**U.S.
      Securities and Exchange Commission**
 
 **Washington,
      D.C. 20549**
 
 
 
 **FORM
          10-QSB/A**
 **Amendment
          No. 1**
 
 
 x
            QUARTERLY
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934
                for the quarterly period ended March 31,
                2007
 
 o
            TRANSITION
                REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
                1934
                for the transition period from _______ to
                _______
 
 Commission
      file number: 0-28806
 
 **EVER-GLORY
      INTERNATIONAL GROUP, INC.**
 (Exact
      name of small business issuer as specified in its charter)
 
 Florida
            65-0420146(State
                or other jurisdiction of
            (IRS
                Employer identification No.)incorporation
                or organization)
 
 100
          N.
          Barranca Ave. #810
 West
          Covina, California 91791
 (Address
      of principal executive offices)
 
 (626)
      839-9116
 (Issuer’s
      telephone number)
 
 Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Exchange Act during the past 12 months (or for such shorter period
      that the registrant was required to file such reports), and (2) has been subject
      to such filing requirements for the past 90 days. Yes x No  o
 
 Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Exchange Act). Yes  o No x
 
 Number
        of
        shares of common stock outstanding as of July__, 2007:
        19,971,758
 
 Transitional
      Small Business Disclosure Format: Yes  o No x
 
  
  
  **EXPLANATORY
        NOTE**
 
 This
            Amendment No. 1 to this Quarterly Report on Form 10-QSB for the quarter
            ended
            March 31, 2007 was filed in order to restate the condensed consolidated
            financial statements as of and for the quarter ended March 31, 2007 to
            revise
            the accounting treatment for the acquisition of Nanjing New-Tailun Garments
            Co,
            Ltd, a Chinese limited liability company (“New-Tailun”) from Ever-Glory
            Enterprises (HK) Ltd, a British Virgin Islands company (“Seller”) on December
            11, 2006.  The acquisition of New-Tailun was originally recorded at
            the fair value of the assets acquired. However, as a result of discussions
            with
            the Staff of the Securities and Exchange Commission, the Company determined
            that
            the acquisition of New-Tailun should have been accounted for as a merger of
            entites under common control in accordance with paragraph 11 of SFAS
            141.
            Accordingly, the assets and liabilities of New-Tailun should have been
            recorded
            at their carrying amounts, not fair value.
  Part
            1 has
            been amended herein to reflect this change. The CEO and CFO of the Company
            have
            also reissued their certifications required by Sections 302 and 906 of
            the
            Sarbanes-Oxley Act of 2002. This amendment does not otherwise update
            information
            in the original filing to reflect facts or events occurring subsequent
            to the
            date of the original filing.
  All
        other
        information is unchanged and this Amendment continues to speak as of the
        date of
        the Original Filing and the Company has not updated the disclosure in this
        Amendment to speak to any later date. All information contained in the Amendment
        and the Original Filing is subject to updating and supplementing as provided
        in
        the Registrant’s subsequent periodic reports filed with the Securities and
        Exchange Commission.
 
 **EVER-GLORY
                  INTERNATIONAL TRAVEL GROUP, INC.****FORM
                  10-QSB****INDEX****Page****SPECIAL
                  NOTE REGARDING FORWARD-LOOKING STATEMENTS**
              
              3**PART********I.****FINANCIAL INFORMATION**
              
              4Item
                  1.
              
              Financial
                  Statements (Unaudited)
              
              4Condensed
                  Consolidated Balance Sheet as of March 31, 2007 (Restated)
              
              4Condensed
                  Consolidated Statements of Operations and Comprehensive income
                  forthree
                  months ended March 31, 2007 and 2006
              
              5Condensed
                  Consolidated Statements of Cash Flows for the three months ended
                  March31,
                  2007 and 2006
              
              6Notes
                  to the Condensed Consolidated Financial Statements as of March
                  31,
                  2007
              
              7Item
                  2.
              
              Management’s
                  Discussion and Analysis of Financial Condition and Results of
                  Operations
              
              16Item
                  3.
              
              Controls
                  and Procedures
              
              26**PART
                  II. OTHER INFORMATION**
              
              23Item
                  1.
              
              Legal
                  Proceedings
              
              24Item
                  4.
              
              Submission
                  of Matters to a Vote of Security Holders
              
              24Item
                  6.
              
              Exhibits
              
              24**SIGNATURES**
              
              25
 
   2
  **Forward-Looking
      Statements**
 
 This
      document contains certain statements of a forward-looking nature. Such
      forward-looking statements, including but not limited to growth and strategies,
      future operating and financial results, financial expectations and current
      business indicators are based upon current information and expectations and
      are
      subject to change based on factors beyond the control of the Company.
      Forward-looking statements typically are identified by the use of terms such
      as
“look,” “may,” “will,” “should,” “might,” “believe,” “plan,” “expect,”
“anticipate,” “estimate” and similar words, although some forward-looking
      statements are expressed differently. The accuracy of such statements may be
      impacted by a number of business risks and uncertainties that could cause actual
      results to differ materially from those projected or anticipated, including
      but
      not limited to:
 
 ·
            the
                ability to timely and accurately complete product
                orders;
 ·
            the
                ability to coordinate product design with its
                customers;
 ·
            its
                dependence on a limited number of larger
                customers;
 ·
            political
                and economic factors in the Peoples’ Republic of
                China;
 ·
            the
                ability of the Company’s internal production operations to increase
                production volumes on finished goods ina
                timely fashion in response to increasing demand and enable the Company
                to
                achieve timely delivery offinished
                goods to its customers;
 ·
            the
                Company’s ability to expand and grow its distribution
                channels;
 ·
            unanticipated
                changes in general market conditions or other factors, which may
                result in
                cancellations ofadvance
                orders or a reduction in the rate of
                reorders;
 ·
            a
                weakening of economic conditions which would reduce demand for products
                sold by the Company and couldadversely
                affect profitability;
 ·
            the
                effect of terrorist acts, or the threat thereof, on consumer confidence
                and spending, or the production anddistribution
                of product and raw materials which could, as a result, adversely
                affect
                the Company’s operationsand
                financial performance;
 ·
            the
                acceptance in the marketplace of the Company’s new products and changes in
                consumer preferences;
 ·
            reductions
                in sales of products, either as the result of economic or other
                conditions, or reduced consumeracceptance
                of a product, could result in a buildup of
                inventory;
 ·
            the
                ability to source raw materials and finished products at favorable
                prices
                to the Company;
 ·
            the
                potential impact of power crises on the Company’s operations including
                temporary blackouts at theCompany’s
                facilities;
 ·
            foreign
                currency exchange rate
                fluctuations;
 ·
            earthquakes
                or other natural disasters;
 ·
            the
                Company’s ability to identify and successfully execute cost control
                initiatives;
 ·
            the
                impact of quotas, tariffs, or safeguards on the importation or exportation
                of the Company’s products;
 ·
            other
                risks outlined above and in the Company’s other filings made periodically
                by the Company.
 
 Readers
      are cautioned not to place undue reliance on these forward-looking statements,
      which speak only as of the date hereof. The Company undertakes no obligation
      to
      update this forward-looking information. Nonetheless, the Company reserves
      the
      right to make such updates from time to time by press release, periodic report
      or other method of public disclosure without the need for specific reference
      to
      this Report. No such update shall be deemed to indicate that other statements
      not addressed by such update remain correct or create an obligation to provide
      any other updates.
  3
  **EVER-GLORY
      INTERNATIONAL GROUP, INC.**
 **AND
      SUBSIDIARIES**
 **CONDENSED
      CONSOLIDATED BALANCE SHEET**
 **AS
      OF MARCH 31, 2007 (RESTATED AND UNAUDITED)**
  **ASSETS****CURRENT
                  ASSETS**
              
              (Restated)Cash
                  and cash equivalents
              
              $
              1,298,417Accounts
                  receivable, net of allowances
              
              
              4,934,186Accounts
                  receivable - related companies
              
              
              2,266,184Inventories,
                  net
              
              
              481,238Other
                  receivables and prepaid expenses
              
              
              226,140Total
                  Current Assets
              
              
              9,206,165**LAND
                  USE RIGHT, NET**
              
              
              2,530,324**PROPERTY
                  AND EQUIPMENT, NET**
              
              
              13,220,710**TOTAL
                  ASSETS**
              
              $
              24,957,199**LIABILITIES
                  AND STOCKHOLDERS' EQUITY****CURRENT
                  LIABILITIES**Accounts
                  payable
              
              $
              1,123,106Accounts
                  payable - a related company
              
              
              420,013Due
                  to related parties
              
              
              2,678,129Other
                  payables and accrued liabilities
              
              
              3,154,476Note
                  payable
              
              
              4,521,438Value
                  added tax
              
              
              173,330Income
                  tax payable and other tax payable
              
              
              96,063Total
                  Current Liabilities
              
              
              12,166,555**LONG-TERM
                  LIABILITIES**Due
                  to a related company
              
              
              4,297,221**TOTAL
                  LIABILITIES**
              
              
              16,463,776**COMMITMENTS
                  AND CONTINGENCIES**
              
              
              -**STOCKHOLDERS'
                  EQUITY**Preferred
                  stock ($.0001 par value, authorized 5,000,000 shares,Nil
                  shares issued and outstanding)
              
              
              -Series
                  A Convertible Preferred Stock ($.0001 par value,authorized
                  10,000 shares, 7,883 shares issued and outstanding)
              
              
              1Common
                  stock ($.0001 par value, authorized 100,000,000 shares,issued
                  and outstanding 19,971,758 shares)
              
              
              1,997Common
                  stock to be issued for acquisition (20,833,333 shares)
              
              
              2,083Additional
                  paid-in capital
              
              
              161,666Retained
                  earningsUnappropriated
              
              
              5,162,441Appropriated
              
              
              2,425,711Accumulated
                  other comprehensive income
              
              
              739,524Total
                  Stockholders' Equity
              
              
              8,493,423**TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY**
              
              $
              24,957,199
 *The
      accompanying notes are an integral part of these condensed
      consolidated financial statements*
  4
  **EVER-GLORY
      INTERNATIONAL GROUP, INC.**
 **AND
      SUBSIDIARIES**
 **CONDENSED
      CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
      INCOME**
 **(UNAUDITED)**
  For
                  the three
              
              
              For
                  the threemonths
                  ended
              
              
              months
                  endedMarch
                  31, 2007
              
              
              March
                  31, 2006**NET
                  SALES**To
                  related parties
              
              $
              27,016
              
              
              $
              -To
                  third parties
              
              
              11,402,701
              
              
              
              5,229,520Total
                  Net Sales
              
              
              11,429,717
              
              
              
              5,229,520**COST
                  OF SALES**From
                  related parties
              
              
              (655,810
              )
              
              
              (810,174
              )From
                  third parties
              
              
              (9,069,122
              )
              
              
              (3,510,466
              )Total
                  Cost Of Sales
              
              
              (9,724,932
              )
              
              
              (4,320,640
              )**GROSS
                  PROFIT**
              
              
              1,704,785
              
              
              
              908,880**OPERATING
                  EXPENSES**Selling
                  expenses
              
              
              155,259
              
              
              
              119,175General
                  and administrative expenses
              
              
              615,090
              
              
              
              321,594Depreciation
                  and amortization
              
              
              60,739
              
              
              
              8,709Total
                  Operating Expenses
              
              
              831,088
              
              
              
              449,478**INCOME
                  FROM OPERATIONS**
              
              
              873,697
              
              
              
              459,402**OTHER
                  INCOME (EXPENSES)**Interest
                  income
              
              
              1,378
              
              
              
              741Interest
                  expenses
              
              
              (132,290
              )
              
              
              (9,936
              )Other
                  income
              
              
              26
              
              
              
              7,235Other
                  expenses
              
              
              (84
              )
              
              
              -Total
                  Other Expenses, net
              
              
              (130,970
              )
              
              
              (1,960
              )**INCOME
                  BEFORE INCOME TAX EXPENSE**
              
              
              742,727
              
              
              
              457,442**INCOME
                  TAX EXPENSE**
              
              
              (75,694
              )
              
              
              (66,852
              )**NET
                  INCOME**
              
              
              667,033
              
              
              
              390,590**OTHER
                  COMPREHENSIVE INCOME**Foreign
                  currency translation gain
              
              
              130,336
              
              
              
              87,061**COMPREHENSIVE
                  INCOME**
              
              $
              797,369
              
              
              $
              477,651Net
                  income share-basic
              
              $
              0.02
              
              
              $
              0.02Net
                  income share-diluted
              
              $
              0.01
              
              
              $
              0.00Weighted
                  average number of shares outstanding duringthe
                  period-basic
              
              
              40,805,091
              
              
              
              19,971,758Weighted
                  average number of shares outstanding duringthe
                  period-diluted
              
              
              100,720,079
              
              
              
              79,886,746
  *The
      accompanying notes are an integral part of these condensed
      consolidated****financial
      statements*
  5
  **EVER-GLORY
      INTERNATIONAL GROUP, INC.**
 **AND
      SUBSIDIARIES**
 **CONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS**
 **(UNAUDITED)**
 
 For
                  the three months
              
              
              For
                  the three monthsended
                  March 31, 2007
              
              
              ended
                  March 31, 2006**CASH
                  FLOWS FROM OPERATING ACTIVITIES**Net
                  income
              
              $
              667,033
              
              
              $
              390,590Adjusted
                  to reconcile net income to cash providedby
                  (used in) operating activities:Depreciation
                  and amortization - cost of sales
              
              
              121,193
              
              
              
              38,315Depreciation
                  and amortization
              
              
              60,739
              
              
              
              8,709Changes
                  in operating assets and liabilities(increase)decrease
                  in:Accounts
                  receivable
              
              
              1,341,005
              
              
              
              (1,898,058
              )Accounts
                  receivable - related companies
              
              
              271,549
              
              
              
              -Other
                  receivable and prepaid expenses
              
              
              (140,926
              )
              
              
              (44,922
              )Inventories
              
              
              271,053
              
              
              
              (23,246
              )Increase
                  (decrease) in:Accounts
                  payable
              
              
              216,782
              
              
              
              2,178,068Accounts
                  payable - related companies
              
              
              (996,903
              )
              
              
              (166,957
              )Other
                  payables and accrued liabilities
              
              
              (179,372
              )
              
              
              (185,957
              )Value
                  add tax payables
              
              
              (30,564
              )
              
              
              44,511Income
                  tax and other tax payables
              
              
              33,855
              
              
              
              (38,239
              )Net
                  cash provided by operating activities
              
              
              1,635,444
              
              
              
              302,814**CASH
                  FLOWS FROM INVESTING ACTIVITIES**Purchase
                  of property and equipment
              
              
              (1,120,674
              )
              
              
              (569,881
              )Net
                  cash used in investing activities
              
              
              (1,120,674
              )
              
              
              (569,881
              )**CASH
                  FLOWS FROM FINANCING ACTIVITIES**Due
                  to related parties
              
              
              115,694
              
              
              
              -Repayment
                  of note payable
              
              
              (1,292,959
              )
              
              
              -Proceeds
                  from notes payable
              
              
              1,292,959
              
              
              
              -Net
                  cash provided by financing activities
              
              
              115,694
              
              
              
              -**EFFECT
                  OF EXCHANGE RATE ON CASH**
              
              
              7,857
              
              
              
              87,061**NET
                  INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS**
              
              
              638,321
              
              
              
              (180,006
              )**CASH
                  AND CASH EQUIVALENTS AT BEGINNING OF PERIOD**
              
              
              660,096
              
              
              
              1,467,245**CASH
                  AND CASH EQUIVALENTS AT END OF PERIOD**
              
              $
              1,298,417
              
              
              $
              1,287,239**SUPPLEMENTAL
                  DISCLOSURE OF CASH FLOW INFORMATION**Cash
                  paid during the period for:Interest
                  expenses
              
              $
              73,595
              
              
              $
              9,936Cash
                  paid during the period for:Income
                  taxes
              
              $
              41,827
              
              
              $
              104,577
  *The
      accompanying notes are an integral part of these condensed
      consolidated financial statements*
  6
  **NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
      OF MARCH 31, 2007 (UNAUDITED)**
 
 
 **NOTE
        1.   **ORGANIZATION
        AND BASIS OF PRESENTATION****
 
 Ever-Glory
      International Group, Inc. (“EGLY”) was incorporated in Florida on October
      19, 1994.
 
 Perfect
      Dream Limited (“Perfect Dream”) was incorporated in the British Virgin Islands
      on July 1, 2004. Goldenway Nanjing Garments Company Limited (“Goldenway”), a
      People’s Republic of China (“PRC”) wholly foreign-owned enterprise was
      incorporated on December 31, 1993.  Goldenway is principally engaged
      in the manufacturing and sale of garments.
 
 On
      November 9, 2006, Perfect Dream entered into a purchase agreement with
      Ever-Glory Enterprises (HK) Limited (“Ever-Glory Hong Kong”) whereby Ever-Glory
      Hong Kong sold 100% interest of Nanjing New-Tailun Garments Company Limited
      (“New Tailun”) to Perfect Dream (the “New-Tailun transaction”). Pursuant to the
      terms of the purchases agreement, Perfect Dream will pay to Ever-Glory Hong
      Kong
      an amount of $2,000,000 in cash and issue 20,833,333 shares of the EGLY’s
      restricted common stock having a value of $10,000,000, such value of shares
      were
      based on the preceding 30-day average of high bid and the low ask price for
      the
      EGLY’s common stock on the date of the transfer within 90 days of the closing of
      the New-Tailun transaction.  The New-Tailun transaction closed on
      December 30, 2006.
 
 New-Tailun
      is a wholly foreign-owned enterprise incorporated in PRC on March 27, 2006
      with
      its principal place of business in Nanjing, PRC and is principally engaged
      in
      the manufacturing and sale of garments.
 
 EGLY,
      Perfect Dream, Goldenway and New Tailun are hereinafter referred to as (“the
      Company”).
 
 The
      accompanying unaudited condensed consolidated financial statements have been
      prepared in accordance with accounting principles generally accepted in the
      United States of America for interim financial information and pursuant to
      the
      rules and regulations of the Securities and Exchange Commission. Accordingly,
      they do not include all of the information and footnotes required by generally
      accepted accounting principles for complete financial statements.
 
 In
      the
      opinion of management, the unaudited condensed consolidated financial statements
      contain all adjustments consisting only of normal recurring accruals considered
      necessary to present fairly the Company's financial position at March 31, 2007,
      the results of operations for the three-month periods ended March 31, 2007
      and
      2006, and cash flows for the three months ended March 31, 2007 and 2006. The
      results for the period ended March 31, 2007 are not necessarily indicative
      of
      the results to be expected for the entire fiscal year ending December 31,
      2007.
  7
  **EVER-GLORY
      INTERNATIONAL GROUP, INC.**
 **AND
      SUBSIDIARIES**
 **NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
      OF MARCH 31, 2007 (UNAUDITED)**
 
 **NOTE
        2.    **RESTATEMENT
        OF FINANCIAL STATEMENTS****
  The
      acquisition by the Company of New-Tailun from Ever-Glory Hong Kong as originally
      reported was recorded at the fair value of the assets acquired. However, as
      a
      result of discussions with the Staff of the Securities and Exchange Commission,
      the Company determined that the acquisition of New-Tailun should have been
      accounted for as a merger of entities under common control in accordance
      with paragraph 11 of SFAS 141. Accordingly, the assets and liabilities of
      New-Tailun should have been recorded at their carrying amounts, not their
      fair values and the consolidated financial statements of the Company should
      have
      been prepared as if the merger had occurred retroactively. The Company has
      therefore restated the accounting for its acquisition of New-Tailun in its
      Unaudited Condensed Consolidated Balance Sheet and Unaudited Consolidated
      Statement of Stockholders' Equity. The Company's restatement had no effect
      on
      its net income or cash flows for the three months ended March 31,
      2007.
  A
      summary
      of significant effects of the restatement is as follows:
  **CONSOLIDATED
                  BALANCE SHEETS**
              
              As
                  of March 31, 2007PreviouslyRestated
              
              
              Adjustments
              
              
              Reported**CURRENT
                  ASSETS**Cash
                  and cash equivalents
              
              $
              1,298,417
              
              
              $
              
              
              
              $
              1,298,417Accounts
                  receivable, net of allowances
              
              
              4,934,186
              
              
              
              
              
              
              
              4,934,186Accounts
                  receivable - related companies
              
              
              2,266,184
              
              
              
              
              
              
              
              2,266,184Inventories,
                  net
              
              
              481,238
              
              
              
              
              
              
              
              481,238Other
                  receivables and prepaid expenses
              
              
              226,140
              
              
              
              
              
              
              
              226,140Total
                  Current Assets
              
              
              9,206,165
              
              
              
              
              
              
              
              9,206,165**GOODWILL,
                  NET**
              
              
              -
              
              
              
              (10,079,156
              )
              
              
              10,079,156**LAND
                  USE RIGHT, NET**
              
              
              2,530,324
              
              
              
              
              
              
              
              2,530,324**PROPERTY
                  AND EQUIPMENT, NET**
              
              
              13,220,710
              
              
              
              
              
              
              
              13,220,710**TOTAL
                  ASSETS**
              
              $
              24,957,199
              
              
              $
              
              
              
              $
              35,036,355**LIABILITIES
                  AND STOCKHOLDERS' EQUITY****CURRENT
                  LIABILITIES**Accounts
                  payable
              
              $
              1,123,106
              
              
              $
              
              
              
              $
              1,123,106Accounts
                  payable - related companies
              
              
              420,013
              
              
              
              
              
              
              
              420,013Due
                  to related parties
              
              
              2,678,129
              
              
              
              
              
              
              
              2,678,129Other
                  payables and accrued liabilities
              
              
              3,154,476
              
              
              
              
              
              
              
              3,154,476Value
                  added tax
              
              
              4,521,438
              
              
              
              
              
              
              
              4,521,438Income
                  tax payable and other taxes payable
              
              
              173,330
              
              
              
              
              
              
              
              173,330Notes
                  payable
              
              
              96,063
              
              
              
              
              
              
              
              96,063Total
                  Current Liabilities
              
              
              12,166,555
              
              
              
              
              
              
              
              12,166,555**COMMITMENTS
                  AND CONTINGENCIES**
              
              
              -
              
              
              
              
              
              
              
              -**LONG-TERM
                  LIABILITIES**Due
                  to a related company
              
              
              4,297,221
              
              
              
              
              
              
              
              4,297,221**TOTAL
                  LIABILITIES**
              
              
              16,463,776
              
              
              
              
              
              
              
              16,463,776**STOCKHOLDERS'
                  EQUITY**Preferred
                  stock ($.0001 par value, authorized 5,000,000 shares,Nil
                  shares issued and outstanding)
              
              
              -
              
              
              
              
              
              
              
              -Series
                  A Convertible Preferred Stock ($.0001 par value,authorized
                  10,000 shares, 7,883 shares issued andoutstanding)
              
              
              1
              
              
              
              
              
              
              
              1Common
                  stock ($.0001 par value, authorized 100,000,000 shares,issued
                  and outstanding 19,971,758 shares)
              
              
              1,997
              
              
              
              
              
              
              
              1,997Common
                  stock to be issued for acquisition (20,833,333 shares)
              
              
              2,083
              
              
              
              
              
              
              
              2,083Additional
                  paid-in capital
              
              
              161,666
              
              
              
              11,100,000
              
              
              
              11,261,666Retained
                  earningsUnappropriated
              
              
              5,162,441
              
              
              
              (782,264
              )
              
              
              4,380,177Appropriated
              
              
              2,425,711
              
              
              
              (195,566
              )
              
              
              2,230,145Accumulated
                  other comprehensive income
              
              
              739,524
              
              
              
              (43,014
              )
              
              
              696,510Total
                  Stockholders' Equity
              
              
              8,493,423
              
              
              
              
              
              
              
              18,572,579**TOTAL
                  LIABILITIES AND STOCKHOLDERS' EQUITY**
              
              $
              24,957,199
              
              
              $
              
              
              
              $
              35,036,355
 8
  **EVER-GLORY
      INTERNATIONAL GROUP, INC.**
 **AND
      SUBSIDIARIES**
 **NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
      OF MARCH 31, 2007 (UNAUDITED)**
 
 
 **NOTE
        3.    **PRINCIPLES
        OF CONSOLIDATION****
 
 The
      accompanying March 31, 2007 unaudited condensed consolidated financial
      statements include the accounts of EGLY and its 100% owned
      subsidiaries Perfect Dream, Goldenway and New-Tailun.  All significant
      inter-company balances and transactions have been eliminated in
      consolidation.
 
 **NOTE
        4.    **USE
        OF ESTIMATES****
 
 The
      preparation of the financial statements in conformity with generally accepted
      accounting principles requires management to make estimates and assumptions
      that
      affect the reported amount of assets and liabilities and disclosure of
      contingent assets and liabilities at the date of the financial statements and
      the reported amounts of revenues and expenses during the reporting period.
      Actual results could differ from those estimates.
 
 **NOTE
        5.    **CASH
        AND CASH EQUIVALENTS****
 
 For
      purpose of the unaudited condensed consolidated statements of cash flows, cash
      and cash equivalents include cash on hand and demand deposits with a bank with
      a
      maturity of less than 3 months.
 
 **NOTE
        6.    **LONG-LIVED
        ASSETS****
 
 The
      Company accounts for long-lived assets under the Statements of Financial
      Accounting Standards Nos. 142 and 144 “Accounting for Goodwill and Other
      Intangible Assets” and “Accounting for Impairment or Disposal of Long-Lived
      Assets” (“SFAS No. 142 and 144”).  In accordance with SFAS No. 142 and
      144, long-lived assets, goodwill and certain identifiable intangible assets
      held
      and used by the Company are reviewed for impairment whenever events or changes
      in circumstances indicate that the carrying amount of an asset may not be
      recoverable. For purposes of evaluating the recoverability of long-lived assets,
      when undiscounted future cash flows will not be sufficient to recover an asset’s
      carrying amount, the asset is written down to its fair value.
 
 **NOTE
        7.    **FAIR
        VALUE OF FINANCIAL INSTRUMENTS****
 
 Statement
      of Financial Accounting Standards No. 107, "Disclosure About Fair Value of
      Financial      Instruments," requires certain
      disclosures regarding the fair value of financial instruments.
      Trade   accounts receivable, accounts payable, and accrued
      liabilities are reflected in the financial statements at fair value because
      of
      the short-term maturity of the instruments. As these estimates are subjective
      in
      nature, involving uncertainties and matters of significant judgment, they cannot
      be determined with precision. Changes in assumptions can significantly affect
      estimated fair values.
 
 The
      carrying value of cash and cash equivalents, accounts receivable (trade and
      others), accounts payable (trade and related party) and accrued liabilities
      approximate their fair value because of the short-term nature of these
      instruments. The Company places its cash and cash equivalents with what it
      believes to be high credit quality financial institutions. The Company has
      a
      diversified customer base, most of which are in Europe, Japan, the United States
      and the PRC. The Company controls credit risk related to accounts receivable
      through credit approvals, credit limit and monitoring procedures. The Company
      routinely assesses the financial strength of its customers and, based upon
      factors surrounding the credit risk, establishes an allowance, if required,
      for
      uncollectible accounts and, as a consequence, believes that its accounts
      receivable credit risk exposure beyond such allowance is limited.
   9
  **EVER-GLORY
      INTERNATIONAL GROUP, INC.**
 **AND
      SUBSIDIARIES**
 **NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
      OF MARCH 31, 2007 (UNAUDITED)**
  **NOTE
        8.   **FOREIGN
        CURRENCY TRANSLATION****
 
 EGLY,
      Perfect Dream, Goldenway and New-Tailun maintain their accounting records in
      their functional currencies of US$, US$, RMB and RMB respectively.
 
 Foreign
      currency transactions during the year are translated to the functional currency
      at the approximate rates of exchange on the dates of
      transactions.  Monetary assets and liabilities denominated in foreign
      currencies at the balance sheet date are translated at the approximate rates
      of
      exchange at that date.  No-monetary assets and liabilities are
      translated at the rates of exchange prevailing at the time the asset or
      liability was acquired.  Exchange gains or losses are recorded in the
      statement of operations.
 
 **NOTE
        9.   **FOREIGN
        CURRENCY TRANSLATION****
 
 The
      financial statements of Goldenway and New-Tailun (whose functional currency
      is
      the RMB) are translated into US$ using the closing rate method.  The
      balance sheet items are translated into US$ using the exchange rates at the
      respective balance sheet dates.  The capital and various reserves are
      translated at historical exchange rates prevailing at the time of the
      transactions while income and expenses items are translated at the average
      exchange rate for the period.  All exchange differences are recorded
      within equity. Translation gain for the periods ended March 31, 2007 and 2006
      were $130,336and $87,061respectively.
 
 **NOTE
        10. **COMPREHENSIVE
        INCOME****
  The
      foreign currency translation gain or loss resulting from translation of the
      financial statements expressed in RMB to United States Dollar is reported as
      other comprehensive income in the statements of operations and stockholders’
equity.
 
 **NOTE
        11. **RECLASSIFICATION****
  Certain
      2006 balances in the Statement of Operation have been reclassified to conform
      with the 2007 presentation.
 
 **NOTE
        12. **INCOME
        PER SHARE****
  Basic
      income per share is computed by dividing income available to common stockholders
      by the weighted average number of common shares outstanding during the
      period.  Diluted income per share is computed similar to basic income
      per share except that the denominator is increased to include the number of
      additional common shares that would have been outstanding if the potential
      common shares had been issued and if the additional common shares were
      dilutive.
 
 **NOTE
        13. **SEGMENTS****
 
 The
      Company adopted Statement of Financial Accounting Standards No. 131, Disclosures
      about Segments of an Enterprise and Related Information (“SFAS 131”). SFAS
      establishes standards for operating information regarding operating segments
      in
      annual financial statements and requires selected information for those segments
      to be presented in interim financial reports issued to stockholders. SFAS 131
      also establishes standards for related disclosures about products and services
      and geographic areas. Operating segments are identified as components of an
      enterprise about which separate discrete financial information is available
      for
      evaluation by the chief operating decision maker, or decision making group,
      in
      making decision how to allocate resources and assess performance. The
      information disclosed herein, materially represents all of the financial
      information related to the Company’s principal operating segments. The Company
      operates in a single segment.
 
  10
  **EVER-GLORY
      INTERNATIONAL GROUP, INC.**
 **AND
      SUBSIDIARIES**
 **NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
      OF MARCH 31, 2007 (UNAUDITED)**
  **NOTE
        14. **RECENT
        ACCOUNTING PRONOUNCEMENTS****
 
 In
      July 2006, the FASB issued FASB Interpretation No. 48, Accounting for
      Uncertainty in Income Taxes—an Interpretation of FASB Statement 109 (“FIN 48”),
      which clarifies the accounting for uncertainty in tax positions. This
      Interpretation provides that the tax effects from an uncertain tax position
      can
      be recognized in the Company’s financial statements, only if the position is
      more likely than not of being sustained on audit, based on the technical merits
      of the position. The provisions of FIN 48 are effective as of the beginning
      of
      fiscal 2007, with the cumulative effect of the change in accounting principle
      recorded as an adjustment to opening retained earnings. We do not expect the
      adoption of FIN 48 to have an impact on the Company’s results of operations or
      financial condition.
  In
      September 2006, FASB issued Statement 157, Fair Value Measurements. This
      statement defines fair value and establishes a framework for measuring fair
      value in generally accepted accounting principles (GAAP). More precisely, this
      statement sets forth a standard definition of fair value as it applies to assets
      or liabilities, the principle market (or most advantageous market) for
      determining fair value (price), the market participants, inputs and the
      application of the derived fair value to those assets and liabilities. The
      effective date of this pronouncement is for all full fiscal and interim periods
      beginning after November 15, 2007. We do not expect the adoption of SFAS 157
      to
      have an impact on the Company’s results of operations or financial
      condition.
  In
      February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for
      Financial Assets and Financial Liabilities” (SFAS 159) which permits entities to
      choose to measure many financial instruments and certain other items at fair
      value that are not currently required to be measured at fair value. SFAS 159
      will become effective for us on January 1, 2008. The Company is currently
      evaluating the impact this new Standard, but believes that it will not have
      that
      it will not have a material impact on the Company’s financial
      position.
  **NOTE
        15. **INVENTORIES****
  Inventories
      at March 31, 2007 consisted of the following:
 Raw
                  materials
              
              $
              215,890Work-in-progress
              
              
              70,194Finished
                  goods
              
              
              195,154481,238Less:
                  provision of obsolescence
              
              
              -Inventories,
                  net
              
              $
              481,238
  11
  **EVER-GLORY
      INTERNATIONAL GROUP, INC.**
 **AND
      SUBSIDIARIES**
 **NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
      OF MARCH 31, 2007 (UNAUDITED)**
 
 **NOTE
        16.  **NOTES
        PAYABLE****
 
 Balance
      at March 31, 2007:
 Note
                  payable to a bank, interest rate of 0.4875% per month,
              
              
              645,920collateralized
                  by buildings of the Company, due April 18, 2007Note
                  payable to a bank, interest rate of 0.4875% per month,
              
              
              645,920collateralized
                  by buildings of the Company, due May 20, 2007Note
                  payable to a bank, interest rate of 0.4875% per month,
              
              
              645,920collateralized
                  by buildings of the Company, due June 20, 2007Note
                  payable to a bank, interest rate of 0.4875% per month,
              
              
              645,920collateralized
                  by buildings of the Company, due June 14, 2007Note
                  payable to a bank, interest rate of 0.4875% per month,
              
              
              645,920collateralized
                  by buildings of the Company, due June 26, 2007Note
                  payable to a bank, interest rate of 0.5036% per month,collateralized
                  by buildings of the Company, due June 26, 2007
              
              
              645,919Note
                  payable to a bank, interest rate of 0.5035% per month,collateralized
                  by buildings of the Company, due August 14, 2007
              
              
              645,9194,521,438Less:
                  current maturities
              
              
              (4,521,438
              )$
              -
 Maturities
      are as follows:
 For
                  the period ending March 31,2008
              
              $
              4,521,438
  Interest
      paid for the three months ended 2006 and 2005 was $73,595 and $9,936
      respectively.
  **NOTE
        17.  **NET
        INCOME PER SHARE****
 
 The
      following is net income per share information at March 31:
 2007
              
              
              2006Net
                  income
              
              $
              667,033
              
              
              $
              390,590Basic
                  weighted-average common stock outstanding
              
              
              40,805,091
              
              
              
              19,971,758Effect
                  of dilutive securitiesSeries
                  A Convertible Perferred Stock
              
              
              59,914,988
              
              
              
              59,914,988Diluted
                  weighted-average common stock outstanding
              
              
              100,720,079
              
              
              
              79,886,746Net
                  income per share - basic
              
              $
              0.02
              
              
              $
              0.02Net
                  income per share - diluted
              
              $
              0.01
              
              
              $
              0.00
  12
  **EVER-GLORY
      INTERNATIONAL GROUP, INC.**
 **AND
      SUBSIDIARIES**
 **NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
      OF MARCH 31, 2007 (UNAUDITED)**
 
 **NOTE
        18.  **SEGMENTS****
 
 The
      following is geographic information of the Company’s revenue from third parties
      for the period ended March 31:
 2007
              
              
              2006Europe
              
              $
              6,685,080
              
              
              $
              3,015,273United
                  States
              
              
              2,634,287
              
              
              
              1,344,675Japan
              
              
              1,765,787
              
              
              
              372,267The
                  People Republic of China
              
              
              317,547
              
              
              
              353,034Russia
              
              
              -
              
              
              
              144,271$
              11,402,701
              
              
              $
              5,229,520
  **NOTE
        19.  **SHAREHOLDERS’
        EQUITY****
 **(A)**  **Series
      A Convertible Preferred stock**
 
 The
      Company authorized 10,000 shares of Series A Convertible Preferred Stock, with
      a
      par value of $0.0001 per share.
 
 Each
      share of the Series A Convertible Preferred Stock had upon issuance the same
      voting, dividend and liquidation rights as 1,000 shares of common stock and
      will
      convert back into common stock at such time as the Company is able to increase
      the number of authorized shares of common stock. Effective November 8, 2006,
      the
      Company effected a 7.6-for-1 forward stock split on the remaining outstanding
      2,627,861 shares, which increased the number of outstanding shares to 19,971,743
      shares. Under the adjustment provisions of the Series A Convertible Preferred
      Stock, the conversion, voting, dividend and liquidation ratios of the Series
      A
      Convertible Preferred Stock were all increased by the forward stock split from
      1,000 for one to 7,600 for one (a total of 59,914,988 shares of common stock
      fully converted). The Series A Convertible Preferred Stock will be converted
      back into common stock at such time as the number of shares of authorized common
      stock is increased to 100,000,000 or more via a proposed amendment to the
      Articles of Incorporation. The relative voting and equity ownership of the
      Company’s stockholders was unchanged by the exchange for Series A Convertible
      Preferred Stock and the forward stock split. If all the Series A Convertible
      Preferred Stock were converted as of March 31, 2007, there would be 79,886,746
      outstanding shares of common stock.
 
 **(B)**  **Appropriated
      retained earnings**
 
 The
      Company’s PRC subsidiaries are required to make appropriations to reserve funds,
      comprising the statutory surplus reserve based on after-tax net income
      determined in accordance with generally accepted accounting principles of the
      People’s Republic of China (the “PRC GAAP”).  Appropriation to
      the statutory surplus reserve should be at least 10% of the after tax net income
      determined in accordance with PRC GAAP until the reserve is equal to 50% of
      the
      entities’ registered capital.
  13
  **EVER-GLORY
      INTERNATIONAL GROUP, INC.**
 **AND
      SUBSIDIARIES**
 **NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
      OF MARCH 31, 2007 (UNAUDITED)**
 
 **NOTE
        20. **RELATED
        PARTY TRANSACTIONS****
 
 During
      2007 and 2006, the Company sub-contracted certain manufacturing work valued
      at
      $539,338 and $692,456 respectively to five related companies which are
      controlled by a shareholder and director of the Company.  The Company
      provided the raw materials to the sub-contractor who charged the Company a
      fixed
      labor charge for the sub-contracting work.
 
 During
      2007, the Company purchased raw materials valued at $116,472 from a related
      company which is controlled by a shareholder and director of the
      Company.
 
 As
      of
      March 31, 2007 the Company owed $420,013, to four related companies which are
      controlled by a shareholder and director of the Company for sub-contracting
      work
      done and inventory purchases made.
 
 During
      2007 and 2006, the Company sold products and provided sub-contracting services
      totaling $27,016 and $Nil respectively to a related company which is controlled
      by a shareholder and director of the Company. As of March 31, 2007 accounts
      receivable from two related companies amounted to $68,387 for products sold
      and
      sub-contracting services provided.
 
 A
      related
      company which is controlled by a shareholder and director of the Company
      provides treasury services to the Company by negotiating all of the Company’s
      letters of credit and receiving proceeds thereon and paying creditors for
      inventory purchases made by the Company. As of March 31, 2007, Company is owed
      $2,197,797 from a related company.
 
 During
      2007 and 2006, the Company received rental income of $Nil and $4,670
      respectively for the lease of factory space to a related company which is
      controlled by a shareholder and director of the Company.
 
 During
      2007, the Company paid rent of $6,434 for factory and office spaces leased
      from
      a related company which is controlled by a shareholder and director of the
      Company.
 
 As
      of
      March 31, 2007 the Company owed an aggregate of $4,297,221 to a related company
      which is controlled by a shareholder and director of the Company for advances
      made. Interest is charged at 6% per annum on the amounts due. The loan is
      repayable to the related company between July 2010 and April 2011. During 2007
      and 2006, the Company paid interest of $58,695 and $Nil respectively to the
      related company.
 
 As
      of
      March 31, 2007, the Company owed $670,306 for advance to a related company
      which
      is owned by a stockholder. The amount is interest-free and is repayable on
      demand.
 
 As
      of
      March 31, 2007, the Company owed $7,823 for advance to a stockholder. The amount
      is interest-free and is repayable on demand.
 
 As
      of
      March 31, 2007, the Company owed $2,000,000 for merger of New-Tailun to a
      related company which owned by a stockholder.
 
 On
      November 9, 2006, the Company entered into a purchase agreement with a related
      company which is controlled by a shareholder and director of the Company whereby
      the related company sold all of its shares in New-Tailun to the
      Company.  Pursuant to the terms of the purchases agreement, the
      Company will pay to a related company an amount of $2,000,000 in cash and common
      stock of EGLY equivalent to $10,000,000 on the date of the transfer within
      90
      days of the closing of the New-Tailun transaction.  As of March 31,
      2007, the Company owed $2,000,000 and 20,833,333 shares of the EGLY’s restricted
      common stock to a related company for consideration of the New-Tailun
      transaction.
  14
  **EVER-GLORY
      INTERNATIONAL GROUP, INC.**
 **AND
      SUBSIDIARIES**
 **NOTES
      TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS**
 **AS
      OF MARCH 31, 2007 (UNAUDITED)**
 
 **NOTE
        21. **COMMITMENTS****
 
 (A)
            Capital
                commitment
 
 According
      to the Articles of Association of Goldenway, Goldenway has to fulfill registered
      capital requirements of $17,487,894 within three years from February 2,
      2005.  As of December 31, 2006, the Company has fulfilled $2,630,000
      of its registered capital requirements and has a registered capital commitment
      of $14,857,894, which is payable by February 1, 2008.
 
 (B)
            Operating
                lease commitment
 
 The
      Company leases factory and office spaces from a related company under an
      operating lease which expires on March 31, 2008 at an annual rental of
      $25,735.  Accordingly, for the period ended March 31, 2007, the
      Company recognized rental expense for these spaces in the amount of
      $6,434.
 
 As
      of
      March 31, 2007, the Company has outstanding commitments of $25,735 with respect
      to the above non-cancelable operating lease, which are due in 2008.
 
 **NOTE
        22. **CONTINGENCIES****
 
 The
      Company accounts for loss contingencies in accordance with SFAS 5 “Accounting
      for Loss Contingencies”, and other related guidance. Set forth below is a
      description of certain loss contingencies as of December 31, 2006 and
      management’s opinion as to the likelihood of loss in respect of each loss
      contingency.
  On
      April
      17, 2006, Mark B. Aronson filed a Complaint against the Company in the United
      States Court of common pleas of Allegheny County Pennsylvania. The action
      alleges that Company violated the Pennsylvania Unsolicited Telecommunication
      Advertisement Act to spam emails to plaintiff to purchase its shares of common
      stock. The action seeks an award of damages in excess of $12,100. The Company
      denies that it was a party to such email spamming activities and intends to
      vigorously defend its legal position.
  In
      September 2006, the Company filed responses to plaintiff's interrogatories
      with
      the court of common pleas of Allegheny County in Pennsylvania to vigorously
      defend Mr. Aronson's accusation that the company has used faxes to promote
      its
      stock and the Complaint was voluntarily dismissed by the Plaintiff without
      prejudice from an action pending in the U.S. District Court for the Northern
      District of Ohio. No payment was made to plaintiff and no settlement agreement
      was entered into between the Company and plaintiff.
  Accordingly,
      no provision has been made to the above claim as of March 31, 2007.
  **NOTE
        23. **CONCENTRATIONS
        AND RISKS****
 
 During
      2007, 100% of the Company’s assets were located in China.
 
 The
      Company principally relied on two customers for its revenue during the first
      quarter of 2007 and on three customers for its revenue during the first quarter
      of 2006, detail of which are as follows:
  Customer
                  A
              
              
              Customer
                  B
              
              
              Customer
                  CDuring2007
              
              
              40
              %
              
              
              15
              %2006
              
              
              27
              %
              
              
              21
              %
              
              
              15
              %
  At
      March
      31, 2007, accounts receivable to those customers totaled
      $2,658,399.
 
 The
      Company relied on two suppliers for approximately $218,627, representing 26%
      in
      aggregate of raw materials purchased from those suppliers in
      2006.
  15
  
 **RISK
        FACTORS**
 
 Our
      business is subject to certain risks, and we want you to review these risks
      while you are evaluating our business and our historical results. Please keep
      in
      mind that any of the following risks discussed below and elsewhere in this
      Annual Report could materially and adversely affect us, our operating results,
      our financial condition and our projections and beliefs as to our future
      performance. As such, our results could differ materially from those projected
      in our forward-looking statements.
 
 Risks Relating to the Industry in Which We
      Compete.
 
 **Our
      sales are influenced by general economic cycles. A prolonged period of depressed
      consumer spending would have a material adverse affect our
      profitability.**
 
 Apparel
      is a cyclical industry that is dependent upon the overall level of consumer
      spending. Purchase of apparel generally decline during recessionary periods
      when
      disposable income is low. Our customers anticipate and respond to adverse
      changes in economic conditions and uncertainty by reducing inventories and
      canceling orders. As a result, any substantial deterioration in general economic
      conditions, increases in energy costs or interest rates, acts of war, acts
      of
      nature or terrorist or political events that diminish consumer spending and
      confidence in any of the regions in which we compete, could reduce our sales
      and
      adversely affect our business and financial condition.
 
 **Intense
      competition in the worldwide apparel industry could reduce our sales and
      prices.**
 
 We
      face a
      variety of competitive challenges from other apparel manufacturers both in
      China
      and elsewhere. Some of these competitors have greater financial and marketing
      resources than we do and may be able to adapt to changes in consumer preferences
      or retail requirements more quickly, devote greater resources to the marketing
      and sale of their products or adopt more aggressive pricing policies than we
      can. As a result, we may not be able to compete successfully with them if we
      cannot continue enhancing our marketing and management strategies, quality
      and
      value or responding appropriately to consumers needs.
 
 **The
      success of our business depends upon our ability to offer innovative and
      upgraded products at attractive price points.**
 
 The
      worldwide apparel industry is characterized by constant product innovation
      due
      to changing consumer preferences and by the rapid replication of new products
      by
      competitors. As a result, our success depends in large part on our ability
      to
      continuously and rapidly respond to customer requirements for innovative and
      stylish products at a competitive pace, intensity, and price. Failure on our
      part to regularly and rapidly respond to customer requirements could adversely
      affect our ability to retain our existing customers or to acquire new customers
      which would limit our sales growth.
 
 **The
      worldwide apparel industry is subject to ongoing pricing
      pressure.**
 
 The
      apparel market is characterized by low barriers to entry for both suppliers
      and
      marketers, global sourcing through suppliers located throughout the world,
      trade
      liberalization, continuing movement of product sourcing to lower cost countries,
      ongoing emergence of new competitors with widely varying strategies and
      resources, and an increasing focus on apparel in the mass merchant channel
      of
      distribution. These factors contribute to ongoing pricing pressure throughout
      the supply chain. This pressure has and may continue to:
  ·
            require
                us to reduce wholesale prices on existing
                products;
 
 ·
            result
                in reduced gross margins across our product
                lines;
 
 ·
            increase
                pressure on us to further reduce our production costs and our operating
                expenses.
 
 Any
      of
      these factors could adversely affect our business and financial
      condition.
  16
  **Fluctuation
      in the price, availability and quality of raw
      materials could increase our cost of goods and decrease our
      profitability.**
 
 We
      purchase raw materials directly from local fabric and accessory suppliers.
      The
      Company may also import specialty fabrics to meet specific customer
      requirements. The Company also purchases finished goods from other contract
      manufacturers. The prices we charge for our products are dependent in part
      on
      the market price for raw materials used to produce them. The price, availability
      and quality of our raw materials may fluctuate substantially, depending on
      a
      variety of factors, including demand, crop yields, weather patterns, supply
      conditions, transportation costs, government regulation, economic climates
      and
      other unpredictable factors. Any raw material price increases could increase
      our
      cost of goods and decrease our profitability unless we are able to pass higher
      prices on to our customers.
 
 One
      supplier represented approximately 15% of the Company’s raw materials purchases
      in the fiscal year ended December 31, 2006, two suppliers represented
      approximately 12% and 10%, respectively of the Company’s raw materials purchases
      in the fiscal year ended December 31, 2005, and one supplier represented
      approximately 17% of the Company’s raw materials purchases in the fiscal year
      ended December 31, 2004. We do not have long-term written agreements with any
      of
      these suppliers and do not anticipate entering into any such agreements in
      the
      near future. However, we always execute a written agreement for each order
      placed with our suppliers. We do not believe that loss on any of these suppliers
      would have a material adverse affect on our ability to obtain finished goods
      or
      raw materials essential to its business because we believe we can locate other
      suppliers in a timely manner.
 
 **Risks
        Relating to Our Business**
 
 **We
      depend on a group of key customers for a significant portion of our sales.
      A
      significant adverse change in a customer relationship or in a customer’s
      performance or financial position could harm our business and financial
      condition.**
 
 Net
      sales
      to our two largest customers totaled approximately 55% and 48 % of total net
      sales in the first quarter of 2007 and 2006, respectively. Our largest customer
      accounted for approximately 40% and 27% of net sales for the three months ended
      March 31, 2007 and 2006. The garment manufacturing industry has experienced
      substantial consolidation in recent years, which has resulted in increased
      customer leverage over suppliers, greater exposure for suppliers to credit
      risk
      and an increased emphasis by customers on inventory management and
      productivity.
 
 A
      decision by a major customer, whether motivated by competitive considerations,
      strategic shifts, financial requirements or difficulties, economic conditions
      or
      otherwise, to decrease its purchases from us or to change its manner of doing
      business with us, could adversely affect our business and financial condition.
      In addition, while we have long-standing customer relationships, we do not
      have
      long term contracts with any of our customers. As a result, purchases generally
      occur on an order-by-order basis, and the relationship, as well as particular
      orders, can generally be terminated by either party at any time. We do not
      believe that there is a material risk of loss of any of these customers during
      the next 12 months. We also believe that the unexpected loss of these four
      customers could have material adverse effect on the Company’s earnings or
      financial condition. While we believe that we could replace these three
      customers within 12 months, the loss of which will not have material adverse
      effects on our financial condition in a long run. None of the Company or its
      affiliates are officers, directors or material shareholders of any of these
      three customers.
 
 **Our
        internal controls and procedures have been materially deficient, and we are
        in
        the process of correcting internal control
        deficiencies.**
 
 In
        the
        second quarter of 2007, resulting from comments by and discussions with the
        Staff of the SEC related to the Company’s Preliminary Information Statement on
        Form 14C, the Company and its independent registered public accounting firm
        recognized that our internal controls had material weaknesses.  We are
        restating our results of operations for the year ended December 31, 2006
        and our
        quarterly results for the quarter ended March 31, 2007 as a result of our
        purchase accounting for the acquisition of New-Tailun completed on December
        30,
        2006.
 
 If
        we
        cannot rectify these material weaknesses through remedial measures and
        improvements to our systems and procedures, management may encounter
        difficulties in timely assessing business performance and identifying incipient
        strategic and oversight issues. Management is currently focused on remedying
        internal control deficiencies, and this focus will require management from
        time
        to time to devote its attention away from other planning, oversight and
        performance functions.
 
 We
        cannot
        provide assurances as to the timing of the completion of these efforts. We
        cannot be certain that the measures we take will ensure that we implement
        and
        maintain adequate internal controls in the future. Any failure to implement
        required new or improved controls, or difficulties encountered in their
        implementation, could harm our operating results or cause us to fail to meet
        our
        reporting obligations.
  17
  **We
      will be required to evaluate our internal control over financial reporting
      under
      Section 404 of the Sarbanes-Oxley Act.**
 
 Failure
      to timely comply with the requirements of Section 404 or any adverse results
      from such evaluation could result in a loss of investor confidence in our
      financial reports and have an adverse effect on the trading price of our debt
      securities.  We are not currently an “accelerated filer”
as defined in Rule 12b-2 under the Securities
      Exchange Act of 1934, as amended.
      Beginning with our Annual Report for the year ending December 31, 2007, Section
      404 of the Sarbanes-Oxley Act of 2002 will require us to include an internal
      control report with our Annual Report on Form 10-KSB. That report must include
      management’s assessment of the effectiveness of our internal control over
      financial reporting as of the end of the fiscal year. This report must also
      include disclosure of any material weaknesses in internal control over financial
      reporting that we have identified. Additionally, our independent registered
      public accounting firm will be required to issue reports on management’s
      assessment of our internal control over financial reporting and their evaluation
      of the operating effectiveness of our internal control over financial reporting.
      the auditor’s report is required for financial year ending December 31, 2008.
      Our assessment requires us to make subjective judgments and our independent
      registered public accounting firm may not agree with our
      assessment.
 
 Achieving
      compliance with Section 404 within the prescribed period may require us to
      incur
      significant costs and expend significant time and management resources. If
      we
      are not able to complete the assessment under Section 404 in a timely manner,
      we
      and our independent registered public accounting firm would be unable to
      conclude that our internal control over financial reporting is effective as
      of
      December 31, 2007. As a result, investors could lose confidence in our reported
      financial information, which could have an adverse effect on the trading price
      of our debt securities. In addition, our independent registered public
      accounting firm may not agree with our management’s assessment or conclude that
      our internal control over financial reporting is operating effectively. We
      will
      continue to consistently improve our internal control over the financial
      reporting with our best efforts and with the assistance from outside
      experts.
 
 **As
      the Company is listed on the over-the-counter bulletin board, the Company is
      subject to less stringent corporate governance requirements than a company
      listed on a national exchange. Specifically, the Company is not required to
      have
      a majority of independent directors or a separate audit committee. This provides
      less protection to our investors.**
 
 The
      Company’s board of directors currently does not have a separate audit committee
      or a member that qualifies as an audit committee financial expert or an
      independent director. The Company’s management and board of directors are
      considering the addition of an independent director who qualified as a financial
      expert but there can be no assurance the Company will be able to attract one
      or
      more qualified independent directors or that any such directors can be added
      to
      the Company’s board as it may require us to increase the number of director on
      the Company’s board of directors, seek the resignation of directors who are not
      independent, or some combination thereof. If the Company is unable to attract
      qualified independent directors or nominate or elect such directors, the
      Company’s security holders will not have the protections provided by having
      independent directors or audit committee members. Although we believe that
      all
      actions taken by our directors on our behalf will be in our best interests,
      whether or not they are deemed to be independent, we cannot assure you that
      this
      will actually be the case. If actions are taken, or expenses are incurred that
      are not in our best interests, it could have a material adverse effect on our
      business and operations and the price of our stock held by our
      stockholders.
 
 **We
      must successfully maintain and/or upgrade our information technology
      systems.**
 
 We
      rely
      on various information technology systems to manage our operations and we
      regularly evaluate these systems against our current and expected requirements.
      Although we have no current plans to implement modifications or upgrades to
      our
      systems, we will eventually be required to make changes to legacy systems and
      acquiring new systems with new functionality. We do anticipate that the
      aggregate cost of updating such systems will be approximately USD 600,000 over
      the next 36 months. We will also continue to self-develop and update our
      information systems on a timely basis to meet our business expansion
      needs****Any information technology system disruptions, if
      not anticipated and appropriately mitigated, could have an adverse effect on
      our
      business and operations.
  18
  **We
      may engage in future acquisitions and strategic investments
      that dilute the ownership percentage of our shareholders and require the use
      of
      cash, incur debt or assume contingent liabilities.**
 
 As
      part
      of our business strategy, we expect to continue to review opportunities to
      buy
      or invest in other businesses or technologies that we believe would enhance
      our
      manufacturing capabilities, or that may otherwise offer growth opportunities.
      If
      we buy or invest in other businesses in the future, we could: require the use
      of
      cash, incur debt or assume contingent liabilities.
 
 As
      part
      of our business strategy, we expect to continue to review opportunities to
      buy
      or invest in other businesses or technologies that we believe would complement
      our current products, expand the breadth of our markets or enhance our technical
      capabilities, or that may otherwise offer growth opportunities. If we buy or
      invest in other businesses, products or technologies in the future, we
      could:
  ·
            incur
                significant unplanned expenses and personnel
                costs;
 
 ·
            issue
                stock that would dilute our current shareholders’ percentage
                ownership;
 
 ·
            use
                cash, which may result in a reduction of our
                liquidity;
 
 ·
            incur
                debt;
 
 ·
            assume
                liabilities; and
 
 ·
            spend
                resources on unconsummated
                transactions.
 
 **We
      may not realize the anticipated benefits of past or future acquisitions and
      strategic investments, and integration of acquisitions may disrupt our business
      and management.**
 
 We
      may in
      the future acquire or make strategic investments in additional companies. We
      may
      not realize the anticipated benefits of these or any other acquisitions or
      strategic investments, which involve numerous risks, including:
 
 ·
            problems
                integrating the purchased operations, technologies, personnel or
                products
                over geographically disparate
                locations;
 
 ·
            unanticipated
                costs, litigation and other contingent
                liabilities;
 
 ·
            diversion
                of management’s attention from our core
                business;
 
 ·
            adverse
                effects on existing business relationships with suppliers and
                customers;
 
 ·
            incurrence
                of acquisition-related costs or amortization costs for acquired intangible
                assets that could impact our operating
                results;
 
 ·
            inability
                to retain key customers, distributors, vendors and other business
                partners
                of the acquired business; and
 
 ·
            potential
                loss of our key employees or the key employees of an acquired
                organization.
  19
  If
      we are not be able to successfully integrate businesses,
      products, technologies or personnel that we acquire, or to realize expected
      benefits of our acquisitions or strategic investments, our business and
      financial results may be adversely affected.
 
 **International
      political instability and concerns about other international crises may increase
      our cost of doing business and disrupt our business.**
 
 International
      political instability may halt or hinder our ability to do business and may
      increase our costs. Various events, including the occurrence or threat of
      terrorist attacks, increased national security measures in the United States
      and
      other countries, and military action and armed conflicts, can suddenly increase
      international tensions. Increases in energy prices will also impact our costs
      and could harm our operating results. In addition, concerns about other
      international crises, such as the spread of severe acute respiratory syndrome
      (“SARS”), avian influenza, or bird flu, and West Nile viruses, may have an
      adverse effect on the world economy and could adversely affect our business
      operations or the operations of our OEM partners, contract manufacturer and
      suppliers. This political instability and concerns about other international
      crises may, for example:
 
 ·
            negatively
                affect the reliability and cost of
                transportation;
 
 ·
            negatively
                affect the desire and ability of our employees and customers to
                travel;
 
 ·
            adversely
                affect our ability to obtain adequate insurance at reasonable rates;
                and
 
 ·
            require
                us to take extra security precautions for our
                operations.
 
 Furthermore,
      to the extent that air or sea transportation is delayed or disrupted, our
      operations may be disrupted, particularly if shipments of our products are
      delayed.
 
 **Business
      interruptions could adversely affect our business.**
 
 Our
      operations and the operations of our suppliers and customers are vulnerable
      to
      interruption by fire, earthquake, hurricanes, power loss, telecommunications
      failure and other events beyond our control. In the event of a major natural
      disaster, we could experience business interruptions, destruction of facilities
      and loss of life. In the event that a material business interruption occurs
      that
      affects us or our suppliers or customers, shipments could be delayed and our
      business and financial results could be harmed.
 
 **The
      market for the Company’s common stock is illiquid.**
 
 The
      Company’s common stock is traded on the Over-the-Counter Bulletin Board. It is
      thinly traded compared to larger more widely known companies in its industry.
      Thinly traded common stock can be more volatile than stock trading in an active
      public market. The Company cannot predict the extent to which an active public
      market for its common stock will develop or be sustained. The high and low
      bid
      price of Ever-Glory’s common stock during the past 52 week period is $1.87 and
      $0.27 respectively.
  20
  **Our
      stock is a penny stock. Trading of our stock may be
      restricted by the SEC’s penny stock regulations which may limit a stockholder’s
      ability to buy and sell our stock.**
 
 Our
      stock is a penny stock. The Securities and Exchange Commission has adopted
      Rule
      15g-9 which generally defines “penny stock” to be any equity security that has a
      market price (as defined) less than $5.00 per share or an exercise price of
      less
      than $5.00 per share, subject to certain exceptions. Our securities are covered
      by the penny stock rules, which impose additional sales practice requirements
      on
      broker-dealers who sell to persons other than established customers and
      accredited investors. The penny stock rules require a broker-dealer, prior
      to a
      transaction in a penny stock not otherwise exempt from the rules, to deliver
      a
      standardized risk disclosure document in a form prepared by the SEC which
      provides information about penny stocks and the nature and level of risks in
      the
      penny stock market. The broker-dealer also must provide the customer with
      current bid and offer quotations for the penny stock, the compensation of the
      broker-dealer and its salesperson in the transaction and monthly account
      statements showing the market value of each penny stock held in the customer’s
      account. The bid and offer quotations, and the broker-dealer and salesperson
      compensation information, must be given to the customer orally or in writing
      prior to effecting the transaction and must be given to the customer in writing
      before or with the customer’s confirmation. In addition, the penny stock rules
      require that prior to a transaction in a penny stock not otherwise exempt from
      these rules, the broker-dealer must make a special written determination that
      the penny stock is a suitable investment for the purchaser and receive the
      purchaser’s written agreement to the transaction. These disclosure requirements
      may have the effect of reducing the level of trading activity in the secondary
      market for the stock that is subject to these penny stock rules. Consequently,
      these penny stock rules may affect the ability of broker-dealers to trade our
      securities. **We believe that the penny stock rules discourage investor
      interest in and limit the marketability of our common
      stock.**
 
 **NASD
      sales practice requirements may also limit a stockholder’s ability to buy and
      sell our stock.**
 
 In
      addition to the “penny stock” rules described above, the NASD has adopted rules
      that require that in recommending an investment to a customer, a broker-dealer
      must have reasonable grounds for believing that the investment is suitable
      for
      that customer. Prior to recommending speculative low priced securities to their
      non-institutional customers, broker-dealers must make reasonable efforts to
      obtain information about the customer’s financial status, tax status, investment
      objectives and other information. Under interpretations of these rules, the
      NASD
      believes that there is a high probability that speculative low priced securities
      will not be suitable for at least some customers. The NASD requirements make
      it
      more difficult for broker-dealers to recommend that their customers buy our
      common stock, which may limit your ability to buy and sell our stock and have
      an
      adverse effect on the market for our shares.
 
 **Because
      our assets are located overseas, stockholders may not receive distributions
      that
      they would otherwise be entitled to if we were declared bankrupt or
      insolvent.**
 
 Our
      assets are, for the most part, located in the PRC. Because the Company’s assets
      are located overseas, the assets of the Company may be outside of the
      jurisdiction of U.S. courts to administer if the Company was the subject of
      an
      insolvency or bankruptcy proceeding. As a result, if the Company was declared
      bankrupt or insolvent, the Company’s stockholders may not receive the
      distributions on liquidation that they are otherwise entitled to under U.S.
      bankruptcy law.
 
 **Export
      quotas imposed by the WTO could negatively affect our business and operations,
      particularly if the Chinese government changes its allocation of such quotas
      to
      the Company.**
 
 Pursuant
      to the World Trade Organization (WTO) Agreement, effective January 1, 2005,
      the
      United States and other WTO member countries removed quotas from WTO members.
      In
      certain instances, the elimination of quotas affords the Company greater access
      to foreign markets; however, as the removal of quotas resulted in an import
      surge from China, the U.S. took action in May 2005 and imposed safeguard quotas
      on seven categories of goods, including certain classes of apparel products.
      Exports of each specified product category will continue to be
      admitted into the United States in the ordinary course until the restraint
      level
      for that category is reached, after which further exports will be embargoed
      and
      will not be cleared until after January 2006. Additionally, on September 10,
      2005, in response to the surge of Chinese imports into the European Union (EU),
      the EU Commission signed a Memorandum of Understanding (MOU) with China in
      which
      ten categories of textiles and apparel will be subject to
      restraints.
 
 Although
      certain of the Company’s apparel products fall within the categories subject to
      the quotas with respect to exports to the United States and Europe, the Chinese
      government allocated a portion of the aggregate export quota to the Company
      based upon the amount of product that the Company exported in the prior year.
      The imposition of such quotas did not have a material affect on the Company’s
      net sales. See “Results of Operations” above. As a result of the Company’s prior
      export performance, it was awarded a sufficient portion of the export quotas
      to
      enable it to increase its sales to customers in Europe and the U.S. despite
      the
      reinstitution of export quotas. In order to increase the Company’s allocation of
      future export quotas, however, the Company will continue accepting orders from
      its customers. The Company believes that its customer mix and its ability to
      adjust the types of apparel it manufactures will mitigate its exposure to such
      trade restrictions in the future. However, there can be no assurance that
      additional trade restrictions will not be imposed on the exports of the
      Company’s products in the future. Such actions could result in increases in the
      cost of its products generally and may adversely affect the Company’s results of
      operations. The Company continues to monitor the developments described
      above.
  21
  **We
      expect to experience volatility in our stock price, which could negatively
      affect shareholders’ investments.**
 
 The
      market price for shares of the Company’s common stock may be volatile and may
      fluctuate based upon a number of factors, including, without limitation,
      business performance, news announcements or changes in general market
      conditions.
 
 Other
      factors, in addition to the those risks included in this section, that may
      have
      a significant impact on the market price of the Company’s common stock include,
      but are not limited to:
 
 ·
            receipt
                of substantial orders or order cancellations of
                products;
 
 ·
            quality
                deficiencies in services or
                products;
 
 ·
            international
                developments, such as technology mandates, political developments
                or
                changes in
                economic  policies;
 
 ·
            changes
                in recommendations of securities
                analysts;
 
 ·
            shortfalls
                in the Company’s backlog, revenues or earnings in any given period
                relative to the levels expected  by securities analysts or
                projected by the Company;
 
 ·
            government
                regulations, including stock option accounting and tax
                regulations;
 
 ·
            energy
                blackouts;
 
 ·
            acts
                of terrorism and war;
 
 ·
            widespread
                illness;
 
 ·
            proprietary
                rights or product or patent
                litigation;
 
 ·
            strategic
                transactions, such as acquisitions and
                divestitures;
 
 ·
            rumors
                or allegations regarding the Company’s financial disclosures or practices;
                or
 
 ·
            earthquakes
                or other natural disasters concentrated in Nanjing, China where a
                significant portion of the Company’s operations are
                based.
  In
      the
      past, securities class action litigation has often been brought against a
      company following periods of volatility in the market price of its securities.
      Due to changes in the volatility of the Company’s common stock price, the
      Company may be the target of securities litigation in the future. Securities
      litigation could result in substantial costs and divert management’s attention
      and resources.
  22
  **ITEM
        3. CONTROLS AND PROCEDURES**
 
 **Disclosure
      Controls and Procedures**
 
 Internal
          Controls
 
 Under
          the
          supervision and with the participation of our management, including our
          chief
          executive officer and our chief financial officer, we have assessed the
          effectiveness of the design and operation of our disclosure controls and
          procedures pursuant to Securities Exchange Act of 1934 Rule 13a-15(e) as
          of the
          end of the period covered by this report. Based on that assessment, our
          management has concluded that our internal control over financial reporting
          was
          not effective as of March 31, 2007 because of the material weaknesses identified
          and described below.
 
 Control
          Activities:
 
 The
          Company did not maintain effective controls to ensure the completeness,
          accuracy
          and valuation over the accounting for business combinations, including
          the
          inability to prepare financial statements and footnotes in accordance with
          SEC
          rules and regulations and with our 2006 acquisition of New-Tailun. We misapplied
          generally accepted accounting principles whereby we did not value the
          acquisitions and record the resulting purchase accounting in accordance
          with
          SFAS 141 and EITF 02-5. As a result, we were required to restate our financial
          results for the year ended December 31, 2006 and for the three months ended
          March 31, 2007. Management determined that the disclosure controls and
          procedures for these periods were not effective.
 Remediation
          of Material Weaknesses in Internal Control over Financial Reporting
 
 In
          light
          of the need for these restatements and the material weaknesses described
          above,
          management will undertake a review of our disclosure, financial information
          and
          internal controls and procedures regarding these areas for future complex
          financing transactions and acquisitions. This review will include efforts
          by our
          management and directors, as well as the use of additional outside resources,
          as
          follows:
 
 ·
                Senior
                    accounting personnel and our chief financial officer will continue
                    to
                    review any future acquisition or divestiture in order to evaluate,
                    document and approve its accounting treatment in accordance with
                    SFAS 141
                    and EITF 02-5; and
 
 ·
                We
                    will augment, as necessary, such procedures by obtaining concurrence
                    with
                    independent outside accounting experts prior to finalizing financial
                    reporting for such transactions;
                    and
 
 ·
                In
                    conjunction with the measures outlined below, we believe these
                    actions
                    will strengthen our internal control over our valuation and purchase
                    accounting of acquisitions, and this material weakness should
                    be resolved.
                    Management does not anticipate any extra cost from this change
                    over the
                    review of our valuation and purchase accounting of future
                    acquisitions.
 
 We
          believe that we will satisfactorily address the control deficiencies and
          material weakness relating to these matters by the end of the third quarter
          of
          2007, although there can be no assurance that we will do so.
 
 Given
          the
          presence of material weaknesses in our internal control over financial
          reporting, there is a more than a remote likelihood that a material misstatement
          of the annual or interim financial statements will not be prevented or
          detected.
          Our financial reporting process includes extensive procedures we undertake
          in
          order to obtain assurance regarding the reliability of our published financial
          statements, notwithstanding the material weaknesses in internal control.
          We have
          expanded our review of accounting for business combinations to help compensate
          for our material weaknesses in order to provide assurance that the financial
          statements are free of material inaccuracies or omissions of material fact.
          As a
          result, management, to the best of its knowledge, believes that (i) the
          report
          does not contain any untrue statements of a material fact or omits any
          material
          fact and (ii) the consolidated financial statements and other financial
          information included in this report for the quarter ended March 31, 2007
          has
          been prepared in conformity with GAAP and fairly present in all material
          aspects
          our financial condition, results of operations and cash flows.
 
 Management,
          including our chief executive officer and our chief financial officer,
          does not
          expect that our disclosure controls and internal controls will prevent
          all error
          or all fraud, even as the same are improved to address any deficiencies
          and/or
          weaknesses. A control system, no matter how well conceived and operated,
          can
          provide only reasonable, not absolute, assurance that the objectives of
          the
          control system are met. Over time, controls may become inadequate because
          of
          changes in conditions or deterioration in the degree of compliance with
          policies
          or procedures. Further, the design of a control system must reflect the
          fact
          that there are resource constraints, and the benefits of controls must
          be
          considered relative to their costs. Because of the inherent limitations
          in all
          control systems, no evaluation of controls can provide absolute assurance
          that
          all control issues and instances of fraud, if any, within the Company have
          been
          detected. These inherent limitations include the realities that judgments
          in
          decision-making can be faulty, and that breakdowns can occur because of
          simple
          error or mistake. Additionally, controls can be circumvented by the individual
          acts of some persons, by collusion of two or more people, or by management
          override of the control.
  23
 **Changes
        in internal control over financial reporting.**
 
 There
      were no changes in our internal control over financial reporting (as defined
      in
      Rule 13a-15(f) of the Exchange Act) during the fiscal quarter ended March 31,
      2007 that have materially affected, or are reasonably likely to materially
      affect, our internal control over financial reporting.
 
 **PART
        II - OTHER INFORMATION**
  **ITEM
        1.   LEGAL PROCEEDINGS**
 
 The
      Company is a named defendant in an action pending in the U.S. District Court
      for
      the Northern District of Ohio. The action was filed on February 22, 2006 by
      Plaintiff Douglas G. Furth. The other principal parties are named defendants
      John Zanic, Wilson-Davis & Co., and Godwin, Pappas, Longley & Ronquillo,
      LLP. The action alleges that Company breached an agreement with the plaintiff
      under which it had promised to provide plaintiff 1,000,000 shares of its common
      stock in exchange for certain assistance in marketing and financial public
      relations services. The action seeks an award of damages in excess of $75,000.
      The Company denies that it was a party to such an agreement, that it breached
      the agreement or that it is otherwise liable. The Company intends to vigorously
      defend its legal position. After vigorously defending itself, the Company was
      voluntarily dismissed by the Plaintiff without prejudice from an action pending
      in the U.S. District Court for the Northern District of Ohio. No payment was
      made to plaintiff and no settlement agreement was entered into between the
      Company and plaintiff.
  **ITEM
        2.   **UNREGISTERED
        SALES OF EQUITY SECURITIES AND USE OF
        PROCEEDS****
  None.
  **ITEM
        3.   **DEFAULTS
        UPON SENIOR SECURITIES****
  None.
 **ITEM
        4.  **SUBMISSION
        OF MATTERS TO A VOTE OF
        SECURITYHOLDERS****
  None.
  **ITEM
        5.  **OTHER
        INFORMATION****
  None.
  **ITEM
          6.   **EXHIBITS****
 
 The
      following exhibits are filed herewith
 
 Exhibit
                No.
            Description31.1
            Certifications
                pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange
                Act
                of 1934, as amended, as adopted pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002.31.2
            Certifications
                pursuant to Rule 13a-14(a) or 15d-14(a) under the Securities Exchange
                Act
                of 1934, as amended, as adopted pursuant to Section 302 of the
                Sarbanes-Oxley Act of 2002.32.1
            Certifications
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002.32.2
            Certifications
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002.
  24
  **SIGNATURES**
  In
      accordance with the requirements of the Exchange Act, the registrant caused
      this
      Report on Form 10-QSB to be signed on its behalf by the undersigned, thereunto
      duly authorized.
 
 
 EVER-GLORY
                    INTERNATIONAL GROUP, INC.By:
              /s/Guo
                  YanDate:July
                  11, 2007
              
              Guo
                  YanChief
                  Financial Officer(Principal
                  Financial and Accounting
                  Officer)
   25