Company: ILAG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001641172-25-006445
Chunk: 21

Company: Intelligent Living Application Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 21
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 which would cause the price of our Ordinary Shares to decline, and we may be subject to investigation or sanctions by the SEC.

To comply with the requirements of being a public
company, we may need to undertake various actions, such as implementing new internal controls and procedures and hiring accounting or
internal audit staff.

At such time that our independent registered public
accounting firm is required to formally attest to the effectiveness of our ICFR, it may issue a report
that is adverse in the event it is not satisfied with the level at which our controls are documented, designed or operating. Our remediation
efforts may not enable us to avoid a material weakness in the future.

We do not have any business insurance coverage.

Insurance companies in China currently do not offer
as extensive an array of insurance products as insurance companies in more developed economies. Currently, we and our subsidiaries do
not have any business liability or disruption insurance to cover our operations. We have determined that the costs of insuring for these
risks and the difficulties associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have
such insurance. Any uninsured business disruptions may result in our incurring substantial costs and the diversion of resources, which
could have an adverse effect on our results of operations and financial condition.

  17  

Risks Related to Doing Business in China.

Changes in China’s economic, political
or social conditions or government policies could have a material adverse effect on our business and results of operations.

All of our manufacturing operations are located in
China. Accordingly, our business, prospects, financial condition and results of operations may be influenced to a significant degree by
political, economic and social conditions in China generally and by continued economic growth in China as a whole.

The Chinese economy differs from the economies of
most developed countries in many respects, including the amount of government involvement, level of development, growth rate, control
of foreign exchange and allocation of resources. Although the Chinese government has implemented measures emphasizing the utilization
of market forces for economic reform, the reduction of state ownership of productive assets and the establishment of improved corporate
governance in business enterprises, a substantial portion of productive assets in China is still owned by the government. In addition,
the Chinese government continues to play a significant role in regulating industry development by imposing industrial policies and change
of enforcement practice of such rules and policies can change quickly with little advance notice. The Chinese government also exercises
significant control over China’s economic growth through allocating resources, controlling payment of foreign