Company: OCG
Filing Date: 2025-05-15
Form Type: 20-F
Source: 0001213900-25-043484
Chunk: 70

Company: Oriental Culture Holding LTD
Filing Date: 2025-05-15
Form: 20-F
Item: Item 5
Chunk 70
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 the transaction resulting in an aggregate of 0.3% to 0.6% of total transaction value. Sometimes, we charge
a predetermined transaction rate, which is negotiated on a case-by-case basis, for selected traders with specific large transactions.
Transaction fee revenue also includes predetermined monthly transaction fees, which are negotiated on a case-by-case basis for selected
traders with high trading volume, and is recognized and earned over the specified service period.

In 2018, the Company started a customer reward
points program, pursuant to which reward points were issued for opening a new account or referring customers to open accounts with us
during our promotion period. In that regard, customers are required to redeem certain reward points for new listings in addition to the
regular listing services fees. If a customer does not own any reward points, he/she can purchase them from other customers on our platform.
We do not record revenue when customers redeem any points as it is considered as a prerequisite for a new listing in addition to the regular
services fees. The points are traded by and among our customers on the platform and we charge a transaction fee from such points trading.
Transaction fee revenue from the trading of points amounted to approximately $1,800 and $1.1 million for the years ended December 31,
2023 and 2022, respectively.

Total transaction fee revenue decreased by approximately
$12.8 million or 94.1% from approximately $13.6 million for the year ended December 31, 2022 to approximately $0.8 million for the same
period in 2023. The decrease was due to the decrease in total transaction value. Transaction fee revenue is calculated based on a certain
percentage of the transaction value per transaction. Our total transaction value decreased from approximately $8.6 billion the year ended
December 31, 2022 to approximately $0.5 billion for the same period in 2023. The decrease in our transaction was mainly due to negative
impact from the freezing of bank accounts caused by the ongoing investigation of our related party that started in second half of 2022
which reduced overall customers transactions.

(3) Marketing service fees: Marketing service
fees is what we charge for promoting and marketing our customers’ collectible or artwork. The services include assisting our customers
in connection with his/her listing and trading of his/her collectible/artwork on our platform, which mainly includes consulting and supporting
services of the marketability for the collectible/artwork; assessing its market