We are a retailer of branded fashion apparel and leading global apparel supply chain solution provider based in China. We are listed on the NASDAQ Global Market under the symbol of "EVK".

The primary business objective for our wholesale segment is to expand our portfolio into higher-class brands, expand our customer base and improve our profit. We believe that our growth opportunities and continued investment initiatives include:

? Focusing on high value-added products and continuing our strategy to produce

? Maintaining stable revenue increase in the markets while shifting focus to

We believe that our growth opportunities and continued investment initiatives include:

? Improving our retail stores' efficiency and increasing same-store sales;

? Continuing to launch retail flagship stores in Tier-1 cities and increasing

For our new customers, we generally require orders placed to be backed by letters of credit. For our long-term and established customers with good payment track records, we generally provide payment terms between 30 to 180 days following the delivery of finished goods.

Summary of Critical Accounting Policies

The Company reviews new accounting standards as issued. Management has not identified any other new standards that it believes will have a significant impact on the Company's consolidated financial statements.

Results of Operations for the three months ended June 30, 2022 and 2021

The following table sets forth a breakdown of our total sales, by region, for the three months ended June 30, 2022 and 2021.

Sales for the three months ended June 30, 2022 were $63.8 million, a 5.4% increase compared with the three months ended June 30, 2021. This increase was primarily attributable to a 60.5% ($16.0 million) increase in our wholesale business, offset by a 37.3% ($12.7 million) decrease in our retail business.

Cost of Sales and Gross Margin

Labor costs for our wholesale business were 1.1% (0.5 million) of our total wholesale business sales in the three months ended June 30, 2022, compared with 1.4%(0.4 million) in the three months ended June 30, 2021. There were no significant changes.

Selling, General and Administrative Expenses

Our selling expenses consist primarily of local transportation, unloading charges, product inspection charges, salaries for retail staff and decoration and marketing expenses associated with our retail business.

Interest expense for the three months ended June 30, 2022 was $0.3 million, while interest expense was $0.2 million for the three months ended June 30, 2021. The increase was due to the slightly increased bank loans.

Income tax expense was $0.9 million and $1.1 million for the three months ended June 30, 2022 and 2021, respectively.

The Company's operating subsidiaries are governed by the Income Tax Law of the PRC concerning Foreign Investment Enterprises and Foreign Enterprises and various local income tax laws ("the Income Tax Laws").

All PRC subsidiaries are subject to income tax at the 25% statutory rate.

Perfect Dream was incorporated in the British Virgin Islands (BVI), and under the current laws of the BVI, dividends and capital gains arising from the Company's investments in the BVI are not subject to income taxes.

Ever-Glory HK was incorporated in Samoa, and under the current laws of Samoa, has no liabilities for income taxes.

Ever-Glory Supply Chain Service Co., Limited was incorporated in Hongkong, and under the current laws of Hongkong, are subject to income tax at the 16.5% statutory rate.

Net income for the three months ended June 30, 2022 was $2.4 million, and net loss for the three months ended June 30, 2021 was $1.8 million.

Results of Operations for the six months ended June 30, 2022 and 2021

The following table sets forth a breakdown of our total sales, by region, for the six months ended June 30, 2022 and 2021.

Sales for the six months ended June 30, 2022 were $128.6 million, a decrease of 2.1% from the six months ended June 30, 2021. This decrease was primarily attributable to a 45.6% (22.7million) increase in sales in our wholesale business and a 31.1% (25.4 million) decrease in our retail business.

Total retail store square footage and sales per square foot for the six months ended June 30, 2022 and 2021 are as follows:

Total store sales (in thousands of U.S. dollars) $ 56,279 $ 81,723 Sales per square foot

Same store sales and newly opened store sales for the six months ended June 30, 2022 and 2021 are as follows:

* Primarily sales from stores that were closed in the current reporting period.

Cost of Sales and Gross Margin

Labor costs for our wholesale business were 1.3% of our total wholesale business sales in the six months ended June 30, 2022, compared with 1.4% in the six months ended June 30, 2021. There were no significant changes.

Outsourced production costs for our wholesale business were 37.8% of our total sales in the six months ended June 30, 2022, compared with 37.8% in the six months ended June 30, 2021. There were no significant changes.

Overhead and other expenses for our wholesale business accounted for 0.4% and 0.4% of our total sales for the six months ended June 30, 2022 and 2021, respectively.

Selling, General and Administrative Expenses

Our selling expenses consist primarily of local transportation, unloading charges, product inspection charges, salaries for retail staff and decoration and marketing expenses associated with our retail business.

Loss from operations for the six months ended June 30, 2022 was $0.1 million, a 98.0% decrease from $4.7 million of loss for the six months ended June 30, 2021.

Interest expense was $0.9 million and $0.7 million for the six months ended June 30, 2022 and 2021, respectively. The increase was due to the increased bank loans.

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