Company: OCG
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043484
Chunk: 141

Company: Oriental Culture Holding LTD
Filing Date: 2025-05-15
Form: 20-F
Item: Item 19
Chunk 141
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             $                   181,930      $                     449,037  
  Customer advances                                 558,603                          1,302,736  
  Recognized as revenues                          ( 650,332                        ( 1,363,629  
  Refunds                                                 -                          ( 194,841  
  Effect of exchange rates                         ( 11,774                           ( 11,373  
  Ending balance                $                    78,427      $                     181,930  

F-16

ORIENTAL CULTURE HOLDING LTD. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Cost of revenues

Cost of revenues consist of compensation including
social welfare and benefits for the Company’s IT, risk management and customer services team, appraisal fees, online cloud service
fees, storage fees paid to related party, and depreciation and amortization of hardware and software for the Company’s trading platforms.

Selling and marketing expenses:

Selling and marketing expenses includes salary
and benefits for our employees in the sales and marketing department and marketing and advertising expenses. Selling expenses also include
incentive payments to third parties that refer new traders to utilize the Company’s e-commerce trading platforms.

Website advertising expenses which are included
in selling and marketing expenses to related party were nil, nil, and $43,590for the years ended December 31, 2024, 2023 and 2022, respectively.

Stock compensation

The measurement and recognition of compensation
expense for all stock-based payment awards made to officers and employees of the Company and subsidiaries of its operating variable interest
entity, is based on the market value of the Company’s common stock on the date of grant.

Warrants

The Company accounts for warrants as either equity-classified
or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance
in FASB ASC 480, Distinguishing Liabilities from Equity (“ ASC 480”) and ASC 815, Derivatives and Hedging (“ ASC 815”).
The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability
pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether
the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net
cash settlement” in circumstances outside of the Company’s control, among other conditions