Related Party Transactions

3 Months Ended

Mar. 31, 2022

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 9 RELATED PARTY TRANSACTIONS

Mr. Kang is the Company’s Chairman and Chief Executive Officer. Ever-Glory Enterprises (HK) Ltd. (Ever-Glory Enterprises) is the Company’s major shareholder. Mr. Xiaodong Yan was Ever-Glory Enterprises’ sole shareholder and sole director. Mr. Huake Kang, Mr. Kang’s son, acquired 83% interest of Ever-Glory Enterprises and became its sole director in 2014. All transactions associated with the following companies controlled by Mr. Kang or his son are considered to be related party transactions, and it is possible that the terms of these transactions may not be the same as those that would result from transactions between unrelated parties. All related party outstanding balances are short-term in nature and are expected to be settled in cash.

Other income from Related Parties

Jiangsu Wubijia Trading Company Limited (“Wubijia”) is an entity engaged in high-grade home goods sales and is controlled by Mr. Kang. Wubijia has sold their home goods on consignment in some Company’s retail stores since the third quarter of 2014.

	2022		2021
	(In thousands of U.S. Dollars)
The Company received from the customers	$	-		3
The Company paid to Wubijia		-		(3	)
The net income recorded as other income	$	-	$	-

Included in other income for the three months ended March 31, 2022 and 2021 is rental income from EsC’Lav, the entity controlled by Mr. Kang under operating lease agreement with term through 2021. The rental income is $6,502 and $6,366 for the three months ended March 31, 2022 and 2021, respectively.

Other expenses due to Related Parties

Included in other expenses for the three months ended March 31, 2022 and 2021 are rent due to entities controlled by Mr. Kang under operating lease agreements as follows:

	2022		2021
	(In thousands of U.S. Dollars)
Chuzhou Huarui		56		55
Kunshan Enjin		12		23
Total	$	68	$	78

The Company leases Chuzhou Huarui and Kunshan Enjin’s warehouse spaces because the locations are convenient for transportation and distribution.

Purchases from and Sub-contracts with Related Parties

The Company purchased raw materials from Nanjing Knitting totaled $0.2 million and $0.2 million during the three months ended March 31, 2022 and 2021, respectively.

In addition, the Company sub-contracted certain manufacturing work to related companies totaled $4.5 million and $4.7 million for the three months ended March 31, 2022 and 2021, respectively. The Company provided raw materials to the sub-contractors and charged a fixed fee for labor provided by the sub-contractors. Purchase advances or prepaid sub-contracting fees are recorded as amounts due from related parties.

Sub-contracts with related parties included in cost of sales for the three months ended March 31, 2022 and 2021 are as follows:

	2022		2021
	(In thousands of U.S. Dollars)
Ever-Glory Vietnam	$	3,269	$	3,083
Chuzhou Huarui		301		491
Fengyang Huarui		288		319
Nanjing Ever-Kyowa		438		391
Nanjing Knitting		245
EsC’eLav		-		6
Jiangsu Ever-Glory		-		457
Total	$	4,541	$	4,747

Accounts Payable – Related Parties

The accounts payable to related parties at March 31, 2022 and December 31, 2021 are as follows:

	2022		2021
	(In thousands of U.S. Dollars)
Ever-Glory Vietnam	$	-		395
Fengyang Huarui		116		161
Nanjing Ever-Kyowa		133		-
Chuzhou Huarui		414		59
Nanjing Knitting		648		668
Jiangsu Ever-Glory		163		49
Total	$	1,474	$	1,332

Amounts Due From Related Parties-current assets

The amounts due from related parties at March 31, 2022 and December 31, 2021 are as follows:

	2022		2021
	(In thousands of U.S. Dollars)
Jiangsu Ever-Glory	$	-	$	220
Ever-Glory Vietnam		1,308		-
Total	$	1,308	$	220

Jiangsu Ever-Glory is an entity engaged in importing/exporting, apparel-manufacture, real-estate development, car sales and other activities. Jiangsu Ever-Glory is controlled by Mr. Kang. During three months ended March 31, 2022 and 2021, the Company and Jiangsu Ever-Glory purchased raw materials on behalf of each other in order to obtain cheaper purchase prices. The Company purchased raw materials on Jiangsu Ever-Glory’s behalf and sold to Jiangsu Ever-Glory at cost for $0.02 million and $1.8 million during the three month period ended March 31, 2022 and 2021, respectively. Jiangsu Ever-Glory purchased raw materials on the Company’s behalf and sold to the Company at cost for $0.0 million and $0.5 million during the three months ended March 31, 2022 and 2021, respectively.