisdictions in which
the holders of the Existing Warrants reside, we will not be required to net cash settle or cash settle the Existing Warrant exercise,
the Existing Warrants may have no value, the market for the warrants may be limited and the warrants may expire worthless.
Warrant holders may elect to be subject to a
restriction on the exercise of their Existing Warrants such that an electing Warrant holder (and his, her or its affiliates) would not
be able to exercise their warrants to the extent that, after giving effect to such exercise, such holder (and his, her or its affiliates)
would beneficially own in excess of 9.8% of the ordinary shares issued and outstanding.
No fractional shares will be issued upon exercise
of the Existing Warrants. If, upon exercise of the Existing Warrants, a holder would be entitled to receive a fractional interest in
a share, issue or cause to be issued only the largest whole number of ordinary shares issuable on such exercise (and such fraction of
an ordinary share will be disregarded); provided, that if more than one Existing Warrant certificate is presented for exercise at the
same time by the same registered holder, the number of whole ordinary shares which shall be issuable upon the exercise thereof shall
be computed on the basis of the aggregate number of ordinary shares issuable on exercise of all such Existing Warrants.
Key Provisions of Our Memorandum and Articles
of Association and British Virgin Islands Laws Affecting Our Ordinary Shares or Corporate Governance
The following are summaries of material terms
and provisions of our Memorandum and Articles of Association and the BVI Act, insofar as they relate to the material terms of our ordinary
shares or corporate governance. This summary is not intended to be complete, and you should read our Memorandum and Articles of Association.
Voting Rights
Under the BVI Act, the ordinary shares are deemed
to be issued when the name of the shareholder is entered in our register of members. Our register of members is maintained by our transfer
agent, Continental Stock Transfer & Trust Company, which will enter the name of our shareholders in our register of members. If (a)
information that is required to be entered in the register of shareholders is omitted from the register or is inaccurately entered in
the register, or (b) there is unreasonable delay in entering information in the register, a shareholder of ours, or any person who is
aggrieved by the omission, inaccuracy or delay, may apply to the British Virgin Islands courts for an order that the register be rectified,
and the court may either refuse the application or order the rectification of the register, and may direct us to pay all costs of the
application and any damages the applicant may have sustained.
Subject to any rights or restrictions attached
to any shares, at any general meeting on a show of hands every ordinary shareholder who is present in person (or, in the case of a shareholder
being a corporation, by its duly authorized representative) or by proxy will have one vote for each share held on all matters to be voted
on by shareholders. Voting at any meeting of the ordinary shareholders is by show of hands unless a poll is demanded. A poll may be demanded
by shareholders present in person or by proxy if the shareholder disputes the outcome of the vote on a proposed resolution and the chairman
shall cause a poll to be taken.
There is nothing under the laws of the British
Virgin Islands, which specifically prohibits or restricts the creation of cumulative voting rights for the election of our directors,
but cumulative voting for the election of directors is permitted only if expressly provided for in a BVI company’s memorandum or
articles of association. We have not made provisions in our Memorandum and Articles of Association for cumulative voting for such elections.
Under British Virgin Islands laws, the voting
rights of shareholders are regulated by our Memorandum and Articles of Association and, in certain circumstances, the BVI Act. Our Memorandum
and Articles of Association govern matters such as quorum for the transaction of business, rights of shares, and majority votes required
to approve any action or resolution at a meeting of the shareholders or board of directors. Unless our Memorandum and Articles of Association
otherwise provide, the requisite majority is usually a simple majority of votes cast.
Dividend Rights
Each ordinary share is entitled to an equal share
in any dividend paid by the Company. The Articles of Association provide that the directors of the Company may authorize a distribution
(including a dividend) at a time and of an amount they think fit if they are satisfied that immediately after the distribution (or dividend)
the value of the Company’s assets will exceed its liabilities and the Company will be able to pay its debts as they fall due.
Preemption Rights
British Virgin Islands laws do not make a distinction
between public and private companies and some of the protections and safeguards (such as statutory preemption rights, save to the extent
that they are expressly provided for in our Memorandum and Articles of Association) that investors may expect to find in relation to
a public company are not provided for under British Virgin Islands laws. There are no preemption rights applicable to the issuance of
new shares under either British Virgin Islands laws or our Memorandum and Articles of Association.
Liquidation Rights
We may by resolution of shareholders or, subject
to section 199(2) of the BVI Act, by resolution of directors appoint a voluntary liquidator.
Transfer of Shares
Any shareholder may transfer all or any of his
shares by an instrument of transfer provided that such transfer complies with applicable rules of the SEC and federal and state securities
laws of the United States. The instrument of transfer of any share shall be in writing in the usual or common form or in a form prescribed
by the Designated Stock Exchange (such as NASDAQ Capital Market) or in any other form approved by the directors.
Share Repurchases and Redemptions
As permitted by the BVI Act and our Memorandum
and Articles of Association, shares may be repurchased, redeemed or otherwise acquired by us. In addition, our directors must determine
that, immediately following the redemption or repurchase, we will be able to pay our debts as they fall due and that the value of our
assets will exceed our liabilities.
Board of Directors
We are managed by a Board which currently consists
of seven directors. Our Memorandum and Articles of Association provide that the minimum number of directors shall be two and there shall
be no maximum number of directors.
The directors may by Resolution of Directors
exercise all the powers of the Company to incur indebtedness, liabilities or obligations and to secure indebtedness, liabilities or obligations
whether of the Company or of any third party. There are no share ownership qualifications for directors.
Meetings of our Board may be convened at any
time deemed necessary by any of our directors.
A meeting of directors is duly constituted for
all purposes if at the commencement of the meeting there are present in person or by alternate not less than one-half of the total number
of directors, unless there are only 2 directors in which case the quorum is 2.
The directors may, by Resolution of Directors,
fix the emoluments of directors with respect to services to be rendered in any capacity to the Company.
We do not have any age limitations for our directors,
nor do we have mandatory retirement as a result of reaching a certain age.
Staggered Board of Directors
Our Memorandum and Articles of Association provide
for a staggered Board consisting of two classes of directors. Our directors are appointed by our shareholders and are subject to rotational
retirement every two years. The initial terms of office of the Class I and Class II directors have been staggered over a period of two
years to ensure that all directors of the company do not face reelection in the same year. However, the directors may by resolution appoint
a replacement director to fill a casual vacancy arising on the resignation, disqualification or death of a director. The replacement
director will then hold office until the next annual general meeting at which the director he replaces would have been subject to retirement
by rotation.
Meetings of Shareholders
Any of our directors of may convene meetings
of the shareholders at such times and in such manner and places within or outside the British Virgin Islands as the director considers
necessary or desirable.
Upon the written request of shareholders entitled
to exercise 30 percent or more of the voting rights in respect of the matter for which the meeting is requested the directors shall convene
a meeting of shareholders.
Subject to our Memorandum and Articles of Association,
the director convening a meeting of members shall give not less than 7 days’ written notice of such meeting to: (a) those members
whose names on the date the notice is given appear as members in the share register of the Company and are entitled to vote at the meeting;
and (b) the other directors.
A meeting of shareholders held in contravention
of the requirement to give notice is valid if shareholders holding at least 90% of the total voting rights on all the matters to be considered
at the meeting have waived notice of the meeting and, for this purpose, the presence of a shareholder at the meeting shall constitute
a waiver in relation to all the shares which that shareholder holds.
A meeting of shareholders is duly constituted
if, at the commencement of the meeting, there are present in person or by proxy not less than 50% of the votes of the shares entitled
to vote at the meeting. A quorum may be comprised of a single shareholder or proxy and then such person may pass a resolution of shareholders
and a certificate signed by such person accompanied where such person is a proxy by a copy of the proxy instrument shall constitute a
valid resolution of shareholders.
Differences in Corporate Law
We were incorporated under, and are governed
by, the laws of the British Virgin Islands. The corporate statutes of the State of Delaware and the British Virgin Islands are similar,
and the flexibility available under British Virgin Islands law has enabled us to adopt a memorandum and articles of association that
will provide shareholders with rights that do not vary in any material respect from those they would enjoy if we were incorporated under
Delaware law. Set forth below is a summary of some of the differences between provisions of the BVI Act applicable to us and the laws
applicable to companies incorporated in Delaware and their shareholders.
Director’s Fiduciary Duties
Under Delaware corporate law, a director of a
Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and
the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would
exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material
information reasonably available regarding a significant transaction. The duty of loyalty requires that a director act in a manner he
reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage.
This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence
over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general,
actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken
was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary
duties. Should such evidence be presented concerning a transaction by a director, a director must prove the procedural fairness of the
transaction, and that the transaction was of fair value to the corporation.
British Virgin Islands law provides that every
director of a British Virgin Islands company in exercising his powers or performing his duties, shall act honestly and in good faith
and in what the director believes to be in the best interests of the company. Additionally, the director shall exercise the care, diligence,
and skill that a reasonable director would exercise in the same circumstances taking into account the nature of the company, the nature
of the decision and the position of the director and his responsibilities. In addition, British Virgin Islands law provides that a director
shall exercise his powers as a director for a proper purpose and shall not act, or agree to the company acting, in a manner that contravenes
British Virgin Islands law or the memorandum and articles of association of the company.
Amendment of Governing Documents
Under Delaware corporate law, with very limited
exceptions, a vote of the shareholders of a corporation is required to amend the certificate of incorporation. In addition, Delaware
corporate law provides that shareholders have the right to amend the corporation’s bylaws, but the certificate of incorporation
may confer such right on the directors of the corporation.
Our Memorandum and Articles of Association can
generally be amended by with the approval of the holders of a majority of our outstanding ordinary shares or by a resolution of the board
of directors. In addition, pursuant to our Memorandum and Articles of Association, our board of directors may amend our Memorandum and
Articles of Association by a resolution of directors without a requirement for a resolution of shareholders so long as the amendment
does not:
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restrict
the rights or powers of the shareholders to amend our Memorandum and Articles of Association;
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change
the percentage of shareholders required to pass a resolution of shareholders to amend our Memorandum and Articles of Association; or
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amend
our Memorandum and Articles of Association in circumstances where it cannot be amended by the shareholders;
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certain
provisions that our Memorandum and Articles of Association specifies cannot be amended.
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Written Consent of Directors
Under Delaware corporate law, a written consent
of the directors must be unanimous to take effect. Under British Virgin Islands law and our Memorandum and Articles of Association, only
a majority of the directors are required to sign a written consent.
Written Consent of Shareholders
Under Delaware corporate law, unless otherwise
provided in the certificate of incorporation, any action to be taken at any annual or special meeting of shareholders of a corporation
may be taken by written consent of the holders of outstanding stock having not less than the minimum number of votes that would be necessary
to take that action at a meeting at which all shareholders entitled to vote were present and voted. As permitted by British Virgin Islands
law, our Memorandum and Articles of Association provides that a resolution of shareholders can be consented to in writing by a majority
of in excess of 50 percent of the votes of ordinary shares entitled to vote thereon.
Shareholder Proposals
Under Delaware corporate law, a shareholder has
the right to put any proposal before the annual meeting of shareholders, provided it complies with the notice provisions in the governing
documents. A special meeting may be called by the board of directors or any other person authorized to do so in the governing documents,
but shareholders may be precluded from calling special meetings. British Virgin Islands law and our Memorandum and Articles of Association
provide that our directors shall call a meeting of the shareholders if requested in writing to do so by shareholders entitled to exercise
at least 30% of the voting rights in respect of the matter for which the meeting is requested.
Dissolution; Winding Up
Under Delaware corporate law, unless the board
of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of
the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation’s
outstanding shares. Delaware corporate law allows a Delaware corporation to include in its certificate of incorporation a supermajority
voting requirement in connection with dissolutions initiated by the board. As permitted by British Virgin Islands law and our Memorandum
and Articles of Association, we may by resolution of shareholders or, subject to section 199(2) of the BVI Act, by resolution of directors
appoint a voluntary liquidator.
Redemption of Shares
Under Delaware corporate law, any stock may be
made subject to redemption by the corporation at its option, at the option of the holders of that stock or upon the happening of a specified
event, provided shares with full voting power remain outstanding. The stock may be made redeemable for cash, property or rights, as specified
in the certificate of incorporation or in the resolution of the board of directors providing for the issue of the stock. As permitted
by British Virgin Islands law and our Memorandum and Articles of Association, shares may be repurchased, redeemed or otherwise acquired
by us. However, the consent of the shareholder whose shares are to be repurchased, redeemed or otherwise acquired must be obtained, except
as specified in the terms of the applicable class or series of shares or as described under “—Compulsory Acquisition”
below. In addition, our directors must determine that, immediately following the redemption or repurchase, we will be able to pay our
debts as they fall due and that the value of our assets will exceed our liabilities.
Compulsory Acquisition
Under Delaware General Corporation Law §
253, in a process known as a “short form” merger, a corporation that owns at least 90% of the outstanding shares of each
class of stock of another corporation may either merge the other corporation into itself and assume all of its obligations or merge itself
into the other corporation by executing, acknowledging and filing with the Delaware Secretary of State a certificate of such ownership
and merger setting forth a copy of the resolution of its board of directors authorizing such merger. If the parent corporation is a Delaware
corporation that is not the surviving corporation, the merger also must be approved by a majority of the outstanding stock of the parent
corporation. If the parent corporation does not own all of the stock of the subsidiary corporation immediately prior to the merger, the
minority shareholders of the subsidiary corporation party to the merger may have appraisal rights as set forth in § 262 of the Delaware
General Corporation Law.
Under the BVI Act, subject to any limitations
in a company’s memorandum and articles of association, members holding 90% of the votes of the outstanding shares entitled to vote,
and members holding 90% of the votes of the outstanding shares of each class of shares entitled to vote, may give a written instruction
to the company directing the company to redeem the shares held by the remaining members. Upon receipt of such written instruction, the
company shall redeem the shares specified in the written instruction, irrespective of whether or not the shares are by their terms redeemable.
The company shall give written notice to each member whose shares are to be redeemed stating the redemption price and the manner in which
the redemption is to be effected. A member whose shares are to be so redeemed is entitled to dissent from such redemption and to be paid
the fair value of his shares, as described under “—Shareholders’ Rights under British Virgin Islands Law Generally”
below.
Variation of Rights of Shares
Under Delaware corporate law, a corporation may
vary the rights of a class of shares with the approval of a majority of the outstanding shares of that class, unless the certificate
of incorporation provides otherwise. As permitted by British Virgin Islands law and our Memorandum and Articles of Association, if at
any time the Shares are divided into different classes, the rights attached to any class may only be varied, whether or not the Company
is in liquidation, with the consent in writing of or by a resolution passed at a meeting by the holders of not less than 50 percent of
the issued Shares in that class.
Election of Directors
Under Delaware corporate law, unless otherwise
specified in the certificate of incorporation or bylaws of a corporation, directors are elected by a plurality of the votes of the shares
entitled to vote on the election of directors. As permitted by British Virgin Islands law, and pursuant to our Memorandum and Articles
of Association, our first directors shall be appointed by the first registered agent within 6 months of the date of incorporation; and
thereafter, the directors shall be elected by resolution of shareholders or, where permitted by our Memorandum and Articles of Association,
by resolution of directors.
Removal of Directors
Under Delaware corporate law, a director of a
corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled
to vote, unless the certificate of incorporation provides otherwise. Similarly, as permitted by British Virgin Islands law, our Memorandum
and Articles of
Association provides that directors may be removed
from office, (a) with or without cause, by resolution of shareholders passed at a meeting of shareholders called for the purposes of
removing the director or for purposes including the removal of the director or by a written resolution passed by at least 75 percent
of the votes of the shareholders of the Company entitled to vote, or (b) with cause, by Resolution of Directors passed at a meeting of
directors called for the purpose of removing the director or for purposes including the removal of the director.
Mergers
Under Delaware corporate law, one or more constituent
corporations may merge into and become part of another constituent corporation in a process known as a merger. A Delaware corporation
may merge with a foreign corporation as long as the law of the foreign jurisdiction permits such a merger. To effect a merger under Delaware
General Corporation Law § 251, an agreement of merger must be properly adopted and the agreement of merger or a certificate of merger
must be filed with the Delaware Secretary of State. In order to be properly adopted, the agreement of merger must be adopted by the board
of directors of each constituent corporation by a resolution or unanimous written consent. In addition, the agreement of merger generally
must be approved at a meeting of shareholders of each constituent corporation by a majority of the outstanding stock of the corporation
entitled to vote, unless the certificate of incorporation provides for a supermajority vote. In general, the surviving corporation assumes
all of the assets and liabilities of the disappearing corporation or corporations as a result of the merger.
Under the BVI Act, two or more companies may
merge or consolidate in accordance with the statutory provisions. A merger means the merging of two or more constituent companies into
one of the constituent companies, and a consolidation means the uniting of two or more constituent companies into a new company. In order
to merge or consolidate, the directors of each constituent company must approve a written plan of merger or consolidation, which must
be authorized by a resolution of shareholders. One or more companies may also merge or consolidate with one or more companies incorporated
under the laws of jurisdictions outside the British Virgin Islands if the merger or consolidation is permitted by the laws of the jurisdictions
in which the companies incorporated outside the British Virgin Islands are incorporated. In respect of such a merger or consolidation,
a British Virgin Islands company is required to comply with the provisions of the BVI Act, and a company incorporated outside the British
Virgin Islands is required to comply with the laws of its jurisdiction of incorporation.
Shareholders not otherwise entitled to vote on
the merger or consolidation may still acquire the right to vote if the plan of merger or consolidation contains any provision that, if
proposed as an amendment to the memorandum and articles of association, would entitle them to vote as a class or series on the proposed
amendment. In any event, all shareholders must be given a copy of the plan of merger or consolidation irrespective of whether they are
entitled to vote at the meeting or consent to the written resolution to approve the plan of merger or consolidation.
Inspection of Books and Records
Under Delaware corporate law, any shareholder
of a corporation may for any proper purpose inspect or make copies of the corporation’s stock ledger, list of shareholders and
other books and records. Under British Virgin Islands law, members of the general public, on payment of a nominal fee, can obtain copies
of the public records of a company available at the office of the British Virgin Islands Registrar of Corporate Affairs, including the
company’s certificate of incorporation, its memorandum and articles of association (with any amendments), records of license fees
paid to date, any articles of dissolution, any articles of merger and a register of charges if the company has elected to file such a
register.
A shareholder of a company is entitled, on giving
written notice to the company, to inspect:
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a)
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the
memorandum and articles of association;
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b)
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the
register of members;
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c)
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the
register of directors; and
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d)
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the
minutes of meetings and resolutions of shareholders and of those classes of shares of which he is a shareholder.
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In addition, a shareholder may make copies of
or take extracts from the documents and records referred to in (a) through (d) above. However, subject to the memorandum and
articles of association of the company, the directors may, if they are satisfied that it would be contrary to the company’s interests
to allow a shareholder to inspect any document, or part of any document, specified in (b), (c) or (d) above, refuse to permit
the shareholder to inspect the document or limit the inspection of the document, including limiting the making of copies or the taking
of extracts from the records. Where a company fails or refuses to permit a shareholder to inspect a document or permits a shareholder
to inspect a document subject to limitations, that shareholder may apply to the court for an order that he should be permitted to inspect
the document or to inspect the document without limitation.
Where a company keeps a copy of the register
of members or the register of directors at the office of its registered agent, it is required to notify the registered agent of any changes
to the originals of such registers, in writing, within 15 days of any change; and to provide the registered agent with a written record
of the physical address of the place or places at which the original register of members or the original register of directors is kept.
Where the place at which the original register of members or the original register of directors is changed, the company is required to
provide the registered agent with the physical address of the new location of the records within 14 days of the change of location.
A company is also required to keep at the office
of its registered agent or at such other place or places, within or outside the British Virgin Islands, as the directors determine the
minutes of meetings and resolutions of shareholders and of classes of shareholders, and the minutes of meetings and resolutions of directors
and committees of directors. If such records are kept at a place other than at the office of the company’s registered agent, the
company is required to provide the registered agent with a written record of the physical address of the place or places at which the
records are kept and to notify the registered agent, within 14 days, of the physical address of any new location where such records may
be kept.
Conflict of Interest
Under Delaware corporate law, a contract between
a corporation and a director or officer, or between a corporation and any other organization in which a director or officer has a financial
interest, is not void as long as (i) the material facts as to the director’s or officer’s relationship or interest are
disclosed or known and (ii) either a majority of the disinterested directors authorizes the contract in good faith or the shareholders
vote in good faith to approve the contract. Nor will any such contract be void if it is fair to the corporation when it is authorized,
approved or ratified by the board of directors, a committee or the shareholders.
The BVI Act provides that a director shall, forthwith
after becoming aware that he is interested in a transaction entered into or to be entered into by the company, disclose that interest
to the board of directors of the company. The failure of a director to disclose that interest does not affect the validity of a transaction
entered into by the director or the company, so long as the director’s interest was disclosed to the board prior to the company’s
entry into the transaction or was not required to be disclosed because the transaction is between the company and the director himself
and is otherwise in the ordinary course of business and on usual terms and conditions. As permitted by British Virgin Islands laws and
our Memorandum and Articles of Association, a director interested in a particular transaction may vote on it, attend meetings at which
it is considered, and sign documents on our behalf which relate to the transaction, and subject to compliance with the BVI Act shall
not, by reason of his office be accountable to us for any benefit which he derives from such transaction and no such transaction shall
be liable to be avoided on the grounds of any such interest or benefit.
Transactions with Interested Shareholders
Delaware corporate law contains a business combination
statute applicable to Delaware public corporations whereby, unless the corporation has specifically elected not to be governed by that
statute by amendment to its certificate of incorporation, it is prohibited from engaging in certain business combinations with an “interested
shareholder” for three years following the date that the person becomes an interested shareholder. An interested shareholder generally
is a person or group that owns or owned 15% or more of the company’s outstanding voting stock within the past three years. This
statute has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the company in which all shareholders
would not be treated equally. The statute does not apply if, among other things, prior to the date on which the shareholder becomes an
interested shareholder, the board of directors approves either the business combination or the transaction that resulted in the person
becoming an interested shareholder.
British Virgin Islands law has no comparable
provision. However, although British Virgin Islands law does not regulate transactions between a company and its significant shareholders,
it does provide that these transactions must be entered into in the bona fide best interests of the company and not with the effect of
constituting a fraud on the minority shareholders.
Independent Directors
There are no provisions under Delaware corporate
law or under the BVI Act that require a majority of our directors to be independent.
Cumulative Voting
Under Delaware corporate law, cumulative voting
for elections of directors is not permitted unless the company’s certificate of incorporation specifically provides for it. Cumulative
voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder
to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder’s voting power
with respect to electing such director. There are no prohibitions on cumulative voting under the laws of the British Virgin Islands,
but our Memorandum and Articles of Association does not provide for cumulative voting.
Shareholders’ Rights under British Virgin
Islands Law Generally
The BVI Act provides for certain remedies that
may be available to shareholders. Where a company incorporated under the BVI Act or any of its directors engages in, or proposes to engage
in, conduct that contravenes the BVI Act or the company’s memorandum and articles of association, British Virgin Islands courts
can issue a restraining or compliance order. However, shareholders can also bring derivative, personal and representative actions under
certain circumstances. The traditional English basis for members’ remedies has also been incorporated into the BVI Act: where a
shareholder of a company considers that the affairs of the company have been, are being or are likely to be conducted in a manner likely
to be oppressive, unfairly discriminating or unfairly prejudicial to him, he may apply to the court for an order based on such conduct.
In addition, any shareholder of a company may apply to the courts for the appointment of a liquidator of the company and the court may
appoint a liquidator of the company if it is of the opinion that it is just and equitable to do so.
The BVI Act also provides that any shareholder
of a company is entitled to payment of the fair value of his shares upon dissenting from any of the following: (i) a merger, if
the company is a constituent company, unless the company is the surviving company and the member continues to hold the same or similar
shares; (ii) a consolidation, if the company is a constituent company; (iii) any sale, transfer, lease, exchange or other disposition
of more than 50% in value of the assets or business of the company if not made in the usual or regular course of the business carried
on by the company but not including (a) a disposition pursuant to an order of the court having jurisdiction in the matter, (b) a
disposition for money on terms requiring all or substantially all net proceeds to be distributed to the shareholders in accordance with
their respective interest within one year after the date of disposition, or (c) a transfer pursuant to the power of the directors
to transfer assets for the protection thereof; (iv) a redemption of 10% or fewer of the issued shares of the company required by
the holders of 90% or more of the shares of the company pursuant to the terms of the BVI Act; and (v) an arrangement, if permitted
by the court.
Generally, any other claims against a company
by its shareholders must be based on the general laws of contract or tort applicable in the British Virgin Islands or their individual
rights as shareholders as established by a company’s memorandum and articles of association.
Rights of Non-resident or Foreign Shareholders
and Disclosure of Substantial Shareholdings
There are no limitations imposed by our amended
and restated memorandum and articles of association on the rights of non-resident or foreign shareholders to hold or exercise voting
rights on our shares. In addition, there are no provisions in our amended and restated memorandum and articles of association governing
the ownership threshold above which shareholder ownership must be disclosed.
Anti-Money Laundering — British Virgin
Islands
In order to comply with legislation or regulations
aimed at the prevention of money laundering we are required to adopt and maintain anti-money laundering procedures, and may require subscribers
or transferees to provide evidence to verify their identity. Where permitted, and subject to certain conditions, we also may delegate
the maintenance of our anti-money laundering procedures (including the acquisition of due diligence information) to a suitable person.
We reserve the right to request such information
as is necessary to verify the identity of a subscriber or transferee. In the event of delay or failure on the part of the subscriber
or transferee in producing any information required for verification purposes, we may refuse to accept the application, in which case
any funds received will be returned without interest to the account from which they were originally debited or refuse to amend the register
of members to reflect the transferee’s ownership of the relevant shares.
If any person resident in the British Virgin
Islands knows or suspects that another person is engaged in money laundering or terrorist financing and the information for that knowledge
or suspicion came to their attention in the course of their business the person will be required to report his belief or suspicion to
the Financial Investigation Agency of the British Virgin Islands, pursuant to the Proceeds of Criminal Conduct Act 1997 (as amended).
Such a report shall not be treated as a breach of confidence or of any restriction upon the disclosure of information imposed by any
enactment or otherwise.
Exchange Controls.
No laws of the British Virgin Islands, decrees,
regulations or other legislation that limit the import or export of capital or the payment of dividends to shareholders who do not reside
in the British Virgin Islands.
Our Transfer Agent
The transfer agent for our securities is Continental
Stock Transfer & Trust Company.
Listing
Our ordinary shares are listed on the Nasdaq
Capital Market under the symbol “SJ”.
DESCRIPTION OF DEBT SECURITIES
General
We may issue debt securities which may or may
not be converted into our ordinary shares or preferred shares. We may issue the debt securities independently or together with any underlying
securities, and debt securities may be attached or separate from the underlying securities. In connection with the issuance of any debt
securities, we do not intend to issue them pursuant to a trust indenture upon reliance of Section 304(a)(8) of the Trust Indenture Act
and Rule 4a-1 promulgated thereunder.
The following description is a summary of selected
provisions relating to the debt securities that we may issue. The summary is not complete. When debt securities are offered in the future,
a prospectus supplement, information incorporated by reference, or a free writing prospectus, as applicable, will explain the particular
terms of those securities and the extent to which these general provisions may apply. The specific terms of the debt securities as described
in a prospectus supplement, information incorporated by reference, or free writing prospectus will supplement and, if applicable, may
modify or replace the general terms described in this section.
This summary and any description of debt securities
in the applicable prospectus supplement, information incorporated by reference, or free writing prospectus is subject to and is qualified
in its entirety by reference to all the provisions of any specific debt securities document or agreement. We will file each of these
documents, as applicable, with the SEC and incorporate them by reference as an exhibit to the registration statement of which this prospectus
is a part on or before the time we issue a series of warrants. See “Where You Can Find Additional Information” and “Incorporation
of Documents by Reference” below for information on how to obtain a copy of a debt securities document when it is filed.
When we refer to a series of debt securities,
we mean all debt securities issued as part of the same series under the applicable indenture.
Terms
The applicable prospectus supplement, information
incorporated by reference, or free writing prospectus, may describe the terms of any debt securities that we may offer, including, but
not limited to, the following:
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the
title of the debt securities;
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the
total amount of the debt securities;
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the
amount or amounts of the debt securities will be issued and interest rate;
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the
conversion price at which the debt securities may be converted;
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the date on which the right
to convert the debt securities will commence and the date on which the right will expire;
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if applicable, the minimum
or maximum amount of debt securities that may be converted at any one time;
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if
applicable, a discussion of material federal income tax consideration;
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if
applicable, the terms of the payoff of the debt securities;
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the
identity of the indenture agent, if any;
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the
procedures and conditions relating to the conversion of the debt securities; and
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any other terms of the debt
securities, including terms, procedure and limitation relating to the exchange or conversion of the debt securities.
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Form, Exchange, and Transfer
We may issue the debt securities in registered
form or bearer form. Debt securities issued in registered form, i.e., book-entry form, will be represented by a global security registered
in the name of a depository, which will be the holder of all the debt securities represented by the global security. Those investors
who own beneficial interests in global debt securities will do so through participants in the depository’s system, and the rights
of these indirect owners will be governed solely by the applicable procedures of the depository and its participants. In addition, we
may issue debt securities in non-global form, i.e., bearer form. If any debt securities are issued in non-global form, debt securities
certificates may be exchanged for new debt securities certificates of different denominations, and holders may exchange, transfer, or
convert their debt securities at the debt securities agent’s office or any other office indicated in the applicable prospectus
supplement, information incorporated by reference or free writing prospectus.
Prior to the conversion of their debt securities,
holders of debt securities convertible for ordinary shares or preferred shares will not have any rights of holders of ordinary shares
or preferred shares, and will not be entitled to dividend payments, if any, or voting rights of the ordinary shares or preferred shares.
Conversion of Debt Securities
A debt security may entitle the holder to purchase,
in exchange for the extinguishment of debt, an amount of securities at a conversion price that will be stated in the debt security. Debt
securities may be converted at any time up to the close of business on the expiration date set forth in the terms of such debt security.
After the close of business on the expiration date, debt securities not exercised will be paid in accordance with their terms.
Debt securities may be converted as set forth
in the applicable offering material. Upon receipt of a notice of conversion properly completed and duly executed at the corporate trust
office of the indenture agent, if any, or to us, we will forward, as soon as practicable, the securities purchasable upon such exercise.
If less than all of the debt security represented by such security is converted, a new debt security will be issued for the remaining
debt security.
DESCRIPTION OF WARRANTS
General
We may issue warrants to purchase our securities.
We may issue the warrants independently or together with any underlying securities, and the warrants may be attached or separate from
the underlying securities. We may also issue a series of warrants under a separate warrant agreement to be entered into between us and
a warrant agent. The warrant agent will act solely as our agent in connection with the warrants of such series and will not assume any
obligation or relationship of agency for or with holders or beneficial owners of warrants.
The following description is a summary of selected
provisions relating to the warrants that we may issue. The summary is not complete. When warrants are offered in the future, a prospectus
supplement, information incorporated by reference, or a free writing prospectus, as applicable, will explain the particular terms of
those securities and the extent to which these general provisions may apply. The specific terms of the warrants as described in a prospectus
supplement, information incorporated by reference, or free writing prospectus will supplement and, if applicable, may modify or replace
the general terms described in this section.
This summary and any description of warrants
in the applicable prospectus supplement, information incorporated by reference, or free writing prospectus is subject to and is qualified
in its entirety by reference to all the provisions of any specific warrant document or agreement, if applicable. We will file each of
these documents, as applicable, with the SEC and incorporate them by reference as an exhibit to the registration statement of which this
prospectus is a part on or before the time we issue a series of warrants. See “Where You Can Find Additional Information”
and “Incorporation of Documents by Reference” below for information on how to obtain a copy of a warrant document when it
is filed.
When we refer to a series of warrants, we mean
all warrants issued as part of the same series under the applicable warrant agreement.
Terms
The applicable prospectus supplement, information
incorporated by reference, or free writing prospectus, may describe the terms of any warrants that we may offer, including, but not limited
to, the following:
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the
title of the warrants;
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the
total number of warrants;
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the
price or prices at which the warrants will be issued;
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the
price or prices at which the warrants may be exercised;
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the
currency or currencies that investors may use to pay for the warrants;
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the date on which the right
to exercise the warrants will commence and the date on which the right will expire;
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whether
the warrants will be issued in registered form or bearer form;
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information
with respect to book-entry procedures, if any;
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if
applicable, the minimum or maximum amount of warrants that may be exercised at any one time;
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if applicable, the designation and terms of the underlying
securities with which the warrants are issued and the number of warrants issued with each underlying security;
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if applicable, the date on and
after which the warrants and the related underlying securities will be separately transferable;
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if applicable, a discussion
of material federal income tax considerations;
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if applicable, the terms
of redemption of the warrants;
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the identity of the warrant
agent, if any;
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the procedures and conditions
relating to the exercise of the warrants; and
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any other terms of the warrants,
including terms, procedures, and limitations relating to the exchange and exercise of the warrants.
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Warrant Agreement
We may issue the warrants in one or more series
under one or more warrant agreements, each to be entered into between us and a bank, trust company, or other financial institution as
warrant agent. We may add, replace, or terminate warrant agents from time to time. We may also choose to act as our own warrant agent
or may choose one of our subsidiaries to do so.
The warrant agent under a warrant agreement will
act solely as our agent in connection with the warrants issued under that agreement. Any holder of warrants may, without the consent
of any other person, enforce by appropriate legal action, on its own behalf, its right to exercise those warrants in accordance with
their terms.
Form, Exchange, and Transfer
We may issue the warrants in registered form
or bearer form. Warrants issued in registered form, i.e., book-entry form, will be represented by a global security registered in the
name of a depository, which will be the holder of all the warrants represented by the global security. Those investors who own beneficial
interests in a global warrant will do so through participants in the depository’s system, and the rights of these indirect owners
will be governed solely by the applicable procedures of the depository and its participants. In addition, we may issue warrants in non-global
form, i.e., bearer form. If any warrants are issued in non-global form, warrant certificates may be exchanged for new warrant certificates
of different denominations, and holders may exchange, transfer, or exercise their warrants at the warrant agent’s office or any
other office indicated in the applicable prospectus supplement, information incorporated by reference, or free writing prospectus.
Prior to the exercise of their warrants, holders
of warrants exercisable for ordinary shares or preferred shares will not have any rights of holders of ordinary shares or preferred shares
and will not be entitled to dividend payments, if any, or voting rights of the ordinary shares or preferred shares.
Exercise of Warrants
A warrant will entitle the holder to purchase
for cash an amount of securities at an exercise price that will be stated in, or that will be determinable as described in, the applicable
prospectus supplement, information incorporated by reference, or free writing prospectus. Warrants may be exercised at any time up to
the close of business on the expiration date set forth in the applicable offering material. After the close of business on the expiration
date, unexercised warrants will become void. Warrants may be redeemed as set forth in the applicable offering material.
Warrants may be exercised as set forth in the
applicable offering material. Upon receipt of payment and the warrant certificate properly completed and duly executed at the corporate
trust office of the warrant agent or any other office indicated in the applicable offering material, we will forward, as soon as practicable,
the securities purchasable upon such exercise. If less than all of the warrants represented by such warrant certificate are exercised,
a new warrant certificate will be issued for the remaining warrants.
DESCRIPTION OF RIGHTS
We may issue rights to purchase our securities.
The rights may or may not be transferable by the persons purchasing or receiving the rights. In connection with any rights offering,
we may enter into a standby underwriting or other arrangement with one or more underwriters or other persons pursuant to which such underwriters
or other persons would purchase any offered securities remaining unsubscribed for after such rights offering. Each series of rights will
be issued under a separate rights agent agreement to be entered into between us and one or more banks, trust companies, or other financial
institutions, as rights agent, that we will name in the applicable prospectus supplement. The rights agent will act solely as our agent
in connection with the rights and will not assume any obligation or relationship of agency or trust for or with any holders of rights
certificates or beneficial owners of rights.
The prospectus supplement relating to any rights
that we offer will include specific terms relating to the offering, including, among other matters:
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the
date of determining the security holders entitled to the rights distribution;
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the aggregate number of rights
issued and the aggregate amount of securities purchasable upon exercise of the rights;
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the
conditions to completion of the rights offering;
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the date on which the right
to exercise the rights will commence and the date on which the rights will expire; and
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any
applicable federal income tax considerations.
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Each right would entitle the holder of the rights
to purchase for cash the principal amount of securities at the exercise price set forth in the applicable prospectus supplement. Rights
may be exercised at any time up to the close of business on the expiration date for the rights provided in the applicable prospectus
supplement. After the close of business on the expiration date, all unexercised rights will become void.
If less than all of the rights issued in any
rights offering are exercised, we may offer any unsubscribed securities directly to persons other than our security holders, to or through
agents, underwriters, or dealers, or through a combination of such methods, including pursuant to standby arrangements, as described
in the applicable prospectus supplement.
DESCRIPTION OF UNITS
We may issue units composed of any combination
of our securities. We will issue each unit so that the holder of the unit is also the holder of each security included in the unit. As
a result, the holder of a unit will have the rights and obligations of a holder of each included security. The unit agreement under which
a unit is issued may provide that the securities included in the unit may not be held or transferred separately, at any time or at any
time before a specified date.
The following description is a summary of selected
provisions relating to units that we may offer. The summary is not complete. When units are offered in the future, a prospectus supplement,
information incorporated by reference, or a free writing prospectus, as applicable, will explain the particular terms of those securities
and the extent to which these general provisions may apply. The specific terms of the units as described in a prospectus supplement,
information incorporated by reference, or free writing prospectus will supplement and, if applicable, may modify or replace the general
terms described in this section.
This summary and any description of units in
the applicable prospectus supplement, information incorporated by reference, or free writing prospectus is subject to and is qualified
in its entirety by reference to the unit agreement, collateral arrangements, and depositary arrangements, if applicable. We will file
each of these documents, as applicable, with the SEC and incorporate them by reference as an exhibit to the registration statement of
which this prospectus is a part on or before the time we issue a series of units. See “Where You Can Find Additional Information”
and “Incorporation of Documents by Reference” below for information on how to obtain a copy of a document when it is filed.
The applicable prospectus supplement, information
incorporated by reference, or free writing prospectus may describe:
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The
designation and terms of the units and of the securities comprising the units, including
whether and under what circumstances those securities may be held or transferred separately;
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Any
provisions for the issuance, payment, settlement, transfer, or exchange of the units or of
the securities composing the units;
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Whether
the units will be issued in fully registered or global form; and
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Any
other terms of the units
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The applicable provisions described in this section,
as well as those described under “Description of Share Capital,” “Description of Debt Securities,” “Description
of Warrants,” and “Description of Rights” above, will apply to each unit and to each security included in each unit,
respectively.
PLAN OF DISTRIBUTION
We, or selling shareholders, may sell the securities
included in this prospectus from time to time in one or more transactions, including without limitation:
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to
or through one or more underwriters on a firm commitment or agency basis;
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through
put or call option transactions relating to the securities;
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through
broker-dealers (acting as agent or principal);
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directly
to purchasers, through a specific bidding or auction process, on a negotiated basis or otherwise;
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through
any other method permitted pursuant to applicable law; or
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through
a combination of any such methods of sale.
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At any time a particular offer of the securities
covered by this prospectus is made, a revised prospectus or prospectus supplement, if required, will be distributed which will set forth
the aggregate amount of securities covered by this prospectus being offered and the terms of the offering, including the name or names
of any underwriters, dealers, brokers or agents, any discounts, commissions, concessions and other items constituting compensation from
us and any discounts, commissions or concessions allowed or re-allowed or paid to dealers. Such prospectus supplement, and, if necessary,
a post-effective amendment to the registration statement of which this prospectus is a part, will be filed with the SEC to reflect the
disclosure of additional information with respect to the distribution of the securities covered by this prospectus. In order to comply
with the securities laws of certain jurisdictions, if applicable, the securities sold under this prospectus may only be sold through
registered or licensed brokers or dealers. In addition, in some states the securities may not be sold unless they have been registered
or qualified for sale in the applicable state or an exemption from registration or qualification requirements is available and is complied
with.
Any public offering price and any discounts or
concessions allowed or re-allowed or paid to dealers may be changed from time to time.
The distribution of securities may be effected
from time to time in one or more transactions, including block transactions and transactions on NASDAQ or any other organized market
where the securities may be traded. The securities may be sold at a fixed price or prices, which may be changed, or at market prices
prevailing at the time of sale, at prices relating to the prevailing market prices or at negotiated prices. The consideration may be
cash or another form negotiated by the parties. Agents, underwriters or broker-dealers may be paid compensation for offering and selling
the securities. That compensation may be in the form of discounts, concessions or commissions to be received from us or from the purchasers
of the securities. Any dealers and agents participating in the distribution of the securities may be deemed to be underwriters, and compensation
received by them on resale of the securities may be deemed to be underwriting discounts. If any such dealers or agents were deemed to
be underwriters, they may be subject to statutory liabilities under the Securities Act of 1933, as amended, or the Securities Act.
Agents may from time to time solicit offers to
purchase the securities. If required, we will name in the applicable prospectus supplement any agent involved in the offer or sale of
the securities and set forth any compensation payable to the agent. Unless otherwise indicated in the prospectus supplement, any agent
will be acting on a best efforts basis for the period of its appointment. Any agent selling the securities covered by this prospectus
may be deemed to be an underwriter, as that term is defined in the Securities Act, of the securities.
If underwriters are used in a sale, securities
will be acquired by the underwriters for their own account and may be resold from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale, or under delayed delivery
contracts or other contractual commitments. Securities may be offered to the public either through underwriting syndicates represented
by one or more managing underwriters or directly by one or more firms acting as underwriters. If an underwriter or underwriters are used
in the sale of securities, an underwriting agreement will be executed with the underwriter or underwriters, as well as any other underwriter
or underwriters, with respect to a particular underwritten offering of securities, and will set forth the terms of the transactions,
including compensation of the underwriters and dealers and the public offering price, if applicable. The prospectus and prospectus supplement
will be used by the underwriters to resell the securities.
If a dealer is used in the sale of the securities,
we, the selling shareholders or an underwriter will sell the securities to the dealer, as principal. The dealer may then resell the securities
to the public at varying prices to be determined by the dealer at the time of resale. To the extent required, we will set forth in the
prospectus supplement the name of the dealer and the terms of the transactions.
We or the selling shareholders may directly solicit
offers to purchase the securities and may make sales of securities directly to institutional investors or others. These persons may be
deemed to be underwriters within the meaning of the Securities Act with respect to any resale of the securities. To the extent required,
the prospectus supplement will describe the terms of any such sales, including the terms of any bidding or auction process, if used.
Agents, underwriters and dealers may be entitled
under agreements which may be entered into with us or the selling shareholders to indemnification by us or the selling shareholders against
specified liabilities, including liabilities incurred under the Securities Act, or to contribution by us or the selling shareholders
to payments they may be required to make in respect of such liabilities. If required, the prospectus supplement will describe the terms
and conditions of the indemnification or contribution. Some of the agents, underwriters or dealers, or their affiliates may be customers
of, engage in transactions with or perform services for us or our subsidiaries or the selling shareholders.
Any person participating in the distribution of
securities registered under the registration statement that includes this prospectus will be subject to applicable provisions of the
Exchange Act, and the applicable SEC rules and regulations, including, among others, Regulation M, which may limit the timing of
purchases and sales of any of our securities by that person. Furthermore, Regulation M may restrict the ability of any person engaged
in the distribution of our securities to engage in market-making activities with respect to our securities. These restrictions may affect
the marketability of our securities and the ability of any person or entity to engage in market-making activities with respect to our
securities.
Certain persons participating in an offering may
engage in over-allotment, stabilizing transactions, short-covering transactions and penalty bids that stabilize, maintain or otherwise
affect the price of the offered securities. These activities may maintain the price of the offered securities at levels above those that
might otherwise prevail in the open market, including by entering stabilizing bids, effecting syndicate covering transactions or imposing
penalty bids, each of which is described below.
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A
stabilizing bid means the placing of any bid, or the effecting of any purchase, for the purpose of pegging, fixing or maintaining the
price of a security.
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A
syndicate covering transaction means the placing of any bid on behalf of the underwriting syndicate or the effecting of any purchase
to reduce a short position created in connection with the offering.
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A
penalty bid means an arrangement that permits the managing underwriter to reclaim a selling concession from a syndicate member in connection
with the offering when offered securities originally sold by the syndicate member are purchased in syndicate covering transactions.
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These transactions may be effected on an exchange,
if the securities are listed on that exchange, or in the over-the-counter market or otherwise.
If so indicated in the applicable prospectus supplement,
we will authorize agents, underwriters or dealers to solicit offers from certain types of institutions to purchase offered securities
from us at the public offering price set forth in such prospectus supplement pursuant to delayed delivery contracts providing for payment
and delivery on a specified date in the future. Such contracts will be subject only to those conditions set forth in the prospectus supplement
and the prospectus supplement will set forth the commission payable for solicitation of such contracts.
Any underwriters to whom offered securities are
sold for public offering and sale may make a market in such offered securities, but such underwriters will not be obligated to do so
and may discontinue any market making at any time without notice. The offered securities may or may not be listed on a national securities
exchange. No assurance can be given that there will be a market for the offered securities.
Any securities that qualify for sale pursuant to
Rule 144 or Regulation S under the Securities Act may be sold under Rule 144 or Regulation S rather than pursuant
to this prospectus.
To the extent that we or the selling shareholders
make sales to or through one or more underwriters or agents in at-the-market offerings, we or the selling shareholders will do so pursuant
to the terms of a distribution agreement between us or the selling shareholders and the underwriters or agents. If we engage in at-the-market
sales pursuant to a distribution agreement, we will sell our ordinary shares to or through one or more underwriters or agents, which
may act on an agency basis or on a principal basis. During the term of any such agreement, we may sell ordinary shares on a daily basis
in exchange transactions or otherwise as we agree with the underwriters or agents. The distribution agreement will provide that any ordinary
shares sold will be sold at prices related to the then prevailing market prices for our ordinary shares. Therefore, exact figures regarding
proceeds that will be raised or commissions to be paid cannot be determined at this time and will be described in a prospectus supplement.
Pursuant to the terms of the distribution agreement, we may agree to sell, and the relevant underwriters or agents may agree to solicit
offers to purchase, blocks of our ordinary shares or warrants. The terms of each such distribution agreement will be set forth in more
detail in a prospectus supplement to this prospectus.
Offers to purchase the securities offered by this
prospectus may be solicited, and sales of the securities may be made, by us or the selling shareholders directly to institutional investors
or others, who may be deemed to be underwriters within the meaning of the Securities Act with respect to any re-sales of the securities.
The terms of any offer made in this manner will be included in the prospectus supplement relating to the offer.
In connection with offerings made through underwriters
or agents, we or the selling shareholders may enter into agreements with such underwriters or agents pursuant to which we or the selling
shareholders receive our outstanding securities in consideration for the securities being offered to the public for cash. In connection
with these arrangements, the underwriters or agents may also sell securities covered by this prospectus to hedge their positions in these
outstanding securities, including in short sale transactions. If so, the underwriters or agents may use the securities received from
us or the selling shareholders under these arrangements to close out any related open borrowings of securities.
We or the selling shareholders may enter into derivative
transactions with third parties or sell securities not covered by this prospectus to third parties in privately negotiated transactions.
If the applicable prospectus supplement indicates, in connection with those derivatives, such third parties (or affiliates of such third
parties) may sell securities covered by this prospectus and the applicable prospectus supplement, including in short sale transactions.
If so, such third parties (or affiliates of such third parties) may use securities pledged by us or the selling shareholders or borrowed
from us, the selling shareholders or others to settle those sales or to close out any related open borrowings of shares, and may use
securities received from us or the selling shareholders in settlement of those derivatives to close out any related open borrowings of
shares. The third parties (or affiliates of such third parties) in such sale transactions will be underwriters and, if not identified
in this prospectus, will be identified in the applicable prospectus supplement (or a post-effective amendment).
We or the selling shareholders may loan or pledge
securities to a financial institution or other third party that in turn may sell the securities using this prospectus. Such financial
institution or third party may transfer its short position to investors in our securities or in connection with a simultaneous offering
of other securities offered by this prospectus or in connection with a simultaneous offering of other securities offered by this prospectus.
Our ordinary shares are quoted on The NASDAQ
Capital Market under the symbol “SJ”.
TAXATION
Material income tax consequences relating to
the purchase, ownership, and disposition of the securities offered by this prospectus are set forth in “Item 10. Additional Information—10.E.
Taxation” in our annual report on Form 20-F for the fiscal year ended December 31, 2020, which is incorporated herein by reference,
as updated by our subsequent filings under the Exchange Act that are incorporated by reference and, if applicable, in any accompanying
prospectus supplement or relevant free writing prospectus.
The following discussion of material British
Virgin Islands, PRC, and United States federal income tax consequences of an investment in our ordinary shares is based upon laws and
relevant interpretations thereof in effect as of the date of this prospectus, all of which are subject to change. This discussion does
not deal with all possible tax consequences relating to an investment in our ordinary shares, such as the tax consequences under state,
local, and other tax laws.
WE URGE POTENTIAL PURCHASERS OF OUR ORDINARY
SHARES TO CONSULT THEIR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL, AND NON-U.S. TAX CONSEQUENCES OF PURCHASING, OWNING
AND DISPOSING OF OUR ORDINARY SHARES.
People’s Republic of China Taxation
We are a holding company incorporated in the
British Virgin Islands and we gain substantial income by way of dividends paid to us from our PRC subsidiaries. The PRC Enterprise Income
Tax Law and its implementation rules (the “EIT Law”) provide that PRC-sourced income of foreign enterprises, such as dividends
paid by a PRC subsidiary to its equity holders that are non-resident enterprises, will normally be subject to PRC withholding tax at
a rate of 10%, unless any such foreign investor’s jurisdiction of incorporation has a tax treaty with China that provides for a
preferential tax rate or a tax exemption.
Under the EIT Law, an enterprise established
outside of China with a “de facto management body” within China is considered a “resident enterprise,” which
means that it is treated in a manner similar to a PRC domestic enterprise for enterprise income tax purposes. Although the implementation
rules of the EIT Law define “de facto management body” as a managing body that actually, comprehensively manage and control
the production and operation, staff, accounting, property and other aspects of an enterprise, the only official guidance for this definition
currently available is set forth in SAT Circular 82, which provides guidance on the determination of the tax residence status of a PRC-controlled
offshore incorporated enterprise, defined as an enterprise that is incorporated under the laws of a foreign country or territory and
that has a PRC enterprise or enterprise group as its primary controlling shareholder. Although the Company does not have a PRC enterprise
or enterprise group as our primary controlling shareholder and is therefore not a PRC-controlled offshore incorporated enterprise within
the meaning of SAT Circular 82, in the absence of guidance specifically applicable to us, we have applied the guidance set forth in SAT
Circular 82 to evaluate the tax residence status of the Company and its subsidiaries organized outside of China.
According to SAT Circular 82, a PRC-controlled
offshore incorporated enterprise will be regarded as a PRC tax resident by virtue of having a “de facto management body”
in China and will be subject to PRC enterprise income tax on its worldwide income only if all of the following criteria are met: (i)
the places where senior management and senior management departments that are responsible for daily production, operation and management
of the enterprise perform their duties are mainly located within the territory of China; (ii) financial decisions (such as money borrowing,
lending, financing and financial risk management) and personnel decisions (such as appointment, dismissal and salary and wages) are decided
or need to be decided by organizations or persons located within the territory of China; (iii) main property, accounting books, corporate
seal, the board of directors and files of the minutes of shareholders’ meetings of the enterprise are located or preserved within
the territory of China; and (iv) one half (or more) of the directors or senior management staff having the right to vote habitually reside
within the territory of China.
We believe that we do not meet some of the conditions
outlined in the immediately preceding paragraph. For example, the key assets and records of the Company, including the resolutions and
meeting minutes of our board of directors and the resolutions and meeting minutes of our shareholders, are located and maintained outside
China. In addition, we are not aware of any offshore holding companies with a corporate structure similar to ours that has been deemed
a PRC “resident enterprise” by the PRC tax authorities. Accordingly, we believe that the Company and its offshore subsidiary
should not be treated as a “resident enterprise” for PRC tax purposes if the criteria for “de facto management body”
as set forth in SAT Circular 82 were deemed applicable to us. As the tax residency status of an enterprise is subject to determination
by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term “de facto management body”
as applicable to our offshore entities, however, we will continue to monitor our tax status.
If the PRC tax authorities determine that the
Company is a PRC resident enterprise for enterprise income tax purposes, we may be required to withhold a 10% withholding tax from any
dividends we pay to our shareholders that are non-resident enterprises. In addition, non-resident enterprise shareholders may be subject
to a 10% PRC withholding tax on gains realized on the sale or other disposition of our ordinary shares, if such income is treated as
sourced from within the PRC. It is unclear whether our non-PRC individual shareholders would be subject to any PRC tax on dividends or
gains obtained by such non-PRC individual shareholders in the event we are determined to be a PRC resident enterprise. If any PRC tax
were to apply to dividends or gains realized by non-PRC individuals, it would generally apply at a rate of 20% unless a reduced rate
is available under an applicable tax treaty. It is also unclear, however, whether non-PRC shareholders of the Company would be able to
claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that the Company is treated as
a PRC resident enterprise. There is no guidance from the PRC government to indicate whether or not any tax treaties between the PRC and
other countries would apply in circumstances where a non-PRC company was deemed to be a PRC tax resident, and thus there is no basis
for expecting how tax treaty between the PRC and other countries may impact non-resident enterprises.
Provided that the Company is not deemed to be
a PRC resident enterprise, holders of our ordinary shares who are not PRC residents will not be subject to PRC income tax on dividends
distributed by us or gains realized from the sale or other disposition of our shares. However, under SAT Bulletin 7, where a non-resident
enterprise conducts an “indirect transfer” by transferring taxable assets, including, in particular, equity interests in
a PRC resident enterprise, indirectly by disposing of the equity interests of an overseas holding company, the non-resident enterprise,
being the transferor, or the transferee or the PRC entity which directly owned such taxable assets may report to the relevant tax authority
such indirect transfer. Using a “substance over form” principle, the PRC tax authority may disregard the existence of the
overseas holding company if it lacks a reasonable commercial purpose and was established for the purpose of reducing, avoiding, or deferring
PRC tax. As a result, gains derived from such indirect transfer may be subject to PRC enterprise income tax, and the transferee or other
person who is obligated to pay for the transfer is obligated to withhold the applicable taxes, currently at a rate of 10% for the transfer
of equity interests in a PRC resident enterprise. We and our non-PRC resident investors may be at risk of being required to file a return
and being taxed under SAT Bulletin 7, and we may be required to expend valuable resources to comply with SAT Bulletin 7, or to establish
that we should not be taxed under this Bulletin.
British Virgin Islands Taxation
The British Virgin Islands currently levies no
taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance
tax or estate duty. There are no other taxes likely to be material to the Company levied by the Government of the British Virgin Islands
except for stamp duties which may be applicable on instruments executed in, or after execution brought within the jurisdiction of the
British Virgin Islands. No stamp duty is payable in the British Virgin Islands on the issue of shares by, or any transfers of shares
of, British Virgin Islands companies (except those which hold interests in land in the British Virgin Islands). The British Virgin Islands
is not party to any double tax treaties that are applicable to any payments made to or by the Company. There are no exchange control
regulations or currency restrictions in the British Virgin Islands.
Payments of dividends and capital in respect
of our ordinary shares will not be subject to taxation in the British Virgin Islands and no withholding will be required on the payment
of a dividend or capital to any holder of our ordinary shares, as the case may be, nor will gains derived from the disposal of our ordinary
shares be subject to British Virgin Islands income or corporation tax.
United States Federal Income Taxation
The following does not address the tax consequences
to any particular investor or to persons in special tax situations such as:
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financial
institutions;
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regulated
investment companies;
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real
estate investment trusts;
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persons
that elect to mark their securities to market;
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U.S.
expatriates or former long-term residents of the U.S.;
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governments
or agencies or instrumentalities thereof;
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persons
liable for alternative minimum tax;
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persons
holding our ordinary shares as part of a straddle, hedging, conversion or integrated transaction;
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persons
that actually or constructively own 10% or more of our voting power or value (including by reason of owning our ordinary shares);
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persons
who acquired our ordinary shares pursuant to the exercise of any employee share option or otherwise as compensation;
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persons
holding our ordinary shares through partnerships or other pass-through entities;
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beneficiaries
of a Trust holding our ordinary shares; or
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persons
holding our ordinary shares through a Trust.
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The discussion set forth below is addressed only
to U.S. Holders that purchase ordinary shares in this offering. Prospective purchasers are urged to consult their own tax advisors about
the application of the U.S. federal income tax rules to their particular circumstances as well as the state, local, foreign and other
tax consequences to them of the purchase, ownership and disposition of our ordinary shares.
Material Tax Consequences Applicable to U.S.
Holders of Our Ordinary Shares
The following sets forth the material U.S. federal
income tax consequences related to the ownership and disposition of our ordinary shares. It is directed to U.S. Holders (as defined below)
of our ordinary shares and is based upon laws and relevant interpretations thereof in effect as of the date of this prospectus, all of
which are subject to change. This description does not deal with all possible tax consequences relating to ownership and disposition
of our ordinary shares or U.S. tax laws, other than the U.S. federal income tax laws, such as the tax consequences under non-U.S. tax
laws, state, local and other tax laws.
The following brief description applies only
to U.S. Holders (defined below) that hold ordinary shares as capital assets and that have the U.S. dollar as their functional currency.
This brief description is based on the federal income tax laws of the United States in effect as of the date of this prospectus and on
U.S. Treasury regulations in effect or, in some cases, proposed, as of the date of this prospectus, as well as judicial and administrative
interpretations thereof available on or before such date. All of the foregoing authorities are subject to change, which change could
apply retroactively and could affect the tax consequences described below.
The brief description below of the U.S. federal
income tax consequences to “U.S. Holders” will apply to you if you are a beneficial owner of ordinary shares and you are,
for U.S. federal income tax purposes,
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an
individual who is a citizen or resident of the United States;
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a
corporation (or other entity taxable as a corporation for U.S. federal income tax purposes) organized under the laws of the United States,
any state thereof or the District of Columbia;
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an
estate whose income is subject to U.S. federal income taxation regardless of its source; or
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a
trust that (1) is subject to the primary supervision of a court within the United States and the control of one or more U.S. persons
for all substantial decisions or (2) has a valid election in effect under applicable U.S. Treasury regulations to be treated as a U.S.
person.
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Taxation of Dividends and Other Distributions
on Our Ordinary Shares
Subject to the PFIC (defined below) rules discussed
below, the gross amount of distributions made by us to you with respect to the ordinary shares (including the amount of any taxes withheld
therefrom) will generally be includable in your gross income as dividend income on the date of receipt by you, but only to the extent
that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles).
With respect to corporate U.S. Holders, the dividends will not be eligible for the dividends-received deduction allowed to corporations
in respect of dividends received from other U.S. corporations.
With respect to non-corporate U.S. Holders, including
individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable to qualified dividend income, provided that
(1) the ordinary shares are readily tradable on an established securities market in the United States, or we are eligible for the benefits
of an approved qualifying income tax treaty with the United States that includes an exchange of information program, (2) we are not a
PFIC (defined below) for either our taxable year in which the dividend is paid or the preceding taxable year, and (3) certain holding
period requirements are met. Because there is no income tax treaty between the United States and the British Virgin Islands, clause (1)
above can be satisfied only if the ordinary shares are readily tradable on an established securities market in the United States. Under
U.S. Internal Revenue Service authority, ordinary shares are considered for purpose of clause (1) above to be readily tradable on an
established securities market in the United States if they are listed on certain exchanges, which presently includes the NYSE and the
Nasdaq Stock Market. You are urged to consult your tax advisors regarding the availability of the lower rate for dividends paid with
respect to our ordinary shares, including the effects of any change in law after the date of this prospectus.
Dividends will constitute foreign source income
for foreign tax credit limitation purposes. If the dividends are taxed as qualified dividend income (as discussed above), the amount
of the dividend taken into account for purposes of calculating the foreign tax credit limitation will be adjusted pursuant to a formula
provided in applicable Treasury regulation. The limitation on foreign taxes eligible for credit is calculated separately with respect
to specific classes of income. For this purpose, dividends distributed by us with respect to our ordinary shares will constitute “passive
category income” but could, in the case of certain U.S. Holders, constitute “general category income.”
To the extent that the amount of the distribution
exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), it will be treated
first as a tax-free return of your tax basis in your ordinary shares, and to the extent the amount of the distribution exceeds your tax
basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings and profits under U.S. federal income tax
principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a dividend even if that distribution would
otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above.
Taxation of Dispositions of Ordinary Shares
Subject to the passive foreign investment company
rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of a share equal to
the difference between the amount realized (in U.S. dollars) for the share and your tax basis (in U.S. dollars) in the ordinary shares.
The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder, who has held
the ordinary shares for more than one year, you will generally be eligible for reduced tax rates. The deductibility of capital losses
is subject to limitations. Any such gain or loss that you recognize will generally be treated as United States source income or loss
for foreign tax credit limitation purposes which will generally limit the availability of foreign tax credits.
Passive Foreign Investment Company (“PFIC”)
A non-U.S. corporation is considered a PFIC,
as defined in Section 1297(a) of the US Internal Revenue Code, for any taxable year if either:
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at
least 75% of its gross income for such taxable year is passive income; or
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at
least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable
to assets that produce or are held for the production of passive income (the “asset test”).
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Passive income generally includes dividends,
interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the
disposition of passive assets. We will be treated as owning our proportionate share of the assets and earning our proportionate share
of the income of any other corporation in which we own, directly or indirectly, at least 25% (by value) of the stock. In determining
the value and composition of our assets for purposes of the PFIC asset test, (1) the cash we raise in this offering will generally be
considered to be held for the production of passive income and (2) the value of our assets must be determined based on the market value
of our ordinary shares from time to time, which could cause the value of our non-passive assets to be less than 50% of the value of all
of our assets (including the cash raised in this offering) on any particular quarterly testing date for purposes of the asset test.
Based on our operations and the composition of
our assets we do not expect to be treated as a PFIC under the current PFIC rules. We must make a separate determination each year as
to whether we are a PFIC, however, and there can be no assurance with respect to our status as a PFIC for our current taxable year or
any future taxable year. Depending on the amount of cash we raise in this offering, together with any other assets held for the production
of passive income, it is possible that, for our current taxable year or for any subsequent taxable year, more than 50% of our assets
may be assets held for the production of passive income. In addition, because the value of our assets for purposes of the asset test
will generally be determined based on the market price of our ordinary shares and because cash is generally considered to be an asset
held for the production of passive income, our PFIC status will depend in large part on the market price of our ordinary shares and the
amount of cash we raise in this offering. Accordingly, fluctuations in the market price of the ordinary shares may cause us to become
a PFIC. In addition, the application of the PFIC rules is subject to uncertainty in several respects and the composition of our income
and assets will be affected by how, and how quickly, we spend the cash we raise in this offering. We are under no obligation to take
steps to reduce the risk of our being classified as a PFIC, and as stated above, the determination of the value of our assets will depend
upon material facts (including the market price of our ordinary shares from time to time and the amount of cash we raise in this offering)
that may not be within our control. If we are a PFIC for any year during which you hold ordinary shares, we will continue to be treated
as a PFIC for all succeeding years during which you hold ordinary shares. If we cease to be a PFIC and you did not previously make a
timely “mark-to-market” election as described below, however, you may avoid some of the adverse effects of the PFIC regime
by making a “purging election” (as described below) with respect to the ordinary shares.
If we are a PFIC for your taxable year(s) during
which you hold ordinary shares, you will be subject to special tax rules with respect to any “excess distribution” that you
receive and any gain you realize from a sale or other disposition (including a pledge) of the ordinary shares, unless you make a “mark-to-market”
election as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions
you received during the shorter of the three preceding taxable years or your holding period for the ordinary shares will be treated as
an excess distribution. Under these special tax rules:
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the
excess distribution or gain will be allocated ratably over your holding period for the ordinary shares;
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the
amount allocated to your current taxable year, and any amount allocated to any of your taxable year(s) prior to the first taxable year
in which we were a PFIC, will be treated as ordinary income, and
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the
amount allocated to each of your other taxable year(s) will be subject to the highest tax rate in effect for that year and the interest
charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.
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The tax liability for amounts allocated to years
prior to the year of disposition or “excess distribution” cannot be offset by any net operating losses for such years, and
gains (but not losses) realized on the sale of the ordinary shares cannot be treated as capital, even if you hold the ordinary shares
as capital assets.
A U.S. Holder of “marketable stock”
(as defined below) in a PFIC may make a mark-to-market election under Section 1296 of the US Internal Revenue Code for such stock to
elect out of the tax treatment discussed above. If you make a mark-to-market election for first taxable year which you hold (or are deemed
to hold) ordinary shares and for which we are determined to be a PFIC, you will include in your income each year an amount equal to the
excess, if any, of the fair market value of the ordinary shares as of the close of such taxable year over your adjusted basis in such
ordinary shares, which excess will be treated as ordinary income and not capital gain. You are allowed an ordinary loss for the excess,
if any, of the adjusted basis of the ordinary shares over their fair market value as of the close of the taxable year. Such ordinary
loss, however, is allowable only to the extent of any net mark-to-market gains on the ordinary shares included in your income for prior
taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition
of the ordinary shares, are treated as ordinary income. Ordinary loss treatment also applies to any loss realized on the actual sale
or disposition of the ordinary shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously
included for such ordinary shares. Your basis in the ordinary shares will be adjusted to reflect any such income or loss amounts. If
you make a valid mark-to-market election, the tax rules that apply to distributions by corporations which are not PFICs would apply to
distributions by us, except that the lower applicable capital gains rate for qualified dividend income discussed above under “—Taxation
of Dividends and Other Distributions on our Ordinary Shares” generally would not apply.
The mark-to-market election is available only
for “marketable stock”, which is stock that is traded in other than de minimis quantities on at least 15 days during each
calendar quarter (“regularly traded”) on a qualified exchange or other market (as defined in applicable U.S. Treasury regulations),
including Nasdaq Stock Market. If the ordinary shares are regularly traded on Nasdaq Stock Market and if you are a holder of ordinary
shares, the mark-to-market election would be available to you were we to be or become a PFIC.
Alternatively, a U.S. Holder of stock in a PFIC
may make a “qualified electing fund” election under Section 1295(b) of the US Internal Revenue Code with respect to such
PFIC to elect out of the tax treatment discussed above. A U.S. Holder who makes a valid qualified electing fund election with respect
to a PFIC will generally include in gross income for a taxable year such holder’s pro rata share of the corporation’s earnings
and profits for the taxable year. The qualified electing fund election, however, is available only if such PFIC provides such U.S. Holder
with certain information regarding its earnings and profits as required under applicable U.S. Treasury regulations. We do not currently
intend to prepare or provide the information that would enable you to make a qualified electing fund election. If you hold ordinary shares
in any taxable year in which we are a PFIC, you will be required to file U.S. Internal Revenue Service Form 8621 in each such year and
provide certain annual information regarding such ordinary shares, including regarding distributions received on the ordinary shares
and any gain realized on the disposition of the ordinary shares.
If you do not make a timely “mark-to-market”
election (as described above), and if we were a PFIC at any time during the period you hold our ordinary shares, then such ordinary shares
will continue to be treated as stock of a PFIC with respect to you even if we cease to be a PFIC in a future year, unless you make a
“purging election” for the year we cease to be a PFIC. A “purging election” creates a deemed sale of such ordinary
shares at their fair market value on the last day of the last year in which we are treated as a PFIC. The gain recognized by the purging
election will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above.
As a result of the purging election, you will have a new basis (equal to the fair market value of the ordinary shares on the last day
of the last year in which we are treated as a PFIC) and holding period (which new holding period will begin the day after such last day)
in your ordinary shares for tax purposes.
IRC Section 1014(a) provides for a step-up in
basis to the fair market value for our ordinary shares when inherited from a decedent that was previously a holder of our ordinary shares.
However, if we are determined to be a PFIC and a decedent that was a U.S. Holder did not make a mark-to-market election and ownership
of those ordinary shares are inherited, a special provision in IRC Section 1291(e) provides that the new U.S. Holder’s basis should
be reduced by an amount equal to the Section 1014 basis minus the decedent’s adjusted basis just before death. As such if we are
determined to be a PFIC at any time prior to a decedent’s passing, the PFIC rules will cause any new U.S. Holder that inherits
our ordinary shares from a U.S. Holder to not get a step-up in basis under Section 1014 and instead will receive a carryover basis in
those ordinary shares.
You are urged to consult your tax advisors regarding
the application of the PFIC rules to your investment in our ordinary shares and the elections discussed above.
Information Reporting and Backup Withholding
Dividend payments with respect to our ordinary
shares and proceeds from the sale, exchange or redemption of our ordinary shares may be subject to information reporting to the U.S.
Internal Revenue Service and possible U.S. backup withholding under Section 3406 of the US Internal Revenue Code with at a current flat
rate of 24%. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and
makes any other required certification on U.S. Internal Revenue Service Form W-9 or who is otherwise exempt from backup withholding.
U.S. Holders who are required to establish their exempt status generally must provide such certification on U.S. Internal Revenue Service
Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S. information reporting and backup
withholding rules.
Backup withholding is not an additional tax.
Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability, and you may obtain a refund of
any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the U.S. Internal Revenue
Service and furnishing any required information. We do not intend to withhold taxes for individual shareholders. Transactions effected
through certain brokers or other intermediaries, however, may be subject to withholding taxes (including backup withholding), and such
brokers or intermediaries may be required by law to withhold such taxes.
Under the Hiring Incentives to Restore Employment
Act of 2010, certain U.S. Holders are required to report information relating to our ordinary shares, subject to certain exceptions (including
an exception for ordinary shares held in accounts maintained by certain financial institutions), by attaching a complete Internal Revenue
Service Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold ordinary shares.
EXPENSES
Set forth below is an itemization of the total
expenses which are expected to be incurred by us in connection with the offer and sale of our ordinary shares by our selling securityholders.
With the exception of the SEC registration fee, all amounts are estimates.
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SEC registration fee
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$
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25,022.86
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Legal fees and expenses
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$
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30,000
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Accounting fees and expenses
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$
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10,000
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Printing expenses
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$
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1,500
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Miscellaneous expenses
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$
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5,000
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MATERIAL CONTRACTS
Our material contracts are described in the documents
incorporated by reference into this prospectus. See “Incorporation of Documents by Reference” below.
MATERIAL CHANGES
Except as otherwise described in our annual report
on Form 20-F for the fiscal year ended December 31, 2020, in our reports of foreign private issuer on Form 6-K filed
or submitted under the Exchange Act and incorporated by reference herein, and as disclosed in this prospectus or the applicable prospectus
supplement, no reportable material changes have occurred since December 31, 2020.
LEGAL MATTERS
Legal matters as to British Virgin Islands’
law, and the validity of the ordinary shares, Class A preferred shares, debt securities, warrants and units offered by this prospectus
will be passed upon for us by Forbes Hare.
EXPERTS
The audited consolidated financial statements
of Scienjoy Holding Corporation and its subsidiaries as for the years ended December 31, 2020 and 2019, incorporated in this Prospectus
by reference to the Annual Report on Form 20-F for the year ended December 31, 2020 have been so incorporated in reliance on the report
of Friedman LLP, an independent registered public accounting firm, given the authority of said firm as experts in auditing and accounting.
ENFORCEABILITY OF CIVIL LIABILITIES
We were incorporated under the laws of the British
Virgin Islands because there are certain benefits associated with being a British Virgin Islands company, such as political and economic
stability, an effective judicial system, a favorable tax system, the absence of foreign exchange control or currency restrictions, and
the availability of professional and support services. The British Virgin Islands, however, has a less developed body of securities laws
as compared to the United States and provides significantly less protection for investors than the United States, and British Virgin
Islands companies may not have standing to sue before the federal courts of the United States.
Substantially all of our assets are located in
the PRC. In addition, most of our directors and officers are nationals or residents of the PRC and all or a substantial portion of their
assets are located outside the United States. As a result, it may be difficult for investors to effect service of process within the
United States upon us or these persons, or to enforce against us or them judgments obtained in United States courts, including judgments
predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States.
We have appointed Cogency Global Inc. as our
agent to receive service of process with respect to any action brought against us under the federal securities laws of the U.S. or of
any state in the U.S.
Forbes Hare, our counsel with respect to the
laws of the British Virgin Islands, and Beijing Feng Yu Law Firm, our counsel as to Chinese law, have advised us that there is uncertainty
as to whether the courts of the British Virgin Islands or the PRC would, respectively, (i) recognize or enforce judgments of United States
courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the
United States or any state in the United States where that liability is in respect of penalties, taxes, fines or similar fiscal or revenue
obligations of the company; or (ii) entertain original actions brought in the British Virgin Islands or the PRC against us or our directors
or officers predicated upon the securities laws of the United States or any state in the United States that are penal in nature.
Forbes Hare has further advised us that there
is currently no statutory enforcement or treaty between the United States and the British Virgin Islands providing for enforcement of
judgments. A judgment obtained in the United States, however, may be recognized and enforced in the courts of the British Virgin Islands
at common law, without any re-examination on the merits of the underlying dispute, by an action commenced on the foreign judgment debt
in the Commercial Division of the Eastern Caribbean Supreme Court in the British Virgin Islands, provided such judgment: (i) is given
by a foreign court of competent jurisdiction and the company either submitted to such jurisdiction or was resident or carrying on business
within such jurisdiction and was duly served with process; (ii) is final and for a liquidated sum; (iii) is not in respect of taxes,
a fine or a penalty or similar fiscal or revenue obligations of the company; (iv) in obtaining judgment there was no fraud on the part
of the person in whose favor judgment was given or on the part of the court; (v) recognition or enforcement of the judgment would not
be contrary to public policy in the British Virgin Islands; and (vi) the proceedings pursuant to which judgment was obtained were not
contrary to natural justice. Furthermore, it is uncertain that British Virgin Islands courts would enforce: (1) judgments of U.S. courts
obtained in actions against us or other persons that are predicated upon the civil liability provisions of the U.S. federal securities
laws; or (2) original actions brought against us or other persons predicated upon the Securities Act. Forbes Hare has informed us that
there is uncertainty with regard to British Virgin Islands law relating to whether a judgment obtained from the U.S. courts under civil
liability provisions of the securities laws will be determined by the courts of the British Virgin Islands as penal or punitive in nature.
In appropriate circumstances, a British Virgin
Islands court may give effect in the British Virgin Islands to other kinds of final foreign judgments such as declaratory orders, orders
for performance of contracts and injunctions.
Beijing Fengyu Law Office, our Chinese counsel,
has advised us that the recognition and enforcement of foreign judgments are provided for under China’s Civil Procedure Law (the
“Civil Procedure Law”). Chinese courts may recognize and enforce foreign judgments in accordance with the requirements of
the Civil Procedure Law based either on treaties between China and the country where the judgment is made or on principles of reciprocity
between jurisdictions. However, as of the date of this prospectus, China does not have any treaties or other form of reciprocity with
the United States or the British Virgin Islands that provide for the reciprocal recognition and enforcement of foreign judgments. In
addition, courts in China will not recognize or enforce a foreign judgment against us or our directors and officers if they decide that
the judgment violates the basic principles of Chinese law or national sovereignty, security or social public interest. As a result, it
is uncertain whether and on what basis a Chinese court would enforce a judgment rendered by a court in the United States or in the British
Virgin Islands. Furthermore, it will be difficult for U.S. shareholders to initiate actions against us in China in accordance with Chinese
laws because we are incorporated under the laws of the British Virgin Islands and it will be difficult for U.S. shareholders, by virtue
only of holding our ordinary shares, to establish a connection to China for a Chinese court to have jurisdiction as required under the
Civil Procedure Law.
WHERE YOU CAN FIND MORE INFORMATION
We have filed with the SEC a registration statement
(including amendments and exhibits to the registration statement) on Form F-3 under the Securities Act. This prospectus, which is part
of the registration statement, does not contain all of the information set forth in the registration statement and the exhibits and schedules
to the registration statement. For further information, we refer you to the registration statement and the exhibits and schedules filed
as part of the registration statement. If a document has been filed as an exhibit to the registration statement, we refer you to the
copy of the document that has been filed. Each statement in this prospectus relating to a document filed as an exhibit is qualified in
all respects by the filed exhibit.
We are subject to the informational requirements
of the Exchange Act that are applicable to foreign private issuers. Accordingly, we are required to file or furnish reports and other
information with the SEC, including annual reports on Form 20-F and current reports on Form 6-K. The SEC maintains an internet website
at http://www.sec.gov, from which you can electronically access the registration statement and our other materials.
As a foreign private issuer, we are exempt under
the Exchange Act from, among other things, the rules prescribing the furnishing and content of proxy statements, and our executive officers,
directors and principal and selling shareholders are exempt from the reporting and short-swing profit recovery provisions contained in
Section 16 of the Exchange Act. In addition, we will not be required under the Exchange Act to file periodic reports and financial statements
with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act.
Our corporate website is www.scienjoy.com. The
information contained on, or may be accessed through, our website is not a part of this prospectus. We have included our website address
in this prospectus solely for informational purposes.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The SEC allows us to incorporate by reference
information in this document. This means that we can disclose important information to you by referring you to another document filed
separately with the SEC. The information incorporated by reference is considered to be part of this document, except for any information
that is superseded by information that is included directly in this document. Statements in this prospectus regarding the provisions
of certain documents filed with, or incorporated by reference in, the registration statement are not necessarily complete and each statement
is qualified in all respects by that reference. The documents we are incorporating by reference are:
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Our
Annual Report on Form 20-F
for the fiscal year ended December 31, 2020, filed on May 3, 2021;
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The
description of our ordinary shares and warrants contained in our Registration Statement on Form
8-A, as filed with the SEC on February 5, 2019 and any subsequent amendment or report filed for the purpose of updating such
description; and
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Our
reports on Form 6-K furnished to the SEC since December 31, 2020 (on January
12, 2021; January 19,
2021; January 26, 2021;
February 12, 2021;
February 23, 2021; March
24, 2021; April 6, 2021;
April 12, 2021; April
19, 2021; April 26,
2021; April 29, 2021;
May 3, 2021; May
6, 2021; May 10, 2021;
May 20, 2021; May
26, 2021; June
28, 2021; July 7,
2021; August 2,
2021; August 12,
2021; August
16, 2021; August
23, 2021; August
26, 2021; September 29, 2021).
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In addition, all documents we file under Sections
13(a), 13(c) and 15(d) of the Exchange Act subsequent to the date hereof and before the termination of this offering, are incorporated
by reference including annual reports on Form 20-F and current reports on Form 6-K that we submit to the SEC prior to the termination
of this offering that indicate they are being incorporated by reference into this prospectus. Any statement contained in this prospectus,
or in a document incorporated or deemed to be incorporated by reference herein, shall be deemed to be modified or superseded to the extent
that a statement contained herein, or in any subsequently filed document that also is incorporated or deemed to be incorporated by reference
herein, modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this prospectus.
You can obtain a copy of any documents that are
incorporated by reference in this prospectus or any prospectus supplement at no cost, by writing or telephoning us at:
Scienjoy Holding Corporation
3rd Floor, JIA No. 34, Shenggu Nanli
Chaoyang District
People’s Republic of China, 100029
Attention: Xiaowu He
Phone: (86) 10–6642 8188
You should rely only on the information contained
in, or incorporated by reference into, this prospectus, in any accompanying prospectus supplement or in any free writing prospectus filed
by us with the SEC. We have not authorized anyone to provide you with different or additional information. You should not assume that
the information in this prospectus or in any document incorporated by reference is accurate as of any date other than the date on the
front cover of the applicable document.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item
8. Indemnification of Directors and Officers.
Our Memorandum and Articles of Association (the
“Articles”), as amended, the BVI Business Companies Act, 2004, the Insolvency Act, 2003 of the British Virgin Islands, each
of which as amended, and the common law of British Virgin Islands allow the Company to indemnify its officers and directors from certain
liabilities. The Articles provide that we shall indemnify against all expenses, including legal fees, and against all judgments, fines
and amounts paid in settlement and reasonably incurred in connection with legal, administrative or investigative proceedings any person
who: (a) is or was a party or is threatened to be made a party to any threatened, pending or completed proceedings, whether civil, criminal,
administrative or investigative, by reason of the fact that the person is or was a director of us; or (b) is or was, at the request of
us, serving as a director of, or in any other capacity is or was acting for, another body corporate or a partnership, joint venture,
trust or other enterprise.
We will only indemnify the individual in question
if the relevant indemnitee acted honestly and in good faith with a view to our best interests and, in the case of criminal proceedings,
the indemnitee had no reasonable cause to believe that his conduct was unlawful.
The decision of our board of directors as to
whether an indemnitee acted honestly and in good faith and with a view to our best interests and as to whether such indemnitee had no
reasonable cause to believe that his conduct was unlawful is, in the absence of fraud, sufficient for the purposes of the Articles, unless
a question of law is involved.
The termination of any proceedings by any judgment,
order, settlement, conviction or the entering of a nolle prosequi does not, by itself, create a presumption that the person did not act
honestly and in good faith and with a view to our best interests or that the person had reasonable cause to believe that his conduct
was unlawful.
We may purchase and maintain insurance in relation
to any person who is or was a director, officer or liquidator of us, or who, at our request, is or was serving as a director, officer
or liquidator of, or in any other capacity is or was acting for, another company or a partnership, joint venture, trust or other enterprise,
against any liability asserted against the person and incurred by the person in that capacity, whether or not we have or would have had
the power to indemnify the person against the liability as provided in the Articles.
The indemnification provisions contained in the
director service agreement by and between us and each of our incumbent non-executive directors provide for a scope of indemnification
consistent with the scope described in the foregoing paragraphs in this section.
Item 9.
Exhibits.
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Exhibit No.
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Description
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2.1
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Share Exchange Agreement dated October 28, 2019 (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on November 01, 2019).
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3.1
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Third Amended and Restated Memorandum and Articles of Association of Scienjoy Holding Corporation, as adopted by a special resolution on May 5, 2020 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on May 13, 2020).
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4.1
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Specimen Ordinary Share Certificate (incorporated by reference to Exhibit 4.2 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 21, 2018).
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4.2
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Specimen Warrant Certificate (incorporated by reference to Exhibit 4.3 to the Registration Statement on Form S-1 filed with the Securities and Exchange Commission on December 21, 2018).
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4.3
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Warrant Agreement, dated February 5, 2019, by and between Continental Stock Transfer & Trust Company, LLC and the Registrant (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on February 11, 2019).
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4.4
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Form of Unit Purchase Option between the Registrant and Chardan Capital Markets, LLC (incorporated by reference to Exhibit 4.3 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on February 11, 2019).
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4.5
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Letter Agreements by and between the Registrant and each of the initial shareholders, officers and directors of the Registrant (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on February 11, 2019).
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4.6
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Stock Escrow Agreement, dated February 5, 2019, among the Registrant, Continental Stock Transfer & Trust Company, LLC, and the initial shareholders (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on February 11, 2019).
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4.7
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Registration Rights Agreement, dated February 5, 2019, among the Registrant, Continental Stock Transfer & Trust Company, LLC and the initial shareholders (incorporated by reference to Exhibit 10.4 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on February 11, 2019).
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4.8
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Form of Subscription Agreement among the Registrant, the Initial Shareholders and Chardan Capital Markets, LLC (incorporated by reference to Exhibit 10.5 to the Registration Statement on Form S-1 filed with the Securities & Exchange Commission on December 21, 2018)
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4.9
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Investment Management Trust Account Agreement, dated February 5, 2019, by and between Continental Stock Transfer & Trust Company, LLC and the Registrant (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K filed with the Securities & Exchange Commission on February 11, 2019).
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4.10*
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Form of Class A Preferred Shares
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4.11*
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Form of Debt Security
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4.12*
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Form of Warrant Agreement and Warrant Certificate
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4.13*
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Form of Unit Agreement and Unit Certificate
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5.1*
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Form of Legal Opinion
of Forbes Hare.
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23.1**
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Consent of Friedman LLP.
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23.2*
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Consent of Forbes Hare (included in Exhibit 5.1).
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23.4**
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Consent of Beijing Fengyu Law Office.
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24.1**
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Power of Attorney (included on signature page to this Registration Statement).
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*
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To
be filed, if applicable, by amendment or as an exhibit to a report filed pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934, as amended, and incorporated herein by reference.
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Item 10.
Undertakings.
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(a)
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The undersigned Registrant hereby undertakes:
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(1)
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To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration statement:
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i
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To include any prospectus required by section 10(a)(3)
of the Securities Act of 1933;
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ii
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To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent post- effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in
the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent
no more than 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table
in the effective registration statement;
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iii
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To include any material information with respect to
the plan of distribution not previously disclosed in the registration statement or any material change to such information in the
registration statement;
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Provided, however, That:
(A) Paragraphs (a)(1)(i) and (a)(1)(ii) of this section
do not apply if the registration statement is on Form S-8 (§ 239.16b of this chapter), and the information required to be included
in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by the registrant pursuant
to section 13 or section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d)) that are
incorporated by reference in the registration statement; and
(B) Paragraphs (a)(1)(i), (ii), and (iii) of this
section do not apply if the registration statement is on Form S-1 (§ 239.11 of this chapter), Form S-3 (§ 239.13 of
this chapter), Form SF-3 (§ 239.45 of this chapter) or Form F-3 (§ 239.33 of this chapter) and the information required
to be included in a post-effective amendment by those paragraphs is contained in reports filed with or furnished to the Commission by
the registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m or 78o(d))
that are incorporated by reference in the registration statement, or, as to a registration statement on Form S-3, Form SF-3 or Form F-3,
is contained in a form of prospectus filed pursuant to § 230.424(b) of this chapter that is part of the registration statement.
(C) Provided further, however, that paragraphs
(a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is for an offering of asset-backed securities on Form SF-1 (§
239.44 of this chapter) or Form SF-3 (§ 239.45 of this chapter), and the information required to be included in a post-effective
amendment is provided pursuant to Item 1100(c) of Regulation AB (§ 229.1100(c)).
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(2)
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That for the purpose of determining any liability under
the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration
statement relating to the securities offered therein, and this offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
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(3)
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To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the termination of the offering.
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(4)
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If the registrant is a foreign private issuer, to file
a post-effective amendment to the registration statement to include any financial statements required by Item 8.A of Form 20-F at
the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by
Section 10(a)(3) of the Act need not be furnished, provided that the registrant includes in the prospectus, by means of a
post-effective amendment, financial statements required pursuant to this paragraph (a)(4) and other information necessary to ensure
that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the
foregoing, with respect to registration statements on Form F-3 (§ 239.33 of this chapter), a post-effective amendment need not
be filed to include financial statements and information required by Section 10(a)(3) of the Act or Item 8.A of Form 20-F if such
financial statements and information are contained in periodic reports filed with or furnished to the Commission by the registrant
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3.
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(5)
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That, for the purpose of determining liability under
the Securities Act to any purchaser
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i
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If the registrant is relying on Rule 430B (§ 230.430B
of this chapter):
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(A)
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Each prospectus filed by the registrant pursuant to
Rule 424(b)(3) shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and
included in the registration statement; and
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(B)
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Each prospectus required to be filed pursuant to Rule
424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to
Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of
1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus
is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus.
As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall
be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which
that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.
Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part
of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or
modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made
in any such document immediately prior to such effective date; or
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ii
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If the registrant is subject to Rule 430C (§ 230.430C
of this chapter), each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other
than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A (§ 230.430A of this
chapter), shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness.
Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement
or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part
of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify
any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any
such document immediately prior to such date of first use.
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(6)
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That, for the purpose of determining liability of the registrant
under the Securities Act of 1933 to any purchaser in the initial distribution of the securities:
The undersigned registrant undertakes that in a primary offering
of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to
sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications,
the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
(i) Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant to Rule 424 (§ 230.424 of this chapter);
(ii) Any free writing prospectus relating to the offering prepared
by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant;
(iii) The portion of any other free writing prospectus relating
to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the
undersigned registrant; and
(iv) Any other communication that is an offer in the offering
made by the undersigned registrant to the purchaser.
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(b)
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Insofar as indemnification for liabilities arising
under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the opinion of the SEC such indemnification is against public policy
as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection
with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy
as expressed in the Securities Act and will be governed by the final adjudication of such issue.
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(c)
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The undersigned registrant hereby undertakes:
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(1)
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That for purposes of determining any liability under
the Securities Act, the information omitted from the form of prospectus filed as part of this registration statement in reliance
upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the
Securities Act shall be deemed to be part of this registration statement as of the time it was declared effective.
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(2)
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For the purpose of determining any liability under
the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
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SIGNATURES
Pursuant to the requirements of the Securities
Act of 1933, the registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form
F-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Beijing, China on October 1, 2021.
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Scienjoy Holding Corporation
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By:
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/s/ Xiaowu
He
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Name:
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Xiaowu He
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Title:
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Chief Executive Officer
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POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each
person whose signature appears below, hereby constitutes and appoints Xiaowu He and Denny Tang and each of them singly, as his or her
true and lawful attorney-in-fact and agent, with full power of substitution and re-substitution, for him or her and in his or her name,
place and stead, in any and all capacities, to sign any or all amendments, including post-effective amendments to this Registration Statement,
and to sign any and all additional registration statements relating to the same offering of securities of the Registration Statement
that are filed pursuant to Rule 462(b) of the Securities Act of 1933, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting unto said attorneys-in-fact and agents, full power and
authority to do and perform each and every act and thing necessary or appropriate to be done in connection therewith and about the premises,
as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his or her substitutes or substitutes, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities
Act of 1933, as amended, this registration statement has been signed by the following persons in the capacities and on the dated indicated.
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Signature
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Capacity
in Which Signed
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Date
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/s/ Xiaowu He
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Chief Executive Officer
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October 1,
2021
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Xiaowu He
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(Principal Executive Officer,
Director and Chairman of the Board of Directors)
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/s/ Denny
Tang
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Chief Financial Officer
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October 1,
2021
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Denny Tang
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(Principal Financial Officer
and Principal Accounting Officer)
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/s/ Bo Wan
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Chief Operating Officer
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October 1,
2021
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Bo Wan
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(Director)
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/s/ Yongsheng
Liu
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Director
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October 1,
2021
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Yongsheng Liu
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/s/ Hucheng
Zhou
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Independent Director
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October 1,
2021
|
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Hucheng Zhou
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/s/ Huifeng
Chang
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Independent Director
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October 1,
2021
|
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Huifeng Chang
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/s/ Jian Sun
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Independent Director
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October 1,
2021
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Jian Sun
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/s/ Yibing
Liu
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Independent Director
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October 1,
2021
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Yibing Liu
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AUTHORIZED REPRESENTATIVE
Pursuant to the requirements of the Securities Act of 1933, as amended,
the undersigned, the duly authorized representative in the United States of Scienjoy Holding Corporation, has signed this Registration
Statement, in the City of New York, New York on October 1, 2021.
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Scienjoy Holding Corporation
|
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By:
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/s/ Ray Chen
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Name:
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Ray Chen
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Title:
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Head of Investor Relations
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II-8
