Cover
Cover | 12 Months Ended |
Dec. 31, 2023 shares | |
Entity Addresses [Line Items] | |
Document Type | 20-F |
Amendment Flag | false |
Document Registration Statement | false |
Document Annual Report | true |
Document Transition Report | false |
Document Shell Company Report | false |
Document Period End Date | Dec. 31, 2023 |
Document Fiscal Period Focus | FY |
Document Fiscal Year Focus | 2023 |
Current Fiscal Year End Date | --12-31 |
Entity File Number | 001-41444 |
Entity Registrant Name | INTELLIGENT LIVING APPLICATION GROUP INC. |
Entity Central Index Key | 0001814963 |
Entity Incorporation, State or Country Code | E9 |
Entity Address, Address Line One | Unit 2, 5/F, Block A, Profit Industrial Building |
Entity Address, Address Line Two | 1-15 Kwai Fung Crescent, Kwai Chung |
Entity Address, City or Town | New Territories |
Entity Address, Country | HK |
Title of 12(b) Security | Ordinary Shares, par value $0.0001 |
Trading Symbol | ILAG |
Security Exchange Name | NASDAQ |
Entity Well-known Seasoned Issuer | No |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Non-accelerated Filer |
Entity Emerging Growth Company | true |
Elected Not To Use the Extended Transition Period | false |
Document Accounting Standard | U.S. GAAP |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 18,060,000 |
ICFR Auditor Attestation Flag | false |
Document Financial Statement Error Correction [Flag] | false |
Auditor Firm ID | 2388 |
Auditor Name | Wei, Wei & Co., LLP |
Auditor Location | Flushing, New York |
Business Contact [Member] | |
Entity Addresses [Line Items] | |
Entity Address, Address Line One | Unit 2, 5/F, Block A, Profit Industrial Building |
Entity Address, Address Line Two | 1-15 Kwai Fung Crescent, Kwai Chung |
Entity Address, City or Town | New Territories |
Entity Address, Country | HK |
City Area Code | 852 |
Local Phone Number | 2481 7938 |
Contact Personnel Name | Bong Lau |
Contact Personnel Email Address | info@i-l-a-g.com |
Consolidated Balance Sheets
Consolidated Balance Sheets | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 4,483,730 | $ 9,165,651 |
Accounts receivable | 445,500 | 1,624,809 |
Inventories | 5,027,747 | 4,472,487 |
Prepayments | 1,899,584 | 487,703 |
Other receivables | 245,599 | 265,127 |
Total current assets | 12,102,160 | 16,015,777 |
NON-CURRENT ASSETS | ||
Deposits | 72,637 | 1,449 |
Property and equipment, net | 5,673,584 | 5,134,566 |
Right-of-use assets, net | 435,477 | 650,282 |
Total non-current assets | 6,181,698 | 5,786,297 |
Total assets | 18,283,858 | 21,802,074 |
CURRENT LIABILITIES | ||
Bank borrowings - current | 129,722 | 201,222 |
Accounts payable | 324,626 | 396,628 |
Advance from customers | 6,364 | |
Other payables and accruals | 625,350 | 677,972 |
Taxes payable | 31,972 | |
Operating lease liabilities - current | 279,293 | 531,750 |
Total current liabilities | 1,390,963 | 1,813,936 |
NON-CURRENT LIABILITIES | ||
Bank borrowings | 334,319 | 417,795 |
Operating lease liabilities | 156,183 | 118,532 |
Total non-current liabilities | 490,502 | 536,327 |
Total liabilities | 1,881,465 | 2,350,263 |
COMMITMENTS AND CONTINGENCIES | ||
SHAREHOLDERS’ EQUITY | ||
Preferred shares, par value $0.0001 per share; 50,000,000 shares authorized; none issued and outstanding as of December 31, 2023 and 2022 | ||
Ordinary shares, par value $0.0001 per share; 450,000,000 shares authorized; 18,060,000 issued and outstanding as of December 31, 2023 and 2022 | 1,806 | 1,806 |
Additional paid-in capital | 23,804,550 | 23,137,534 |
Deficit | (7,143,409) | (3,641,891) |
Accumulated other comprehensive loss | (260,554) | (45,638) |
Total shareholders’ equity | 16,402,393 | 19,451,811 |
Total liabilities and shareholders’ equity | $ 18,283,858 | $ 21,802,074 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 | Jul. 16, 2021 |
Statement of Financial Position [Abstract] | |||
Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred stock, shares authorized | 50,000,000 | 50,000,000 | 50,000,000 |
Preferred stock, shares issued | 0 | 0 | |
Preferred stock, shares outstanding | 0 | 0 | |
Ordinary shares, par value | $ 0.0001 | $ 0.0001 | |
Ordinary shares, shares authorized | 450,000,000 | 450,000,000 | |
Ordinary shares, shares issued | 18,060,000 | 18,060,000 | |
Ordinary shares, shares outstanding | 18,060,000 | 18,060,000 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Loss - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||
REVENUES | $ 6,443,357 | $ 12,158,102 | $ 12,543,556 |
COST OF GOODS SOLD | (5,464,591) | (9,961,988) | (11,231,253) |
COST OF GOODS SOLD - IDLE CAPACITY | (345,424) | ||
GROSS PROFIT | 633,342 | 2,196,114 | 1,312,303 |
SELLING AND MARKETING EXPENSES | (59,841) | (105,473) | (150,152) |
GENERAL AND ADMINISTRATIVE EXPENSES | (4,440,314) | (4,208,197) | (2,902,040) |
FINANCE COSTS | (26,935) | (147,588) | (57,774) |
LOSS FROM OPERATIONS | (3,893,748) | (2,265,144) | (1,797,663) |
OTHER INCOME | |||
Interest income | 244,840 | 27,928 | 199 |
Foreign exchange gain | 47,237 | 125,480 | 9,318 |
Other income | 156,390 | 455,833 | 401,631 |
Total other income, net | 448,467 | 609,241 | 411,148 |
LOSS BEFORE PROVISION FOR INCOME TAXES | (3,445,281) | (1,655,903) | (1,386,515) |
PROVISION FOR INCOME TAXES | (56,237) | ||
NET LOSS | (3,501,518) | (1,655,903) | (1,386,515) |
COMPREHENSIVE LOSS | |||
Net loss | (3,501,518) | (1,655,903) | (1,386,515) |
Foreign currency translation adjustments | (214,916) | (420,941) | 52,289 |
COMPREHENSIVE LOSS | $ (3,716,434) | $ (2,076,844) | $ (1,334,226) |
Weighted average number of ordinary shares outstanding | |||
Basic | 18,060,000 | 15,342,849 | 13,000,000 |
Diluted | 18,060,000 | 15,342,849 | 13,000,000 |
LOSS PER SHARE - BASIC | $ (0.19) | $ (0.11) | $ (0.11) |
LOSS PER SHARE - DILUTED | $ (0.19) | $ (0.11) | $ (0.11) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders' Equity - USD ($) | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | AOCI Attributable to Parent [Member] | Total |
Balance, at Dec. 31, 2020 | $ 1,300 | $ 4,371,723 | $ (599,473) | $ 323,014 | $ 4,096,564 | |
Balance, shares at Dec. 31, 2020 | 13,000,000 | |||||
Net loss | (1,386,515) | (1,386,515) | ||||
Shareholder contribution | 717,949 | 717,949 | ||||
Foreign currency translation adjustment | 52,289 | 52,289 | ||||
Balance, at Dec. 31, 2021 | $ 1,300 | 5,089,671 | (1,985,988) | 375,303 | 3,480,286 | |
Balance, shares at Dec. 31, 2021 | 13,000,000 | |||||
Net loss | (1,655,903) | (1,655,903) | ||||
Shareholder contribution | ||||||
Foreign currency translation adjustment | (420,941) | (420,941) | ||||
Stock options granted under Equity Plan | $ 506 | 18,047,863 | 18,048,369 | |||
Stock options granted under Equity, shares | 5,060,000 | |||||
Balance, at Dec. 31, 2022 | $ 1,806 | 23,137,534 | (3,641,891) | (45,638) | 19,451,811 | |
Balance, shares at Dec. 31, 2022 | 18,060,000 | |||||
Net loss | (3,501,518) | (3,501,518) | ||||
Foreign currency translation adjustment | (214,916) | (214,916) | ||||
Stock options granted under Equity Plan | 667,016 | 667,016 | ||||
Stock options granted under Equity, shares | ||||||
Balance, at Dec. 31, 2023 | $ 1,806 | $ 23,804,550 | $ (7,143,409) | $ (260,554) | $ 16,402,393 | |
Balance, shares at Dec. 31, 2023 | 18,060,000 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
CASH FLOWS FROM OPFRATING ACTIVITIES: | |||
Net loss | $ (3,501,518) | $ (1,655,903) | $ (1,386,515) |
Adjustments to reconcile net loss to cash (used in) operating activities: | |||
Depreciation and amortization | 693,531 | 303,269 | 259,122 |
Bad debt written-off | 105,204 | ||
Options issued for equity compensation plan | 667,016 | ||
Change in operating assets and liabilities | |||
Accounts receivable | 1,119,804 | (697,873) | (199,392) |
Inventories | (586,551) | 535,182 | (712,854) |
Prepayments | (1,412,318) | (180,974) | (140,151) |
Deposits | (71,188) | 2,525 | 13 |
Other receivables | 20,627 | 268,621 | (134,161) |
Accounts payable | (67,945) | (1,631,595) | 530,221 |
Advance from customers | (6,364) | (216,269) | 222,633 |
Other payables and accruals | (50,253) | (960,292) | 545,903 |
Taxes payable | 31,972 | ||
Operating lease liabilities | (42,771) | (23,786) | |
Net cash (used in) operating activities | (3,163,187) | (4,170,876) | (1,038,967) |
CASH FLOWS FROM INVESTING ACTIVITIES: | |||
Purchases of property and equipment | (1,360,274) | (4,181,724) | (9,758) |
Net cash (used in) investing activities | (1,360,274) | (4,181,724) | (9,758) |
CASH FLOWS FROM FINANCING ACTIVITIES: | |||
Proceeds from sale of shares in IPO | 18,048,369 | ||
Payments of principal finance lease | (8,391) | (32,954) | |
Proceeds from shareholder contribution | 717,949 | ||
Proceeds from short-term loan | 1,964,072 | ||
Repayments of short-term loan | (1,964,072) | ||
Proceeds from bank borrowings | 191,339 | ||
Repayments of bank borrowings | (154,976) | (642,176) | |
Net cash (used in) provided by financing activities | (154,976) | 17,397,802 | 876,334 |
EFFECT OF EXCHANGE RATE ON CASH | (3,484) | (10,680) | 1,080 |
NET (DECREASE) INCREASE IN CASH | (4,681,921) | 9,034,522 | (171,311) |
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR | 9,165,651 | 131,129 | 302,440 |
CASH AND CASH EQUIVALENTS AT END OF YEAR | 4,483,730 | 9,165,651 | 131,129 |
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION | |||
Cash paid for interest | 18,859 | 208,565 | 49,688 |
Cash paid for income taxes | $ 125,067 |
ORGANIZATION AND BUSINESS
ORGANIZATION AND BUSINESS | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
ORGANIZATION AND BUSINESS | ORGANIZATION AND BUSINESS Intelligent Living Application Group Inc. (“ILA”) and its consolidated subsidiaries (collectively referred to as the “Company”) are in the business of the manufacture and sale of door locksets. The Company sells its door locksets primarily to customers in the United States of America (“US”) and Canada. ILA is a holding company incorporated in the Cayman Islands on July 17, 2019, under the Cayman Islands Companies Act as an exempted company with limited liability. ILA has no substantive operations other than holding all of the outstanding share capital of Intelligent Living Application Group Limited (“ILA BVI”). ILA BVI was established under the laws of the British Virgin Islands on March 19, 2014; and it is a company holding all of the outstanding equity of Kambo Hardware Limited, Kambo Locksets Limited, Bamberg (HK) Limited, Hing Fat Industrial Limited and Dongguan Xingfa Hardware Products Co., Ltd. On July 15, 2022, the Company closed its initial public offering (“IPO”) of 5,060,000 0.0001 4.00 20.24 Below is a summary of legal entities controlled by ILA after the reorganization. SUMMARY OF LEGAL ENTITIES CONTROLLED BY ILA AFTER THE REORGANIZATION Date of Place of Legal Entity incorporation incorporation Principal activities Intelligent Living Application Group Inc. July 17, 2019 Cayman Islands Holding company Intelligent Living Application Group Limited March 19, 2014 British Virgin Islands Intermediate holding company Kambo Locksets Limited March 26, 2014 Hong Kong, PRC Sale of door locksets to US and Canadian market Kambo Hardware Limited February 25, 2015 Hong Kong, PRC Sale of locksets and related hardware to other markets Bamberg (HK) Limited June 24, 2016 Hong Kong, PRC Sale of self-branded door locksets Hing Fat Industrial Limited March 23, 2009 Hong Kong, PRC Designs door locksets; holding company of Dongguan Xingfa Dongguan Xingfa Hardware Products Co., Ltd. August 6, 1993 The People Republic of China (the “PRC”) Manufactures door locksets |
SUMMARY OF SIGNIFICANT ACCOUNTI
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). Basis of consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries. All subsidiaries are wholly-owned. All significant intercompany transactions and balances have been eliminated upon consolidation. The consolidated financial statements have been prepared on a historical cost basis, except for financial assets and financial liabilities which have been measured at fair value. The consolidated financial statements are presented in United States dollars (“USD”). Use of estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods presented. Significant accounting estimates reflected in the Company’s consolidated financial statements include the useful lives and residual value of property and equipment. Actual results could differ from those estimates. Foreign currency translation The Company’s reporting currency is the USD. The functional currency of its Hong Kong subsidiaries is the Hong Kong dollar (the “HKD”), and the functional currency of its PRC subsidiary is the Renminbi (the “RMB”). Results of operations and cash flows are translated at the average exchange rates during the period, and assets and liabilities are translated at the exchange rate at the end of the period. Capital accounts are translated at their historical exchange rates when the capital transaction occurred. Translation adjustments resulting from this process are included in accumulated other comprehensive gain (loss). Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Translation of amounts from HKD into USD has been made at the following exchange rates: SCHEDULE OF EXCHANGE RATE USED FOR FOREIGN CURRENCY TRANSLATION Balance sheet items, except for equity accounts: December 31, 2023 HKD 7.81 1 December 31, 2022 HKD 7.80 1 December 31, 2021 HKD 7.80 1 Statement of operations and cash flow items: For the year ended December 31, 2023 HKD 7.83 1 For the year ended December 31, 2022 HKD 7.76 1 For the year ended December 31, 2021 HKD 7.76 1 Translation of amounts from RMB into USD has been made at the following exchange rates: Balance sheet items, except for equity accounts: December 31, 2023 RMB 7.08 1 December 31, 2022 RMB 6.96 1 December 31, 2021 RMB 6.38 1 Statement of operations and cash flow items: For the year ended December 31, 2023 RMB 7.05 1 For the year ended December 31, 2022 RMB 6.7 3 1 For the year ended December 31, 2021 RMB 6.45 1 Cash and cash equivalents Cash and cash equivalents comprise cash on hand and at banks, which are not restricted as to use; and highly liquid investments that are readily convertible into known amounts of cash, which have a short maturity of generally within three months when acquired. As of December 31, 2023 and 2022, the Company did not have any cash equivalents. The Company maintains bank accounts in the PRC and Hong Kong. Expected credit losses On January 1, 2023, the Company adopted ASC 326, Credit Losses (“ASC 326”), which replaced previously issued guidance regarding the impairment of financial instruments with an expected loss methodology that will result in more timely recognition of credit losses. The Company used a modified retrospective approach and did not restate the comparable prior periods. The adoption did not have a material impact on the Company’s consolidated financial statement. In accordance with ASC 326, the Company maintains an allowance for credit losses in accordance with ASC 326 and records the allowance for credit losses, if warranted, as an offset to assets such as accounts receivable, and the estimated credit losses charged to the allowance are classified as general and administrative expenses in the consolidated statements of operations and comprehensive loss. The Company assesses collectability by reviewing receivables on a collective basis where similar characteristics exist, primarily based on the size and nature of specific customers’ receivables. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the receivable balances, credit quality of the Company’s customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers. Bad debts are written off as incurred. Inventories Inventories consist of raw materials, work-in-progress and finished goods. They are stated at the lower of cost or net realizable value, as determined using the weighted average cost method. Management compares the cost of inventories with the related net realizable value and will set up an allowance to write down the cost of inventories to its net realizable value, if it is lower than cost. As of December 31, 2023 and 2022, the Company determined that no Other receivables Other receivables primarily include receivables from employees related to social security benefits and VAT receivable. Management reviews the composition of other receivables and determines if an allowance for doubtful accounts is needed. A provision for doubtful accounts is made when collection of the full amount is no longer probable. As of December 31, 2023 and 2022, the Company determined that no Prepayments and deposits Prepayments consisted mainly of prepaid marketing research expenses, prepaid manufacture expenses, prepaid research and development expenses, prepaid taxes, prepaid insurance, and prepaid software license. As of December 31, 2023 and 2022, prepaid marketing research expenses amounted to $ 755,355 nil 399,442 nil 299,581 nil no t impaired. Property and equipment Property and equipment are stated at cost net of accumulated depreciation, amortization and impairment, if necessary. Depreciation and amortization are provided over the estimated useful lives of the assets using the straight-line method from the time the assets are placed in service. Estimated useful lives are as follows: SCHEDULE OF USEFUL LIVES OF PROPERTY AND EQUIPMENT Category Estimated useful life Office equipment 5 10 Production equipment 5 10 Motor vehicles 5 Leasehold improvements Over the shorter of remaining lease term or the estimated useful lives of the assets Repairs and maintenance are charged to expense as incurred, whereas the costs of betterments that extend the useful life of property and equipment are capitalized as additions to the related assets. The cost and related accumulated depreciation and amortization of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of operations and comprehensive loss. Revenue recognition The Company follows FASB ASC 606, Revenue from Contracts with Customers in accounting for its revenues. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize the allocated revenue when the company satisfies a performance obligation The Company derives substantially all of its revenue from product sales, specifically sale of door locksets, locksets and related hardware to customers. Revenue from product sales is recognized when control passes to the customer, which generally occurs at a point in time when products are delivered FOB (freight on board). Revenue is recorded net of tariffs, VAT and discounts. Cost of goods sold Cost of goods sold consists primarily of the cost of raw materials (mainly brass, stainless steel, iron and zinc alloy), direct and indirect labor and related benefits, and manufacturing overhead that is directly attributable to the production process, and related production costs from molding of raw materials to production of door locksets such as handles, panels and spindles, product assembly, quality control and packaging and shipping. Write-down of inventory, export tax rebates, if any, are also recorded in cost of goods sold. For the years ended December 31, 2023 and 2022, the Company received export tax rebates of approximately RMB 2,906,000 412,000 6,628,000 985,000 Cost of goods sold – idle capacity Idle capacity consists of direct production costs in excess of charges allocated to the Company’s finished goods in production. Such costs relate primarily to depreciation expense related to the Company’s electroplating equipment that cannot be directly attributable to the production process. Idle capacity expenses amounted to $ 345,424 nil Other Income Other income consists primarily of proceeds from sale of raw materials waste (mainly iron), and rental income from sublease of extra factory space. Leases The Company follows FASB ASU 2016-02, “Leases” (Topic 842) and measures the lease liability based on the present value of the lease payments discounted by the relevant borrowing rate and reduces the carrying value of the lease liability for lease payments made. The Company accounts for all significant leases as either operating or finance leases. At lease inception, if the lease meets any of the following five criteria, the Company will classify it as a finance lease: (i) the lease transfers ownership of the underlying asset to the Company by the end of the lease term, (ii) the lease grants the Company an option to purchase the underlying asset that the lessee is reasonably certain to exercise, (iii) the lease term is for the major part of the remaining economic life of the underlying asset, (iv) the present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all (90% or more) of the fair value of the underlying asset, or (v) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. Otherwise, the lease will be treated as an operating lease. For leases with a term of 12 months or less, the Company is permitted to and did make an accounting policy election by class of underlying assets not to recognize lease assets and lease liabilities. During the years ended December 31, 2023 and 2022, the Company recognized lease expense for such leases on a straight-line basis over the lease term. Income taxes The Company accounts for income taxes in accordance with FASB ASC Section 740. The Company is subject to the tax laws of the PRC and Hong Kong (a special administrative region of PRC). The charge for taxation is based on actual results for the year as adjusted for items that are non-assessable or disallowed; and it is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. The Company is not currently subject to tax in the Cayman Islands or the British Virgin Islands. Deferred taxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the Company’s consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit of loss. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that future taxable income can be utilized with deferred tax liabilities and/or net operating loss carry forwards. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized, or the liability is settled. Deferred tax is charged or credited in the statement of operations, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Net deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the net deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that has a greater than 50% likelihood of being realized on examination Value added tax The Company is subject to value added tax (“VAT”) in the PRC. Revenue generated and purchases within the PRC from domestic suppliers are generally subject to VAT at the rate of 13 216,000 200,000 Related parties Parties are considered to be related to the Company if they, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its separate interests. Share-based compensation The Board of Directors of the Company approved and adopted Intelligent Living Application Group Inc. 2022 Omnibus Equity Plan (the “Equity Plan”) on October 20, 2022, which was approved at the stockholders’ meeting on December 16, 2022. The total aggregate ordinary shares of the Company authorized for issuance during the term of the Equity Plan is limited to 2,500,000 On February 22, 2023, (the “Grant Date”), the Compensation Committee of the Board of Directors (the “Board”) of the Company granted stock options to purchase 820,000 1.23 5 The related cost of share-based payments for the ordinary shares is measured by fair value (“FV”) at the Grant Date. The FV is determined by using a binomial model. The cost is recognized in employee benefit expenses recorded in the Company’s consolidated statements of operations and comprehensive loss, together with a corresponding amount in additional paid-in capital. Comprehensive income (loss) Comprehensive income (loss) is defined as the increase or decrease in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Amongst other disclosures, ASC 220, Comprehensive Income, requires that all items that are required to be recognized under current accounting standards as components of comprehensive income (loss) be reported in a financial statement that is displayed with the same prominence as other financial statements. For each of the periods presented, the Company’s comprehensive loss included the net loss and foreign currency translation adjustments that are presented in the consolidated statements of operations and comprehensive loss. Segment reporting The Company follows ASC 280, Segment Reporting. The Company’s Chief Executive Officer as the chief operating decision-maker reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Company as a whole and has determined that the Company has only one reportable segment. The Company operates and manages its business as a single segment. The following table sets forth the Company’s revenue from customers by geographical areas based on the location of the customers: SCHEDULE OF REVENUE FROM CUSTOMERS BY GEOGRAPHICAL INFORMATION For the years ended December 31, 2023 2022 2021 US $ 6,364,773 $ 11,717,347 $ 12,233,382 Canada 78,584 440,755 310,174 Total $ 6,443,357 $ 12,158,102 $ 12,543,556 The following table sets forth the Company’s property and equipment, for the purpose of geographical information: SCHEDULE OF PROPERTY AND EQUIPMENT BY GEOGRAPHICAL INFORMATION As of December 31, 2023 2022 PRC $ 4,863,530 $ 4,966,262 Hong Kong 810,054 168,304 Total $ 5,673,584 $ 5,134,566 Earnings (loss) per share In accordance with ASC 260, Earnings per Share, basic earnings (loss) per share is computed by dividing net income (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted income per share is calculated by dividing net income attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary shares and dilutive ordinary equivalent shares outstanding during the period. Ordinary share equivalents are excluded from the computation of diluted income per share as their effects would be anti-dilutive. Recent accounting pronouncements In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which requires disaggregated information about an entity’s effective tax rate reconciliation and additional discloses on income taxes paid. The new requirements are effective for annual periods beginning after December 15, 2024. The guidance is to be applied prospectively, with an option for retrospective application. The Company is currently evaluating the impact of this new guidance. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on its consolidated financial statements. Concentration of credit risk Details of the customers accounting for 10% or more of the Company’s total revenues are as follows: SCHEDULES OF CREDIT RISK For the years ended December 31, 2023 2022 2021 Customer A $ 1,786,656 27.5 % $ 5,654,248 46.5 % $ 6,833,866 54.5 % Customer B 888,595 13.7 % 1,871,116 15.4 % 1,588,156 12.7 % Customer C 1,723,506 26.5 % 1,586,681 13.1 % 1,310,376 10.5 % Customer D 1,332,746 20.5 % 1,306,755 10.7 % — — % $ 5,731,503 88.2 % $ 10,418,800 85.7 % $ 9,732,398 77.7 % Details of the customers which accounted for 10% or more of the Company’s accounts receivable are as follows: As of December 31, 2023 2022 Customer A $ 110,963 24.9 % $ 1,129,520 69.5 % Customer B 165,600 37.2 % 312,327 19.2 % Customer C 135,074 30.3 % 182,853 11.3 $ 41 1 92.4 % $ 1,624,700 100.0 % Liquidity risk The Company reported consecutive years of net loss of approximately $ 3.5 1.7 12.2 6.4 4.5 Supplier risk The Company’s operations are dependent on a limited number of suppliers for its major raw materials. There can be no assurance that the Company will be able to secure the raw materials supply from these suppliers. Any termination or suspension of the supply arrangements, any change in cooperation terms, or the deterioration of cooperation relationships with these suppliers may materially and adversely affect the Company’s results of operations. Details of the suppliers accounting for 10% or more of total purchases are as follows: SCHEDULES OF SUPPLIER RISK As of December 31, 2023 2022 2021 Supplier A $ 747,881 22.3 % $ 1,453,212 21.7 % $ 1,701,515 19.9 % Supplier B — — % 679,950 10.2 % 1,407,690 16.5 % $ 747,881 22.3 % $ 2,133,162 31.9 % $ 3,109,205 36.4 % Details of the suppliers which accounted for 10% or more of accounts payable are as follows: As of December 31, 2023 2022 Supplier A $ 94,913 29.2 % $ 185,982 11.1 % Supplier B 80,577 24.8 % — — % Supplier C 34,434 10.6 % — — % $ 209,924 64.6 % $ 185,982 11.1 % Foreign currency risk The RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMBs into foreign currencies. The value of the RMB is subject to changes in central government policies and international economic and political developments that affect supply and demand in the China Foreign Exchange Trading System market of cash and cash equivalents and restricted cash. The Company had $ 81,226 263,350 Certain transactions of the Company are denominated in HKD which is different from the functional currency of the Company, and therefore the Company is exposed to foreign currency risk. As the HKD is currently pegged to the USD, management considers that there is no significant foreign currency risk arising from the Company’s monetary assets denominated in USD. The Company currently does not have a foreign currency hedging policy. However, management monitors the Company’s foreign exchange exposure periodically and will consider hedging significant foreign exchange exposure should the need arise. |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 12 Months Ended |
Dec. 31, 2023 | |
Credit Loss [Abstract] | |
ACCOUNTS RECEIVABLE | NOTE 3 - ACCOUNTS RECEIVABLE Accounts receivable as of December 31, 2023 and 2022 consisted of the following: SCHEDULE OF ACCOUNTS RECEIVABLE 2023 2022 As of December 31, 2023 2022 Accounts receivable $ 445,500 $ 1,624,809 Less: allowance for estimated credit losses — — Accounts receivable, net $ 445,500 $ 1,624,809 As of December 31, 2023, 2022 and 2021, no nil 105,204 |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
INVENTORIES | NOTE 4 - INVENTORIES The composition of inventories are as follows: SCHEDULE OF THE COMPOSITION OF INVENTORY 2023 2022 As of December 31, 2023 2022 Raw materials $ 48,422 $ 35,270 Work-in-progress 4,615,592 4,300,962 Finished goods 363,733 136,255 Total $ 5,027,747 $ 4,472,487 During the years ended December 31, 2023, 2022 and 2021, there were no |
PROPERTY AND EQUIPMENT, NET
PROPERTY AND EQUIPMENT, NET | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
PROPERTY AND EQUIPMENT, NET | NOTE 5 - PROPERTY AND EQUIPMENT, NET Property and equipment, net consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT NET 2023 2022 As of December 31, 2023 2022 Office equipment $ 185,280 $ 187,234 Production equipment 7,746,905 7,357,634 Motor vehicles 387,741 389,333 Leasehold improvements 876,709 95,539 Property and equipment, gross 876,709 95,539 Less: accumulated depreciation and amortization (3,523,051 ) (2,895,174 ) Property and equipment, net $ 5,673,584 $ 5,134,566 Total depreciation and amortization expenses were $ 693,531 303,269 259,122 |
OTHER PAYABLES AND ACCRUALS
OTHER PAYABLES AND ACCRUALS | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
OTHER PAYABLES AND ACCRUALS | NOTE 6 - OTHER PAYABLES AND ACCRUALS Other payables and accruals consist of the followings: SCHEDULE OF OTHER PAYABLES AND ACCRUALS 2023 2022 As of December 31, 2023 2022 Accrued production cost $ 252,569 $ 309,956 Accrued salary 177,995 161,761 Accrued social security benefits 110,906 105,155 Accrued utilities 34,683 25,817 Accrued business tax and others 49,198 75,283 Total $ 625,350 $ 677,972 |
RELATED PARTY BALANCES AND TRAN
RELATED PARTY BALANCES AND TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
RELATED PARTY BALANCES AND TRANSACTIONS | NOTE 7 - RELATED PARTY BALANCES AND TRANSACTIONS In 2018, the Company entered into a rental agreement with Kambo Security Products Limited for office space in Hong Kong. The rental agreement is renewed annually. Kambo Security Products Limited is owned by Mr. Bong Lau, Mr. Wynn Hui, and Mr. Bun Lau, major shareholders of ILA. The major shareholders of ILA are committed to renewing the rental agreement with the Company for no less than 5 additional years 74,000 54,100 54,100 |
BANK BORROWINGS
BANK BORROWINGS | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
BANK BORROWINGS | NOTE 8 - BANK BORROWINGS On May 14, 2021, the Company obtained banking facilities from the Bank of China (Hong Kong) Limited for the maximum amount of HKD 1.0 0.1 2.75 1.0 0.1 96 On October 8, 2020, the Company obtained banking facilities from the Bank of China (Hong Kong) Limited for the maximum amount of HKD 1.0 0.1 2.75 1.0 0.1 96 On April 28, 2020, the Company obtained banking facilities from the Bank of China (Hong Kong) Limited for the maximum amount of HKD 4.0 0.5 2.75 4.0 0.5 96 On November 3, 2017, the Company obtained banking facilities from the Bank of China (Hong Kong) Limited pursuant to which the Company may borrow up to HKD 6.0 0.8 7.0 0.9 5.5 During the years ended December 31, 2023, 2022 and 2021, interest expense related to these credit facilities was $ 18,859 26,836 48,910 The following table represents the maturity of the Company’s bank borrowings as of December 31, 2023: SUMMARY OF MATURITY OF BANK BORROWINGS For the years ending December 31, Amount 2024 $ 129,722 2025 86,154 2026 89,330 2027 92,623 2028 58,740 2029 7,472 Total Bank Borrowings $ 464,041 |
RIGHT-OF-USE ASSETS AND OPERATI
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES | 12 Months Ended |
Dec. 31, 2023 | |
Right-of-use Assets And Operating Lease Liabilities | |
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES | NOTE 9 - RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES The Company determines if a contract contains a lease at inception. US GAAP requires that the Company’s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right-to-use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain or failure to exercise such option would result in an economic penalty. The Company has the following operating leases: ● Real estate leases for its manufacturing factory and electroplating production line in the PRC (annual payment of approximately $ 622,000 February 28, 2026 September 30, 2026 16,000 expire on April 30, 2024 and November 30, 2024, March 31, 2024, respectively ● Office equipment lease (annual payment of approximately $ 4,000 December 20, 2025 173,000 expire on December 31, 2024, June 15, 2024 and July 31, 2024, respectively The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. The leases generally do not contain options to extend at the time of expiration. Upon adoption of ASU 2016-02, on January 1, 2019, the Company recognized lease liabilities of approximately $ 1.7 4.75 5.63 The following table sets forth the five-year maturity schedule of the Company’s lease liabilities: SCHEDULE OF MATURITY OF LEASE LIABILITIES For the years ending December 31, Amount 2024 $ 292,190 2025 93,185 2026 69,888 Total operating lease payments 455,263 Less: imputed interest (19,786 ) Present value of operating lease liabilities $ 435,477 Operating lease expenses are allocated between the cost of revenues and selling, general, and administrative expenses. Total operating lease expenses were approximately $ 778,000 497,000 408,000 |
STOCK-BASED COMPENSATION
STOCK-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2023 | |
Compensation Related Costs [Abstract] | |
STOCK-BASED COMPENSATION | NOTE 10 – STOCK-BASED COMPENSATION The Company operates a share-based payment scheme (the “Scheme”) for the purpose of providing incentives and rewards to eligible participants who contribute to the success of the Company’s operations. Eligible participants of the Scheme include the Company’s directors, employees and consultants. The The Board of Directors of the Company approved and adopted Intelligent Living Application Group Inc. 2022 Omnibus Equity Plan (the “Equity Plan”) on October 20, 2022, which was approved at the stockholders’ meeting on December 16, 2022. The total aggregate ordinary shares of the Company authorized for issuance during the term of the Equity Plan is limited to 2,500,000 On February 22, 2023, (the “Grant Date”), the Compensation Committee of the Board of Directors (the “Board”) of the Company granted stock options to purchase 820,000 1.23 5 667,016 |
EQUITY TRANSACTIONS
EQUITY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
EQUITY TRANSACTIONS | NOTE 1 EQUITY TRANSACTIONS Preferred shares On July 16, 2021, the Company amended its articles of association and authorized 50,000,000 0.0001 No no O On July 15, 2022, the Company closed its IPO of 5,060,000 4.00 |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | NOTE 1 INCOME TAXES Corporate income taxes Cayman Islands The Company was incorporated in the Cayman Islands and is not subject to tax on income or capital gains under the laws of the Cayman Islands. The Company mainly conducts its operating business through its subsidiaries in the PRC and Hong Kong. Additionally, the Cayman Islands does not impose a withholding tax on payments of dividends to shareholders. British Virgin Islands The Company’s subsidiary incorporated in the British Virgin Islands is not subject to taxation. Hong Kong The Company’s Hong Kong subsidiaries, including Hing Fat Industrial Limited, Kambo Locksets Limited, Bamberg (HK) Limited and Kambo Hardware Limited, are subject to Hong Kong Profits Tax on their taxable income as reported in their statutory financial statements adjusted in accordance with relevant Hong Kong tax laws. Hong Kong Profits Tax has been calculated at 16.5 PRC The Company’s PRC operating subsidiary, Dongguan Xingfa Hardware Products Co., Ltd, is governed by the income tax laws of the PRC and the income tax provisions in respect to operations in the PRC is calculated at the applicable tax rate on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Enterprise Income Tax Laws of the PRC (the “EIT Laws”), Chinese enterprises are subject to an income tax rate of 25 five years (Loss) income before provision for income taxes is as follows: SCHEDULE OF PROFIT (LOSS) BEFORE PROVISION FOR INCOME TAXES 2023 2022 2021 For the years ended December 31, 2023 2022 2021 Cayman and BVI $ (1,658,203 ) $ (138,363 ) $ (335,802 ) Hong Kong (1,959,799 ) (1,500,125 ) (983,008 ) PRC 172,723 (17,415 ) (67,705 ) Total $ (3,445,281 ) $ (1,655,903 ) $ (1,386,515 ) Provision for income taxes were $ 56,237 nil nil Significant components of deferred tax assets are as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2023 2022 As of December 31, 2023 2022 Deferred tax assets: Net operating loss carryforwards $ 972,930 $ 651,643 Total deferred tax assets 972,930 651,643 Deferred tax liabilities: Depreciation — (14,955 ) Total deferred tax liabilities — (14,955 ) Total deferred tax assets-net 972,930 636,688 Less: Valuation allowance (972,930 ) (636,688 ) Deferred tax assets, net $ — $ — Future tax benefits which may arise as a result of net operating loss carry-forward have not been recognized in the accompanying consolidated financial statements as their realization has not been determined likely to occur. As of December 31, 2023 and 2022, the Company believes it is more likely than not that its PRC and HK subsidiaries will be unable to fully utilize their deferred tax assets related to their net operating loss carry-forward in the PRC and Hong Kong. If the Company is unable to generate taxable income in its PRC and Hong Kong operations, it is more likely than not that it will not have sufficient income to recognize the net deferred tax assets. As a result, the Company provided a 100% valuation allowance on its net deferred tax assets of approximately $ 973,000 637,000 336,242 242,472 185,995 Reconciliation of effective income tax rate is as follows: SCHEDULE OF RECONCILIATION OF EFFECTIVE INCOME TAX RATE 2023 2022 2021 For the years ended December 31, 2023 2022 2021 PRC statutory tax rate 25.0 % 25.0 % 25.0 % Effect of tax rate differential (HK) (4.8 ) (7.7 ) (6.0 ) Tax effect of non-deductible expenses (0.6 ) — — Valuation allowance (18.0 ) (17.3 ) (19.0 ) Effective tax rate 1.6 % — % — % Uncertain tax position There were no |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | NOTE 1 SUBSEQUENT EVENTS The Company has analyzed its operations subsequent to December 31, 2023, through the date of this report and have determined that the Company does not have any material subsequent events to disclose in these unaudited condensed consolidated financial statements. |
CONDENSED FINANCIAL INFORMATION
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | 12 Months Ended |
Dec. 31, 2023 | |
Condensed Financial Information Disclosure [Abstract] | |
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY | NOTE 1 CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY The Company performed a test of its restricted net assets of the consolidated subsidiaries in accordance with the Securities and Exchange Commission’s Regulation S-X Rule 4-08 (e) (3), “General Notes to Financial Statements” and concluded that it was applicable for the Company to disclose the financial information of the parent company. The subsidiaries did not pay any dividends to the Company for the periods presented. For the purpose of presenting parent-only financial information, the Company records its investment in its subsidiaries under the equity method of accounting. Such investment is presented on the separate condensed statement of financial position of the Company as “Investment in subsidiaries”. ILA became the parent company of the Company as a result of the execution of the Share Exchange Agreement in April 2020. ILA is a holding company with no bank account, did not have any significant capital and other commitments, and did not have any long-term obligations, or guarantees as of December 31, 2023. ILA did not have any business activities during the year ended December 31, 2023. The following is the parent company balance sheets: SCHEDULE OF CONDENSED FINANCIAL INFORMATION 2023 2022 As of December 31, 2023 2022 USD USD (Unaudited) (Unaudited) ASSETS NON-CURRENT ASSETS Investment in subsidiaries $ 16,402,393 $ 19,451,811 TOTAL ASSETS $ 16,402,393 $ 19,451,811 LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES $ — $ — SHAREHOLDERS’ EQUITY Preferred shares, par value $ 0.0001 50,000,000 none — — Ordinary shares, par value $ 0.0001 450,000,000 18,060,000 1,806 1,806 Additional paid-in capital 19,586,674 18,919,658 Retained earnings (2,925,533 ) 575,985 Accumulated other comprehensive (loss) gain (260,554 ) (45,638 ) TOTAL SHAREHOLDERS’ EQUITY 16,402,393 19,451,811 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 16,402,393 $ 19,451,811 The following is the parent company statements of operations and comprehensive loss: 2023 2022 2021 For the Years Ended December 31, 2023 2022 2021 USD USD USD (Unaudited) (Unaudited) (Unaudited) EQUITY LOSS $ (1,658,203 ) $ (1,538,363 ) $ (1,386,515 ) NET LOSS $ (1,658,203 ) $ (1,538,363 ) $ (1,386,515 ) COMPREHENSIVE LOSS Net loss $ (1,658,203 ) $ (1,538,363 ) $ (1,386,515 ) Foreign currency translation adjustments (214,916 ) (420,941 ) 52,289 COMPREHENSIVE LOSS $ (1,873,119 ) $ (1,959,304 ) $ (1,334,226 ) |
SUMMARY OF SIGNIFICANT ACCOUN_2
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“US GAAP”). |
Basis of consolidation | Basis of consolidation The consolidated financial statements include the financial statements of the Company and its subsidiaries. All subsidiaries are wholly-owned. All significant intercompany transactions and balances have been eliminated upon consolidation. The consolidated financial statements have been prepared on a historical cost basis, except for financial assets and financial liabilities which have been measured at fair value. The consolidated financial statements are presented in United States dollars (“USD”). |
Use of estimates | Use of estimates The preparation of consolidated financial statements in conformity with US GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods presented. Significant accounting estimates reflected in the Company’s consolidated financial statements include the useful lives and residual value of property and equipment. Actual results could differ from those estimates. |
Foreign currency translation | Foreign currency translation The Company’s reporting currency is the USD. The functional currency of its Hong Kong subsidiaries is the Hong Kong dollar (the “HKD”), and the functional currency of its PRC subsidiary is the Renminbi (the “RMB”). Results of operations and cash flows are translated at the average exchange rates during the period, and assets and liabilities are translated at the exchange rate at the end of the period. Capital accounts are translated at their historical exchange rates when the capital transaction occurred. Translation adjustments resulting from this process are included in accumulated other comprehensive gain (loss). Transaction gains and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the functional currency are included in the results of operations as incurred. Translation of amounts from HKD into USD has been made at the following exchange rates: SCHEDULE OF EXCHANGE RATE USED FOR FOREIGN CURRENCY TRANSLATION Balance sheet items, except for equity accounts: December 31, 2023 HKD 7.81 1 December 31, 2022 HKD 7.80 1 December 31, 2021 HKD 7.80 1 Statement of operations and cash flow items: For the year ended December 31, 2023 HKD 7.83 1 For the year ended December 31, 2022 HKD 7.76 1 For the year ended December 31, 2021 HKD 7.76 1 Translation of amounts from RMB into USD has been made at the following exchange rates: Balance sheet items, except for equity accounts: December 31, 2023 RMB 7.08 1 December 31, 2022 RMB 6.96 1 December 31, 2021 RMB 6.38 1 Statement of operations and cash flow items: For the year ended December 31, 2023 RMB 7.05 1 For the year ended December 31, 2022 RMB 6.7 3 1 For the year ended December 31, 2021 RMB 6.45 1 |
Cash and cash equivalents | Cash and cash equivalents Cash and cash equivalents comprise cash on hand and at banks, which are not restricted as to use; and highly liquid investments that are readily convertible into known amounts of cash, which have a short maturity of generally within three months when acquired. As of December 31, 2023 and 2022, the Company did not have any cash equivalents. The Company maintains bank accounts in the PRC and Hong Kong. |
Expected credit losses | Expected credit losses On January 1, 2023, the Company adopted ASC 326, Credit Losses (“ASC 326”), which replaced previously issued guidance regarding the impairment of financial instruments with an expected loss methodology that will result in more timely recognition of credit losses. The Company used a modified retrospective approach and did not restate the comparable prior periods. The adoption did not have a material impact on the Company’s consolidated financial statement. In accordance with ASC 326, the Company maintains an allowance for credit losses in accordance with ASC 326 and records the allowance for credit losses, if warranted, as an offset to assets such as accounts receivable, and the estimated credit losses charged to the allowance are classified as general and administrative expenses in the consolidated statements of operations and comprehensive loss. The Company assesses collectability by reviewing receivables on a collective basis where similar characteristics exist, primarily based on the size and nature of specific customers’ receivables. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the receivable balances, credit quality of the Company’s customers based on ongoing credit evaluations, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers. Bad debts are written off as incurred. |
Inventories | Inventories Inventories consist of raw materials, work-in-progress and finished goods. They are stated at the lower of cost or net realizable value, as determined using the weighted average cost method. Management compares the cost of inventories with the related net realizable value and will set up an allowance to write down the cost of inventories to its net realizable value, if it is lower than cost. As of December 31, 2023 and 2022, the Company determined that no |
Other receivables | Other receivables Other receivables primarily include receivables from employees related to social security benefits and VAT receivable. Management reviews the composition of other receivables and determines if an allowance for doubtful accounts is needed. A provision for doubtful accounts is made when collection of the full amount is no longer probable. As of December 31, 2023 and 2022, the Company determined that no |
Prepayments and deposits | Prepayments and deposits Prepayments consisted mainly of prepaid marketing research expenses, prepaid manufacture expenses, prepaid research and development expenses, prepaid taxes, prepaid insurance, and prepaid software license. As of December 31, 2023 and 2022, prepaid marketing research expenses amounted to $ 755,355 nil 399,442 nil 299,581 nil no t impaired. |
Property and equipment | Property and equipment Property and equipment are stated at cost net of accumulated depreciation, amortization and impairment, if necessary. Depreciation and amortization are provided over the estimated useful lives of the assets using the straight-line method from the time the assets are placed in service. Estimated useful lives are as follows: SCHEDULE OF USEFUL LIVES OF PROPERTY AND EQUIPMENT Category Estimated useful life Office equipment 5 10 Production equipment 5 10 Motor vehicles 5 Leasehold improvements Over the shorter of remaining lease term or the estimated useful lives of the assets Repairs and maintenance are charged to expense as incurred, whereas the costs of betterments that extend the useful life of property and equipment are capitalized as additions to the related assets. The cost and related accumulated depreciation and amortization of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the consolidated statements of operations and comprehensive loss. |
Revenue recognition | Revenue recognition The Company follows FASB ASC 606, Revenue from Contracts with Customers in accounting for its revenues. The core principle of the revenue standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. The following five steps are applied to achieve that core principle: Step 1: Identify the contract with the customer Step 2: Identify the performance obligations in the contract Step 3: Determine the transaction price Step 4: Allocate the transaction price to the performance obligations in the contract Step 5: Recognize the allocated revenue when the company satisfies a performance obligation The Company derives substantially all of its revenue from product sales, specifically sale of door locksets, locksets and related hardware to customers. Revenue from product sales is recognized when control passes to the customer, which generally occurs at a point in time when products are delivered FOB (freight on board). Revenue is recorded net of tariffs, VAT and discounts. |
Cost of goods sold | Cost of goods sold Cost of goods sold consists primarily of the cost of raw materials (mainly brass, stainless steel, iron and zinc alloy), direct and indirect labor and related benefits, and manufacturing overhead that is directly attributable to the production process, and related production costs from molding of raw materials to production of door locksets such as handles, panels and spindles, product assembly, quality control and packaging and shipping. Write-down of inventory, export tax rebates, if any, are also recorded in cost of goods sold. For the years ended December 31, 2023 and 2022, the Company received export tax rebates of approximately RMB 2,906,000 412,000 6,628,000 985,000 |
Cost of goods sold – idle capacity | Cost of goods sold – idle capacity Idle capacity consists of direct production costs in excess of charges allocated to the Company’s finished goods in production. Such costs relate primarily to depreciation expense related to the Company’s electroplating equipment that cannot be directly attributable to the production process. Idle capacity expenses amounted to $ 345,424 nil |
Other Income | Other Income Other income consists primarily of proceeds from sale of raw materials waste (mainly iron), and rental income from sublease of extra factory space. |
Leases | Leases The Company follows FASB ASU 2016-02, “Leases” (Topic 842) and measures the lease liability based on the present value of the lease payments discounted by the relevant borrowing rate and reduces the carrying value of the lease liability for lease payments made. The Company accounts for all significant leases as either operating or finance leases. At lease inception, if the lease meets any of the following five criteria, the Company will classify it as a finance lease: (i) the lease transfers ownership of the underlying asset to the Company by the end of the lease term, (ii) the lease grants the Company an option to purchase the underlying asset that the lessee is reasonably certain to exercise, (iii) the lease term is for the major part of the remaining economic life of the underlying asset, (iv) the present value of the sum of the lease payments and any residual value guaranteed by the lessee that is not already reflected in the lease payments equals or exceeds substantially all (90% or more) of the fair value of the underlying asset, or (v) the underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. Otherwise, the lease will be treated as an operating lease. For leases with a term of 12 months or less, the Company is permitted to and did make an accounting policy election by class of underlying assets not to recognize lease assets and lease liabilities. During the years ended December 31, 2023 and 2022, the Company recognized lease expense for such leases on a straight-line basis over the lease term. |
Income taxes | Income taxes The Company accounts for income taxes in accordance with FASB ASC Section 740. The Company is subject to the tax laws of the PRC and Hong Kong (a special administrative region of PRC). The charge for taxation is based on actual results for the year as adjusted for items that are non-assessable or disallowed; and it is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. The Company is not currently subject to tax in the Cayman Islands or the British Virgin Islands. Deferred taxes are accounted for using the asset and liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the Company’s consolidated financial statements and the corresponding tax basis used in the computation of assessable tax profit of loss. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that future taxable income can be utilized with deferred tax liabilities and/or net operating loss carry forwards. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized, or the liability is settled. Deferred tax is charged or credited in the statement of operations, except when it is related to items credited or charged directly to equity, in which case the deferred tax is also dealt with in equity. Net deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the net deferred tax assets will not be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that has a greater than 50% likelihood of being realized on examination |
Value added tax | Value added tax The Company is subject to value added tax (“VAT”) in the PRC. Revenue generated and purchases within the PRC from domestic suppliers are generally subject to VAT at the rate of 13 216,000 200,000 |
Related parties | Related parties Parties are considered to be related to the Company if they, directly or indirectly, through one or more intermediaries, control, are controlled by, or are under common control with the Company. Related parties also include principal owners of the Company, its management, members of the immediate families of principal owners of the Company and its management and other parties with which the Company may deal with if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its separate interests. |
Share-based compensation | Share-based compensation The Board of Directors of the Company approved and adopted Intelligent Living Application Group Inc. 2022 Omnibus Equity Plan (the “Equity Plan”) on October 20, 2022, which was approved at the stockholders’ meeting on December 16, 2022. The total aggregate ordinary shares of the Company authorized for issuance during the term of the Equity Plan is limited to 2,500,000 On February 22, 2023, (the “Grant Date”), the Compensation Committee of the Board of Directors (the “Board”) of the Company granted stock options to purchase 820,000 1.23 5 The related cost of share-based payments for the ordinary shares is measured by fair value (“FV”) at the Grant Date. The FV is determined by using a binomial model. The cost is recognized in employee benefit expenses recorded in the Company’s consolidated statements of operations and comprehensive loss, together with a corresponding amount in additional paid-in capital. |
Comprehensive income (loss) | Comprehensive income (loss) Comprehensive income (loss) is defined as the increase or decrease in equity of the Company during a period from transactions and other events and circumstances excluding transactions resulting from investments by owners and distributions to owners. Amongst other disclosures, ASC 220, Comprehensive Income, requires that all items that are required to be recognized under current accounting standards as components of comprehensive income (loss) be reported in a financial statement that is displayed with the same prominence as other financial statements. For each of the periods presented, the Company’s comprehensive loss included the net loss and foreign currency translation adjustments that are presented in the consolidated statements of operations and comprehensive loss. |
Segment reporting | Segment reporting The Company follows ASC 280, Segment Reporting. The Company’s Chief Executive Officer as the chief operating decision-maker reviews the consolidated financial results when making decisions about allocating resources and assessing the performance of the Company as a whole and has determined that the Company has only one reportable segment. The Company operates and manages its business as a single segment. The following table sets forth the Company’s revenue from customers by geographical areas based on the location of the customers: SCHEDULE OF REVENUE FROM CUSTOMERS BY GEOGRAPHICAL INFORMATION For the years ended December 31, 2023 2022 2021 US $ 6,364,773 $ 11,717,347 $ 12,233,382 Canada 78,584 440,755 310,174 Total $ 6,443,357 $ 12,158,102 $ 12,543,556 The following table sets forth the Company’s property and equipment, for the purpose of geographical information: SCHEDULE OF PROPERTY AND EQUIPMENT BY GEOGRAPHICAL INFORMATION As of December 31, 2023 2022 PRC $ 4,863,530 $ 4,966,262 Hong Kong 810,054 168,304 Total $ 5,673,584 $ 5,134,566 |
Earnings (loss) per share | Earnings (loss) per share In accordance with ASC 260, Earnings per Share, basic earnings (loss) per share is computed by dividing net income (loss) attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the period. Diluted income per share is calculated by dividing net income attributable to ordinary shareholders as adjusted for the effect of dilutive ordinary equivalent shares, if any, by the weighted average number of ordinary shares and dilutive ordinary equivalent shares outstanding during the period. Ordinary share equivalents are excluded from the computation of diluted income per share as their effects would be anti-dilutive. |
Recent accounting pronouncements | Recent accounting pronouncements In December 2023, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures, which requires disaggregated information about an entity’s effective tax rate reconciliation and additional discloses on income taxes paid. The new requirements are effective for annual periods beginning after December 15, 2024. The guidance is to be applied prospectively, with an option for retrospective application. The Company is currently evaluating the impact of this new guidance. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on its consolidated financial statements. |
Concentration of credit risk | Concentration of credit risk Details of the customers accounting for 10% or more of the Company’s total revenues are as follows: SCHEDULES OF CREDIT RISK For the years ended December 31, 2023 2022 2021 Customer A $ 1,786,656 27.5 % $ 5,654,248 46.5 % $ 6,833,866 54.5 % Customer B 888,595 13.7 % 1,871,116 15.4 % 1,588,156 12.7 % Customer C 1,723,506 26.5 % 1,586,681 13.1 % 1,310,376 10.5 % Customer D 1,332,746 20.5 % 1,306,755 10.7 % — — % $ 5,731,503 88.2 % $ 10,418,800 85.7 % $ 9,732,398 77.7 % Details of the customers which accounted for 10% or more of the Company’s accounts receivable are as follows: As of December 31, 2023 2022 Customer A $ 110,963 24.9 % $ 1,129,520 69.5 % Customer B 165,600 37.2 % 312,327 19.2 % Customer C 135,074 30.3 % 182,853 11.3 $ 41 1 92.4 % $ 1,624,700 100.0 % |
Liquidity risk | Liquidity risk The Company reported consecutive years of net loss of approximately $ 3.5 1.7 12.2 6.4 4.5 |
Supplier risk | Supplier risk The Company’s operations are dependent on a limited number of suppliers for its major raw materials. There can be no assurance that the Company will be able to secure the raw materials supply from these suppliers. Any termination or suspension of the supply arrangements, any change in cooperation terms, or the deterioration of cooperation relationships with these suppliers may materially and adversely affect the Company’s results of operations. Details of the suppliers accounting for 10% or more of total purchases are as follows: SCHEDULES OF SUPPLIER RISK As of December 31, 2023 2022 2021 Supplier A $ 747,881 22.3 % $ 1,453,212 21.7 % $ 1,701,515 19.9 % Supplier B — — % 679,950 10.2 % 1,407,690 16.5 % $ 747,881 22.3 % $ 2,133,162 31.9 % $ 3,109,205 36.4 % Details of the suppliers which accounted for 10% or more of accounts payable are as follows: As of December 31, 2023 2022 Supplier A $ 94,913 29.2 % $ 185,982 11.1 % Supplier B 80,577 24.8 % — — % Supplier C 34,434 10.6 % — — % $ 209,924 64.6 % $ 185,982 11.1 % |
Foreign currency risk | Foreign currency risk The RMB is not a freely convertible currency. The State Administration for Foreign Exchange, under the authority of the People’s Bank of China, controls the conversion of RMBs into foreign currencies. The value of the RMB is subject to changes in central government policies and international economic and political developments that affect supply and demand in the China Foreign Exchange Trading System market of cash and cash equivalents and restricted cash. The Company had $ 81,226 263,350 Certain transactions of the Company are denominated in HKD which is different from the functional currency of the Company, and therefore the Company is exposed to foreign currency risk. As the HKD is currently pegged to the USD, management considers that there is no significant foreign currency risk arising from the Company’s monetary assets denominated in USD. The Company currently does not have a foreign currency hedging policy. However, management monitors the Company’s foreign exchange exposure periodically and will consider hedging significant foreign exchange exposure should the need arise. |
ORGANIZATION AND BUSINESS (Tabl
ORGANIZATION AND BUSINESS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
SUMMARY OF LEGAL ENTITIES CONTROLLED BY ILA AFTER THE REORGANIZATION | Below is a summary of legal entities controlled by ILA after the reorganization. SUMMARY OF LEGAL ENTITIES CONTROLLED BY ILA AFTER THE REORGANIZATION Date of Place of Legal Entity incorporation incorporation Principal activities Intelligent Living Application Group Inc. July 17, 2019 Cayman Islands Holding company Intelligent Living Application Group Limited March 19, 2014 British Virgin Islands Intermediate holding company Kambo Locksets Limited March 26, 2014 Hong Kong, PRC Sale of door locksets to US and Canadian market Kambo Hardware Limited February 25, 2015 Hong Kong, PRC Sale of locksets and related hardware to other markets Bamberg (HK) Limited June 24, 2016 Hong Kong, PRC Sale of self-branded door locksets Hing Fat Industrial Limited March 23, 2009 Hong Kong, PRC Designs door locksets; holding company of Dongguan Xingfa Dongguan Xingfa Hardware Products Co., Ltd. August 6, 1993 The People Republic of China (the “PRC”) Manufactures door locksets |
SUMMARY OF SIGNIFICANT ACCOUN_3
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
SCHEDULE OF EXCHANGE RATE USED FOR FOREIGN CURRENCY TRANSLATION | Translation of amounts from HKD into USD has been made at the following exchange rates: SCHEDULE OF EXCHANGE RATE USED FOR FOREIGN CURRENCY TRANSLATION Balance sheet items, except for equity accounts: December 31, 2023 HKD 7.81 1 December 31, 2022 HKD 7.80 1 December 31, 2021 HKD 7.80 1 Statement of operations and cash flow items: For the year ended December 31, 2023 HKD 7.83 1 For the year ended December 31, 2022 HKD 7.76 1 For the year ended December 31, 2021 HKD 7.76 1 Translation of amounts from RMB into USD has been made at the following exchange rates: Balance sheet items, except for equity accounts: December 31, 2023 RMB 7.08 1 December 31, 2022 RMB 6.96 1 December 31, 2021 RMB 6.38 1 Statement of operations and cash flow items: For the year ended December 31, 2023 RMB 7.05 1 For the year ended December 31, 2022 RMB 6.7 3 1 For the year ended December 31, 2021 RMB 6.45 1 |
SCHEDULE OF USEFUL LIVES OF PROPERTY AND EQUIPMENT | SCHEDULE OF USEFUL LIVES OF PROPERTY AND EQUIPMENT Category Estimated useful life Office equipment 5 10 Production equipment 5 10 Motor vehicles 5 Leasehold improvements Over the shorter of remaining lease term or the estimated useful lives of the assets |
SCHEDULE OF REVENUE FROM CUSTOMERS BY GEOGRAPHICAL INFORMATION | The following table sets forth the Company’s revenue from customers by geographical areas based on the location of the customers: SCHEDULE OF REVENUE FROM CUSTOMERS BY GEOGRAPHICAL INFORMATION For the years ended December 31, 2023 2022 2021 US $ 6,364,773 $ 11,717,347 $ 12,233,382 Canada 78,584 440,755 310,174 Total $ 6,443,357 $ 12,158,102 $ 12,543,556 |
SCHEDULE OF PROPERTY AND EQUIPMENT BY GEOGRAPHICAL INFORMATION | The following table sets forth the Company’s property and equipment, for the purpose of geographical information: SCHEDULE OF PROPERTY AND EQUIPMENT BY GEOGRAPHICAL INFORMATION As of December 31, 2023 2022 PRC $ 4,863,530 $ 4,966,262 Hong Kong 810,054 168,304 Total $ 5,673,584 $ 5,134,566 |
SCHEDULES OF CREDIT RISK | Details of the customers accounting for 10% or more of the Company’s total revenues are as follows: SCHEDULES OF CREDIT RISK For the years ended December 31, 2023 2022 2021 Customer A $ 1,786,656 27.5 % $ 5,654,248 46.5 % $ 6,833,866 54.5 % Customer B 888,595 13.7 % 1,871,116 15.4 % 1,588,156 12.7 % Customer C 1,723,506 26.5 % 1,586,681 13.1 % 1,310,376 10.5 % Customer D 1,332,746 20.5 % 1,306,755 10.7 % — — % $ 5,731,503 88.2 % $ 10,418,800 85.7 % $ 9,732,398 77.7 % Details of the customers which accounted for 10% or more of the Company’s accounts receivable are as follows: As of December 31, 2023 2022 Customer A $ 110,963 24.9 % $ 1,129,520 69.5 % Customer B 165,600 37.2 % 312,327 19.2 % Customer C 135,074 30.3 % 182,853 11.3 $ 41 1 92.4 % $ 1,624,700 100.0 % |
SCHEDULES OF SUPPLIER RISK | Details of the suppliers accounting for 10% or more of total purchases are as follows: SCHEDULES OF SUPPLIER RISK As of December 31, 2023 2022 2021 Supplier A $ 747,881 22.3 % $ 1,453,212 21.7 % $ 1,701,515 19.9 % Supplier B — — % 679,950 10.2 % 1,407,690 16.5 % $ 747,881 22.3 % $ 2,133,162 31.9 % $ 3,109,205 36.4 % Details of the suppliers which accounted for 10% or more of accounts payable are as follows: As of December 31, 2023 2022 Supplier A $ 94,913 29.2 % $ 185,982 11.1 % Supplier B 80,577 24.8 % — — % Supplier C 34,434 10.6 % — — % $ 209,924 64.6 % $ 185,982 11.1 % |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Credit Loss [Abstract] | |
SCHEDULE OF ACCOUNTS RECEIVABLE | Accounts receivable as of December 31, 2023 and 2022 consisted of the following: SCHEDULE OF ACCOUNTS RECEIVABLE 2023 2022 As of December 31, 2023 2022 Accounts receivable $ 445,500 $ 1,624,809 Less: allowance for estimated credit losses — — Accounts receivable, net $ 445,500 $ 1,624,809 |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
SCHEDULE OF THE COMPOSITION OF INVENTORY | The composition of inventories are as follows: SCHEDULE OF THE COMPOSITION OF INVENTORY 2023 2022 As of December 31, 2023 2022 Raw materials $ 48,422 $ 35,270 Work-in-progress 4,615,592 4,300,962 Finished goods 363,733 136,255 Total $ 5,027,747 $ 4,472,487 |
PROPERTY AND EQUIPMENT, NET (Ta
PROPERTY AND EQUIPMENT, NET (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
SCHEDULE OF PROPERTY AND EQUIPMENT NET | Property and equipment, net consisted of the following: SCHEDULE OF PROPERTY AND EQUIPMENT NET 2023 2022 As of December 31, 2023 2022 Office equipment $ 185,280 $ 187,234 Production equipment 7,746,905 7,357,634 Motor vehicles 387,741 389,333 Leasehold improvements 876,709 95,539 Property and equipment, gross 876,709 95,539 Less: accumulated depreciation and amortization (3,523,051 ) (2,895,174 ) Property and equipment, net $ 5,673,584 $ 5,134,566 |
OTHER PAYABLES AND ACCRUALS (Ta
OTHER PAYABLES AND ACCRUALS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Payables and Accruals [Abstract] | |
SCHEDULE OF OTHER PAYABLES AND ACCRUALS | Other payables and accruals consist of the followings: SCHEDULE OF OTHER PAYABLES AND ACCRUALS 2023 2022 As of December 31, 2023 2022 Accrued production cost $ 252,569 $ 309,956 Accrued salary 177,995 161,761 Accrued social security benefits 110,906 105,155 Accrued utilities 34,683 25,817 Accrued business tax and others 49,198 75,283 Total $ 625,350 $ 677,972 |
BANK BORROWINGS (Tables)
BANK BORROWINGS (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
SUMMARY OF MATURITY OF BANK BORROWINGS | The following table represents the maturity of the Company’s bank borrowings as of December 31, 2023: SUMMARY OF MATURITY OF BANK BORROWINGS For the years ending December 31, Amount 2024 $ 129,722 2025 86,154 2026 89,330 2027 92,623 2028 58,740 2029 7,472 Total Bank Borrowings $ 464,041 |
RIGHT-OF-USE ASSETS AND OPERA_2
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Right-of-use Assets And Operating Lease Liabilities | |
SCHEDULE OF MATURITY OF LEASE LIABILITIES | The following table sets forth the five-year maturity schedule of the Company’s lease liabilities: SCHEDULE OF MATURITY OF LEASE LIABILITIES For the years ending December 31, Amount 2024 $ 292,190 2025 93,185 2026 69,888 Total operating lease payments 455,263 Less: imputed interest (19,786 ) Present value of operating lease liabilities $ 435,477 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
SCHEDULE OF PROFIT (LOSS) BEFORE PROVISION FOR INCOME TAXES | (Loss) income before provision for income taxes is as follows: SCHEDULE OF PROFIT (LOSS) BEFORE PROVISION FOR INCOME TAXES 2023 2022 2021 For the years ended December 31, 2023 2022 2021 Cayman and BVI $ (1,658,203 ) $ (138,363 ) $ (335,802 ) Hong Kong (1,959,799 ) (1,500,125 ) (983,008 ) PRC 172,723 (17,415 ) (67,705 ) Total $ (3,445,281 ) $ (1,655,903 ) $ (1,386,515 ) |
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES | Significant components of deferred tax assets are as follows: SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES 2023 2022 As of December 31, 2023 2022 Deferred tax assets: Net operating loss carryforwards $ 972,930 $ 651,643 Total deferred tax assets 972,930 651,643 Deferred tax liabilities: Depreciation — (14,955 ) Total deferred tax liabilities — (14,955 ) Total deferred tax assets-net 972,930 636,688 Less: Valuation allowance (972,930 ) (636,688 ) Deferred tax assets, net $ — $ — |
SCHEDULE OF RECONCILIATION OF EFFECTIVE INCOME TAX RATE | Reconciliation of effective income tax rate is as follows: SCHEDULE OF RECONCILIATION OF EFFECTIVE INCOME TAX RATE 2023 2022 2021 For the years ended December 31, 2023 2022 2021 PRC statutory tax rate 25.0 % 25.0 % 25.0 % Effect of tax rate differential (HK) (4.8 ) (7.7 ) (6.0 ) Tax effect of non-deductible expenses (0.6 ) — — Valuation allowance (18.0 ) (17.3 ) (19.0 ) Effective tax rate 1.6 % — % — % |
CONDENSED FINANCIAL INFORMATI_2
CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Condensed Financial Information Disclosure [Abstract] | |
SCHEDULE OF CONDENSED FINANCIAL INFORMATION | The following is the parent company balance sheets: SCHEDULE OF CONDENSED FINANCIAL INFORMATION 2023 2022 As of December 31, 2023 2022 USD USD (Unaudited) (Unaudited) ASSETS NON-CURRENT ASSETS Investment in subsidiaries $ 16,402,393 $ 19,451,811 TOTAL ASSETS $ 16,402,393 $ 19,451,811 LIABILITIES AND SHAREHOLDERS’ EQUITY LIABILITIES $ — $ — SHAREHOLDERS’ EQUITY Preferred shares, par value $ 0.0001 50,000,000 none — — Ordinary shares, par value $ 0.0001 450,000,000 18,060,000 1,806 1,806 Additional paid-in capital 19,586,674 18,919,658 Retained earnings (2,925,533 ) 575,985 Accumulated other comprehensive (loss) gain (260,554 ) (45,638 ) TOTAL SHAREHOLDERS’ EQUITY 16,402,393 19,451,811 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $ 16,402,393 $ 19,451,811 The following is the parent company statements of operations and comprehensive loss: 2023 2022 2021 For the Years Ended December 31, 2023 2022 2021 USD USD USD (Unaudited) (Unaudited) (Unaudited) EQUITY LOSS $ (1,658,203 ) $ (1,538,363 ) $ (1,386,515 ) NET LOSS $ (1,658,203 ) $ (1,538,363 ) $ (1,386,515 ) COMPREHENSIVE LOSS Net loss $ (1,658,203 ) $ (1,538,363 ) $ (1,386,515 ) Foreign currency translation adjustments (214,916 ) (420,941 ) 52,289 COMPREHENSIVE LOSS $ (1,873,119 ) $ (1,959,304 ) $ (1,334,226 ) |
SUMMARY OF LEGAL ENTITIES CONTR
SUMMARY OF LEGAL ENTITIES CONTROLLED BY ILA AFTER THE REORGANIZATION (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Intelligent Living Application Group Inc [Member] | |
Date of incorporation | Jul. 17, 2019 |
Place of incorporation | Cayman Islands |
Principal activities | Holding company |
Intelligent Living Application Group Limited [Member] | |
Date of incorporation | Mar. 19, 2014 |
Place of incorporation | British Virgin Islands |
Principal activities | Intermediate holding company |
Kambo Locksets Limited [Member] | |
Date of incorporation | Mar. 26, 2014 |
Place of incorporation | Hong Kong, PRC |
Principal activities | Sale of door locksets to US and Canadian market |
Kambo Hardware Limited [Member] | |
Date of incorporation | Feb. 25, 2015 |
Place of incorporation | Hong Kong, PRC |
Principal activities | Sale of locksets and related hardware to other markets |
Bamberg (HK) Limited [Member] | |
Date of incorporation | Jun. 24, 2016 |
Place of incorporation | Hong Kong, PRC |
Principal activities | Sale of self-branded door locksets |
Hing Fat Industrial Limited [Member] | |
Date of incorporation | Mar. 23, 2009 |
Place of incorporation | Hong Kong, PRC |
Principal activities | Designs door locksets; holding company of Dongguan Xingfa |
Dongguan Xingfa Hardware Products Co., Ltd. [Member] | |
Date of incorporation | Aug. 06, 1993 |
Place of incorporation | The People Republic of China (the “PRC”) |
Principal activities | Manufactures door locksets |
ORGANIZATION AND BUSINESS (Deta
ORGANIZATION AND BUSINESS (Details Narrative) - USD ($) | 12 Months Ended | ||||
Jul. 15, 2022 | Jul. 15, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Subsidiary, Sale of Stock [Line Items] | |||||
Ordinary shares, par value | $ 0.0001 | $ 0.0001 | |||
Proceeds from aggregate gross | $ 18,048,369 | ||||
IPO [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares issued on initial public offering | 5,060,000 | 5,060,000 | |||
Ordinary shares, par value | $ 0.0001 | $ 0.0001 | |||
Share price | $ 4 | $ 4 | |||
Proceeds from aggregate gross | $ 20,240,000 |
SCHEDULE OF EXCHANGE RATE USED
SCHEDULE OF EXCHANGE RATE USED FOR FOREIGN CURRENCY TRANSLATION (Details) | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Translation rate for balance sheet items, except for equity accounts | 1 | 1 | 1 |
Translation rate for statement of operations and cash flow items | 1 | 1 | 1 |
Hong Kong, Dollars | |||
Translation rate for balance sheet items, except for equity accounts | 7.81 | 7.80 | 7.80 |
Translation rate for statement of operations and cash flow items | 7.83 | 7.76 | 7.76 |
China, Yuan Renminbi | |||
Translation rate for balance sheet items, except for equity accounts | 7.08 | 6.96 | 6.38 |
Translation rate for statement of operations and cash flow items | 7.05 | 6.7 | 6.45 |
SCHEDULE OF USEFUL LIVES OF PRO
SCHEDULE OF USEFUL LIVES OF PROPERTY AND EQUIPMENT (Details) | Dec. 31, 2023 |
Office Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Office Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 10 years |
Equipment [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Equipment [Member] | Maximum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 10 years |
Vehicles [Member] | Minimum [Member] | |
Property, Plant and Equipment [Line Items] | |
Estimated useful life | 5 years |
Leasehold Improvements [Member] | |
Property, Plant and Equipment [Line Items] | |
Property, Plant, and Equipment, Useful Life, Term, Description [Extensible Enumeration] | Useful Life, Shorter of Lease Term or Asset Utility [Member] |
SCHEDULE OF REVENUE FROM CUSTOM
SCHEDULE OF REVENUE FROM CUSTOMERS BY GEOGRAPHICAL INFORMATION (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Revenue from customers | $ 6,443,357 | $ 12,158,102 | $ 12,543,556 |
UNITED STATES | |||
Revenue from customers | 6,364,773 | 11,717,347 | 12,233,382 |
CANADA | |||
Revenue from customers | $ 78,584 | $ 440,755 | $ 310,174 |
SCHEDULE OF PROPERTY AND EQUIPM
SCHEDULE OF PROPERTY AND EQUIPMENT BY GEOGRAPHICAL INFORMATION (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Property and equipment, net | $ 5,673,584 | $ 5,134,566 |
CHINA | ||
Property and equipment, net | 4,863,530 | 4,966,262 |
HONG KONG | ||
Property and equipment, net | $ 810,054 | $ 168,304 |
SCHEDULES OF CREDIT RISK (Detai
SCHEDULES OF CREDIT RISK (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Product Information [Line Items] | |||
Revenues | $ 6,443,357 | $ 12,158,102 | $ 12,543,556 |
Accounts receivable | 445,500 | 1,624,809 | |
Revenue from Contract with Customer Benchmark [Member] | Customer A [Member] | Customer Concentration Risk [Member] | |||
Product Information [Line Items] | |||
Revenues | $ 1,786,656 | $ 5,654,248 | $ 6,833,866 |
Risk percentage | 27.50% | 46.50% | 54.50% |
Revenue from Contract with Customer Benchmark [Member] | Customer B [Member] | Customer Concentration Risk [Member] | |||
Product Information [Line Items] | |||
Revenues | $ 888,595 | $ 1,871,116 | $ 1,588,156 |
Risk percentage | 13.70% | 15.40% | 12.70% |
Revenue from Contract with Customer Benchmark [Member] | Customer C [Member] | Customer Concentration Risk [Member] | |||
Product Information [Line Items] | |||
Revenues | $ 1,723,506 | $ 1,586,681 | $ 1,310,376 |
Risk percentage | 26.50% | 13.10% | 10.50% |
Revenue from Contract with Customer Benchmark [Member] | Customer D [Member] | Customer Concentration Risk [Member] | |||
Product Information [Line Items] | |||
Revenues | $ 1,332,746 | $ 1,306,755 | |
Risk percentage | 20.50% | 10.70% | |
Revenue from Contract with Customer Benchmark [Member] | Major Customers Aggregate Total [Member] | Customer Concentration Risk [Member] | |||
Product Information [Line Items] | |||
Revenues | $ 5,731,503 | $ 10,418,800 | $ 9,732,398 |
Risk percentage | 88.20% | 85.70% | 77.70% |
Accounts Receivable [Member] | Customer A [Member] | Customer Concentration Risk [Member] | |||
Product Information [Line Items] | |||
Risk percentage | 24.90% | 69.50% | |
Accounts receivable | $ 110,963 | $ 1,129,520 | |
Accounts Receivable [Member] | Customer B [Member] | Customer Concentration Risk [Member] | |||
Product Information [Line Items] | |||
Risk percentage | 37.20% | 19.20% | |
Accounts receivable | $ 165,600 | $ 312,327 | |
Accounts Receivable [Member] | Customer C [Member] | Customer Concentration Risk [Member] | |||
Product Information [Line Items] | |||
Risk percentage | 30.30% | 11.30% | |
Accounts receivable | $ 135,074 | $ 182,853 | |
Accounts Receivable [Member] | Major Customers Aggregate Total [Member] | Customer Concentration Risk [Member] | |||
Product Information [Line Items] | |||
Risk percentage | 92.40% | 100% | |
Accounts receivable | $ 41 | $ 1,624,700 |
SCHEDULES OF SUPPLIER RISK (Det
SCHEDULES OF SUPPLIER RISK (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Product Information [Line Items] | |||
Purchases | $ 324,626 | $ 396,628 | |
Purchases [Member] | Supplier A [Member] | Supplier Concentration Risk [Member] | |||
Product Information [Line Items] | |||
Purchases | $ 747,881 | $ 1,453,212 | $ 1,701,515 |
Risk percentage | 22.30% | 21.70% | 19.90% |
Purchases [Member] | Supplier B [Member] | Supplier Concentration Risk [Member] | |||
Product Information [Line Items] | |||
Purchases | $ 679,950 | $ 1,407,690 | |
Risk percentage | 10.20% | 16.50% | |
Purchases [Member] | Supplier Aggregate Total [Member] | Supplier Concentration Risk [Member] | |||
Product Information [Line Items] | |||
Purchases | $ 747,881 | $ 2,133,162 | $ 3,109,205 |
Risk percentage | 22.30% | 31.90% | 36.40% |
Accounts Payable [Member] | Supplier A [Member] | Supplier Concentration Risk [Member] | |||
Product Information [Line Items] | |||
Risk percentage | 29.20% | 11.10% | |
Purchases | $ 94,913 | $ 185,982 | |
Accounts Payable [Member] | Supplier B [Member] | Supplier Concentration Risk [Member] | |||
Product Information [Line Items] | |||
Risk percentage | 24.80% | ||
Purchases | $ 80,577 | ||
Accounts Payable [Member] | Supplier Aggregate Total [Member] | Supplier Concentration Risk [Member] | |||
Product Information [Line Items] | |||
Risk percentage | 64.60% | 11.10% | |
Purchases | $ 209,924 | $ 185,982 | |
Accounts Payable [Member] | Supplier C [Member] | Supplier Concentration Risk [Member] | |||
Product Information [Line Items] | |||
Risk percentage | 10.60% | ||
Purchases | $ 34,434 |
SUMMARY OF SIGNIFICANT ACCOUN_4
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) | 12 Months Ended | 57 Months Ended | ||||||||
Feb. 22, 2023 $ / shares shares | Dec. 31, 2023 USD ($) | Dec. 31, 2023 CNY (¥) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 CNY (¥) | Dec. 31, 2021 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2023 CNY (¥) | Dec. 31, 2022 CNY (¥) | Dec. 16, 2022 shares | |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Allowance for inventory impairment | $ 0 | $ 0 | $ 0 | |||||||
Allowance for doubtful other receivables | 0 | 0 | 0 | |||||||
Prepaid marketing research expenses | 755,355 | 755,355 | ||||||||
Prepaid manufacture expenses | 399,442 | 399,442 | ||||||||
Prepaid research and development expenses | 299,581 | $ 299,581 | ||||||||
Allowance for prepayments and deposits impairment | 0 | |||||||||
Export tax rebates received | 412,000 | ¥ 2,906,000 | 985,000 | ¥ 6,628,000 | ||||||
Idle capacity expenses | $ 345,424 | |||||||||
Income tax examination, likelihood | greater than 50% likelihood of being realized on examination | greater than 50% likelihood of being realized on examination | ||||||||
Value added tax rate | 1,300% | |||||||||
Value added tax refund receivable | $ 216,000 | $ 216,000 | ||||||||
Value added tax refund receivable | 200,000 | |||||||||
Net loss | 3,501,518 | 1,655,903 | $ 1,386,515 | |||||||
Revenues | 6,400,000 | 12,200,000 | ||||||||
Cash | 4,500,000 | 4,500,000 | ||||||||
Cash and cash equivalents | $ 4,483,730 | $ 9,165,651 | $ 4,483,730 | ¥ 81,226 | ¥ 263,350 | |||||
2022 Omnibus Equity Plan [Member] | ||||||||||
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||||||||
Ordinary shares authorized for issuance | shares | 2,500,000 | |||||||||
Number of options granted | shares | 820,000 | |||||||||
Option exercise price | $ / shares | $ 1.23 | |||||||||
Option term | 5 years |
SCHEDULE OF ACCOUNTS RECEIVABLE
SCHEDULE OF ACCOUNTS RECEIVABLE (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Credit Loss [Abstract] | |||
Accounts receivable | $ 445,500 | $ 1,624,809 | |
Less: allowance for estimated credit losses | |||
Accounts receivable, net | $ 445,500 | $ 1,624,809 |
ACCOUNTS RECEIVABLE (Details Na
ACCOUNTS RECEIVABLE (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Credit Loss [Abstract] | |||
Allowance for doubtful accounts | |||
Written-off uncollectible accounts receivable | $ 105,204 |
SCHEDULE OF THE COMPOSITION OF
SCHEDULE OF THE COMPOSITION OF INVENTORY (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 48,422 | $ 35,270 |
Work-in-progress | 4,615,592 | 4,300,962 |
Finished goods | 363,733 | 136,255 |
Total | $ 5,027,747 | $ 4,472,487 |
INVENTORIES (Details Narrative)
INVENTORIES (Details Narrative) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Inventory reserve | $ 0 | $ 0 |
SCHEDULE OF PROPERTY AND EQUI_2
SCHEDULE OF PROPERTY AND EQUIPMENT NET (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation and amortization | $ (3,523,051) | $ (2,895,174) |
Property and equipment, net | 5,673,584 | 5,134,566 |
Office Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 185,280 | 187,234 |
Equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 7,746,905 | 7,357,634 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | 387,741 | 389,333 |
Leasehold Improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment, gross | $ 876,709 | $ 95,539 |
PROPERTY AND EQUIPMENT, NET (De
PROPERTY AND EQUIPMENT, NET (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization expenses | $ 693,531 | $ 303,269 | $ 259,122 |
SCHEDULE OF OTHER PAYABLES AND
SCHEDULE OF OTHER PAYABLES AND ACCRUALS (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Payables and Accruals [Abstract] | ||
Accrued production cost | $ 252,569 | $ 309,956 |
Accrued salary | 177,995 | 161,761 |
Accrued social security benefits | 110,906 | 105,155 |
Accrued utilities | 34,683 | 25,817 |
Accrued business tax and others | 49,198 | 75,283 |
Total | $ 625,350 | $ 677,972 |
RELATED PARTY BALANCES AND TR_2
RELATED PARTY BALANCES AND TRANSACTIONS (Details Narrative) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Related Party Transaction [Line Items] | |||
Description of transaction | The major shareholders of ILA are committed to renewing the rental agreement with the Company for no less than 5 additional years | ||
Kambo Security Products Limited [Member] | |||
Related Party Transaction [Line Items] | |||
Rent expense | $ 74,000 | $ 54,100 | $ 54,100 |
SUMMARY OF MATURITY OF BANK BOR
SUMMARY OF MATURITY OF BANK BORROWINGS (Details) | Dec. 31, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2024 | $ 129,722 |
2025 | 86,154 |
2026 | 89,330 |
2027 | 92,623 |
2028 | 58,740 |
2029 | 7,472 |
Total Bank Borrowings | $ 464,041 |
BANK BORROWINGS (Details Narrat
BANK BORROWINGS (Details Narrative) $ in Millions | 12 Months Ended | |||||||||||||||
May 14, 2021 USD ($) installment | May 14, 2021 HKD ($) installment | Oct. 08, 2020 USD ($) installment | Oct. 08, 2020 HKD ($) installment | Apr. 28, 2020 USD ($) installment | Apr. 28, 2020 HKD ($) installment | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Jun. 24, 2021 USD ($) | Jun. 24, 2021 HKD ($) | May 14, 2021 HKD ($) | Oct. 08, 2020 HKD ($) | Apr. 28, 2020 HKD ($) | Nov. 03, 2017 USD ($) | Nov. 03, 2017 HKD ($) | |
Short-Term Debt [Line Items] | ||||||||||||||||
Proceeds from bank borrowings | $ 191,339 | |||||||||||||||
Number of installments | installment | 96 | 96 | 96 | 96 | 96 | 96 | ||||||||||
Interest expense | $ 18,859 | $ 26,836 | $ 48,910 | |||||||||||||
Working Capital Facility, Due May 13, 2029 [Member] | ||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||
Borrowing capacity | $ 100,000 | $ 1 | ||||||||||||||
Interest rate percentage | 2.75% | 2.75% | ||||||||||||||
Proceeds from bank borrowings | $ 100,000 | $ 1 | ||||||||||||||
Working Capital Facility, Due November 24, 2028 [Member] | ||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||
Borrowing capacity | $ 100,000 | $ 1 | ||||||||||||||
Interest rate percentage | 2.75% | 2.75% | ||||||||||||||
Proceeds from bank borrowings | $ 100,000 | $ 1 | ||||||||||||||
Working Capital Facility, Due May 17, 2028 [Member] | ||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||
Borrowing capacity | $ 500,000 | $ 4 | ||||||||||||||
Interest rate percentage | 2.75% | 2.75% | ||||||||||||||
Proceeds from bank borrowings | $ 500,000 | $ 4 | ||||||||||||||
Working Capital Facility, No Expiration Date [Member] | ||||||||||||||||
Short-Term Debt [Line Items] | ||||||||||||||||
Borrowing capacity | $ 900,000 | $ 7 | $ 800,000 | $ 6 | ||||||||||||
Interest rate percentage | 5.50% | 5.50% |
SCHEDULE OF MATURITY OF LEASE L
SCHEDULE OF MATURITY OF LEASE LIABILITIES (Details) - USD ($) | Dec. 31, 2023 | Jan. 01, 2019 |
Right-of-use Assets And Operating Lease Liabilities | ||
2024 | $ 292,190 | |
2025 | 93,185 | |
2026 | 69,888 | |
Total operating lease payments | 455,263 | |
Less: imputed interest | (19,786) | |
Present value of operating lease liabilities | $ 435,477 | $ 1,700,000 |
RIGHT-OF-USE ASSETS AND OPERA_3
RIGHT-OF-USE ASSETS AND OPERATING LEASE LIABILITIES (Details Narrative) - USD ($) | 12 Months Ended | |||
Jan. 01, 2019 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating lease liability recognized upon adoption | $ 1,700,000 | $ 435,477 | ||
Operating lease expenses | 778,000 | $ 497,000 | $ 408,000 | |
Minimum [Member] | ||||
Lease incremental borrowing rate | 4.75% | |||
Maximum [Member] | ||||
Lease incremental borrowing rate | 5.63% | |||
Manufacturing Facility in China [Member] | ||||
Annual payment under lease | $ 622,000 | |||
Lease expiration date | Feb. 28, 2026 | |||
Electroplating Production Line in China [Member] | ||||
Annual payment under lease | $ 622,000 | |||
Lease expiration date | Sep. 30, 2026 | |||
Various Office Parking Facilities in China [Member] | ||||
Annual payment under lease | $ 16,000 | |||
Lease description | expire on April 30, 2024 and November 30, 2024, March 31, 2024, respectively | |||
Office Equipment in Hong Kong [Member] | ||||
Annual payment under lease | $ 4,000 | |||
Lease expiration date | Dec. 20, 2025 | |||
Various Real Estate Leases for Office Space in Hong Kong [Member] | ||||
Annual payment under lease | $ 173,000 | |||
Lease description | expire on December 31, 2024, June 15, 2024 and July 31, 2024, respectively |
STOCK-BASED COMPENSATION (Detai
STOCK-BASED COMPENSATION (Details Narrative) - 2022 Omnibus Equity Plan [Member] - USD ($) | Feb. 22, 2023 | Dec. 16, 2022 |
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
Ordinary shares authorized for issuance | 2,500,000 | |
Number of options granted | 820,000 | |
Option exercise price | $ 1.23 | |
Option term | 5 years | |
Grant date fair value of options | $ 667,016 |
EQUITY TRANSACTIONS (Details Na
EQUITY TRANSACTIONS (Details Narrative) - $ / shares | Jul. 15, 2022 | Jul. 15, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Jul. 16, 2021 |
Subsidiary, Sale of Stock [Line Items] | |||||
Preferred shares, authorized | 50,000,000 | 50,000,000 | 50,000,000 | ||
Preferred shares, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||
Preferred stock, shares issued | 0 | 0 | |||
Preferred stock, shares outstanding | 0 | 0 | |||
IPO [Member] | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Preferred stock, shares issued | 0 | ||||
Shares issued on initial public offering | 5,060,000 | 5,060,000 | |||
Share price | $ 4 | $ 4 |
SCHEDULE OF PROFIT (LOSS) BEFOR
SCHEDULE OF PROFIT (LOSS) BEFORE PROVISION FOR INCOME TAXES (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Total | $ (3,445,281) | $ (1,655,903) | $ (1,386,515) |
Cayman Islands and British Virgin Islands [Member] | |||
Total | (1,658,203) | (138,363) | (335,802) |
HONG KONG | |||
Total | (1,959,799) | (1,500,125) | (983,008) |
CHINA | |||
Total | $ 172,723 | $ (17,415) | $ (67,705) |
SCHEDULE OF DEFERRED TAX ASSETS
SCHEDULE OF DEFERRED TAX ASSETS AND LIABILITIES (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets: | ||
Net operating loss carryforwards | $ 972,930 | $ 651,643 |
Total deferred tax assets | 972,930 | 651,643 |
Deferred tax liabilities: | ||
Depreciation | (14,955) | |
Total deferred tax liabilities | (14,955) | |
Total deferred tax assets-net | 972,930 | 636,688 |
Less: Valuation allowance | (972,930) | (636,688) |
Deferred tax assets, net |
SCHEDULE OF RECONCILIATION OF E
SCHEDULE OF RECONCILIATION OF EFFECTIVE INCOME TAX RATE (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
PRC statutory tax rate | 25% | 25% | 25% |
Effect of tax rate differential (HK) | (4.80%) | (7.70%) | (6.00%) |
Tax effect of non-deductible expenses | (0.60%) | ||
Valuation allowance | (18.00%) | (17.30%) | (19.00%) |
Effective tax rate | 1.60% |
INCOME TAXES (Details Narrative
INCOME TAXES (Details Narrative) - USD ($) | 12 Months Ended | |||
Dec. 31, 2028 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating Loss Carryforwards [Line Items] | ||||
Percentage of tax rate | 25% | 25% | 25% | |
Maximum period | 5 years | |||
Provision for income taxes | $ 56,237 | |||
Net deferred tax assets | 972,930 | 636,688 | ||
Increase in valuation allowance | 336,242 | 242,472 | $ 185,995 | |
Uncertain tax positions | 0 | 0 | ||
CHINA | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net deferred tax assets | 973,000 | 637,000 | ||
HONG KONG | ||||
Operating Loss Carryforwards [Line Items] | ||||
Net deferred tax assets | $ 973,000 | $ 637,000 | ||
Inland Revenue, Hong Kong [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Percentage of tax rate | 16.50% | 16.50% | 16.50% | |
State Administration of Taxation, China [Member] | ||||
Operating Loss Carryforwards [Line Items] | ||||
Percentage of tax rate | 25% |
SCHEDULE OF CONDENSED FINANCIAL
SCHEDULE OF CONDENSED FINANCIAL INFORMATION (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
NON-CURRENT ASSETS | |||
Total assets | $ 18,283,858 | $ 21,802,074 | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||
Total liabilities | 1,881,465 | 2,350,263 | |
SHAREHOLDERS’ EQUITY | |||
Preferred shares, par value $0.0001 per share; 50,000,000 shares authorized; none issued and outstanding as of December 31, 2023 and 2022 | |||
Ordinary shares, par value $0.0001 per share; 450,000,000 shares authorized; 18,060,000 shares issued and outstanding as of December 31, 2023 and 2022 | 1,806 | 1,806 | |
Additional paid-in capital | 23,804,550 | 23,137,534 | |
Retained earnings | (7,143,409) | (3,641,891) | |
Accumulated other comprehensive (loss) gain | (260,554) | (45,638) | |
Total shareholders’ equity | 16,402,393 | 19,451,811 | |
Total liabilities and shareholders’ equity | 18,283,858 | 21,802,074 | |
EQUITY LOSS | (3,445,281) | (1,655,903) | $ (1,386,515) |
NET LOSS | (3,501,518) | (1,655,903) | (1,386,515) |
COMPREHENSIVE LOSS | |||
Net loss | (3,501,518) | (1,655,903) | (1,386,515) |
Parent Company [Member] | |||
NON-CURRENT ASSETS | |||
Investment in subsidiaries | 16,402,393 | 19,451,811 | |
Total assets | 16,402,393 | 19,451,811 | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | |||
Total liabilities | |||
SHAREHOLDERS’ EQUITY | |||
Preferred shares, par value $0.0001 per share; 50,000,000 shares authorized; none issued and outstanding as of December 31, 2023 and 2022 | |||
Ordinary shares, par value $0.0001 per share; 450,000,000 shares authorized; 18,060,000 shares issued and outstanding as of December 31, 2023 and 2022 | 1,806 | 1,806 | |
Additional paid-in capital | 19,586,674 | 18,919,658 | |
Retained earnings | (2,925,533) | 575,985 | |
Accumulated other comprehensive (loss) gain | (260,554) | (45,638) | |
Total shareholders’ equity | 16,402,393 | 19,451,811 | |
Total liabilities and shareholders’ equity | 16,402,393 | 19,451,811 | |
EQUITY LOSS | (1,658,203) | (1,538,363) | (1,386,515) |
NET LOSS | (1,658,203) | (1,538,363) | (1,386,515) |
COMPREHENSIVE LOSS | |||
Net loss | (1,658,203) | (1,538,363) | (1,386,515) |
Foreign currency translation adjustments | (214,916) | (420,941) | 52,289 |
COMPREHENSIVE LOSS | $ (1,873,119) | $ (1,959,304) | $ (1,334,226) |
SCHEDULE OF CONDENSED BALANCE S
SCHEDULE OF CONDENSED BALANCE SHEET (Details) (Parenthetical) - $ / shares | Dec. 31, 2023 | Dec. 31, 2022 | Jul. 16, 2021 |
Condensed Financial Statements, Captions [Line Items] | |||
Preferred shares, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Preferred shares, authorized | 50,000,000 | 50,000,000 | 50,000,000 |
Preferred shares, issued | 0 | 0 | |
Preferred shares, outstanding | 0 | 0 | |
Ordinary shares, par value | $ 0.0001 | $ 0.0001 | |
Ordinary shares, authorized | 450,000,000 | 450,000,000 | |
Ordinary shares, issued | 18,060,000 | 18,060,000 | |
Ordinary shares, outstanding | 18,060,000 | 18,060,000 | |
Parent Company [Member] | |||
Condensed Financial Statements, Captions [Line Items] | |||
Preferred shares, par value | $ 0.0001 | $ 0.0001 | |
Preferred shares, authorized | 50,000,000 | 50,000,000 | |
Preferred shares, issued | 0 | 0 | |
Preferred shares, outstanding | 0 | 0 | |
Ordinary shares, par value | $ 0.0001 | $ 0.0001 | |
Ordinary shares, authorized | 450,000,000 | 450,000,000 | |
Ordinary shares, issued | 18,060,000 | 18,060,000 | |
Ordinary shares, outstanding | 18,060,000 | 18,060,000 |