{"url_path":"/sec/jrsh/10-k/2026/item-1","section_key":"item-1","section_title":"Item 1 Business.**","topic":"sec","document":{"doc_type":"10-K","doc_date":"2026-06-18","source_url":"https://www.sec.gov/Archives/edgar/data/1696558/0001213900-26-070227-index.html","accession_number":"0001213900-26-070227","cik":"0001696558","ticker":"JRSH","issuer_name":"Jerash Holdings (US), Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1696558/0001213900-26-070227-index.html","primary_entity_key":"0001696558","primary_entity_name":"Jerash Holdings (US), Inc."},"word_count":4082,"has_tables":true,"body_markdown":"**Item 1. Business.**\n\n** **\n\n**Overview**\n\n \n\nJerash Holdings (US), Inc. (“Jerash Holdings”),\nthrough its wholly owned operating subsidiaries (together, the “Group,” “we,” “us,” or “our”),\nis principally engaged in the manufacturing and exporting of customized, ready-made sportswear and outerwear from knitted fabric produced\nin its facilities in the Hashemite Kingdom of Jordan (“Jordan”). Our website address is http://www.jerashholdings.com. Information\navailable on our website is not a part of, and is not incorporated into, this Annual Report on Form 10-K.\n\n \n\nWe are a manufacturer for several well-known brands and retailers,\nsuch as VF Corporation (which owns brands such as The North Face, Timberland, and Vans), New Balance, G-III (which owns DKNY and licenses\nbrands such as Calvin Klein, Tommy Hilfiger, and Nautica), Hugo Boss, American Eagle, and Acushnet (which owns brands such as Footjoy\nand Titleist). Our production facilities include eight factories and six warehouses and we currently employ approximately 6,300 people.\nThe total annual capacity at our facilities was approximately 24 million pieces (average for product categories including t-shirts, polo\nshirts, pants, shorts, and jackets) as of March 31, 2026.\n\n** **\n\n**Organizational Structure**\n\n \n\nJerash Holdings is a holding company incorporated\nin Delaware in January 2016. As of the date of this annual report, Jerash Holdings has the following wholly owned subsidiaries: (i) Jerash\nGarments and Fashions Manufacturing Co., Ltd. (“Jerash Garments”), an entity formed under the laws of Jordan, (ii) Treasure\nSuccess International Limited (“Treasure Success”), an entity formed under the laws of Hong Kong Special Administrative Region\nof the People’s Republic of China (“Hong Kong”), (iii) Chinese Garments and Fashions Manufacturing Co., Ltd. (“Chinese\nGarments”), an entity formed under the laws of Jordan and a wholly owned subsidiary of Jerash Garments, (iv) Jerash for Industrial\nEmbroidery Co., Ltd. (“Jerash Embroidery”), an entity formed under the laws of Jordan and a wholly owned subsidiary of Jerash\nGarments, (v) Al-Mutafaweq Co. for Garments Manufacturing Ltd. (“Paramount”), an entity formed under the laws of Jordan and\na wholly owned subsidiary of Jerash Garments, (vi) Mustafa and Kamal Ashraf Trading Company (Jordan) for the Manufacture of Ready-Make\nClothes LLC (“MK Garments”), an entity formed under the laws of Jordan and a wholly owned subsidiary of Jerash Garments; (vii)\nJiangmen Treasure Success Business Consultancy Co., Ltd. (“Jiangmen Treasure Success”), an entity incorporated under the laws\nof the People’s Republic of China (“China” or the “PRC”) and a wholly owned subsidiary of Treasure Success,\n(viii) Jerash The First Medical Supplies Manufacturing Company Limited (“Jerash The First”), an entity formed under the laws\nof Jordan and a wholly owned subsidiary of Jerash Garments, (ix) Jerash Supplies, LLC (“Jerash Supplies”), an entity formed\nunder the laws of the State of Delaware, (x) Kawkab Venus Dowalyah Lisenaet Albesah (“Kawkab Venus”), a limited liability\ncompany established in Amman, Jordan and a wholly owned subsidiary of Jerash Garments, and (xi) Ever Winland Limited (“Ever Winland”),\na limited liability company organized in Hong Kong and a wholly owned subsidiary of Treasure Success. As of the date of this annual report,\nTreasure Success owns 51% of the equity interests in J&B International Limited (“J&B”), a company with limited liability\nincorporated under the laws of Hong Kong. P. T. Eratex (Hong Kong) Limited (“Eratex”), a company formed in Hong Kong, owns\nthe remaining 49%. To date, Treasure Success also owns 51% of the equity interests in Jerash Newtech (Hong Kong) Holdings Limited (“Jerash\nNewtech”), a company incorporated under the laws of Hong Kong with limited liability, and Newtech Textile (HK) Limited, a company\nincorporated in Hong Kong (“Newtech”), owns the remaining 49%.\n\n* *\n\nThis chart reflects our organizational structure as of the date of\nthis annual report:\n\n* *\n\n**\n\n \n\n1\n\n \n\n \n\nJerash Garments was established in Jordan on November\n26, 2000 and operates out of our factory in Al Tajamouat Industrial City, a Development Zone in Amman, Jordan. Jerash Garments’\nprincipal activities are to house management offices and to operate production lines and printing, sewing, ironing, packing, and quality\ncontrol units, as well as house our trims and finished products warehouses. We also operate our factory in Al-Hasa County (as discussed\nbelow) under Jerash Garments.\n\n* *\n\nChinese Garments was established in Jordan on\nJune 13, 2013 and operated out of our factory in Al Tajamouat Industrial City. Chinese Garments’ principal activities were to house\nadministration, human resources, finance, and management offices and to operate additional production lines and sewing, ironing, and packing\nunits, as well as house our trims warehouse.\n\n \n\nJerash Embroidery was established in Jordan on\nMarch 11, 2013 and operated out of our factory in Al Tajamouat Industrial City. Jerash Embroidery’s principal activities were to\nperform the cutting and embroidery for our products.\n\n \n\nParamount was established in Jordan on October\n24, 2004 and operated out of our factory in Al Tajamouat Industrial City. Paramount’s principal activities were to manufacture garments\nper customer orders.\n\n \n\nDuring the fiscal year 2026, principal activities\nof Chinese Garments, Jerash Embroidery, Paramount were transferred to Jerash Garments. Chinese Garments, Jerash Embroidery, and Paramount\nhave no operation currently.\n\n \n\nMK Garments was established in Jordan on January\n23, 2003. On June 24, 2021, Jerash Garments and the sole shareholder of MK Garments entered into an agreement, pursuant to which Jerash\nGarments acquired all of the outstanding stock of MK Garments. As of October 7, 2021, MK Garments became a subsidiary of Jerash Garments.\nMK Garments operates out of our factory in Al Tajamouat Industrial City. MK Garments’ principal activities are to manufacture garments\nper customer orders. The new facilities are an existing garment manufacturing operation adjacent to Jerash’s four largest manufacturing\ncenters. Jerash assumed ownership of all of the machinery and equipment owned by MK Garments through the acquisition.\n\n* *\n\nTreasure Success was established in Hong Kong\non July 5, 2016 and operates in Hong Kong. Treasure Success’s primary activities are sales of garments and to employ sales and merchandising\nstaff and supporting personnel in Hong Kong to support the business of Jerash Garments and its subsidiaries.\n\n \n\nJiangmen Treasure Success was established in Jiangmen\nCity of Guangdong Province in the PRC on August 28, 2019 and operates in the PRC. Jiangmen Treasure Success’s primary activities\nare to provide support in sales and marketing, sample development, merchandising, procurement, and other areas.\n\n \n\nJerash The First was established in Jordan on\nJuly 6, 2020 and operate out of our factory in Al-Hasa County. Jerash The First’s principal activities were to manufacture and trade\npersonal protective equipment (“PPE”) products. Jerash The First has no operation currently.\n\n \n\nJerash Supplies was formed in Delaware on November\n20, 2020. Jerash Supplies is engaged in the trading of PPE products.\n\n \n\nKawkab Venus was established in Amman, Jordan,\non January 15, 2015 with a declared capital of JOD 50,000. It holds land with factory premises, which are leased to MK Garments. On July\n14, 2021, Jerash Garments and the sole shareholder of Kawkab Venus entered into an agreement, pursuant to which Jerash Garments acquired\nall of the outstanding stock of Kawkab Venus. Apart from the land and factory premises, Kawkab Venus had no other significant assets or\nliabilities and no operation activities or employees at the time of acquisition, so the acquisition was accounted for an asset acquisition.\nAs of August 21, 2022, Kawkab Venus became a subsidiary of Jerash Garments.\n\n  \n\nEver Winland was organized in Hong Kong on December\n3, 2020. It held office premises, which were leased to Treasure Success. On June 22, 2022, Treasure Success and the shareholders of Ever\nWinland entered into an agreement, pursuant to which Treasure Success acquired all of the outstanding stock of Ever Winland. Apart from\nthe office premises used by Treasure Success, Ever Winland had no other significant assets or liabilities and no operating activities\nor employees at the time of this acquisition, so this transaction was accounted for as an asset acquisition. As of August 29, 2022, Ever\nWinland became a subsidiary of Treasure Success. Treasure Success acquired the office premises as of January 8, 2026.\n\n \n\n2\n\n \n\n \n\nJ&B is a joint venture company established\nin Hong Kong on January 10, 2023. On March 20, 2023, Treasure Success and Eratex entered into a Joint Venture and Shareholders’\nAgreement, pursuant to which Treasure Success acquired 51% of the equity interests in J&B on April 11, 2023. J&B engages in the\nbusiness of garment trading and manufacturing for orders from customers. On June 16, 2025, Treasure Success and Eratex attended a meeting\nof shareholders of J&B and approved the termination of J&B’s business operations and the dissolution of J&B, which is\nexpected to complete in April 2027.\n\n** **\n\nJerash Newtech is a joint venture company established\nin Hong Kong on November 3, 2023. On October 10, 2023, Treasure Success and Newtech entered into a Joint Venture and Shareholders’\nAgreement. Pursuant to this agreement, both parties agreed to form a joint venture company in Hong Kong named Jerash Newtech, of which\nTreasure Success holds 51% of the equity interests and Newtech holds 49%. Jerash Newtech engages in the business of supplying fiber and\nfabric printed with Cooltrans technology, and may engage any other businesses in the future as both parties shall agree from time to time.\nOn August 20, 2025, Treasure Success and Newtech Textile (HK) Limited attended a meeting of shareholders of Jerash Newtech and agreed\nto and authorized an application to be made for the deregistration of Jerash Newtech.\n\n \n\n**Products **\n\n** **\n\nAs a garment manufacturing group, we specialize\nin manufacturing sportswear and outerwear. Our sportswear and outerwear product offering consists of jackets, polo shirts, t-shirts, pants,\nand shorts. During fiscal 2026, our primary product offerings were vests, shorts and pants, which accounted for approximately 35% of our\ntotal shipped pieces. During fiscal 2025, our primary product offering was crew neck, which accounted for approximately 37% of our total\nshipped pieces.\n\n ** **\n\n**Manufacturing and Production**\n\n \n\nOur production facilities are located in Al Tajamouat\nIndustrial City in the Amman Governorate, in the Al-Hasa District in the Tafilah Governorate, and in the Balama Sub-district in the Mafraq\nGovernorate of Jordan.\n\n \n\nOur production facilities in Al Tajamouat Industrial City in the Amman\nGovernorate comprise six operating factories and six warehouses. Effective as of January 1, 2019, the government of the Hashemite Kingdom\nof Jordan converted Al Tajamouat Industrial City into a Development Zone. Following this change, we continued to operate under benefits\nsimilar to the Qualifying Industrial Zone designation, but were subject to a 10% corporate income tax plus a 1% social contribution. Starting\nfrom January 1, 2020, the corporate income tax rate increased from 10% to 20% throughout the years. Effective January 1, 2024, we have\nbeen subject to a 20% corporate income tax rate plus a 1% social contribution. Effective from October 1, 2025, Jerash Garments has been\ngranted tax concession at a corporate income tax rate 10% plus a 1% social contribution in accordance with the Jordanian Income Tax Law.\nCurrently, the first factory, which we own, employs approximately 1,550 people. Its primary functions are to house our management offices,\nas well as production lines, trims warehouse, and printing, sewing, ironing, and packaging units. The second factory, which we lease,\nemploys approximately 1,800 people. Its primary function is to house our administrative and human resources personnel, merchandising and\naccounting departments, embroidery, printing, additional production lines, trims and finished products warehouses, and sewing, ironing,\npacking and quality control units. The third factory, which we lease, employs approximately 200 people. Its primary functions are to perform\nthe cutting for our products. The fourth factory (under Paramount), which we lease, currently employs approximately 1,400 people. Its\nprimary functions are to house additional production lines. The fifth factory (under MK Garments) currently employs approximately 650\npeople. Its primary function is to manufacture garments for orders from customers.\n\n \n\nOn February 2, 2026, the Housing Bank for Trade\nand Finance (the “Housing Bank”) approved the Property Purchase Request submitted by Jerash Garments on January 20, 2026 for\nthe purchase of the property located on Property No. 1326, Basin No. 3 Abu Sawwana, Al-Ruqaim Village, from the lands of South Amman,\nJordan (“Property No. 1326”). The purchase was completed on February 19, 2026. Property No. 1326 will be our sixth factory\nin Al Tajamouat Industrial City and production is scheduled to commence in fiscal 2027.\n\n \n\nOur production facility in Al-Hasa County in the\nTafilah Governorate of Jordan comprises one factory, which currently employs approximately 550 people and its primary functions are to\nmanufacture garment products per customer orders. We commenced the construction of this factory in 2018 and we started operations in November 2019.\nThis is a joint project with the Jordanian Ministry of Labor and the Jordanian Education and Training Department. According to our agreement\nwith these government agencies, we used this factory without paying rent through December 2022. We have continued to use the factory without\npaying rent since January 2023 as new arrangements with the Jordanian Ministry of Labor are still being made. See “Item 2. Properties”\nbelow for more information regarding this factory.\n\n \n\n3\n\n \n\n \n\nOur production facility in Balama Sub-district\nin the Mafraq Governorate comprises one factory, which currently employs approximately 150 people, and its primary functions are to manufacture\ngarment products per customer orders. According to our agreement with these government agencies, we are allowed to use this factory without\npaying rent through February 2029.\n\n \n\nIn April 2021, we commenced construction of a\n195,000-square-foot housing facility for our multi-national workforce, situated on a 49,000-square-foot site owned by us in Al Tajamouat\nIndustrial City. In fiscal 2025, the construction was completed and our workers moved in. To meet increasing demand, we are also finalizing\nplans to construct an additional project on a nearby 133,000-square-foot parcel that we purchased in 2019 for $1.2 million. Two-thirds\nof the land will be used for our factory and the remaining one-third will be used for housing. As of the date of this annual report, we\nare working with engineering consultants on the architectural design of the building, taking into account the potential business growth\nbrought about by the new business expansion with new customers such as Hansoll Group. We will carefully plan the construction investment\nto meet the progress of business developments.\n\n \n\nTotal annual capacity at our existing facilities\nwas approximately 24 million pieces (average for product categories including t-shirts, polo shirts, pants, shorts, and jackets) as of\nMarch 31, 2026. Our production flow begins in the cutting department of our factory. Then the product is sent to the embroidery department\nfor embroidery if applicable. From there, the product moves to be processed by the sewing unit, finishing department, quality control,\nand finally the ironing and packing units.\n\n \n\nWe do not have long-term supply contracts or arrangements\nwith our suppliers. Most of our ultimate suppliers for raw materials, such as fabric, zippers, and labels, are designated by customers\nand we purchase such materials on a purchase order basis.\n\n** **\n\n**Employees**\n\n \n\nAs of March 31, 2026, we had an aggregate of approximately\n6,300 employees located in Jordan, Hong Kong, China, and the United States of America, all of which are full-time employees.\n\n  \n\n**Customers**\n\n \n\nThe following table outlines the dollar amount\nand percentage of total sales to our customers for the fiscal years ended March 31, 2026 (“fiscal 2026”) and March 31, 2025\n(“fiscal 2025”).\n\n \n\n  \nFiscal 2026  \nFiscal 2025 \n\n  \nSales  \n   \nSales  \n  \n\n  \n(USD, in\nthousands)  \n%  \n(USD, in\nthousands)  \n% \n\n  \n   \n   \n   \n  \n\nVF Corporation(1) \n$87,020  \n 52.3% \n$94,151  \n 64.6%\n\nNew Balance \n 22,760  \n 13.7% \n 17,872  \n 12.2%\n\nSuzhou Unitex \n 10,332  \n 6.2% \n 5,696  \n 3.9%\n\nTharanco \n 7,663  \n 4.6% \n 4,673  \n 3.2%\n\nHansoll \n 6,952  \n 4.2% \n -  \n 0%\n\nSWC Inc. \n 5,532  \n 3.3% \n 5,049  \n 3.5%\n\nG-III \n 3,799  \n 2.3% \n 2,352  \n 1.6%\n\nHugo Boss \n 1,315  \n 0.8% \n 4,018  \n 2.8%\n\nOthers \n 20,891  \n 12.6% \n 12,001  \n 8.2%\n\nTotal \n$166,264  \n 100.0% \n$145,812  \n 100.0%\n\n \n\n(1)\nA large portion of our products are sold under The North Face, Timberland, and Vans brands owned by VF Corporation.\n\n \n\n4\n\n \n\n \n\nIn fiscal 2026 and 2025, we depended on a few\nkey customers for our sales, and a large portion of our sales in fiscal 2026 and 2025 were to one customer, VF Corporation.\n\n \n\nWe started producing garments for VF Corporation\nin 2012. A large portion of the products we manufacture are sold under The North Face, Timberland, and Vans brands which are owned by\nVF Corporation. Currently, we manufacture primarily outerwear for The North Face. Approximately 52% and 65% of our sales in fiscal 2026\nand 2025 were derived from the sale of manufactured products to VF Corporation, respectively. We are not party to any long-term contracts\nwith VF Corporation or our other customers, and our sales arrangements with our customers do not have minimum purchase requirements. As\nis common in our industry, VF Corporation and our other customers place purchase orders with us after we complete detailed sample development\nand approval processes that we and our customers have agreed upon for their purchase of the relevant manufactured garments. It is through\nthe sample development and approval processes that we and VF Corporation and our other customers agree on the purchase and manufacture\nof the garments. For fiscal 2026, VF Corporation issued approximately 14,300 purchase orders to us in amounts ranging from approximately\n$5 to $296,000. For fiscal 2025, VF Corporation issued approximately 14,700 purchase orders to us in amounts ranging from approximately\n$6 to $929,000.\n\n \n\nOur customers are in the retail industry, which\nis subject to substantial cyclical variations. Consequently, there can be no assurance that sales to current customers will continue at\nthe current rate or at all. In addition, our annual and quarterly results may vary, which may cause our profits and the market price of\nour common stock to decline.\n\n \n\nWe continue to seek to expand and strengthen our\nrelationship with our current customers and other brand names. However, we cannot assure you that these brands will continue to buy our\nproducts in the same volumes or on the same terms as they did in the past or that we will be successful in expanding our relationship\nwith other brand names.\n\n \n\n**Competition**\n\n \n\nThe markets for the manufacturing of sportswear\nand outerwear are highly competitive. The competition in those markets focuses primarily on the price and quality of the product and the\nlevel of customer service. Our products compete with products of other apparel manufacturers in Asia, Israel, Europe, the United States,\nand South and Central America.\n\n \n\nCompetition with other manufacturers in the clothing\nindustry focuses on reducing production costs, reducing supply lead time, design, product quality, and efficiency of supply to the customer.\nSince production costs depend to a large extent on labor costs, in recent years most production in the industry has been moved to countries\nwhere labor costs are low. Some of our competitors have lower cost bases, longer operating histories, larger customer bases, and other\nadvantages over us which allow them to compete with us. As described in more detail under “—Conditions in Jordan—Trade\nAgreements” below, we were able to sell our products manufactured at our facilities in Jordan to the United States free from customs\nduties and import quotas under certain conditions prior to April 5, 2025. These favorable terms enabled us to remain competitive on the\nbasis of price. Effective from April 5, 2025, the U.S. imposed a baseline tariff of 10% on imports from almost all countries, including\nJordan. Then, effective from April 9, 2025, it had announced “reciprocal” tariffs of imports from specified countries, amongst\nthem Jordan with a prevailing rate of then 20%. These “reciprocal” tariffs are postponed for 90 days, whilst the 10% baseline\ntariff persists. The tariff was modified to 15% according to an executive order of presidential actions on July 31, 2025. In February\n2026, the U.S. Supreme Court ruled that the “reciprocal” tariffs were illegal, and the U.S. Customs has since then stopped\nto impose the “reciprocal” tariff and established a new process to refund importers for voided “reciprocal” tariff.\nFollowing the ruling, the U.S. Government then invoked Section 122 of the Trade Act of 1974 to impose an across the board 10% tariff for\na period of 150 days expiring in July 2026, including on the imports from Jordan. While the payment of the tariff is typically the responsibility\nof the importer (Jerash’s customers), the impact of the tariff on customers’ demand would be affected by the comparative levels\nof the tariffs on imports from Jordan compared to other countries.\n\n \n\n5\n\n \n\n \n\nAccording to the Association Agreement between\nthe European Union (the “EU”) and Jordan, which came into force in May 2002, and the joint initiative on rules of origin reviewed\nand improved in December 2018 by the EU and Jordan, goods manufactured by us in Jordan that are subsequently shipped to EU countries are\nshipped free from customs duties.\n\n \n\n**Conditions in Jordan**\n\n \n\nOur manufacturing facilities are located in Jordan.\nAccordingly, we are directly affected by political, security, and economic conditions in Jordan.\n\n \n\nFrom time to time, Jordan has experienced instances\nof civil unrest, terrorism, and hostilities among neighboring countries, including Syria and Israel. A peace agreement between Israel\nand Jordan was signed in 1994. Terrorist attacks, military activity, rioting, or civil or political unrest in the future could influence\nthe Jordanian economy and our operations by disrupting operations and communications and making travel within Jordan more difficult and\nless desirable. Political or social tensions also could create a greater perception that investments in companies with Jordanian operations\ninvolve a high degree of risk, which could adversely affect the market and price for our common stock. Furthermore, the escalation of\nconflicts such as Russia-Ukraine, Israel-Hamas, and Israel/U.S.-Iran, as well as Houthi rebel attacks on commercial vessels in the Red\nSea, may increase geopolitical tensions globally. These political or social tensions could disrupt international trade, industrial supply\nchains, and transportation, leading to market price volatility, and may adversely affect our business, increase operational costs, and\nlimit our ability to secure foreign financing for our operations and capital expenditures. See “Item 1A. Risk Factors—Risks\nRelated to Operations in Jordan—Our operations in Jordan may be adversely affected by social and political uncertainties or change,\nmilitary actions, health-related risks, acts of terrorism or other geopolitical instability.” \n\n  \n\nJordan is a constitutional monarchy, but the King\nholds wide executive and legislative powers. The ruling family has taken initiatives that support the economic growth of the country.\nHowever, there is no assurance that such initiatives will be successful or will continue. The rate of economic liberalization could change,\nand specific laws and policies affecting manufacturing companies, foreign investments, currency exchange rates, and other matters affecting\ninvestments in Jordan could change as well.\n\n  \n\n*Trade Agreements*\n\n* *\n\nBecause of the Association Agreement between the\nEU and Jordan, which came into force in May 2002, we are able to sell our products manufactured at our facilities in Jordan to EU countries\nfree from customs duties.\n\n \n\nBecause of the United States-Jordan Free Trade\nAgreement, which came into force on December 17, 2001, and was implemented fully on January 1, 2010, we were able to sell our products\nmanufactured at our facilities in Jordan to the U.S. free from customs duties and import quotas under certain conditions prior to April\n5, 2025. For tariff imposed by the U.S., please see “Item 1. Business— Competition.”\n\n* *\n\n*Income/Sales Tax Incentives*\n\n  \n\nEffective January 1, 2019, Jordan’s government\nconverted the geographical area where Jerash Garments and its subsidiaries are located from a Free Zone to a Development Zone. Development\nZones are industrial parks that house manufacturing operations in Jordan. In accordance with applicable law, Jerash Garments and its subsidiaries\nwere subject to corporate income tax in Jordan at a rate of 19% or 20% plus a 1% social contribution between January 1, 2023 to December\n31, 2023. Effective January 1, 2024, the income tax rate increased to 20%, plus a 1% social contribution. Effective from October 1, 2025,\nJerash Garments has been granted tax concession at a corporate income tax rate 10% plus a 1% social contribution in accordance with the\nJordanian Income Tax Law. For more information, see “Note 2—Summary of Significant Accounting Policies—Income and Sales\nTaxes.”\n\n \n\n6\n\n \n\n \n\nIn addition, Jerash Garments and its subsidiaries\nare subject to local sales tax of 16% on purchases. However, Jerash Garments was granted a sales tax exemption from the Jordanian Investment\nCommission for the period June 1, 2015 to June 1, 2018 that allowed Jerash Garments to make purchases with no sales tax charge. This exemption\nwas extended to February 5, 2027.\n\n** **\n\n**Government Regulation**\n\n \n\nOur manufacturing and other facilities in Jordan\nand our subsidiaries outside of Jordan are subject to various local regulations relating to the maintenance of safe working conditions\nand manufacturing practices. Management believes that we are currently in compliance in all material respects with all such regulations.\nWe are not subject to governmental approval of our products or manufacturing process."}