Company: ILAG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001641172-25-006445
Chunk: 99

Company: Intelligent Living Application Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 99
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 placing more orders.
As a result, our gross margin was negatively affected by amortization of idle capacity. To increase the utilization rate, the management
is developing electro-plating business to provide services to third parties with our newly acquired plant and also continued the development
of new smart lock products for mainland China, Cambodia and Hong Kong markets which expect to launch by the end of 2025.

Key Factors Affecting Our Results

We believe the key factors affecting our financial
condition and results of operations include the follows:

  Our Relationship with Customers. We rely heavily on                                                                                 
  customers’ demand to sell our products. Our three and four largest customers accounted for 86.3% and 88.2% for the years ended      
  December 31, 2024 and 2023, respectively. In addition, our five largest customers accounted for approximately 95% and 92% for the   
  years ended December 31, 2024 and 2023, respectively. Our strategy is to attempt to strengthen our direct relationships with these  
  customers to secure and expand the sales orders from these customers in the future.                                                 
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  Cost of Goods Sold. Our products are produced in our manufacturing plant Xingfa in Dongguan, Guangdong Province in the PRC. Cost of raw materials, labor costs and manufacturing overhead incurre...  
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  60  

  More Stringent Environmental and OSH Protection Requirements in the PRC. Environmental and OSH protection authorities impose various administrative penalties on persons or enterprises in violat...  
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  Relations Between the US and China. At various times during                                                                                  
  recent years, the US and China have had disagreements over political and economic issues. Controversies may arise in                         
  the future between these two countries. These controversies also could make it more difficult for us to provide our products to our          
  customers in the US. The international trade policies of China and the US could adversely affect our business, and the imposition            
  of trade sanctions and tariffs relating to imports, taxes, import duties and other charges on imports from China, including those            
  applied specifically