Company: ILAG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001641172-25-006445
Chunk: 8

Company: Intelligent Living Application Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 8
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 compared to the prior year. To the extent our customers seek to reduce their usual or customary inventory
levels or change their practices regarding purchases in excess of consumer demand, our net sales and results of operations may be materially
adversely affected in that period.

We operate in a highly competitive industry
and may lose market share or experience margin erosion if we are unable to compete effectively.

We compete on the basis of product quality, design
and performance, brand awareness and loyalty, product variety, reputation, price and promotional efforts. We compete with a significant
number of companies of varying sizes, including divisions or subsidiaries of larger companies who may have greater financial resources
and larger customer bases than we have. As a result, these competitors may be able to identify and adapt to changes in consumer preferences
more quickly than us due to their resources and scale. They may also be more successful in marketing and selling their products, better
able to increase prices to reflect cost pressures and better able to increase their promotional activity, which may impact us and the
entire lockset manufacturing industry. If these competitive pressures cause our products to lose market share or experience margin erosion,
our business, financial conditions and results of operations may be materially adversely affected.

Fluctuations in the price, availability or quality
of raw materials used in our products could cause manufacturing delays, adversely affect our ability to provide goods to our customers
or increase costs, any of which could decrease our sales or earnings.

Our major raw material purchases include copper, iron,
zinc alloy and packaging materials comprised of paper and plastic. We depend on outside suppliers for these raw materials and must obtain
sufficient quantities of quality raw materials from these suppliers at acceptable prices and in a timely manner. We do not maintain fixed
supply contracts with our suppliers. Unfavorable fluctuations in the price, quality or availability of required raw materials could negatively
affect our ability to meet the demands of our customers. Our inability to meet customers’ demands could result in the loss of future
sales.

The profitability of our products depends in part
upon the margin between the cost to us of certain raw materials and our fabrication costs associated with converting such raw materials
into assembled products, as compared to the selling price of our products. We intend to continue to base the selling prices of our products
in part upon their associated raw material costs. However, we may not be able to pass all increases in raw material costs or increases
in the costs associated with taking possession of raw materials through to our customers in the future