Company: ILAG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001641172-25-006445
Chunk: 103

Company: Intelligent Living Application Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 103
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,607,073                (3,445,281                    (161,792          4.7  
  Provision for income taxes                                                                                   (83,214                   (56,237                     (26,977         48.0  
  Net loss                                                                         $                        (3,690,287      $         (3,501,518      $             (188,769          5.4  
  Loss per share – basic and diluted                                               $                             (0.20      $              (0.19      $                (0.01          5.4  

Revenues

Our revenues from sales of door locksets increased
by $1,063,194, or 16.5% for 2024 to $7,506,551 from $6,443,357 for 2023. The increase was mainly due to increase in units sold in 2024.
Our number of products sold was approximately 1.6 million units (including approximately 0.2 million units of spare parts) for 2024, compared
to 1.3 million units (including approximately 0.1 million units of spare parts) for 2023.

Cost of Goods Sold

Cost of goods sold was $5,831,949 for 2024 compared
to $5,464,591 for 2023. Cost of goods sold was 77.5% and 84.8% of revenues for the years ended December 31, 2024 and 2023, respectively.
The decrease in cost of goods sold as a percentage of revenue mainly caused by (i) improved procurement procedures to reduce the costs
for raw materials by using new materials, and (ii) the calibration of production line along with revamping production procedures.

Cost of goods sold includes raw materials (mainly
copper, stainless steel, iron and zinc alloy), direct labor (including wages and social security contributions), manufacturing overhead
(such as packing materials, direct rental expense and utilities) and taxes. As a small business with limited resources, we lack the ability
to hedge our raw materials costs and we monitor raw material price trends to manage our production needs.

  63  

Cost of goods sold - idle capacity

Idle capacity consists of direct production costs
in excess of charges allocated to the Company’s finished goods in production. Such costs relate primarily to depreciation expense
related to the Company’s electroplating equipment that cannot be directly attributable to the production process. Idle capacity
expenses were $362,