Company: ILAG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001641172-25-006445
Chunk: 11

Company: Intelligent Living Application Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 11
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-19, which will
have material negative impact to our business and financial conditions.

In general, our business could be materially adversely
affected by the effects of epidemics or pandemic, including, but not limited to, the COVID-19, avian influenza, severe acute respiratory
syndrome (SARS), the influenza A virus, Ebola virus, or other outbreaks. In response to an epidemic or other outbreaks, government and
other organizations may adopt regulations and policies that could lead to severe disruption to our daily operations, including temporary
closure of our offices and other facilities. These severe conditions may cause us and/or our partners to make internal adjustments, including
but not limited to, temporarily closing down businesses, limiting business hours, and setting restrictions on travel and/or visits with
clients and partners for a prolonged period of time. Various impacts arising from a severe condition may cause business disruptions, resulting
in a material, adverse impact to our financial condition and results of operations.

  11  

We have a substantial customer concentration,
with a limited number of customers accounting for a substantial portion of our revenues.

We derive a significant portion of our revenues
from a few major customers that are located in the United States. For the years ended December 31, 2024 and 2023, three and four customers accounted for 86% and 88%
of our revenues, respectively. In addition, our five largest customers in aggregate accounted for 95% and 92% of our
revenues for the years ended December 31, 2024 and 2023, respectively. There are inherent risks whenever a large percentage of total
revenues are concentrated with a limited number of customers. It is not possible for us to predict the future level of demand for
our products that will be generated by these customers or the future demand for our products by these customers in the end-user
marketplace. If any of these customers experience declining or delayed sales due to market, economic or competitive conditions, we
could be pressured to reduce our prices or they could decrease the purchase quantity of our products, which could have an adverse
effect on our margins and financial position, and could negatively affect our revenues and results of operations. If any of our
three largest customers terminates the purchase of our products, such termination would materially negatively affect our revenues,
results of operations and financial condition.

Our operating results may fluctuate significantly
and may not fully reflect the underlying performance of our business.

Our operating results, including the levels of our
net revenues