U.S. Securities and Exchange Commission 
Washington, D.C. 20549  FORM 10-QSB/A   xQUARTERLY REPORT
UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended
September 30, 2005 oTRANSITION 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 
incorporation or organization)
    
    (IRS. Employer identification No.)17870 Castleton Street, #335 
City of Industry, California
    
    91748(Address of principal executive offices)
    
    (Zip Code)  (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 xNo o Indicate by check mark whether the registrant is a
shell company (as defined in Rule 12b-2 of the Exchange Act).Yes oNo x Number of shares of common stock outstanding as of September 30, 2005: 79,886,730
   INDEX TO FORM 10-QSB/APage No.PART IItem 1. Financial Statements  UnauditedCondensed Consolidated Balance Sheet  September 30, 2005 (Unaudited)

3Condensed Consolidated Statements of Operations and Comprehensive Income - Three
                    Months and Nine Months Ended September 30, 2005 and 2004 (Unaudited)

4Condensed Consolidated Statements of Cash Flows  Nine Months Ended September

530, 2005 and 2004 (Unaudited)Notes to Condensed Consolidated Financial Statements

6-10Item 2. Managements Discussion and Analysis of Financial Condition And Results of Operations

11Item 3. Controls and Procedures

16PART IIItem 1. Legal Proceedings

16Item 2. Unregistered Sales Of Equity Securities And Use Of Proceeds

16Item 3. Defaults Upon Senior Securities

16Item 4. Submission of Matters to a Vote of Security Holders

16Item 5. Other Information

17Item 6. Exhibits

17PART I

EXPLANATORY NOTE
This Amendment No. 1 on Form 10-QSB to our Quarterly Report on Form 10-QSB for the quarter ended September 30, 2005, originally filed with the United States Securities and Exchange Commission
(SEC) on November 21, 2005, is being filed for the purpose of correcting formatting errors in Part I, Item 1 of the Report and including portions of the discussion previously omitted from Part 1, Item 2 of the Report necessary to the understanding
of the Company's financial statements. Details regarding the events leading to this amendment, and remedial actions taken are set forth in Part I, Item 3 -- CONTROLS AND PROCEDURES below.
Item 1  Financial Statements (Unaudited)ANDEAN DEVELOPMENT CORPORATION
AND SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE SHEETAS OF SEPTEMBER 30, 2005 (UNAUDITED)
ASSETS
CURRENT ASSETSCash and cash equivalents

$
23,545Accounts receivable, net of allowances


19,218Due from related companies


2,380,638Inventories


630,163Other receivables and prepaid expenses


346,758Total Current Assets


3,400,322PROPERTY AND EQUIPMENT, NET


4,031,707TOTAL ASSETS

$
7,432,029LIABILITIES AND STOCKHOLDERS' EQUITYCURRENT LIABILITIESAccounts payable

$
273,564Other payables and accrued liabilities


812,422Value added tax


96,052Income tax payable and other tax payable


117,255Notes payable


616,523Due to related companies


273,157Total Current Liabilities


2,188,973COMMITMENTS AND CONTINGENCIES


-STOCKHOLDERS' EQUITYPreferred stock $.0001 par value, authorized 5,000,000 shares,no shares issued and outstanding.Common stock $.0001 par value, authorized 100,000,000 shares,issued and outstanding 10,511,412 shares


1,051Additional paid-in capital


1,264,546Retained earningsUnappropriated


2,120,947Appropriated


1,807,290Accumulated other comprehensive income


49,222Total Stockholders' Equity


5,243,056TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY

$
7,432,029The accompanying notes are an integral part of these financial statements 3
ANDEAN DEVELOPMENT CORPORATIONAND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS ANDCOMPREHENSIVE INCOMETHREE AND NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004(UNAUDITED)For the threemonths endedSeptember 30, 2005

For the threemonths endedSeptember 30, 2004

For the ninemonths endedSeptember 30, 2005

For the ninemonths endedSeptember 30, 2004NET SALESTo related parties
$
-

$
92,928

$
512,401

$
235,980Other

4,060,499


1,639,725


6,367,969


3,635,535Total net sales

4,060,499


1,732,653


6,880,370


3,871,515COST OF SALES

(3,433,815
)

(1,070,380
)

(5,703,150
)

(2,787,139
)GROSS PROFIT

626,684


662,273


1,177,220


1,084,376OPERATING EXPENSESStock issued for services

42,045


-


42,045


-Selling expenses

23,470


9,222


56,935


22,471General and administrative expenses

114,335


126,770


417,124


389,220Depreciation and amortization

13,437


6,164


20,425


18,492Total Operating Expenses

193,287


142,156


536,529


430,183INCOME FROM OPERATIONS

433,397


520,117


640,691


654,193OTHER INCOME (EXPENSES)Loss on disposal of fixed assets

-


-


-


(13,084
)Interest income

35,265


124


114,520


299Interest expenses

(2,921
)

(2,977
)

(4,486
)

-Other income




-


-


1,402Other expenses

(2,336
)

-


(6,205
)

(9,191
)Total Other Income (Expenses)

30,008


(2,853
)

103,829


(20,574
)INCOME FROM OPERATIONS BEFORE TAXES

463,405


517,264


744,520


633,619INCOME TAX EXPENSE

(119,269
)

(46,802
)

(222,607
)

(60,764
)NET INCOME

344,136


470,462


521,913


572,855OTHER COMPREHENSIVE INCOMEForeign currency translation gain

49,222


-


49,222


-COMPREHENSIVE INCOME
$
393,358

$
470,462

$
571,135

$
572,855Net income share-basic and diluted
$
0.04

$
0.06

$
0.06

$
0.07Weighted average number of shares     outstanding during
the year     basis and diluted8,889,648


7,673,325


8,080,256


7,673,325The accompanying notes are an integral part of these financial statements4
ANDEAN DEVELOPMENT CORPORATION AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)
For the nine months
ended September 30, 2005

For the nine months
ended September 30, 2004CASH FLOWS FROM OPERATING ACTIVITIESNet income
$
521,913

$
572,855Adjusted to reconcile net income to cash providedby operating activities:Stock issued for services

42,045


-Depreciation and amortization - cost of sales

98,806


87,066Depreciation and amortization

20,425


18,492Loss on disposal of fixed assets

-


13,084Changes in operating assets and liabilities(increase)decrease in:Accounts receivable

161,395


(316,034
)Other receivable and prepaid expenses

(203,343
)

(5,616
)Inventories

164,249


(1,510,379
)Due from related companies

(1,857,790
)

3,770,946Increase (decrease) in:Accounts payable

(48,761
)

(40,494
)Other payables and accrued expenses

78,670


(121,823
)Due to related companies

835,724


(32,370
)Value add tax payables

29,535


(14,392
)Income tax and other tax payables

32,436


(58,700
)Net cash (used in) provided by operating activities

(124,696
)

2,362,635CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property and equipment

(650,309
)

(2,333,943
)Net cash used in financing activities

(650,309
)

(2,333,943
)CASH FLOWS FROM FINANCING ACTIVITIESDue to related companies

616,523


-Net cash provided by financial activities

616,523


-NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
(158,482
)

28,692EFFECT OF EXCHANGE RATE ON CASH

21,415


-CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD

160,612


22,225CASH AND CASH EQUIVALENTS AT END OF PERIOD
$
23,545

$
50,917SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATIONCash paid during the period for:Interest expenses
$
4,486

$
-Cash paid during the period for:Income taxes
$
252,040

$
82,424SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
During 2005, the Company issued 7,673,325 shares of common stock for 100% of the common stock of Perfect Dream Limited.
During 2005, the Company issued 2,500,000 shares of common stock to exchange a Convertible Promissory Notes.
During 2005, the Company issued 210,226 shares of common stock valued at 42,045 for consultant
services.
The accompanying notes are an integral part of these financial statements
5
ANDEAN DEVELOPMENT CORPORATIONAND SUBSIDIARIESNOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2005 (UNAUDITED)
NOTE 1.    ORGANIZATION AND BASIS OF PRESENTATION
Andean Development Corporation (Andean) is a US listed company which 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) limited liability company was incorporated on December 31, 1993 with its principal place of business in Nanjing, PRC. Goldenway is principally engaged in the manufacturing and sale of garments.
During 2004, Perfect Dream entered into two purchase agreements with two shareholders of Goldenway to acquire 100% of the registered capital of Goldenway for $1,288,404 and the issue of 50,000 common shares of Perfect
Dream. The transactions have been accounted for as a reorganization of entities under common control as the companies were beneficially owned by principally identical shareholders and share common management.
On July 29, 2005, Andean entered into an Agreement and Plan of Reorganization with the shareholders of Perfect Dream to exchange 100% of Perfect Dreams outstanding shares for 7,673,325 shares of Andean.
The merger of Andean and Perfect Dream has been recorded as a recapitalization by Andean, with Perfect Dream being treated as the continuing entity. The financial statements have been prepared as if the reorganization had
occurred retroactively.  Andean, Perfect Dream and Goldenway are hereafter referred to as (the Company). The transactions were treated for accounting purposes as a capital transaction and recapitalization by the accounting acquirer
(Perfect Dream) and as a reorganization by the accounting acquiree (Andean).
Accordingly, the financial statements include the following:
(1)The balance sheet consists of the net assets of the acquirer at historical cost and the net assets of the acquiree at historical cost.
(2)The statement of operations includes the operations of the acquirer for the periods presented and the operations of the acquiree from the date of
the merger.
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 September 30, 2005, the results of operations for the three-month and nine-month periods ended September 30, 2005 and 2004, and cash flows for the nine months ended September 30, 2005 and 2004. The results for the period ended September
30, 2005 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2005.
6
ANDEAN DEVELOPMENT CORPORATIONAND SUBSIDIARIESNOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2005 (UNAUDITED)NOTE 2.    PRINCIPLES OF CONSOLIDATIONThe accompanying September 30, 2005 unaudited condensed consolidated financial statements include the accounts of Andean, its 100% owned subsidiary Perfect Dream and its 100% owned subsidiary Goldenway. All significant
inter-company balances and transactions have been eliminated in consolidation.
NOTE 3.    USE OF ESTIMATESThe 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 4.    CASH AND CASH EQUIVALENTSFor 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 5.    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.
NOTE 6.    FOREIGN CURRENCY TRANSLATION
The functional currency of the Company is the Chinese Renminbi (RMB). Transactions denominated in currencies other than RMB are translated into United States dollars using period end exchange rates as to assets
and liabilities and average exchange rates as to revenues and expenses. Capital accounts are translated at their historical exchange rates when the capital transaction occurred. Net gains and losses resulting from foreign exchange translations are
included in the statements of operations and stockholders equity as other comprehensive income (loss).
NOTE 7.    COMPREHENSIVE INCOME (LOSS)The foreign currency translation gain or loss resulting from translation of the financial statements expressed in RMB to United States
dollars is reported as other comprehensive income (loss) in the statements of operations
and stockholders equity.
NOTE 8.    EARNINGS PER SHAREBasic earnings per share are computed by dividing income available to common stockholders by the weighted average number
of common shares outstanding during the period. Diluted earnings per share is computed similarly to basic
earnings 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. There are no potentially dilutive securities for the nine months ended September 30, 2005 and 2004.
7
ANDEAN DEVELOPMENT CORPORATIONAND SUBSIDIARIESNOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2005 (UNAUDITED)NOTE 9.    SEGMENTSThe Company adopted Statement of Financial Accounting Standards No. 131, Disclosures about Segments of an Enterprise and Related Information (SFAS 131). SFAS
131 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 decisions how to allocate resources and assess performance.
The Company operates in only one segment.NOTE 10.    CONVERTIBLE PROMISSORY NOTESThe convertible promissory notes were exercised on July 31, 2005 and converted into 2,500,000 shares of the company.
NOTE 11.    COMMITMENTS AND CONTINGENCIES(A)    Employee BenefitsThe full time employees of the Company are entitled to employee benefits including medical care, welfare subsidies, unemployment insurance and pension benefits through a Chinese government mandated multi-employer defined
contribution plan. The Company is required to accrue for those benefits based on certain percentages of the employees salaries and make contributions to the plans out of the amount accrued for medical and pension benefits. The Chinese
government is responsible for the medical benefits and the pension liability to be paid to these employees.
(B)    CommitmentsAccording to the Articles of Association of Goldenway,
Goldenway has to have paid-in registered capital of $17,487,894 within three years from February 2, 2005. As of September 30, 2005, the Company has fulfilled $680,000 of
these registered capital requirements and has registered capital commitments of $16,807,894; $1,943,184 is payable by December 31, 2005 and $14,864,710 is payable by February 1, 2008.
As at September 30, 2005, the Company had commitments for capital projects in progress of approximately $274,000.NOTE 12.    SHAREHOLDERS EQUITY(A)    Common Stock
The Company amended its articles of incorporation in March of 2004 to change the total authorized number of common shares from 20,000,000 to 100,000,000.
The Company affected a one for thirty reverse stock split of its common stock of 3,835,100, resulting in approximately 127,837 post split shares outstanding.
8
ANDEAN DEVELOPMENT CORPORATIONAND SUBSIDIARIESNOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2005 (UNAUDITED)(B)Stock issuancesOn July 31, 2005, the convertible promissory notes
were exercised and converted into 2,500,000 shares of the Company.
On August 22, 2005, the Company entered into an Agreement and Plan of Reorganization with the shareholders of Perfect Dream to acquire 100% of Perfect Dreams equity. The Company issued 7,673,325 shares in exchange for
100% of Perfect Dreams issued and outstanding shares.
On August 22, 2005, the Company issued 63,068 shares of common stock, to a broker for services having a fair value of $12,614.
On August 22, 2005, the Company issued 147,158 shares of common stock, to a broker for services having a fair value of $29,431.(C)Appropriated retained earningsThe Company is required to make appropriations to reserves funds, comprising the statutory surplus reserve, statutory public welfare fund and discretionary 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 the PRC GAAP until the reserve is equal to 50% of the entities registered capital. Appropriations to the discretionary surplus reserve are made at the discretion of the Board of Directors.NOTE 13.    RELATED PARTY TRANSACTIONSDuring 2005, the Company issued 7,673,325 shares to shareholders of Perfect Dream for 100% of the issued and outstanding shares of Perfect Dream.
During 2005, the Company sub-contracted certain manufacturing work valued at $1,687,246 to certain of its related companies. The Company provided the raw materials to the sub-contractor who charges the Company a fixed
labor charge for the sub-contracting work.
During 2005, the Company had related party sales of $512,401.
The Company is owed $2,380,638 from related companies as of September 30, 2005 for products sold and advances made. With effect from January 1, 2005, the Company charges interest to related companies for advances made
at 6% per annum. Total interest charged for the nine months ended September 30, 2005 was $114,098. The advances made to related companies are repayable on demand.
The Company owed related companies $273,157 as of September 30, 2005 for
sub-contracting work.NOTE 14.    CONCENTRATIONS AND RISKSDuring 2005, 100% of the Companys assets were located in China. In 2005, the Company relied on two customers for approximately $1,692,995 and $1,089,384 respectively representing in aggregate 40% of sales. In
2005, the Company relied on one supplier for 38% of its purchases.
9
ANDEAN DEVELOPMENT CORPORATIONAND SUBSIDIARIESNOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2005 (UNAUDITED)NOTE 15.    SUBSEQUENT EVENTS(1)        On October 24, 2005, Perfect Dream contributed registered capital of $500,000 to Goldenway.
(2)     
On October 26, 2005, the Company authorized 10,000 shares of Series A Convertible Preferred
Stock, and holders of 7,883,551 then outstanding shares of common stock (acquired in connection with the acquisition of Perfect Dream) exchanged their 7,883,551 shares of common stock for 7,883.551 shares of a new series of
preferred stock, in order to increase the availability of common stock for public shareholders. Each share of the new series of 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, 2005, 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 59,914,987 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 from the current 20 million shares 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 equity holders 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 September 30, 2005, there would be 79,886,730
outstanding shares of common stock.
(3)On November 17, 2005, the Company filed an Amendment to its Articles of Incorporation to change its name to Ever-Glory International Group, Inc.
10
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.Forward-Looking StatementsThis document contains certain statements of a forward-looking nature. Such statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. 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 in a timely fashion in response to increasing demand and enable the Company
to achieve timely delivery of finished 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 of advance 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 could adversely affect profitability;
the effect of terrorist acts, or the threat thereof, on consumer confidence and spending, or the
production and distribution of product and raw materials which could, as a result,
adversely affect the Companys operations and 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
consumer acceptance 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 the Company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.
11
OVERVIEWEver-Glory and its subsidiaries (the "Company")
manufacture apparel for men, women and children for primarily middle to high-grade well-known casual wear, outerwear and sportswear brands
and for a variety of
companies. All of its products are exported to Japan, EU countries and the United States. The Companys customers include large retailers and well-known brands. The Company is the result of a merger of Andean Development Corporation, a corporation organized under the laws of the State of Florida ("Andean"); and Perfect Dream Limited, a corporation organized under the laws of
British Virgin Islands "Perfect Dream"). Andean was formed on October 19, 1994 and engaged in the business of providing engineering and project management services and electrical and mechanical equipment for energy and private works projects. As of
June 30, 2005, Andean had zero assets and liabilities of $57,000. Perfect Dream was incorporated on July 1, 2004 in the British Virgin Islands. In January of 2005, Perfect Dream acquired 100% of Goldenway Nanjing Garments Co., Ltd ("Goldenway").
Goldenway is a limited liability company, which was incorporated in the People's Republic of China (the "PRC") on December 31, 1993. After its acquisition by Perfect Dream and effective as of April 20, 2005, Goldenway
changed its status to that of a wholly foreign owned enterprise and increased its registered capital from $2,512,106 to $20,000,000. As of September 30, 2005, the Company had paid-in $680,000 of the registered capital. The remaining
registered capital will be paid-in in installments within three years of the issuance of Goldenway's updated business license. The first installment of $1,943,184 is due on December 31, 2005.
In the nine months ended September 30, 2005, 50% of the Companys revenues came from EU Countries, 35% from Japan and 15% from the United States. In the nine months ended September 30, 2005, two customers represented
approximately 25% and 16% of the Companys sales, respectively. Management believes that the relationship with these customers will continue into the foreseeable future.
The Company purchases the majority of its raw materials directly from numerous textile mills. One supplier represented 38% of the Companys raw materials purchases. The Company has not
experienced difficulty in obtaining raw materials essential to its business and management believes that the relationship with its suppliers will continue into the foreseeable future.
The Company currently operates one factory in the Nanjing Jianging Economic and Technological Development Zone of mainland, China. The factory covers an area of 10,000 square meters and is equipped with highly advanced,
state-of-the-art equipment. The factory employs a staff of over 700 people with an annual production capacity of approximately 2,800,000 pieces. All of the Companys work force is non-union, and the Company considers its relations with its
employees to be satisfactory.RESULTS OF OPERATIONSThree Months Ended September 30, 2005 Compared To Three Months Ended September 30, 2004
Revenues, Cost of Revenues and Gross MarginRevenues for the quarter ended September 30, 2005 were $4,060,499, an increase of 134% from $1,732,653 for
the same quarter in 2004. Our increase in revenues was mainly attributable to an increase in orders
from European and U.S. customers as a result of the cancellation of export quotas on January 1, 2005
for all WTO members; and an increase in orders for fall/winter garments, which command a higher price per piece than spring/summer garments.
In 2004 substantially all textile products exported to the U.S. and EU from
China were subject to quotas. Pursuant to a prior agreement among WTO nations,
all quotas on textiles were removed in January 2005 for all WTO members.
Although quotas on certain categories of textiles were reinstituted in March and
July of 2005, with respect to the U.S. and the EU, these quotas apply to fewer
categories of textiles. As a result, the Company saw an increase in orders from
European and U.S. customers.
12
Cost of sales for the quarter ended September 30, 2005 was $3,433,815, an increase of $2,363,435 from $1,070,380 for the quarter ended September 30, 2004. As a percentage of revenues, Cost of sales increased to approximately 85% for the three months ended September 30, 2005 from approximately 62% for the quarter ended September 30, 2004. Consequently, gross margin as a percentage of revenues decreased to approximately
15% for the three months ended September 30, 2005 from approximately 38% for the three months ended September 30, 2004. The increase in cost of sales and the decrease in gross margin were attributable to several factors. On July 21, 2005, the
Chinese government launched a floating exchange rate system for the RMB. As a result, the exchange rate dropped from 8.26 RMB to the U.S. dollar to 8.09 RMB per dollar. By the end of September, the exchange rate dropped to 8.07 RMB per dollar. The
appreciation of the RMB caused a decrease in our gross margin. In addition, in March 2005, the Chinese government reinstituted textile export quotas in certain hot categories because of substantial increases in exports from China to the U.S. and
European markets. In addition, in July 2005, the Chinese government signed an
agreement with the EU in which China agreed to institute passive quotas on
certain textile products. The Chinese government allocates production of
products subject to quota restrictions based on a company's export volume in the
preceding year. As a result, in order to maintain the Companys allocation by the Chinese government for 2006, the Company accepted orders with lower gross margins. Finally, the Company also experienced an increase in raw
material prices and labor costs.
General and Administrative Expenses
General and Administrative expenses totaled $193,287 for the three months ended September 30, 2005, an increase of $51,131 from $142,156 for the three months ended September 30, 2004. The increase in general and
administrative expenses was mainly due to the activities associated with the Acquisition and the trading of the Companys shares on the Over The Counter Bulletin Board.
Income before taxes for the three months ended September 30, 2005 was $463,405 a decrease of $53,859 from $517,264 for the three months ended September 30, 2004.
Nine Months Ended September 30, 2005 Compared To Nine Months Ended September 30, 2004Revenues, Cost of Revenues and Gross MarginRevenues for the nine months ended September 30, 2005 were $6,880,370, an increase of 77.72% from $3,871,515 for same period in 2004. The increase in revenues were attributable to an increase in orders from European
and U.S. customers as a result of the cancellation of export quotas on January 1, 2005; and an increase in orders for fall/winter garments which command a higher price per piece than spring/summer garments.
Cost of sales for the nine months ended September 30, 2005 were $5,703,150 an increase of $2,916,011 from $2,787,139 for the nine months ended September 30, 2004. As a percentage of revenues, Cost of sales
increased to approximately 83% for the nine months ended September 30, 2005 from approximately 72% for the nine months ended September 30, 2004. Consequently, gross margin as a percentage of revenues decreased to approximately 17% for the nine
months ended September 30, 2005 from approximately 28% for the three months ended September 30, 2004. The factors for the increase in cost of sales and corresponding decrease in gross margins are stated above in the discussion regarding the quarter
ended September 30, 2005.General and Administrative ExpensesGeneral and Administrative expenses totaled $536,529 for the nine months ended September 30, 2005, an increase of $106,346 from $430,183 for the nine months ended September 30, 2004. The increase in general and
administrative expenses was mainly due to an increase in general and administrative expenses as a result of the activities associated with the Acquisition and the trading of the Companys shares on the Over The Counter Bulletin Board.
Income before taxes for the nine months ended September 30, 2005 was $ 744,520, an increase of $110,901 from $633,619 for the nine months ended September 30, 2004.
13
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 2005, the Company had cash and cash equivalents of $23,545, other current assets of $3,376,777 and current liabilities of $2,188,973. To date, the Company has financed its operations
primarily from operations and cash flow from operations is expected to continue to be the Company's primary source of funds to finance
its short-term cash needs.
Capital CommitmentsThe Company has a continuing program for the purpose of improving its products and production machinery. As of September 30, 2005, the Company had commitments for capital projects in progress of approximately $274,000.
The Company anticipates that cash flows from operations will be used to pay for these capital commitments. In addition, the Company expects to use funds received from the repayment of outstanding loans due the Company. The Company is owed
approximately $2.4 million from related companies as of September 30, 2005 for products sold and advances made. These loans are repayable on demand. The Company expects to be repaid in full by the end of 2006.
Pursuant to the Articles of Association of Goldenway, registered capital of $17,487,894 needs to be paid into Goldenway by February 2, 2008. As of September 30, 2005, the Company had paid $680,000 of the registered
capital requirements and has remaining capital requirements of $16,807,894. The Company is required to pay $1,943,184 by December 31, 2005 and the remaining $14,864,710 by February 1, 2008.
The Company has purchased 113,220 square meters of land in Nanjing Jianging Economic and Technological Development Zone, which includes an existing manufacturing facility of 26,629 square meters. The Company expects the new
manufacturing facility to be in production by late 2006. The Company does not believe that substantial capital will be required to bring the new facility into full production and expects that cash from operations will be adequate to bring this
facility online.Uses of Liquidity.The Company'scash requirements through the end of fiscal 2006 are primarily to fund operations and to complete the new manufacturing facility in Nanjing. The Company plans to acquire additional manufacturing capacity in the future
to strengthen and stabilize its manufacturing base. The Company is also looking to establish its own distribution and logistics channels in overseas markets and to launch its own brand directly to the Chinese market. In addition, the Company will need
to make the required capital contributions to its subsidiary, Goldenway.Sources of Liquidity.The Companys primary source of liquidity for its
short-term cash needs is expected to be cash flow generated from operations, and
cash and cash equivalents currently on hand. The Company believes its cash flow
from operations together with its cash and cash equivalents currently on hand will be sufficient to meet its working capital, capital expenditure and other commitments through December 2006. For its long-term cash needs, the Company is currently
considering a number of different financing opportunities including debt and equity financing. Adequate funds may not be available on terms acceptable to
it. If additional funds are raised through the issuance of equity securities,
dilution to existing stockholders may result. If funding is insufficient at any
time in the future, the Company may be unable to develop or enhance its products
or services, take advantage of business opportunities or respond to competitive
pressures, any of which could have a material adverse effect on its financial position, results of operations and cash flows.
14
As of September 30, 2005 the Company did not have any amounts outstanding under any credit facilities or lines of credit and it is not the guarantor of any debt or any other material third-party obligations. As of September 30, 2005, the Company did not have any standby letters of credit nor any standby repurchase obligations.
Foreign Currency Translation Risk.The Company does not believe that it has significant foreign currency transactional exposures.
RISK FACTORSExport Quotas
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. 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 June 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
and on November 8, 2005, the U.S. and China entered into an MOU in which 21
categories of textiles and apparel will be subject to restraints.
Certain of the Companys apparel products fall within the categories subject to the safeguards in the U.S. and the EU, which could adversely affect the Companys ability to export and sell these products. At this time, based on expected
U.S. and EU actions and other mitigating factors, the Company believes that such safeguard measures will not have a material impact on its sales in the U.S. and EU. On a longer term basis, if necessary, the Company expects to adjust the types of
apparel it manufactures and therefore believes that the aforementioned restraints and safeguard measures will not have a material impact on its sales and profitability. 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.Possible Volatility of Stock PriceThe 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;15
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.
ITEM 3. CONTROLS AND PROCEDURESAs of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer, of the effectiveness of the
design and operation of our disclosure controls and procedures. Based on this evaluation, the Companys chief executive officer and chief financial officer concluded that the Companys disclosure controls and procedures are effective in
timely alerting them to material information required to be included in the Companys periodic SEC reports. It should be noted that design of any system of controls is based in part upon certain assumptions about the likelihood of future
events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.
Notwithstanding the foregoing, on November 21, 2005, a Quarterly Report on Form 10-QSB, which purported to contain the Companys financial results for the three and nine months ending September 30, 2005 was filed. This
report was filed with neither the approval of the Company nor with the prior review of its auditors and contained numerous errors and omissions and should not be relied upon. Specifically, Part 1, Item 1 of the Report contained formatting errors,
which made the financial statements illegible and Part 1, Item 2 of the Report omitted portions of the discussion necessary to the understanding of the Company's financial statements. In order to institute formal documentation of its policies and
procedures for preparing and filing documents and reports with the SEC, the Company engaged new legal counsel to do the filings.
Other than as set forth above, there has been no change in our internal control over financial reporting during the most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our
internal control over financial reporting.
PART II - OTHER INFORMATIONITEM 1. LEGAL PROCEEDINGSNone.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Incorporated by reference from the Companys Report on Form 8-K filed with the Securities and Exchange Commission on August 24, 2005.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
16
None.ITEM 5. OTHER INFORMATIONNone.ITEM 6. EXHIBITS(a) The following exhibits are filed herewith:
 3.3
Articles of Amendment to change name of the Company to Ever-Glory International Group, Inc. (filed previously as Exhibit 3.3 to the Companys form 10-QSB, filed November 21, 2005)3.4
Certificate of Designation for the Series A Convertible Preferred Stock. (filed previously as Exhibit 3.4 to the Companys form 10-QSB, filed November 21, 2005) .31.1
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 2002.17

SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant caused this Report on Form 10-QSB/A to be signed on its behalf by the undersigned, thereunto duly authorized.
EVER-GLORY INTERNATIONAL GROUP, INC. 
(Registrant)Date: December 5, 2005

By:
/s/ Guo Yan
Chief Financial Officer
(Principal Financial and Accounting Officer)