Company: LICN
Filing Date: 2025-04-29
Form Type: 20-F
Source: 0001213900-25-036244
Chunk: 120

Company: Lichen International Ltd
Filing Date: 2025-04-29
Form: 20-F
Item: Item 19
Chunk 120
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to allocate at least10% of their after-tax profit to the general reserve in accordance with the PRC accounting standards and regulations.
The allocation to the general reserve will cease if such reserve has reached50% of the registered capital of respective company. These
reserves can only be used for specific purposes and are not transferable to the Company in the form of loans, advances, or cash dividends.
There is no such regulation of providing statutory reserve in Hong Kong.

Advertising expenses

Advertising expenditures are expensed as incurred
and such expenses were included as part of selling and marketing expenses. For the years ended December 2024, 2023 and 2022, the advertising
expenses amounted to approximately $11.87million, $2.37million and $1.43million, respectively.

Comprehensive (loss) income

Comprehensive (loss) income consists of two components,
net (loss) income and other comprehensive (loss) income. Other comprehensive (loss) income refers to revenue, expenses, gains and losses
that under GAAP are recorded as an element of equity but are excluded from net income. Other comprehensive (loss) income consists of a
foreign currency translation adjustment resulting from the Company not using the U. S. dollar as its functional currencies.

F-18

(Loss) Earnings per share

The Company computes earnings per share (“ EPS”)
in accordance with ASC 260, Earnings per Share. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured
as net income divided by the weighted average common share outstanding for the period. Diluted EPS presents the dilutive effect on a per-share
basis of the potential Ordinary Shares (e. g., convertible securities, options and warrants) as if they had been converted at the beginning
of the periods presented, or issuance date, if later. Potential Ordinary Shares that have an anti-dilutive effect (i. e., those that increase
income per share or decrease loss per share) are excluded from the calculation of diluted EPS. There were no dilutive or anti-dilutive
potential Ordinary Shares or effect for the years ended 2024, 2023 and 2022.

Recent accounting pronouncements

The Company considers the applicability and impact
of all accounting standards updates (“ ASUs”). Management periodically reviews new accounting standards that are issued. Under
the Jumpstart Our Business Startups Act of 2012, as amended (the “ JOBS Act”), the Company meets the definition of an emerging