Company: LICN
Filing Date: 2025-04-29
Form Type: 20-F
Source: 0001213900-25-036244
Chunk: 116

Company: Lichen International Ltd
Filing Date: 2025-04-29
Form: 20-F
Item: Item 19
Chunk 116
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, the Company assesses whether
the contract involves the use of an identified asset, whether it has the right to obtain substantially all the economic benefits from
the use of the asset and whether it has the right to control the use of the asset. The right-of-use assets and related lease liabilities
are recognized at the lease commencement date. The Company recognizes operating lease expenses on a straight-line basis over the lease
term and had no finance leases for any of the periods stated herein.

The right-of-use of asset is initially measured
at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement
date, plus any initial direct costs incurred and less any lease incentive received. All right-of-use assets are reviewed for impairment
annually. There was no impairment for right-of-use assets as of December 31, 2024 and 2023.

Share-based compensation

The Company accounts for stock-based compensation
to employees in accordance with ASC 718, “ Compensation-Stock Compensation”. ASC 718 requires companies to measure the cost
of employee services received in exchange for an award of equity instruments, including the equity incentive plan, based on the grant
date fair value of the award and to recognize it as compensation expense over the period the employee is required to provide service
in exchange for the award, usually the vesting period. Stock option forfeitures are recognized at the date of employee termination. Effective
January 1, 2024, the Company adopted ASU 2018-07 for the accounting of share-based payments granted to non-employees for goods and services
and no material impacts to the Financial Statements.

F-15

Contingencies

From time to time, the Company is a party to various
legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable
and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. The Company’s
management does not expect any liability from the disposition of such claims and litigation individually or in the aggregate would have
a material adverse impact on the Company’s consolidated financial position, results of operations and cash flows.

Revenue recognition

The Company adopted ASC Topic 606, Revenue from
Contracts with Customers, effective as of January 1, 2019. Accordingly, the consolidated financial statements for the years ended December
31, 2024, 2023 and 2022 are presented under ASC 606.