Company: ILAG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001641172-25-006445
Chunk: 30

Company: Intelligent Living Application Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 30
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 employees’ probation and unilaterally terminating labor contracts. In the event that Xingfa decides to terminate some
of its employees or otherwise change its employment or labor practices, the Labor Contract Law and its implementation rules may limit
our ability to effect those changes in a desirable or cost-effective manner, which could adversely affect our business and results of
operations. We believe Xingfa’s current practice complies with the Labor Contract Law and its amendments. However, the relevant
governmental authorities may take a different view and impose fines on us.

As the interpretation and implementation of labor-related
laws and regulations are still evolving, our employment practices could violate labor-related laws and regulations in China, which may
subject us to labor disputes or government investigations. If Xingfa is deemed to have violated relevant labor laws and regulations, Xingfa
could be required to provide additional compensation to its employees and our business, financial condition and results of operations
could be materially and adversely affected.

Any failure to comply with PRC regulations regarding
the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other legal
or administrative sanctions.

In February 2012, SAFE promulgated the Notices on
Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan of Overseas Publicly-Listed
Company, replacing earlier rules promulgated in March 2007. Pursuant to these rules, PRC citizens and non-PRC citizens who reside in China
for a continuous period of not less than one year who participate in any stock incentive plan of an overseas publicly listed company,
subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be the PRC subsidiary
of such overseas listed company, and complete certain other procedures. In addition, an overseas entrusted institution must be retained
to handle matters in connection with the exercise or sale of stock options and the purchase or sale of shares and interests. We and our
executive officers and other employees who are PRC citizens or who have resided in the PRC for a continuous period of not less than one
year and who have been granted options or other awards are subject to these regulations. Failure to complete the SAFE registrations may
subject them to fines and legal sanctions and may also limit our ability to contribute additional capital into our PRC subsidiary and
limit our PRC subsidiary’s ability to distribute dividends to us. We also face regulatory uncertainties that could restrict our
ability