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

Company: Intelligent Living Application Group Inc.
Filing Date: 2025-04-28
Form: 20-F
Item: Item 3
Chunk 28
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 shares in U. S. dollars.
For example, to the extent that we need to convert U. S. dollars we receive from our IPO into RMB to pay our operating
expenses, appreciation of the RMB against the U. S. dollar would have an adverse effect on the RMB amount we would receive from the conversion.
Conversely, a depreciation of the RMB against the U. S. dollar may reduce the U. S. dollar equivalent of our earnings,
which in turn could adversely affect the market price of our ordinary shares.

  21  

Very limited hedging options are available in China
to reduce our exposure to exchange rate fluctuations. To date, we have not entered into any hedging transactions in an effort to reduce
our exposure to foreign currency exchange risk. While we may decide to enter into hedging transactions in the future, the availability
and effectiveness of these hedges may be limited and we may not be able to adequately hedge our exposure or at all. In addition, our currency
exchange losses may be magnified by PRC exchange control regulations that restrict our ability to convert RMB into foreign currency. As
a result, fluctuations in exchange rates may have a material adverse effect on your investment.

Governmental control of currency conversion
may limit our ability to utilize our net revenues effectively and affect the value of your investment.

The PRC government imposes controls on the convertibility
of the RMB into foreign currencies and, in certain cases, the remittance of currency out of China. Under our current corporate structure,
our company in the Cayman Islands may rely on dividend payments from our PRC subsidiary to fund any cash and financing requirements we
may have. Under existing PRC foreign exchange regulations, payments of current account items, such as profit distributions and trade and
service-related foreign exchange transactions, can be made in foreign currencies without prior approval from SAFE by complying with certain
procedural requirements. Therefore, our PRC subsidiary is able to pay dividends in foreign currencies to us without prior approval from
SAFE, subject to the condition that the remittance of such dividends outside of the PRC complies with certain procedures under PRC foreign
exchange regulation, such as the overseas investment registrations by the beneficial owners of our Company who are PRC residents. But
approval from or registration with appropriate government authorities is required where RMB is to be converted into foreign currency and
remitted out of China to pay capital expenses such as the repayment of loans denominated in foreign currencies. The PRC