Company: ILAG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001641172-25-006445
Chunk: 109

Company: Intelligent Living Application Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 109
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; and keep the production facility open. To support our working capital needs, we maintain
a credit facility with the Bank of China (Hong Kong) Limited for approximately $897,000 since 2021, which is guaranteed by our directors and their personal properties. In 2021, a shareholder and director forgave an advance of
$717,948 ($153,846 in 2020) to the Company and treated as a shareholder contribution.

Our working capital was $7,395,318, $10,711,197 and
$14,201,841 as of December 31, 2024, 2023 and 2022. Our cash and cash equivalents were $1,280,911, $4,483,730 and $9,165,651 as of December
31, 2024, 2023 and 2022, respectively. While our business has been negatively impacted by the tariffs, COVID-19 and high interest rate
in all 2024, 2023 and 2022, we believe we are able to obtain sufficient operating funds from our existing shareholders, potential investors
or extend Hong Kong government guaranteed low interest bank borrowing to operate our business.

On July 15, 2022, we closed our IPO,
raising net proceeds of approximately $16.86 million after deducting underwriting commission and offering expenses. We believe that our
current working capital is sufficient to support our operations for the next 12 months. We may, however, need additional cash resources
in the future if we experience changes in business conditions or other developments, or if we find and wish to pursue opportunities for
investment, acquisition, capital expenditure or similar actions. If we determine that our cash requirements exceed the amount of cash,
cash equivalents and restricted cash we have on hand at the time, we may seek to issue equity or debt securities or obtain credit facilities.
The issuance and sale of additional equity would result in further dilution to our shareholders. The incurrence of indebtedness would
result in increased fixed obligations and could result in operating covenants that would restrict our operations. Our obligation to bear
credit risk for certain financing transactions we facilitate may also strain our operating cash flow. We cannot assure you that financing
will be available in amounts or on terms acceptable to us, if at all.

  66  

Cash Flows

A summary of the sources and uses of cash and cash
equivalents is as follows:

                                                            For the years end December 31,