Company: JL
Filing Date: 2025-07-28
Form Type: 20-F
Source: 0001213900-25-068049
Chunk: 49

Company: J-Long Group Ltd
Filing Date: 2025-07-28
Form: 20-F
Item: Item 3
Chunk 49
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 of our operations may be adversely affected as a result.
Our business operation is generally manual in nature, and any deterioration of labor relations may adversely affect our operational stability
and efficiency. We cannot give any assurance that favorable labor relations can be maintained. Any industrial action or strike by our
labor force beyond our control may also cause temporary or prolonged disruption to our business operation.

Our
insurance coverage may be inadequate to protect us from potential losses.

We
maintain property all risks insurance and contractors’ all risks insurance for our office and warehouse and storage facilities.
We had not made any material claims under our insurance policies. However, there is no assurance that we are fully insured for our losses
under our current insurance policies in place. We do not maintain any business interruption or key person life insurance. Our insurance
may not be sufficient to cover all of our losses in the event of non-payment. There are certain types of losses, such as from war, acts
of terrorism and certain natural disasters, for which we cannot obtain insurance at a reasonable cost, or at all. If any of these occurs,
it may result in us incurring substantial losses and the diversion of our resources, which are not covered by our insurance. It may in
turn materially and adversely affect our business and financial condition and results of operation.

If
we fail to manage our inventory effectively, our results of operations, financial condition and liquidity may be materially and adversely
affected.

Our
inventories are mostly products which consist of reflective and non-reflective garment trims. For our non-branded products, we depend
on our demand and storage capacity forecast to make procurement decisions and to manage our inventory. As the authorized distributor
of our licensed U. S. brand, we also have non-mandatory procurement targets under the license agreement; as such, although there is no
penalty for not meeting our target, we maintain a certain level of inventory and make procurement if the level falls below our pre-determined
threshold. As with our non-branded products, these procurement decisions are determined by our management based on the anticipated demand
from our customers.

Such
demand, however, can change significantly between the time inventory is ordered and the date by which we hope to sell. Demand may be
affected by seasonality, the economy and changes in trends and consumers’ preferences. Consequently, our customers may not order
products in the quantities that we anticipate. In addition, procurement of certain types of inventories may require significant lead
time and prepayment.