Company: OCG
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043484
Chunk: 134

Company: Oriental Culture Holding LTD
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 134
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 losses considering historical, current, and forecasted conditions.
Management reviews its receivables on a regular basis to determine if the allowance for credit losses is adequate and adjusts the allowance
when necessary. Delinquent account balances are written-off against the allowance for credit losses after management has determined that
the likelihood of collection is not probable.

Prepaid expenses

Prepaid expenses mainly include employee advances,
such as travel advance, advance to purchase office supplies in the normal course of business and certain short-term deposits.

Inventory

Inventory is stated at the lower of cost or net
realizable value. The Company’s inventory includes liquor for future sales. On an annual basis, inventory is reviewed for potential
write-downs for estimated obsolescence or unmarketable inventory which equals the difference between the costs of inventory and the estimated
net realizable value, the estimated selling prices in the ordinary course of business. As of December 31, 2024 and 2023, the Company had
inventory of $1,231,335and nil, respectively.

F-12

ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Property and equipment

Property and equipment are stated at cost less
accumulated depreciation and amortization. Depreciation and amortization are computed using the straight-line method over the estimated
useful lives of the assets with no residual value. The estimated useful lives are as follows:

                                        Useful Life                                   
  Office equipment and furnishings      1 - 5 years                                   
  Electronic equipment                  2 - 5 years                                   
  Server room equipment                 5 years                                       
  Vehicles                              5 years                                       
  Office building                       35 years                                      
  Office building improvement           15 years                                      
  Leasehold improvements                lesser of lease term or expected useful life  

The cost and related accumulated depreciation
and amortization of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated
statements of income and other comprehensive income. Expenditures for maintenance and repairs are expensed as incurred, while additions,
renewals and betterments, which are expected to extend the useful life of an asset, are capitalized. The Company also re-evaluates the
periods of depreciation and amortization to determine whether subsequent events and circumstances warrant revised estimates of useful
lives.

Construction-in-progress represents material,
contractor and labor costs, design fees and inspection fees in connection