Company: ILAG
Filing Date: 2025-04-28
Form Type: 20-F
Source: 0001641172-25-006445
Chunk: 104

Company: Intelligent Living Application Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 104
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894 and $345,424 for the years ended December 31, 2024 and 2023, respectively.

Gross Profit

Gross profit was $1,311,708 for 2024, an increase of $678,366, or 107.1% from $633,342 for 2023. Profit margin was 17.5% for 2024, increase from 9.8% for 2023 as a result of measures taken by the Company to lower the cost of goods sold
during the current period.

We believe we can enhance our profit margin as we
(i) negotiate for volume rebates that would reduce our cost of raw materials, and (ii) optimize our product mix to focus our marketing
efforts on our higher margin products.

Selling and marketing expenses

Major
components of selling and marketing expenses are research expenses, transportation, custom declarations, sales commissions.
Selling and marketing expenses increased by $1,042,937, or 1,742.8% to $1,102,778 for 2024 from $59,841 for 2024. The increase
was mainly to (i) increase in research in Thailand and Southern East Asia market, and (ii) increase in freight and transportation
fees which in line with increase of units sold.

General and Administrative Expenses

General and administrative expenses consist
primarily of personnel costs for our accounting and administrative support personnel and executives as well as legal and
professional fees, depreciation and amortization of non-production property and equipment. General and administrative expenses
decreased by $1,036,411, or 23.3%, to $3,403,903 for 2024 from $4,440,314 for 2023. This decrease was mainly due to reduction of
$373,375 in professional fees and $667,016 in stock options to officers and employees of the Company granted in 2023 under the
Company’s 2022 Omnibus Equity Plan.

Research and Development Expenses

R& D Expenses were $649,753 and
nil year ended December 31, 2024 and 2023. This increase was mainly due to development on smart locks, the Internet of Things (IoT) applications,
plus some spending for AI production.

The Company picked and launched certain smart lock designs for sample production
and have shipped them to the United State with a plan to sell them on e-commerce websites during the first half of 2025. We will continue