Company: ILAG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001641172-25-006445
Chunk: 26

Company: Intelligent Living Application Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 26
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 our liquidity and our ability to fund and expand our
business.

  20  

PRC regulations relating to offshore investment
activities by PRC residents may limit our PRC subsidiary’s ability to increase its registered capital or distribute profits to us
or otherwise expose us or our PRC resident beneficial owners to liability and penalties under PRC law.

SAFE promulgated the Circular on Relevant Issues Relating
to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37,
in July 2014 that requires PRC residents or entities to register with SAFE or its local branch in connection with their establishment
or control of an offshore entity established for the purpose of overseas investment or financing. In addition, such PRC residents or entities
must update their SAFE registrations when the offshore special purpose vehicle undergoes material events relating to any change of basic
information (including change of such PRC citizens or residents, name and operation term), increases or decreases in investment amount,
transfers or exchanges of shares, or mergers or divisions. SAFE Circular 37 was issued to replace the Notice on Relevant Issues Concerning
Foreign Exchange Administration for PRC Residents Engaging in Financing and Roundtrip Investments via Overseas Special Purpose Vehicles,
or SAFE Circular 75. SAFE promulgated the Notice on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning
Direct Investment in February 2015, which took effect on June 1, 2015. This notice has amended SAFE Circular 37 requiring PRC residents
or entities to register with qualified banks rather than SAFE or its local branch in connection with their establishment or control of
an offshore entity established for the purpose of overseas investment or financing.

If our shareholders who are PRC residents or entities
do not complete their registration as required, our PRC subsidiary may be prohibited from distributing its profits and proceeds from any
reduction in capital, share transfer or liquidation to us, and we may be restricted in our ability to contribute additional capital to
our PRC subsidiary. Moreover, failure to comply with the SAFE registration described above could result in liability under PRC laws for
evasion of applicable foreign exchange restrictions.

Currently, to our knowledge, all our 5% or more shareholders
are not PRC citizens or residents, however, we cannot assure you whether our other shareholders or beneficial owners will include the
PRC residents or entities in the future and whether they will comply with, and make or obtain any applicable registrations or approvals
required by