Company: ILAG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001641172-25-006445
Chunk: 23

Company: Intelligent Living Application Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 23
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court proceedings and the level of legal protection we enjoy than in more developed legal systems. Furthermore, the PRC legal system is
based in part on government policies and internal rules (some of which are not published in a timely manner or at all) that may have retroactive
effect. As a result, we may not be aware of our violation of these policies and rules until sometime after the violation. Such uncertainties,
including uncertainty over the scope and effect of our contractual, property (including intellectual property) and procedural rights,
could materially and adversely affect our business and impede our ability to continue our operations.

  18  

We rely on dividends and other distributions
on equity paid by our subsidiaries to fund any cash and financing requirements we may have, and any limitation on the ability of our subsidiaries
to make payments to us could have a material adverse effect on our ability to conduct our business.

We are a holding company, and we rely on dividends
and other distributions on equity paid by our subsidiaries for our cash and financing requirements, including the funds necessary to pay
dividends and other cash distributions to our shareholders and service any debt we may incur. If any of our subsidiaries incurs debt on
its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions
to us.

Under PRC laws and regulations, our PRC subsidiary,
as a wholly foreign-owned enterprise in China, may pay dividends only out of its respective accumulated after-tax profits as determined
in accordance with PRC accounting standards and regulations. In addition, a wholly foreign-owned enterprise in China is required to set
aside at least 10% of its accumulated after-tax profits each year, if any, to fund certain statutory reserve funds, until the aggregate
amount of such funds reaches 50% of its registered capital.

Any limitation on the ability of our PRC subsidiary
to pay dividends or make other distributions to us could materially and adversely limit our ability to grow, make investments or acquisitions
that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

PRC regulation of loans to and direct investment
in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from using the proceeds
of offering to make loans to or make additional capital contributions to our PRC subsidiary, which could materially and adversely affect
our liquidity and our ability to fund and expand our business.

Under PRC laws and regulations, we are permitted to
utilize the