Company: ILAG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001641172-25-006445
Chunk: 108

Company: Intelligent Living Application Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 108
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859 and $26,836, respectively.

Provision for Income Taxes

Provision for income tax was $56,237 in 2023, an increase of $56,237 from $nil for 2022.

Our PRC entity in 2023 and 2022 was subject to the
statutory PRC enterprise income tax rate of 25.0%. Our subsidiaries in Hong Kong are subject to Hong Kong taxation on income derived from
their activities conducted in Hong Kong at a rate of 16.5%.

Net loss

Net loss increased $1,845,615 to $3,501,518 for 2023 from $1,655,903 for 2022.

5B. Liquidity and Capital Resources

Liquidity and Capital Resources

We are a holding company incorporated in the Cayman
Islands. We conduct our operations primarily through our subsidiaries in Hong Kong and China. As a result, our ability to pay dividends
depends upon dividends paid by our subsidiaries. If our subsidiaries incur debt on their behalf in the future, the instruments governing
their debt may restrict their ability to pay dividends to us. In addition, Xingfa is permitted to pay dividends in accordance with PRC
accounting standards and regulations. Under PRC law, Xingfa is required to set aside at least 10% of its after-tax profits each year,
if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. Additionally, Xingfa may
allocate a portion of its after-tax profits based on PRC accounting standards to its enterprise expansion fund and staff bonus and welfare
funds, at its discretion. Xingfa may also allocate a portion of its after-tax profits based on PRC accounting standards to a discretionary
surplus fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends. Under
existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade
and service-related foreign exchange transactions, can be made in foreign currencies without prior SAFE approval as long as certain routine
procedural requirements are fulfilled. However, capital account transactions, which include foreign direct investment and loans, must
be approved by and/or registered with SAFE and its local branches.

Our cost structure is relatively fixed and our working
capital requirements are generally influenced by our order backlog. We need substantial operating funds to pay for raw materials; maintain
an appropriate level of work-in-process inventory