Company: OCG
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043484
Chunk: 74

Company: Oriental Culture Holding LTD
Filing Date: 2025-05-15
Form: 20-F
Item: Item 5
Chunk 74
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 provision for income taxes amounted to $14,833
and $4,812 for the year ended December 31, 2023 and 2022, respectively. We generated most of our income from the subsidiaries of our VIE
that had preferential tax treatment which are formed and registered in Kashi in Xinjiang Provence, China. We also have provided 100% allowance
on net operating losses from our VIE which incurred losses.

Net Income

Our net income decreased by approximately $6.8
million, or 211.2%, from $3.2 million for the year ended December 31, 2022 to approximately $(3.6) million for the same period in 2023.
Such change was the result of the combination of the changes as discussed above.

Foreign Currency Translation Adjustment

Changes in foreign currency translation adjustment
are mainly due to the fluctuation of foreign exchange rates between RMB/HKD (the functional currency of our operating entities) and the
USD dollar (reporting currency).

5B. Liquidity and Capital Resources

Liquidity and Capital Resources

We had approximately $39.6 million of cash and
cash equivalents and short-term investments, including approximately $17.3 million restricted cash and cash equivalents and short term
investments. We had approximately $38.8 million of working capital as of December 31, 2024. In assessing our liquidity, we monitor and
analyze our cash on-hand and our operating and capital expenditure commitments. To date, we have financed our operations primarily through
cash flows from operations, short-term investment, private placement and public offering.

On May 31, 2024, we entered into a Securities Purchase Agreement with
certain purchasers, pursuant to which we sold to the purchasers in a private placement 14,000,000 ordinary shares of the Company, at a
purchase price of $0.50 per share for an aggregate price of $7,000,000. We believe that our current working capital is sufficient to support
our operations for the next twelve months. We may, however, need additional cash resources in the future if we experience changes in business
conditions or other developments, or if we find and wish to pursue opportunities for investment, acquisition, capital expenditure or similar
actions. If we determine that our cash requirements exceed the amount of cash and cash equivalents we have on hand at the time, we may
seek to issue equity or debt securities or obtain credit facilities. The issuance and sale of additional equity