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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

☒ ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended: December 31, 2025

☐ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number: 000-32585

SUNRISE REAL ESTATE GROUP, INC.

(Name of Small Business Issuer in its Charter)


Texas	6500	75-2713701
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

No. 18, Panlong Road

Shanghai, PRC 201702

(Address of Principal Executive Offices) (Zip Code)

Issuer’s telephone number: + 86-21-6139-8018

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	SRRE	N/A

Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.01 par value

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act of 1934. Yes ☐ No ☒

Check whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act during the preceding 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 ☐ No ☒

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☐ No ☒

Indicate by check mark if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-K (§229.405 of this Chapter) is not contained in this form, and no disclosure will be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated file ☒	Smaller reporting company ☒
Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided to Section 7(a)(2)(B) of the Securities Act. ☐

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act): Yes ☐ No ☒

The aggregate market value of the common stock held by non-affiliates 17,321,283 shares was approximately $3,291,044, based on the average opening and closing price of $0.19 for the Common Stock on June 24, 2025.

The number of shares outstanding of the issuer’s Common Stock, $0.01 par value, as of April 15, 2026 was 68,691,925 shares.

Table of Contents

TABLE OF CONTENTS

PART I
Item 1.	Business	2
Item 1A.	Risk Factors	11
Item 1B.	Unresolved Staff Comments	22
Item 1C	Cybersecurity	22
Item 2.	Property	23
Item 3.	Legal Proceedings	23
Item 4.	Mine Safety Disclosures	23
PART II
Item 5.	Market for Registrant’s Common Equity and Related Stockholder Matters and Issuer Purchases of Equity Securities	24
Item 6.	[Reserved]	24
Item 7.	Management’s Discussion and Analysis of Financial Condition, and Results of Operations	24
Item 7A.	Quantitative and Qualitative Disclosures about Market Risks	30
Item 8.	Financial Statements and Supplementary Data	31
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosure	56
Item 9A.	Controls and Procedures	56
Item 9B.	Other Information	57
Item 9C.	Disclosure Regarding Foreign Jurisdictions That Prevent Inspection	57
PART III
Item 10.	Directors, Executive Officers and Corporate Governance	58
Item 11.	Executive Compensation	62
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	63
Item 13.	Certain Relationships and Related Transactions and Director Independence	63
Item 14.	Principal Accountant Fees and Services	64
PART IV
Item 15.	Exhibits and Financial Statement Schedules	65
Item 16.	Form 10-K Summary	66

Table of Contents

PART I

ITEM 1. BUSINESS

Corporate History

The principal activities of Sunrise Real Estate Group, Inc. (“SRRE”) and its subsidiaries (collectively referred to as the “Company”) are real estate development including property leasing services; and property management services in the People’s Republic of China (“PRC”). Our current ownership interests in our various subsidiaries and other entities are set forth in the below organizational chart below.

Sunrise Real Estate Development Group, Inc. (“CY-SRRE”), a wholly-owned subsidiary of SRRE, was established in the Cayman Islands on April 30, 2004 as a limited liability company. Shanghai Xin Ji Yang Real Estate Consultation Company Limited (“SHXJY”) was established in the PRC on August 20, 2001 as a limited liability company. SHXJY was originally owned by a Taiwanese company, the principal and controlling shareholder of which was Lin Chi-Jung. On June 8, 2004, all the fully paid-up capital of SHXJY was transferred to CY-SRRE. On June 25, 2004, SHXJY and two individuals established a subsidiary, namely, Suzhou Xin Ji Yang Real Estate Consultation Company Limited (“SZXJY”) in the PRC and SHXJY held 90% equity interest in SZXJY at the time.

On August 9, 2005, SHXJY sold 10% equity interest in SZXJY to a company owned by a director of SZXJY, and transferred 5% equity interest in SZXJY to CY-SRRE. Following the sale and transfer, CY-SRRE effectively held 80% equity interest in SZXJY. On November 24, 2006, CY-SRRE, SHXJY, a director of SZXJY and a third party established a subsidiary, namely, Suzhou Shang Yang Real Estate Consultation Company Limited (“SZSY”) in the PRC, with CY-SRRE holding 12.5% equity interest, SHXJY holding 26% equity interest and the director of SZXJY holding 12.5% equity interest in SZSY. At the date of incorporation, SRRE and the director of SZXJY entered into a voting agreement that provided that SRRE is entitled to exercise the voting right in respect of his 12.5% equity interest in SZSY. As a result of the voting agreement, SRRE effectively holds 51% of the voting power of SZSY. On September 24, 2007, CY-SRRE sold 5% equity interest in SZXJY to a company owned by a director of SZXJY. Following the sale, CY-SRRE held 75% equity interest in SZXJY.

In October 2011, SHXJY purchased a 24% interest in Linyi Shang Yang Real Estate Consultation Company Limited (“LYSY”) and acquired approximately 103,385 square meters of land for the purpose of developing the land into villa-style residential housing. On March 6, 2012, SHXJY established a wholly-owned subsidiary, namely Linyi Rui Lin Construction and Design Company Limited (“LYRL”). SHXJY’s 24% equity interest in LYSY was then transferred to LYRL. On May 27, 2020, LYRL received 10% of the issued and outstanding shares of LYSY from Nanjing Longchang Real Estate Development Group. LYRL owned 34% of LYSY following the purchase. The Company and a shareholder of LYSY, Zhang Shu Qin, who holds 46% equity interest in LYSY, entered into a voting agreement that the Company is entitled to exercise the voting rights in respect of her 46% equity interest in LYSY. The Company effectively holds 80% voting rights in LYSY and therefore considers LYSY to be a subsidiary of the Company.

LIN RAY YANG Enterprise Ltd. (“LRY”), a wholly-owned subsidiary of SRRE, was established in the British Virgin Islands on November 13, 2003 as a limited liability company. On February 5, 2004, LRY established a wholly owned subsidiary, Shanghai Shang Yang Investment Management and Consulting Company Limited (“SHSY”) in the PRC as a limited liability company. On January 10, 2005, LRY and a PRC third party established a subsidiary, Suzhou Gao Feng Hui Property Management Company Limited (“SZGFH”), in the PRC, with LRY holding 80% of the equity interest in SZGFH. On May 8, 2006, LRY acquired 20% of the equity interest in SZGFH from the third party. Following the acquisition, LRY effectively held 100% of the equity interest in SZGFH. The Company sold SZGFH in 2017.

In 2011, we acquired 49% ownership interest in Wuhan Yuan Yu Long Property Development Company Limited (“WHYYL”). The purpose of this project company is for a development project in Wuhan.

SRRE was initially incorporated in Texas on October 10, 1996, under the name of Parallax Entertainment, Inc. (“Parallax”). On December 12, 2003, Parallax changed its name to Sunrise Real Estate Development Group, Inc.

On August 31, 2004, SRRE, CY-SRRE and Lin Chi-Jung, an individual and agent for the beneficial shareholder of CY-SRRE, i.e., Ace Develop, entered into an exchange agreement under which SRRE issued 5,000,000 shares of common stock to the beneficial shareholder or its designees, in exchange for all outstanding capital stock of CY-SRRE. The transaction was closed on October 5, 2004. Lin Chi-Jung was Chairman of the Board of Directors of SRRE, the President of CY-SRRE and the principal and controlling shareholder of Ace Develop.

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Also on August 31, 2004, SRRE, LRY and Lin Chi-Jung, an individual and agent for beneficial shareholders of LRY, i.e., Ace Develop, Planet Tech and Systems Tech, entered into an exchange agreement under which SRRE issued 10 million shares of common stock to the beneficial shareholders, or their designees, in exchange for all outstanding capital stock of LRY. The transaction closed on October 5, 2004. Lin Chi-Jung was Chairman of the Board of Directors of SRRE, the President of LRY and the principal and controlling shareholder of Ace Develop. Regarding the 10 million shares of common stock of SRRE issued in this transaction, SRRE issued 8.5 million shares to Ace Develop, 750,000 shares to Planet Tech and 750,000 shares to Systems Tech.

On May 23, 2006, Sunrise Estate Development Group, Inc. changed its name to Sunrise Real Estate Group, Inc.

General Business Description

SRRE went through a series of transactions leading to the completion of a reverse merger on October 5, 2004. Prior to the closing of the exchange agreements described in “Corporate History” above, SRRE was an inactive “shell” company. Following the closing, SRRE, through its two wholly owned subsidiaries, CY-SRRE and LRY, has engaged in the property development, property leasing services and property management services in the PRC.

The Company recognizes that in order to differentiate itself from the market, it should avoid direct competition with large-scale property developers who have their own marketing departments. Our objective is to develop a niche position with marketing alliances with mid-sized and smaller developers and become their outsourcing marketing and sales agents. This strategic plan is designed to expand our activities beyond our existing revenue base, enabling us to assume higher investment risk and giving us flexibility in collaborating with partnering developers. The plan was aimed at improving our capital structure, diversifying our revenue base, and creating higher values and equity returns.

SRRE operates through its wholly owned subsidiaries, CY-SRRE and LRY. CY-SRRE and LRY do not have operations themselves but conduct operations in Mainland China through their respective subsidiaries that are based in the PRC. CY-SRRE operates through its wholly owned subsidiary, SHXJY. LRY operates through its wholly owned subsidiaries, SHSY. SHXJY and SHSY are property agency business earning commission revenue from marketing and sales services to developers. Our company organization chart is as follows:

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Figure 1: Company Organization Chart

1.	It was previously known as Shanghai Shang Yang Real Estate Consultation Co., Limited. The company changed its name to Shanghai Shang Yang Investment Management and Consulting Company Limited on May 28, 2013.

2.	Zhong Ji Pu Fa Real Estate Co., Ltd. (“SHGXL”) is consolidated into the Company’s financials because the Company controls the development rights and is beneficiary of the revenue that SHGXL generates.

The Company and a shareholder of LYSY, which holds 46% equity interest in LYSY, entered into a voting agreement that the Company is entitled to exercise the voting rights in respect of her 46% equity interest in LYSY. The Company effectively holds 80% voting rights in LYSY and therefore considers LYSY a subsidiary of the Company. On May 27, 2020, LYRL received 10% of the issued and outstanding shares of LYSY from Nanjing Longchang Real Estate Development Group. LYRL owned 34% of LYSY following the purchase.

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Our major business is real estate investments, property leasing services, property management services, and real estate development in the PRC. Additionally, we have expanded our business to financial activities such as entity investment, fund management, and financial services. The chart and accompanying narrative below provides the specific entities that conduct operations, as well as the approximate percentage of revenues generated by such entities:

 

Company

 

Operation

 

% of Rev Based
on 2025

 

Place of
Organization

 

Shareholder(s)

 

Place of
Organization
or Citizenship

 

%
Ownership

Lin Ray Yang Enterprise Ltd.

Holding company

British Virgin Islands

Sunrise Real Estate Group Inc.

USA

100

Company

Operation

% of Rev Based
on 2025

Place of
Organization

Shareholder(s)

Place of
Organization
or Citizenship

%
Ownership

Sunrise Real Estate Development Group Inc.

Holding company

Cayman Islands

Sunrise Real Estate Group Inc.

USA

100

Company

Operation

% of Rev Based
on 2025

Place of
Organization

Shareholder(s)

Place of
Organization
or Citizenship

%
Ownership

Shangyang International PTE. LTD.

Holding company

Singapore

Sunrise Real Estate Group Inc.

USA

100

Company

Operation

% of Rev Based
on 2025

Place of
Organization

Shareholder(s)

Place of
Organization
or Citizenship

%
Ownership

Shanghai Xin Ji Yang Real Estate Consultation Co., Ltd

Consultation service

China

Sunrise Real Estate Development Group Inc.

Cayman Islands

100

Company

Operation

% of Rev Based
on 2025

Place of
Organization

Shareholder(s)

Place of
Organization
or Citizenship

%
Ownership

Shanghai Shangyang Investment Management and Consulting Co., Ltd

Consultation service

1.72% (USD230,332)

China

Lin Ray Yang Enterprise Ltd.

British Virgin Islands

100

Company

Operation

% of Rev Based
on 2025

Place of
Organization

Shareholder(s)

Place of
Organization
or Citizenship

%
Ownership

Zhong Ji Pu Fa Real Estate Co., Ltd

Property Development

3.32% (USD444,665)

China

Shanghai Shangyang Investment Management and Consulting Co., Ltd

China

Company

Operation

% of Rev Based
on 2025

Place of
Organization

Shareholder(s)

Place of
Organization
or Citizenship

%
Ownership

Huai’an Zhan Bao Property Investment Co., Ltd

Holding Company

(0%)

China

Lin Ray Yang Enterprise Ltd.

British Virgin Islands

78.46

Zhan Li (HK) Ltd.

Hong Kong

Beijing Zuitaoran Fashion Ltd.

China

Shanghai Ba A Management Centre (Limited Partnership)

China

0.77

Fang Ken Management Centre (Limited Partnership)

China

0.77

Company

Operation

% of Rev Based
on 2025

Place of
Organization

Shareholder(s)

Place of
Organization
or Citizenship

%
Ownership

Huai’an Tianxi Real Estate Development Co., Ltd

Property Development

80.1% (USD10,742,940)

China

Huai’an Zhan Bao Property Investment Co., Ltd

China

100

Company

Operation

% of Rev Based
on 2025

Place of
Organization

Shareholder(s)

Place of
Organization
or Citizenship

%
Ownership

Shanghai Ruijian Design Co., Ltd

Consultation service

China

Shanghai Shangyang Investment Management and Consulting Co., Ltd

China

100

Company

Operation

% of Rev Based
on 2025

Place of
Organization

Shareholder(s)

Place of
Organization
or Citizenship

%
Ownership

Linyi Ruilin Design Co., Ltd

Consultation service

China

Shanghai Ruijian Design Co., Ltd

China

100

Company

Operation

% of Rev Based
on 2025

Place of
Organization

Place of
Organization
or Citizenship

Linyi Shangyang Real Estate Development Co., Ltd

Property development

13.12%(USD1,800,252)

China

Zhang Shu Qing

Taiwan, China

Linyi Ruilin Design Co., Ltd

China

Chen Jia Wei

Taiwan

Huang Xin Hua

Taiwan

Guo Wei Chun

Taiwan

Company

Operation

% of Rev Based
on 2025

Place of
Organization

Shareholder(s)

Place of
Organization
or Citizenship

%
Ownership

Suzhou Xin Ji Yang Real Estate Consultation Co., Ltd

Consultation service,

1.45%(USD195,024)

China

Shanghai Xin Ji Yang Real Estate Consultation Co., Ltd

China

Jacky Pan Investment Inc

British Virgin Islands

Company

Operation

% of Rev Based
on 2025

Place of
Organization

Shareholder(s)

Place of
Organization
or Citizenship

%
Ownership

Sanya Shang Yang Real Estate Consultation Co., Ltd

Consultation service,

China

Shanghai Shangyang Investment Management and Consulting Co., Ltd

China

100

Company

Operation

% of Rev Based
on 2025

Place of
Organization

Shareholder(s)

Place of
Organization
or Citizenship

%
Ownership

Wuhan Yuan Yu Long Real Estate Dev. Co., Ltd.

Property development

China

Sanya Shang Yang Real Estate Consultation Co., Ltd

China

Wang Zhi Qing

China

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Company

 

Operation

 

% of Rev Based
on 2025

 

Place of
Organization

 

Shareholder(s)

 

Place of
Organization
or Citizenship

 

%
Ownership

Shanghai Huitian Wealth Mgmt. Co., Ltd

Consultation service,

China

Shanghai Shangyang Investment Management and Consulting Co., Ltd

China

Pan Jian

China

Wang Zhan

China

Company

Operation

% of Rev Based
on 2025

Place of
Organization

Shareholder(s)

Place of
Organization
or Citizenship

%
Ownership

Shanghai Daerwei Trading Co., Ltd

Sales & wholesale.

China

Shanghai Guangpeng Investment & Managament Co., Ltd

China

35.18

Shanghai Shenji Biological Tech. Co., Ltd

China

31.86

Shanghai Shangyang Investment Management and Consulting Co., Ltd

China

12.61

Linyi Ruilin Design Co., Ltd

China

7.3

Beijing Zuitaoran Clothes Co., Ltd

China

4.7

Xiamen Ruixu Investment Partnership (Limited Partnership)

China

2.37

Tao Hong

China

1.93

Kuang Gui Yuan

China

1.24

Xiamen Xuyao Investment Partnership (Limited Partnership)

China

1.13

Wang Wenhua

China

0.74

Shanghai YuanChong Managment & Consulting Partnership (Limited Partnership)

China

0.56

Shanghai Xuhao Management & Consulting Partnership (Limited Partnership)

China

0.39

Company

Operation

% of Rev Based
on 2025

Place of
Organization

Shareholder(s)

Place of
Organization
or Citizenship

%
Ownership

Shanghai Daerwei Industry Co., Ltd

Sales & wholesale.

China

Zhan Li (HK) Ltd.

Hong Kong, China

41.91

Shanghai Tingran Tech. Development Co., Ltd

China

Shanghai Shangyang Investment Management and Consulting Co., Ltd

China

19.58

Shanghai Tingyang Commercial Consulting Partnership (Limited Partnership)

China

0.95

Shanghai Huotiancao Info. Tech. Co., Ltd.

China

0.79

Shanghai Fangken Management Central Partnership (Limited Partnership)

China

0.77

Company

Operation

% of Rev Based
on 2025

Place of
Organization

Shareholder(s)

Place of
Organization
or Citizenship

%
Ownership

Shanghai Shifenmei Brand Mgmt. Co., Ltd

Sales & wholesale.

China

Shanghai Shenji Bio-tech Co., Ltd.

China

78.09

Shanghai Shangyang Investment Management and Consulting Co., Ltd

China

12.61

Linyi Ruilin Design Co., Ltd

China

7.31

Shanghai Enrun Culture Media Co., Ltd

China

2.0

Company

Operation

% of Rev Based
on 2025

Place of
Organization

Shareholder(s)

Place of
Organization
or Citizenship

%
Ownership

Shanghai Maitinghao Trading Co., Ltd

Sales & wholesale.

China

Shanghai Shenji Bio-tech Co., Ltd.

China

78.09

Shanghai Shangyang Investment Management and Consulting Co., Ltd

China

12.61

Linyi Ruilin Design Co., Ltd

China

7.31

Shanghai Enrun Culture Media Co., Ltd

China

2.0

Company

Operation

% of Rev Based
on 2025

Place of
Organization

Shareholder(s)

Place of
Organization
or Citizenship

%
Ownership

Shanghai Zhuangyanting Trading Co., Ltd

Sales & wholesale.

China

Shanghai Shenji Bio-tech Co., Ltd.

China

78.09

Shanghai Shangyang Investment Management and Consulting Co., Ltd

China

12.61

Linyi Ruilin Design Co., Ltd

China

7.31

Shanghai Enrun Culture Media Co., Ltd

China

2.0

Company

Operation

% of Rev Based
on 2025

Place of
Organization

Shareholder(s)

Place of
Organization
or Citizenship

%
Ownership

Shanghai Aoyue Bio-tech Co., Ltd

Sales & wholesale.

China

Shanghai Shenji Bio-tech Co., Ltd.

China

78.09

Shanghai Shangyang Investment Management and Consulting Co., Ltd

China

12.61

Linyi Ruilin Design Co., Ltd

China

7.31

Shanghai Enrun Culture Media Co., Ltd

China

2.0

Company

Operation

% of Rev Based
on 2025

Place of
Organization

Shareholder(s)

Place of
Organization
or Citizenship

%
Ownership

Shanghai Xinshangyang Media Communication Co., Ltd

Consultation service

China

Shanghai Shangyang Investment Management and Consulting Co., Ltd

China

100

For the fiscal year ended December 31, 2025, there are no percent of our net revenue, was generated from our brokerage operations. For these services, we earned a commission fee calculated as a percentage of the sales prices. We have focused our sales on the entire China market, with a particular focus on the second-tier cities. To expand our business agencies, we have established subsidiaries and branches in Shanghai, Suzhou and Wuhan.

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Since we started our agency sales operations in 2001, we have established a reputation as a sales and marketing agency for new projects. With our accumulated expertise and experience, we intend to take a more aggressive role by participating in property investments. We plan to select property developers with outstanding qualifications as our strategic partners, and continue to build strength in design, planning, positioning and marketing services. We subsequently phased out of the agency sales operations where we no longer have this business unit.

SHDEW was established in June 2013 as a skincare and cosmetic company. We own 19.91% of the common stock of SHDEW. As the Company does not have significant influence in SHDEW and the change of ownership to 19.91% from 20.38% due to certain SHDEW employee stock bonus having vested in December 2019, we changed our accounting method for the SHDEW investment from the equity method to the alternative measurement.

Business Activities

Our main operating subsidiary, SHSY, has real estate developments for residential properties as well as property management and leasing. We also have developed a network of landowners and developers, allowing us to explore opportunities in property investments.

Real Estate Development

In October 2011, we established LYSY and own 34% of the company. During the first quarter of 2012, we acquired approximately 103,385 square meters for the purpose of developing villa-style residential housing. The LYSY project has divided into three phases at this moment. Phase 1 has completed construction of 121 units in May 2015 and sold 119 units out of all 121 units as of March 25, 2026. Phase 2 was divided into north and south area and completed construction of 84 units at the end of 2020. All 84 units were sold during phase 2 as of March 25, 2026. Phase 3 began construction in the first quarter of 2021 and sold 34 units out of 51 units as of March 25, 2026. In September 2020, the Company expanded the Linyi project by purchasing an additional 54,312 square meters for 228 million RMB for future development.

In October 2018, HATX purchased the property in Huai’an, Qingjiang Pu district with an area of 78,030 square meters (“sqm”). In December 2018, we established HAZB with a 78.46% ownership for the purpose of real estate investment, and in March 2019, HAZB purchased 100% of HATX and its land usage rights to the Huai’an property. The Huai’an project, named Tianxi Times, started its first phase development in early 2019 with a gross floor area (“GFA”) of 82,218 sqm totaling 679 units, and started its second phase in 2020 with a GFA of 99,123 sqm totaling 873 units. As of March 25, 2026, the Company sold 655 units, out of 679 units of the first phase and sold 600 units out of 873 of the second phase.

Property Management and Leasing

The Company has two floors of office space encompassing 5,152 square meters in Huilong Tower in Suzhou. We manage these two floors to lease to prospective tenants.

We lease the unsold units of the GXL project. Total leasing area for the GXL building is 3,611 square meters.

We also lease the unsold commercial property of the HATX project. Total leasing area for the property is 8,268 square meters.

Mainland China’s Property Sector

The industry’s macro environment is improving, and the property sector is gradually becoming a more regulated market. Stable economic growth provides a solid and secure base for investment returns in the property sector.

GDP Growth of PRC for the period of 2021 through 2025:


		GDP GROWTH
2021			8.4	%
2022			3.0	%
2023			5.2	%
2024			5.0	%
2025			5.0	%

Source: National Bureau of Statistics of China

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Government Regulation

The State Taxation Administration issued the Regulation of Land Value-added Tax Clearing and Administration in May 2009, effective on June 1, 2009. It requires developers to clear the land value-added tax, which have completed development projects and have finished sale, or have sold development projects under construction, to clear the land value-added tax.

In December 2009, the Ministry of Finance, Ministry of Land and Resources, Ministry of Supervision, the Central Government, and five other agencies required issued “Notice Regarding Improving Land Sales and Responsible Management” and required that the initial payment of land purchases be increased to 50% of the purchase price and that the entire purchase price be paid in full within the year. Prior to the announcement, the initial payment was around 20% to 30% of the purchase price.

On January 1, 2010, the Ministry of Finance and the State Administration of Taxation re-imposed the business tax on total proceeds from the resale of certain residential properties held for less than five years. The China Banking Regulatory Authority withdrew its earlier policy and re-imposed a minimum of 40% down payment requirement for mortgages for second housing units purchased by families. On March 8, 2010, the Ministry of Land and Resources issued a circular to further strengthen the supervision on land supply, requiring a real estate developer to pay at least 50% of the land premium within one month and 100% within one year after the land use right contract is executed. On April 17, 2010, the State Council issued the Circular on Firmly Restraining Soaring Housing Prices in Certain Cities. Pursuant to this circular,

●

A down payment must be no less than 30% of the purchase price for first self-use housing unit purchases by a family with a gross construction area of more than 90 square meters;

●

The minimum down payment for the second housing unit purchased by a family is increased from 40% to 50% and the loan interest rate must be no less than 110% of benchmark lending interest rate;

●

Down payment for the third or additional housing unit purchased by any family and the loan interest rate must be further increased significantly based on the rate for the first and second housing units, as determined by commercial banks based on their assessment of the risks;

●

Commercial banks may suspend extending loans to families for their purchases of the third or additional housing units in regions where commercial housing unit prices are too high or have risen too fast or supply of housing units is insufficient. The banks may also suspend extending loans to individuals for their purchase of housing units outside of their registered residence if they cannot furnish evidence of their tax or social insurance premium payment for at least one year locally in the region where the subject housing units are located; and

●

Local governments are allowed to limit the total number of housing units one can purchase in certain period in light of the local situation.

On January 10, 2010, the government established eleven measures to strengthen management of the real estate market to address rising real estate prices. The measures called for an increasing supply of low-cost houses for low-income families and common residential houses, encouraging reasonably priced house buying while limiting purchases for speculation and investment, strengthening real estate project loan risk management and market supervision, speeding up construction of residential housing projects for low-income households, and specifying responsibilities of local governments.

In January 2011, the State Council released an additional eight new measures to put downward pressure on property prices by:

Requiring local governments to set housing price targets in proportion to local income levels for 2011;

Requiring a business tax for housing sales within 5 years of purchase must be levied on total sales value;

Strengthening the management of land supply for housing;

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Imposing purchase restrictions in all large and medium-sized cities. Families already owning a residential property are allowed to buy only one more, while those already owning two or more properties are prohibited from purchasing additional properties;

Accelerating the construction of social security residential housings;

Providing that the down payment ratio for second-home purchases must not be less than 60%, up from 50%, with an interest rate at least 1.1 times of the benchmark rate;

Improving guidance for the media’s housing market coverage;

Providing for implementation & accountability for local governments over the housing price control targets.

In May 2011, the National Development and Reform Commission (“NDRC”) began the “one house, one price” policy which requires developers to enhance its disclosure of the residential properties’ offering prices and available supply volume. This policy is designed to prevent developers from posting false supply volume and prices to fuel speculative price volatility.

In July 2011, China’s State Council declared that it will continue to implement tightening policies and expand the housing purchase restrictions to second and third-tier cities.

In late February and March 2013, the PRC government issued the “New Five Policies” for administration of the housing market and detailed implementation rules, which signified the PRC government’s strong determination to curb the increase in housing prices by requiring more stringent implementation of the housing price control measures. For example, in the cities where there are existing restrictions on housing sale, if the housing prices are rising fast due to insufficient local housing supply, the local governments are required to take more stringent measures to restrict housing units from being sold to those households that own more than one housing unit. In these cities, the minimum down payment for the second housing unit purchased by a household may be further increased from 60% and the loan interest rate may be raised to be more than 110% of benchmark lending interest rate, as the local housing price control measures require. The New Five Policies also reiterated and emphasized the implementation of the 20% income tax on capital gain generated from housing unit sale. Following the request of the central government, Beijing, Shanghai and other major cities in China have announced detailed regulations to implement the New Five Policies in late March 2013 to further cool down the local real estate markets.

In July 2012, the Ministry of Land and Resources and the Ministry of Housing and Urban-Rural Development jointly issued a notice to further tighten the land use administration and seek stricter enforcement of the existing real estate market regulations, which include, in particular, enhanced control over the floor area and plot ratio of land for housing purpose, closer scrutiny on the qualification of land bidders, and strengthened investigation and punishment on land bidding winners who leave land idle for more than one year.

Such measures and policies by the government have negatively affected the real estate market and caused a reduction in transactions in the real estate market. While these measures and policies remain in effect, they may continue to depress the real estate market, dissuade would-be buyers from making purchases, reduce transaction volume, cause a decline in average selling prices, and prevent developers from raising the capital they need and increase developers’ costs to start new projects.

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Employees

As of December 31, 2025, we had the following number and categories of employees:


		Employees
SRRE
Executive Dept.			2
Accounting Dept.			1
Investor Relations Dept.			1

SHXJY
Administration Dept.			1
Accounting Dept.			1
Research & Development Dept.			1

SZXJY
Administration Dept.			4
Research & Development Dept.			1
Accounting Dept.			2
Marketing Dept.			5

SHSY
Administration Dept.			2
Accounting Dept.			2
Development Dept.			1

LYSY
Accounting Dept			2
Administration Dept.			4
Construction Dept.			6
Marketing Dept.			1
Executive Dept.			1

HATX
Administration Dept.			9
Accounting Dept.			2
Construction Dept.			1
Marketing Dept.			7

SHRJ
Administration Dept.
Design Dept.			1
Total			58

None of our employees are represented by a labor union or bound by a collective bargaining unit. We believe that our relationship with our employees is satisfactory.

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ITEM 1A. RISK FACTORS

RISK FACTORS

SRRE has identified a number of risk factors the Company faces. These factors, among others, may cause actual results, events or performance to differ materially from those expressed in this 10-K or in press releases or other public disclosures. You should be aware of the existence of these factors.

RISKS RELATING TO THE GROUP

SRRE is a holding company and depends on its subsidiaries’ cash flows to meet its obligations.

SRRE is a holding company and it conducts all of its operations through its subsidiaries. As a result, its ability to meet any obligations depends upon its subsidiaries’ cash flows and payment of funds as dividends, loans, advances or other payments. In addition, the payment of dividends or the making of loans, advances or other payments to SRRE may be subject to regulatory or contractual restrictions.

Development of new business may stretch our cash flow and strain our operation efficiency.

Business expansion and the need to integrate operations arising from the expansion may place a significant strain on our managerial, operational and financial resources, and will further contribute to a need to increase in our financial needs.

Our acquisition of new property may involve risks.

These acquisitions involve several risks including, but not limited to, the following:

The acquired properties may not perform as well as we expect or ever become profitable.

Improvements to the properties may ultimately cost significantly more than we had originally estimated.

Additional acquisitions might harm our business.

As part of our business strategy, we may seek to acquire or invest in additional businesses, products, services or technologies that we think could complement or expand our business. If we identify an appropriate acquisition opportunity, we might be unable to negotiate the terms of that acquisition successfully, finance it, or integrate it into our existing business and operations. We may also be unable to select, manage or absorb any future acquisitions successfully. Furthermore, the negotiation of potential acquisitions, as well as the integration of an acquired business, would divert management time and other resources. We may have to use a substantial portion of our available cash to consummate an acquisition. If we complete acquisitions through exchange of our securities, our shareholders could suffer significant dilution. In addition, we cannot assure that any particular acquisition, even if successfully completed, will ultimately benefit our business.

Our real estate investments are subject to numerous risks.

We are subject to risks that generally relate to investments in real estate. The investment returns available from equity investments in real estate depend in large part on the amount of income earned and capital appreciation generated by the related properties, as well as the expenses incurred. In addition, a variety of other factors affect income from properties and real estate values, including governmental regulations, insurance, zoning, tax and eminent domain laws, interest rate levels and the availability of financing. For example, new or existing real estate zoning or tax laws can make it more expensive and/or time-consuming to develop real property or expand, modify or renovate properties. When interest rates increase, the cost of acquiring, developing, expanding or renovating real property increases and real property values may decrease as the number of potential buyers decrease. Similarly, as financing becomes less available, it becomes more difficult both to acquire and to sell real property. Finally, governments can, under eminent domain laws, take real property. Sometimes this taking is for less compensation than the owner believes the property is worth. Any of these factors could have a material adverse impact on results of our operations or financial condition. In addition, equity real estate investments, such as the investments we hold and any additional properties that we may acquire, are relatively difficult to sell quickly. If our properties do not generate sufficient revenue to meet operating expenses, including debt servicing and capital expenditures, our income will be reduced.

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Competition, economic conditions and similar factors affecting us, and the real estate industry in general, could affect our performance.

Our properties and business are subject to all operating risks common to the real estate industry. These risks include:

Adverse effects of general and local economic conditions;

Increases in operating costs attributable to inflation and other factors; and

Overbuilding in certain property sectors.

These factors could adversely affect our revenues, profitability, and results of operations.

Our business is susceptible to fluctuations in the real estate market of China, especially in certain areas of eastern China where a significant portion of our operations are concentrated, which may adversely affect our revenues and results of operations.

We conduct our real estate services business in China. Our business depends substantially on the conditions of the PRC real estate market. Demand for private residential real estate in China has grown rapidly in the recent decade but such growth is often coupled with volatility in market conditions and fluctuation in real estate prices. Fluctuations of supply and demand in China’s real estate market are caused by economic, social, political and other factors. To the extent fluctuations in the real estate market adversely affect real estate transaction volumes or prices, our financial condition and results of operations may be materially and adversely affected.

As a significant portion of our operations is concentrated in Shanghai and Jiangsu Province, any decrease in demand or real estate prices or any other adverse developments in these regions may materially and adversely affect our total real estate transaction volumes and average selling prices, which may in turn adversely affect our revenues and results of operations. These economic uncertainties involve, among other things, conditions of supply and demand in local markets and changes in consumer confidence and income, employment levels, increase in mortgage interest rates and government regulations. These risks and uncertainties could periodically have an adverse effect on consumer demand for and the pricing of our homes, which could cause our operating revenues to decline. In addition, builders are subject to various risks, many of them outside the control of the homebuilder including competitive overbuilding, availability and cost of building lots, materials and labor, adverse weather conditions, cost overruns, changes in government regulations, and increases in real estate taxes and other local government fees. A reduction in our revenues could in turn negatively affect the market price of our securities.

Our net income is generated primarily from an investment in one of our unconsolidated affiliates, and we are dependent upon advances and expected distributions from such affiliate to operate and grow our business and satisfy our liabilities.

SHDEW, an unconsolidated affiliate, has generated the majority of our cash receipts through the payment of dividends and advances in the past few years. Any material decline in the business of SHDEW or in its expected ability to pay dividends would materially and adversely affect our business, our ability to service liabilities and to pay dividends on our common stock, unless we obtain other sources of financing, of which there can be no assurance. As of December 31, 2025, we owned 19.91% of SHDEW, but we do not control or have significant influence on its operations, the payment by SHDEW of dividends or other distributions to us. In addition, the payment of dividends or other distributions from SHDEW could be subject to restrictions on, or taxation of, dividends or repatriation of earnings under applicable law, monetary transfer restrictions, currency exchange regulations in jurisdictions in which our subsidiaries operate or any other restrictions imposed by current or future agreements to which SHDEW may be a party, including debt instruments. Events beyond our control, including changes in general business and economic conditions, could adversely impact the value of our investment and the ability of SHDEW to pay dividends or make other distributions to us.

In addition, a significant portion of our assets consist of ownership interests in SHDEW. If we were required to liquidate any of such securities in order to generate funds to satisfy our liabilities, we may be required to sell such securities at a time or times at which we would not be able to realize what we believe to be the long-term value of such assets and there might be a very limited market for such securities.

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Our business may be materially and adversely affected by government measures aimed at China’s real estate industry.

The real estate industry in China is subject to government regulations. Until 2009, the real estate markets in a number of major cities in China had experienced rapid and significant growth. Before the global economic crisis hit all the major economies worldwide in 2009, the PRC government had adopted a series of measures to restrain what it perceived as unsustainable growth in the real estate market. From 2003 to the present, the PRC government introduced a series of specific administrative and credit-control measures including, but not limited to, setting minimum down payment requirements for residential and commercial real estate transactions, limiting availability of mortgage loans, and tightening governmental approval process for certain real estate transactions.

In cities such as Beijing and Shanghai, we have seen the effects of such policies and regulatory measures. The sales volumes for real properties in Beijing and Shanghai decreased significantly after the policy change. The sale prices for certain properties in such cities are also weakened. The PRC government’s policy and regulatory measures on the PRC real estate sector could adversely affect the property purchasers’ ability to obtain mortgage financing or significantly increase the cost of mortgage financing and reduce market demand for properties. These factors may materially and adversely affect our business, financial condition, results of operations and prospects.

Despite the recent government measures aimed at maintaining the long-term stability of the real estate market, there is no assurance that the PRC government will not continue to adopt new measures in the future that may result in short-term downward adjustments and uncertainty in the real estate market.

Our business may be materially and adversely affected as a result of decreased transaction volumes or real estate prices that may follow these adjustments or market uncertainty.

We operate in a highly competitive environment.

Our competitors may be able to adapt more quickly to changes in customer needs or to devote greater resources than we can to developing and expanding our services. Such competitors could also attempt to increase their presence in our markets by forming strategic alliances with other competitors, by offering new or improved services or by increasing their efforts to gain and retain market share through competitive pricing. As the market for our services matures, price competition and penetration into the market will intensify. Such competition may adversely affect our gross profits, margins and results of operations. There can be no assurance that we will be able to compete successfully with existing or new competitors.

We may be unable to effectively manage our growth.

We will need to manage our growth effectively, which may entail devising and effectively implementing business and integration plans, training and managing our growing workforce, managing our costs, and implementing adequate control and reporting systems in a timely manner. We may not be able to successfully manage our growth or to integrate and assimilate any acquired business operations. Our failure to do so could affect our success in executing our business plan and adversely affect our revenues, profitability and results of operations.

If we fail to successfully manage our planned expansion of operations, our growth prospects will be diminished and our operating expenses could exceed budgeted amounts.

Our ability to offer our services in an evolving market requires an effective planning and management process. We have expanded our operations rapidly since inception, and we intend to continue to expand them in the foreseeable future. This rapid growth places significant demand on our managerial and operational resources and our internal training capabilities. In addition, we have hired a significant number of employees and plan to further increase our total work force. This growth will continue to substantially burden our management team. To manage growth effectively, we must:

Implement and improve our operational, financial and other systems, procedures and controls on a timely basis.

Expand, train and manage our workforce, particularly our sales and marketing and support organizations.

We cannot be certain that our systems, procedures and controls will be adequate to support our current or future operations or that our management will be able to handle such expansion and still achieve the execution necessary to meet our growth expectations. Failure to

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manage our growth effectively could diminish our growth prospects and could result in lost opportunities as well as operating expenses exceeding the amount budgeted.

We may be unable to maintain internal funds or obtain financing or renew credit facilities in the future.

Adequate financing is one of the major factors, which can affect our ability to execute our business plan in this regard. We finance our business mainly through internal funds, bank loans or raising equity funds. There is no guarantee that we will always have internal funds available for future developments or we will not experience difficulties in obtaining financing and renewing credit facilities granted by financial institutions in the future. In addition, there may be a delay in equity fundraising activities. Although in August and November 2014 we issued 40,000,000 shares of stock of the Company in aggregate for cash of approximately $3,400,000 to Ace Develop, with Lin Chi-Jung, our director and the sole shareholder of Ace Develop, our access to obtain debt or equity financing depends on the bank’s willingness to lend and on conditions in the capital markets, and we may not be able to secure additional sources of financing on commercially acceptable terms, if at all. If we cannot raise additional capital on acceptable terms, we may not be able to develop or enhance our services, take advantage of future opportunities or respond to competitive pressures or unanticipated requirements. To fully realize our business objectives and potential, we may require additional financing. If we are unable to obtain any necessary additional financing, we will be required to substantially curtail our approach to implementing our business objectives. Additional financing may be debt, equity or a combination of debt and equity. If equity is used, it could result in significant dilution to our shareholders.

We require substantial capital resources to fund our land use rights acquisition and property developments, which may not be available.

Property development is capital intensive. Our ability to secure sufficient financing for land use rights acquisition and property development depends on a number of factors that are beyond our control, including market conditions in the capital markets, the PRC economy and the PRC government regulations that affect the availability and cost of financing for real estate companies.

In order to strengthen liquidity management and regulate money and credit supply, the People’s Bank of China raised the RMB reserve requirement ratio for depository financial institutions. In 2020, the People’s Bank of China lowered the reserve requirement ratio by 0.5% to 12.5% and 10.5% for large and small financial institutions, respectfully. The reserve requirement ratio refers to the amount of funds that banks must hold in reserve against deposits made by their customers. These increases in the reserve requirement ratio have reduced the amount of commercial bank credit available to businesses in China, including us.

Our operations and growth prospects may be significantly impeded if we are unable to retain our key personnel or attract additional key personnel, particularly since experienced personnel and new skilled personnel are in short supply.

Competition for key personnel is intense. As a small company, our success depends on the service of our executive officers, and other skilled managerial and technical personnel, and our ability to attract, hire, train and retain personnel. There is always the possibility that certain of our key personnel may terminate their employment with us to work for one of our competitors at any time for any reason. There can be no assurance that we will be successful in attracting and retaining key personnel. The loss of services of one or more key personnel could have a material adverse effect on us and would materially impede the operation and growth of our business.

If our partnering developers experience financial or other difficulties, our business and revenues could be adversely affected.

As a service-based company, we greatly depend on the working relationships and agency contracts with its partnering developers. We are exposed to the risks that our partnering developers may experience financial or other difficulties, which may affect their ability or will to carry out any existing development projects or resell contracts, thus delaying or canceling the fulfillment of their agency contracts with us. Any of these factors could adversely affect our revenues, profitability and results of operations.

Our partnering developers are subject to extensive government regulation which could make it difficult for them to obtain adequate funding or additional funding. Various PRC regulations restrict developers’ ability to raise capital through external financings and other methods, including, but not limited to, the following:

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developers cannot pre-sell uncompleted residential units in a project prior to achieving certain development milestones specified in related regulations;

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PRC banks are prohibited from extending loans to real estate companies to fund the purchase of land use rights;

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developers cannot borrow from a PRC bank for a particular project unless we fund at least 35% of the total investment amount of that project using our own capital;

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developers cannot borrow from a PRC bank for a particular project if we do not obtain the land use right certificate for that project;

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property developers are strictly prohibited from using the proceeds from a loan obtained from a local bank to fund property developments outside of the region where the bank is located; and

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PRC banks are prohibited from accepting properties that have been vacant for more than three years as collateral for a loan.

We may fail to obtain, or may experience material delays in obtaining necessary government approvals for any major property development, which will adversely affect our business.

The real estate industry is strictly regulated by the PRC government. Property developers in China must abide by various laws and regulations, including implementation rules promulgated by local governments to enforce these laws and regulations. Before commencing, and during the course of, development of a property project, we need to apply for various licenses, permits, certificates and approvals, including land use rights certificates, construction site planning permits, construction work planning permits, construction permits, pre-sale permits and completion acceptance certificates. We need to satisfy various requirements to obtain these certificates and permits. To date, we have not encountered serious delays or difficulties in the process of applying for these certificates and permits, but we cannot guarantee that we will not encounter serious delays or difficulties in the future. In the event that we fail to obtain the necessary governmental approvals for any of our major property projects, or a serious delay occurs in the government’s examination and approval progress, we may not be able to maintain our development schedule and our business and cash flows may be adversely affected.

We may be unable to complete our property developments on time or at all.

The progress and costs for a development project can be adversely affected by many factors, including, without limitation:

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delays in obtaining necessary licenses, permits or approvals from government agencies or authorities;

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shortages of materials, equipment, contractors and skilled labor;

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disputes with our third-party contractors;

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failure by our third-party contractors to comply with our designs, specifications or standards;

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difficult geological situations or other geotechnical issues;

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on-site labor disputes or work accidents; and natural catastrophes or adverse weather conditions.

Any construction delays, or failure to complete a project according to our planned specifications or budget, may delay our property sales, which could harm our revenues, cash flows and our reputation.

If we fail to establish and maintain strategic relationships, the market acceptance of our services, and our profitability, may suffer.

To offer services to a larger customer base, our direct sales force depends on strategic partnerships, marketing alliances, and partnering developers to obtain customer leads and referrals. If we are unable to maintain our existing strategic relationships or fail to enter into additional strategic relationships, we will have to devote substantially more resources to the marketing of our services. We would also lose anticipated customer introductions and co-marketing benefits. Our success depends in part on the success of our strategic partners and their ability to market our services successfully. In addition, our strategic partners may not regard us as significant for their own businesses. Therefore, they could reduce their commitment to us or terminate their respective relationships with us, pursue other

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partnerships or relationships, or attempt to develop or acquire services that compete with our services. Even if we succeed in establishing these relationships, they may not result in additional customers or revenues.

We are subject to the risks associated with projects operated through joint ventures.

Some of our projects are operated through joint ventures in which we have controlling interests. We may enter into similar joint ventures in the future. Any joint venture investment involves risks such as the possibility that the joint venture partner may seek relief under Chinese insolvency laws, or have economic or business interests or goals that are inconsistent with our business interests or goals. While the bankruptcy or insolvency of our joint venture partner generally should not disrupt the operations of the joint venture, we could be forced to purchase the partner’s interest in the joint venture, or the interest could be sold to a third party. Additionally, we may enter into joint ventures in the future in which we have non-controlling interests. If we do not have control over a joint venture, the value of our investment may be affected adversely by a third party that may have different goals and capabilities than ours. It may also be difficult for us to exit a joint venture that we do not control after an impasse. In addition, a joint venture partner may be unable to meet its economic or other obligations, and we may be required to fulfill those obligations.

We are subject to risks relating to acts of God, terrorist activity and war.

Our operating income may be reduced by acts of God, such as natural disasters or acts of terror, in locations where we own and/or operate significant properties and areas from which we draw customers and partnering developers. Some types of losses, such as from earthquake, hurricane, pandemic, terrorism and environmental hazards, may be either uninsurable or too expensive to justify insuring against. Should an uninsured loss or a loss in excess of insured limits occur, we could lose all or a portion of the capital we have invested in any particular property, as well as any anticipated future revenue from such property. In that event, we might nevertheless remain obligated for any mortgage debt or other financial obligations related to the property. Similarly, wars (including the potential for war), terrorist activity (including threats of terrorist activity), political unrest and other forms of civil strife as well as geopolitical uncertainty have caused in the past, and may cause in the future, our results to differ materially from anticipated results.

A pandemic, epidemic or outbreak of an infectious disease in the markets in which we operate or that otherwise impacts our facilities or advisors could adversely impact our business and/or our ability to complete financial reports to enable us to comply with our reporting obligation under the Exchange Act.

If a pandemic, epidemic, or outbreak of an infectious disease including the recent outbreak of respiratory illness caused by a novel coronavirus (COVID-19) or other public health crisis were to affect our markets or facilities or those of our suppliers or accountants or advisors, our business could be adversely affected. A pandemic typically results in social distancing, travel bans and quarantine, and this may limit access to our employees and professional advisors. These factors may hamper our efforts to comply with our filing obligations with the Securities and Exchange Commission.

We have limited business insurance coverage in China.

The insurance industry in China is still at an early stage of development. Insurance companies in China offer limited business insurance products. As a result, we do not have any business liability or disruption insurance coverage for our operations in China. Any business disruption, litigation or natural disaster might result in substantial costs and diversion of resources.

We may be affected by global climate change or by legal, regulatory, or market responses to such change.

There is a growing concern in regards to the global warming issues affecting the world. The changing weather patterns and abnormal conditions may affect the construction and logistics of developers and this may indirectly cause inverse effect to our operation. Extreme weather conditions may delay in construction of properties; this then may delay the sale of these properties and therefore delaying our future revenue stream. There may be regulations in manufacturing materials for property construction and new building codes in response to global warming that may delay construction and/or create further expenses to the developers. These possible changes may indirectly affect our business.

Our real estate development operating results may not achieve our goals.

As there are many variables to developing a real estate project, we face the risk of running out of funds mid construction and may have to delay or be unable to continue developing the project. We may also run into market downturn and not be able to sell any of the housings we’ve developed. If any of the above happens, we may face an extreme cash shortage and will directly affect our business.

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The staff of our accounting department lack training and experience in the accounting principles generally accepted in the United States (the “U.S. GAAP”), which may result in accounting errors in the financial statements that we file with the Securities and Exchange Commission (the “SEC”).

Our executive offices are located in the PRC. Our entire bookkeeping and accounting staff is located there. Our books and records are maintained in Chinese, using Chinese accounting principles. Chinese accounting principles vary in many important respects from U.S. GAAP. To file our Company’s financial statements with the SEC, our accounting staff must convert the financial statements from Chinese accounting principles to U.S. accounting principles. However, none of the members of our accounting staff has extensive experience or training in the preparation of financial statements under U.S. accounting principles. Neither do we have any employee who has previous experience in accounting for a U.S. public company. This situation creates a risk that the financial statements we file with the SEC will fail to present our financial condition and/or results of operations as required by SEC rules and U.S. GAAP.

We have identified material weaknesses in our internal control over financial reporting. If we fail to develop or maintain an effective system of internal controls, we may not be able to accurately report our financial results and prevent fraud. As a result, current and potential stockholders could lose confidence in our financial statements, which would harm the trading price of our common stock.

Companies that file reports with the SEC, including us, are subject to the requirements of Section 404 of the Sarbanes-Oxley Act of 2002, or SOX 404. SOX 404 requires management to establish and maintain a system of internal control over financial reporting and annual reports on Form 10-K filed under the Exchange Act to contain a report from management assessing the effectiveness of a company’s internal control over financial reporting. A report of our management is included under Item 9A. “Controls and Procedures” of this report. We are a smaller reporting company and, consequently, are not required to include an attestation report of our auditor in this annual report. However, if and when we become subject to the auditor attestation requirements under SOX 404, we can provide no assurance that we will receive an unqualified report from our independent auditors.

During its evaluation of the effectiveness of internal control over financial reporting as of December 31, 2025, management identified a material weakness relating to our lack of sufficient accounting personnel with an appropriate understanding of U.S. GAAP and SEC reporting requirements.

We are undertaking remedial measures, which measures will take time to implement and test, to address the material weakness. There can be no assurance that such measures will be sufficient to remedy the material weakness identified or that additional material weaknesses or other control or significant deficiencies will not be identified in the future. If we continue to experience material weaknesses in our internal controls or fail to maintain or implement required new or improved controls, such circumstances could cause us to fail to meet our periodic reporting obligations or result in material misstatements in our financial statements, or adversely affect the results of periodic management evaluations and, if required, annual auditor attestation reports. Each of the foregoing results could cause investors to lose confidence in our reported financial information and lead to a decline in our stock price. See Item 9A. “Controls and Procedures” for more information.

RISKS RELATING TO OUR SECURITIES

Our controlling shareholders could take actions that are not in the public shareholders’ best interests.

As of March 25, 2026, Ace Develop Properties directly controls 62.61% of our outstanding common stock and Lin Chi-Jung, our director, is the sole shareholder of Ace Develop. As of March 25, 2026, Robert Lin Investments directly controls 4.87% of our outstanding common stock and Lin Chao Chun, is the principal and controlling shareholder of Robert Lin Investments. Accordingly, pursuant to our Articles of Incorporation and bylaws, Ace Develop Properties and Lin Chi-Jung, and Robert Lin Investments and Lin Chao Chun, by virtue of their controlling ownership of share interests, will be able to exercise substantial influence over our business by directly or indirectly voting at either shareholders meetings or the board of directors meetings in matters of significance to us and our public shareholders, including matters relating to:

Election of directors and officers;

The amount and timing of dividends and other distributions;

Acquisition of or merger with another company; and

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Any proposed amendments to our Articles of Incorporation.

Future sales of our common stock could adversely affect our stock price.

If our shareholders sell substantial amounts of our common stock in the public market, the market price of our common stock could be adversely affected. In addition, the sale of these shares could impair our ability to raise capital through the sale of additional equity securities.

We are traded on the OTC Pink, which can be a volatile market.

Our common stock is quoted on the OTC Pink a quotation system for equity securities. It is a more limited trading market than the Nasdaq Capital Market, and timely and accurate quotations of the price of our common stock may not always be available. Investors may expect trading volume to be low in such a market. Consequently, the activity of only a few shares may affect the market and may result in wide swings in price and in volume.

We may be subject to exchange rate fluctuations.

A majority of our revenues are received, and a majority of our operating costs are incurred, in Renminbi. Because our financial statements are presented in U.S. Dollars, any significant fluctuation in the currency exchange rates between the Renminbi and the U.S. Dollar will affect our reported results of operations. We do not currently engage in currency-hedging transactions.

Trading of our common stock is limited, which may make it difficult for investors to sell their shares at times and prices that investors feel appropriate.

Trading of our common stock has been extremely limited. This adversely effects the liquidity of our common stock, not only in terms of the number of shares that can be bought and sold at a given price, but also through delays in the timing of transactions and reduction in security analysts’ and the media’s coverage of us. This may result in lower prices for our common stock than might otherwise be obtained and could also result in a larger spread between the bid and asked prices for our common stock.

There is a limited market for our common stock and an active trading market for our common stock may never develop.

Trading in our common stock has been limited and has been characterized by wide fluctuations in trading prices, due to many factors that may have little to do with a company’s operations or business prospects.

Because it may be a “penny stock,” it will be more difficult for shareholders to sell shares of our common stock.

In addition, our common stock may be considered a “penny stock” under SEC rules because it has been trading on the OTC Bulletin Board at prices lower than $5.00. Broker-dealers who sell penny stocks must provide purchasers of these stocks with a standardized risk-disclosure document prepared by the SEC. This document provides information about penny stocks and the nature and level of risks involved in investing in the penny-stock market. A broker must also give a purchaser, orally or in writing, bid and offer quotations and information regarding broker and salesperson compensation, make a written determination that the penny stock is a suitable investment for the purchaser, and obtain the purchaser’s written agreement for the purchaser. Broker-dealers also must provide customers that hold penny stocks in their accounts with such broker-dealers a monthly statement containing price and market information relating to the penny stock. If a penny stock is sold to investors in violation of the penny stock rules, investors may be able to cancel the purchase and get the money back. The penny stock rules may make it difficult for investors to sell their shares of our stock, and because of these rules, there is less trading in penny stocks. Moreover, many brokers simply choose not to participate in penny-stock transactions. Accordingly, investors may not always be able to resell shares of our common stock publicly at times and at prices that investors feel are appropriate.

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Our stock price is, and we expect it to remain, volatile, which could limit investors’ ability to sell stock at a profit.

Since the completion of the SRRE /CY-SRRE/LRY share exchange transactions the market price of our common stock has ranged from a high of $0.25 per share to a low of $0.17 per share in 2025. The volatile price of our stock makes it difficult for investors to predict the value of our investment, to sell shares at a profit at any given time, or to plan purchases and sales in advance. A variety of factors may affect the market price of our common stock. These include, but are not limited to:

Announcements of new technological innovations or new commercial services by our competitors or us;

Developments concerning proprietary rights;

Regulatory developments in Mainland China and foreign countries;

Period-to-period fluctuations in our revenues and other results of operations;

Economic or other crises and other external factors;

Changes in financial estimates by securities analysts; and

Sales of our common stock.

We will not be able to control many of these factors, and we believe that period-to-period comparisons of our financial results will not necessarily be indicative of our future performance.

The stock market in general has experienced extreme price and volume fluctuations that may have been unrelated and disproportionate to the operating performance of individual companies. These broad market and industry factors may seriously harm the market price of our common stock, regardless of our operating performance.

Because we do not pay cash dividends on a regular basis, investors will not realize any income from an investment in our common stock unless and until investors sell their shares at profit.

We paid a cash dividend of $0.15 per share on our common stocks on April 5, 2023. Investors should not rely on an investment in our stock if they require dividend income. Further, investors will only realize income on an investment in our stock in the event they sell or otherwise dispose of their shares at a price higher than the price they paid for their shares. Such a gain would result only from an increase in the market price of our common stocks, which is uncertain and unpredictable.

We intend to retain all of our earnings for use in our business and do not anticipate paying any cash dividends in the near future.

The payment of any future dividends will be at the discretion of the Board of Directors and will depend upon a number of factors, including future earnings, the success of our business activities, general financial condition, future prospects, general business conditions and such other factors as our Board of Directors may deem relevant.

RISKS RELATING TO THE REAL ESTATE INDUSTRY IN YANGTZE DELTA AND OTHER AREAS OF THE PRC

The real estate market in Yangtze Delta and other areas of the PRC is at a developing one.

We are subject to real estate market conditions in the PRC generally and Yangtze Delta in particular. Private ownership of property in the PRC is still at an early stage of development. Although there is a perception that economic growth in the PRC and the higher standard of living resulting from such growth will lead to a greater demand for private properties in the PRC, it is not possible to predict with certainty that such a correlation exists as many social, political, economic, legal and other factors may affect the development of the property market. The level of uncertainty is increased by the limited availability of accurate financial and market information as well as the overall low level of transparency in the PRC.

The PRC property market, including the Yangtze Delta property market, is volatile and may experience oversupply and property price fluctuations. The central and local governments frequently adjust monetary and other economic policies to prevent and curtail the overheating of the PRC and local economies, and such economic adjustments may affect the real estate market in Yangtze Delta and

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other parts of China. Furthermore, the central and local governments from time to time make policy adjustments and adopt new regulatory measures in a direct effort to control the over development of the real estate market in China, including Yangtze Delta. Such policies may lead to changes in market conditions, including price instability and an imbalance of supply and demand of residential properties, which may materially adversely affect our business and financial conditions. Also, there is no assurance that there will not be over development in the property sector in Yangtze Delta and other parts of China in the future. Any future over development in the property sector in Yangtze Delta and other parts of China may result in an oversupply of properties and a fall of property prices in Yangtze Delta or any of our other markets, which could adversely affect our business and financial condition. The lack of a liquid secondary market for residential property may discourage investors from acquiring new properties. The limited amount of property mortgage financing available to PRC individuals may further inhibit demand for residential developments.

Local government may issue further restrictive measures.

In January 2011, the Shanghai municipal government put forward a local restrictive policy. The policy prohibits residential housing purchases for (1) non-local residents, who are not able to provide a local tax payment or social security payment certificate over one year within the most recent two years, (2) local resident, who is already in possession of two residential units. The policy also limits residential housing purchases for (1) non-local residents, who are able to provide local tax payment certificate over one year, to only one unit, (2) local residents, who are already in possession of only one residential unit, to one additional residential unit.

In 2017, the Shanghai Municipal Construction and Construction Commission issued the Opinions on the Clarification of Commercial and Office Project (Document 2017 No. 400). This new regulation requires all commercial and office buildings be used in accordance to what it was originally intended when the project registered its plans. Our GXL project was inspected by the government and was found to be in accordance with our originally registered plan. However, as of today, we are waiting for the proper authority to allow continued selling of the units.

We cannot assure you that the local government in Shanghai or Jiangsu Province will not issue further restrictive measures in the future. The local government’s restrictive regulations and measures could increase our operating costs in adapting to these regulations and measures, limit our access to capital resources or even restrict our business operations, which could further adversely affect our business and prospects.

We face increasing competition, which may adversely affect our revenues, profitability and results of operations.

In recent years, a large number of property companies have begun undertaking property sales and investment projects in Yangtze Delta and elsewhere in the PRC. Some of these property companies may have better track records and greater financial and other resources than we do. The intensity of the competition may adversely affect our business and financial position. In addition, the real estate market in Yangtze Delta and elsewhere in the PRC is rapidly changing. If we cannot respond to the changes in the market conditions more swiftly or effectively than our competitors do, our business and financial position will be adversely affected.

If the availability or attractiveness of mortgage financing were significantly limited, many of our prospective customers would not be able to purchase the properties, thus adversely affecting our business and financial position.

Mortgages are becoming increasingly popular as a means of financing property purchases in the PRC. An increase in interest rates may significantly increase the cost of mortgage financing, thus reducing the affordability of mortgages as a source of financing for residential property purchases. The PRC government has increased the down payment requirements and imposed certain other conditions that make mortgage financing unavailable or unattractive for some potential property purchasers. There is no assurance that the down payment requirements and other conditions will not be further revised. If the availability or attractiveness of mortgage financing is further significantly limited, many of our prospective customers would not be able to purchase the properties and, as a result, our business and future prospects would be adversely affected.

Our future prospects are heavily dependent on the performance of property sectors in specific geographical areas.

The properties we resell and intend to invest in are mainly based in Yangtze Delta. Our future prospects are, therefore, heavily dependent on the continued growth of the property sector around Yangtze Delta, and our business may be affected by any adverse developments in the supply and demand or housing prices in the property sector around Yangtze Delta.

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The current level of property development and investment activity in Yangtze Delta and other markets is substantial. However, there is no assurance that such property resale and investment activity in Yangtze Delta or any of our other markets will continue at this level in the future or that we will be able to benefit from the future growth of these property markets.

Our revenues and operating income could be reduced by adverse conditions specific to our property locations.

The properties we resell and intend to invest in are concentrated geographically and are located predominately in Yangtze Delta. As a result, our business and our financial operating results may be materially affected by adverse economic, weather or business conditions in this area. Adverse conditions that affect these areas such as economic recession, changes in extreme weather conditions and natural disasters, may have an adverse impact on our operations.

RISKS RELATING TO THE PEOPLES REPUBLIC OF CHINA (“PRC”)

All of our current prospects and deals are generated in Mainland China; thus, all of our revenues are derived from our operations in the PRC. Accordingly, our business, financial condition, results of operations and prospects are subject, to a significant extent, to economic, political and legal developments in the PRC.

PRC economic, political policies and social conditions could adversely affect our business.

The economy of PRC differs from the economies of most developed countries in a number of respects, including the amount of government involvement, level of development, growth rate and control of foreign exchange and allocation of resources. The PRC government continues to play a significant role in regulating industry development through economic, political and social policies.

The PRC Government has been reforming the PRC economic system from planned economy to market oriented economy for more than 20 years, and has also begun reforming the government structure in recent years. These reforms have resulted in significant economic growth and social progress. However, we cannot predict whether any future changes in PRC’s political, economic and social conditions, laws, regulations and policies will have any adverse effect on our current or future business, results of operations or financial condition.

In recent years, the growth of the PRC economy has slowed compared to prior periods, and such slowdown may continue or the economy may experience a contraction. If economic growth continues to slow or if the PRC economy contracts, demand for our real estate development, leasing and property management services may decline, which could materially and adversely affect our business and financial condition.

Changes in foreign exchange regulations may adversely affect our ability to pay dividends and could adversely affect our results of operations and financial condition.

Substantially all of our revenues and operating expenses are denominated in Renminbi. Conversion of Renminbi is under strict government regulation in the PRC. The Renminbi is currently freely convertible under the “current account”, including trade and service-related foreign exchange transactions and payment of dividends, but not under the “capital account”, which includes foreign direct investment and loans. Under the existing foreign exchange regulations in the PRC, we will be able to pay dividends in foreign currencies without prior approval from the State Administration for Foreign Exchange by complying with certain procedural requirements. However, there is no assurance that the above foreign policies regarding payment of dividends in foreign currencies will continue in the future.

Fluctuation of the Renminbi could materially affect the value of, and dividends payable on, the common stock.

The value of the Renminbi is subject to changes in the PRC Government’s policies and depends to a large extent on China’s domestic and international economic and political developments, as well as supply and demand in the local market. Since 1994, the official exchange rate for the conversion of Renminbi to U.S. Dollars has generally been stable, and in 2005 the official exchange rate between U.S. Dollars and Renminbi had a little fluctuation. However, we cannot give any assurance that the value of the Renminbi will continue to remain stable against the U.S. Dollar or any other foreign currency. Since our income and profit are denominated in Renminbi, any devaluation of the Renminbi would adversely affect the value of, and dividends, if any, payable on, our shares in foreign currency terms.

Our operations could be adversely affected by changes in the political and economic conditions in the PRC. The PRC is our main market and accounted for all of our revenue. Therefore, we face risks related to conducting business in the PRC. Changes in the social, economic

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and political conditions of the PRC may adversely affect our business. Unfavorable changes in government policies, political unrest and economic developments may also have a negative impact on our operations.

Since the adoption of the “open door policy” in 1978 and the “socialist market economy” in 1993, the PRC government has been reforming and is expected to continue to reform its economic and political systems. Any changes in the political and economic policies of the PRC government may lead to changes in the laws and regulations or the interpretation of the same, as well as changes in the foreign exchange regulations, taxation and import and export restrictions, which may, in turn, adversely affect our financial performance. While the current policy of the PRC government seems to be one of imposing economic reform policies to encourage foreign investments and greater economic decentralization, we cannot assure that such a policy will continue to prevail in the future.

The PRC Legal System Embodies Uncertainties

The PRC legal system is a civil law system based on written statutes. Unlike common law systems, it is a system in which decided legal cases have little value as precedents. In 1979, the PRC Government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The overall effect of legislation over the past years has significantly enhanced the protections afforded to various forms of foreign investment in Mainland China. Our PRC operating subsidiaries, wholly foreign-owned enterprises (“WFOEs”), are subject to laws and regulations applicable to foreign investment in the PRC in general and laws and regulations applicable to WFOEs in particular. However, these laws, regulations and legal requirements are constantly changing, and their interpretation and enforcement involve uncertainties. These uncertainties could limit the legal protections available to us and other foreign investors. In addition, we cannot predict the effect of future developments in the PRC legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the pre-emption of local regulations by national laws.

Our shareholders may not be able to enforce U.S. civil liabilities claims.

Our assets are located outside the United States and are held through subsidiaries incorporated under the laws of the Cayman Islands, British Virgin Islands and the PRC. Our current operations are conducted in the PRC. In addition, our directors and officers are residents of the PRC. As a result, it may be difficult for shareholders to implement service of process on these individuals. In addition, there is uncertainty as to whether the courts of China would recognize or enforce judgments of United States courts obtained against the Company or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state thereof, or be competent to hear original actions brought in these countries against us or such persons predicated upon the securities laws of the United States or any state thereof.

ITEM 1B. UNRESOLVED STAFF COMMENTS

None.

ITEM 1C. CYBERSECURITY

The Company recognizes the importance of cybersecurity in supporting its real estate development, property leasing, and property management operations in the People’s Republic of China.

The Company’s business activities involve the collection, processing, and storage of various types of information, including customer and tenant data, property transaction data, leasing records, financial information, and operational data relating to its real estate development projects. As a result, the Company is subject to cybersecurity risks, including unauthorized access, data breaches, system disruptions, ransomware attacks, and other cyber incidents.

To date, the Company has not experienced any cybersecurity incidents that have materially affected, or are reasonably likely to materially affect, its business strategy, results of operations, or financial condition.

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ITEM 2. PROPERTY

Our headquarter office space is located at 18 Panlong Road, Qingpu District, Shanghai, PRC. We also rent regional field support offices in various cities in China, including Shanghai, Suzhou, Linyi and Huaian. We lease the facilities that house our regional field support offices. The terms of the leases do not contain rent escalation, contingent rent, renewal, or purchase options.

The Company also owns two floors and four units of the Sovereign Building in Suzhou, PRC. One floor is held for the Company’s own use, and the remaining properties are held for long term investment purposes.

ITEM 3. LEGAL PROCEEDINGS

We are not a party to any legal proceeding that could reasonably be expected to have a material impact on our operations or finances. However, from time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in any such matter may harm our business.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

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PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock is quoted on the OTC Market system under the symbol “SRRE.” The following table sets forth the high and low quotations of our common stock reported by the OTC Market system for the periods indicated. Effective in March, 2011, quotations for our common stock were reported by the OTC Market system.

Over-the-counter market quotations reflect inter-dealer prices, without retail mark-up, mark-down, or commissions, and may not necessarily represent actual transactions.

(Expressed in U.S. Dollars based on Yahoo Finance)


		2025								2024
		High			Low					High			Low
First quarter		$	0.21		$	0.19		First quarter		$	0.34		$	0.25
Second quarter		$	0.25		$	0.19		Second quarter		$	0.26		$	0.19
Third quarter		$	0.19		$	0.16		Third quarter		$	0.25		$	0.21
Fourth quarter		$	0.17		$	0.11		Fourth quarter		$	0.25		$	0.20

As of December 31, 2025, we have approximately 604 record holders of our common stock. On December 31, 2025, the closing price of our common stock was $0.12.

The Company did not repurchase any of its outstanding equity securities nor have any sales of unregistered securities during the year ended December 31, 2025.

ITEM 6. [Reserved]

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following Management’s Discussion and Analysis (“MD&A”) is intended to help the reader understand Sunrise Real Estate Group, Inc. (“SRRE”). MD&A is provided as a supplement to, and should be read in conjunction with, our financial statements and the accompanying notes.

OVERVIEW

In October 2004, the former shareholders of Sunrise Real Estate Development Group, Inc. (Cayman Islands) (“CY-SRRE”) and LIN RAY YANG Enterprise Ltd. (“LRY”) acquired a majority of our voting interests in a share exchange. Before the completion of the share exchange, SRRE had no continuing operations, and its historical results would not be meaningful if combined with the historical results of CY-SRRE, LRY and their subsidiaries.

As a result of the acquisition, the former owners of CY-SRRE and LRY hold a majority interest in the combined entity. Generally accepted accounting principles require in certain circumstances that a company whose shareholders retain the majority voting interest in the combined business be treated as the acquirer for financial reporting purposes. Accordingly, the acquisition has been accounted for as a “reverse acquisition” arrangement whereby CY-SRRE and LRY are deemed to have purchased SRRE. However, SRRE remains the legal entity and the Registrant for Securities and Exchange Commission reporting purposes. The historical financial statements prior to October 5, 2004 are those of CY-SRRE and LRY and their subsidiaries. All equity information and per share data prior to the acquisition have been restated to reflect the stock issuance as a recapitalization of CY-SRRE and LRY.

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SRRE and its subsidiaries, namely, CY-SRRE, LRY, Shanghai Xin Ji Yang Real Estate Consultation Company Limited (“SHXJY”), Shanghai Shang Yang Investment Management and Consulting Company Limited (“SHSY”), Suzhou Shang Yang Real Estate Consultation Company Limited (“SZSY”), Suzhou Xin Ji Yang Real Estate Consultation Company Limited (“SZXJY”), Linyi Rui Lin Construction and Design Company Limited (“LYRL”), Linyi Shang Yang Real Estate Development Company Limited (“LYSY”), Wuhan Gao Feng Hui Consultation Company Limited (“WHGFH”), Sanya Shang Yang Real Estate Consultation Company Limited (“SYSY”), Shanghai Rui Jian Design Company Limited (“SHRJ”), Zhong Ji Pu Fa Real Estate Company Limited (“SHGXL”)，Huai An Zhan Bao Industrial Company Limited (“HAZB”) and its equity investments in affiliates, namely Wuhan Yuan Yu Long Real Estate Development Company Limited (“WHYYL”), are sometimes hereinafter collectively referred to as “the Company,” “our” or “us”.

The principal activities of the Company are real estate development, real estate investments, property leasing services and property management services in the PRC.

RISKS ASSOCIATED WITH FORWARD-LOOKING STATEMENTS INCLUDED IN THIS FORM 10-K

In February 2016, the FASB issued ASU 2016-02 which establishes new accounting and disclosure requirements for leases. ASU No. 2016-02 requires recognition in the statement of operations of a single lease cost, calculated so that the cost of the lease is allocated over the lease term, generally on a straight-line basis. ASU 2016-02 requires classification of all cash payments within operating activities in the statement of cash flows. Disclosures are required to provide the amount, timing and uncertainty of cash flows arising from leases. The Company adopted ASU 2016-02 in the first quarter of 2022 using the effective date approach to recognize and measure leases as of the adoption date. The Company has elected to utilize the available practical expedient to not separate lease components from non-lease components as well as the package of practical expedients that allows the Company not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date and (3) initial direct costs for any existing leases as of the adoption date. At the date of adoption on January 1, 2022, this guidance had no impact to the Company’s condensed consolidated financial statements.

In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which, among other things, provides guidance on how to account for contracts on an entity’s own equity. This ASU eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. It also amends the accounting for certain contracts in an entity’s own equity that are currently accounted for as derivatives because of specific settlement provisions. In addition, this ASU modifies how particular convertible instruments and certain contracts that may be settled in cash or shares impact the diluted EPS computation. The amendments in this ASU are effective for the public companies for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. Early adoption is permitted, but no earlier than fiscal years beginning after December 15, 2020. The Company adopted this standard on January 1, 2022, which had no material impact to the Company’s condensed consolidated financial statements.

APPLICATION OF CRITICAL ACCOUNTING POLICIES

Our discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements. These financial statements are prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”), which requires us to make estimates and assumptions that affect the reported amounts of our assets and liabilities and revenues and expenses, to disclose contingent assets and liabilities on the date of the consolidated financial statements, and to disclose the reported amounts of revenues and expenses incurred during the financial reporting period. The most significant estimates and assumptions include the collection of accounts receivable, and the useful lives and impairment of property and equipment, goodwill and intangible assets, the valuation of deferred tax assets and inventories and the provisions for income taxes. We continue to evaluate these estimates and assumptions that we believe to be reasonable under the circumstances. We rely on these evaluations as the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, actual results could differ from those estimates. Some of our accounting policies require higher degrees of judgment than others in their application. We believe critical accounting policies as disclosed in this Form 10-K reflect the more significant judgments and estimates used in preparation of our consolidated financial statements. We believe there have been no material changes to our critical accounting policies and estimates.

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The following critical accounting policies rely upon assumptions and estimates and were used in the preparation of our consolidated financial statements:

Revenue Recognition

Most of the Company’s revenue is derived from real estate sales in the PRC. The majority of the Company’s contracts contain a single performance obligation involving significant real estate development activities that are performed together to deliver a real estate property to customers. Revenues arising from real estate sales are recognized when or as the control of the asset is transferred to the customer. The control of the asset may transfer over time or at a point in time. For the sales of individual condominium units in a real estate development project, the Company has an enforceable right to payment for performance completed to date, revenue is recognized at a point in time when the customer obtains control of the asset.

ASC 606 requires an entity to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. ASC 606 creates a five-step model that requires entities to exercise judgment when considering the terms of the contract(s) which include (i) identifying the contract(s) with the customer, (ii) identifying the separate performance obligations in the contract, (iii) determining the transaction price, (iv) allocating the transaction price to the separate performance obligations, and (v) recognizing revenue when each performance obligation is satisfied. ASC 606 also specifies the accounting for the incremental costs of obtaining a contract and the costs directly related to fulfilling a contract. In addition, ASC 606 requires extensive disclosures.

The Company recognizes revenue from real estate sales at a point in time when the customer obtains control of the property, which is generally upon delivery and acceptance of the completed unit. All revenues represent gross revenues less applicable value-added tax (“VAT”) and other sales taxes.

Real Estate Property Under Development

Real estate property under development, which consists of residential unit sites and commercial and residential unit sites under development, is stated at the lower of carrying amounts or fair value less selling costs.

Expenditures for land development, including cost of land use rights, deed tax, pre-development costs and engineering costs, are capitalized and allocated to development projects by the specific identification method. Costs are allocated to specific units within a project based on the ratio of the sales value of units to the estimated total sales value times the total project costs.

Costs of amenities transferred to buyers are allocated as common costs of the project that are allocated to specific units as a component of total construction costs. For amenities retained by the Company, costs in excess of the related fair value of the amenity are also treated as common costs. Results of operations of amenities retained by the Company are included in current operating results.

In accordance with ASC 970, Real Estate - General, the real estate property under development are carried at the lower of cost or net realizable value. Impairment is assessed when events or changes in circumstances indicate that the carrying amount of a property may not be recoverable. Such indicators may include, but are not limited to: A significant decline in market value, Project delays or cost overruns or Adverse changes in market demand or economic conditions. The impairment test under ASC 970 involves the following steps: 1.Comparison to Undiscounted Future Cash Flows: Management compares the carrying amount of the property to the undiscounted future cash flows expected from its development and eventual sale.2. Recognition of Impairment Loss: If the carrying amount exceeds the undiscounted future cash flows, an impairment loss is recognized. The loss is measured as the difference between the carrying amount and the property’s fair value.” For the years ended December 31, 2025, the Company recognized $22.1 million impairments for real estate property under development. Accumulated impairment losses totaled $53.2 million.

Impairment of Long-lived Assets

In accordance with ASC 360, “Accounting for the Impairment or Disposal of Long-Lived Assets”, the Company is required to review its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.

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The Company tests long-lived assets, including property and equipment, investment properties and other assets, for recoverability when events or circumstances indicate that the net carrying amount is greater than its fair value. Assets are grouped and evaluated at the lowest level for their identifiable cash flows that are largely independent of the cash flows of other groups of assets. The Company considers historical performance and future estimated results in its evaluation of potential impairment and then compares the carrying amount of the asset to the future estimated cash flows expected to result from the use of the asset. If the carrying amount of the asset exceeds estimated expected undiscounted future cash flows, the Company measures the amount of impairment by comparing the carrying amount of the asset to its fair value. The estimation of fair value is generally determined by using the asset’s expected future discounted cash flows or market value. The Company estimates fair value of the assets based on certain assumptions such as budgets, internal projections, and other available information as considered necessary. There is no impairment of long-lived assets during the years ended December 31, 2025 and 2024.

Income Taxes

The Company accounts for income taxes in accordance with ASC 740, “Income Taxes” (“ASC 740”), which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred income taxes are recognized for the tax consequences in future years of differences between the tax bases of assets and liabilities and their financial reporting amounts at each period end based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

The Company recognizes tax benefits that satisfy a greater than 50% probability threshold and provides for the estimated impact of interest and penalties for such tax benefits. The Company did not incur any interest or penalties related to potential underpaid income tax expenses during the years ended December 31, 2025 and 2024.

RESULTS OF OPERATIONS

We provide the following discussion and analyses of our changes in financial condition and results of operations for the year ended December 31, 2025 with comparisons to the historical year ended December 31, 2024.

Net Revenues

The following table shows the detail for net revenues by line of business:


		Years Ended December 31,
		2025			% to total			2024			% to total			% change
Property management			1,190,183			9			1,411,149			9			(15.7)
House sales			12,086,280			91			14,197,685			91			(14.9)
Net revenues			13,276,463			100			15,608,834			100			(14.9)

The net revenue for 2025 was $13,276,463, a decrease of 14.9% from $15,608,834 in 2024. In 2025, property management and house sales represented 9%, and 91% of our total net revenue. The decrease in 2025 was mainly due to the less house sales of the HATX project in 2025.

Property Management

Property management represented 9% of our revenue in year of 2025 and revenue from property management decreased by 15.7% compared with 2024.

House Sales

House sales represented 91% of our revenue in year of 2025. The company has recognized a proportion of net revenue from the HATX project and Linyi Project.

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Cost of Revenues

The following table shows the Cost of Revenues detail by line of business:


		Years Ended December 31,
		2025			% to total			2024			% to total			% change
Property management			2,058,466			16			1,908,538			14			7.9
House sales			10,525,904			84			11,586,743			86			(9.2)
Cost of revenues			12,584,370			100			13,495,281			100			(6.8)

The cost of revenues for 2025 was $12,584,370, a decrease of 6.8% from $13,495,281 for 2024. In 2025, property management and house sales represented 16%, and 84% of total cost of revenues. The decrease in cost of revenues is mainly due to the less recognition of cost of revenue of house sales from the HATX project in 2025.

Property Management

The cost of revenue from property management for 2025 was $2,058,466, an increase of 7.9% from $1,908,538 for 2024.

House Sales

House sales represented 84% of our cost of revenue in year of 2025. The Company has recognized its cost of revenue from the HATX project and Linyi project at a certain proportion.

Operating Expenses

The following table shows operating expenses detailed by line of business:


		Years Ended December 31,
		2025			% to total			2024			% to total			% change
Property management			581,257			47			567,778			40			2.4
House sales			668,570			53			839,252			60			(20.3)
Operating expenses			1,249,826			100			1,407,030			100			(11.2)

The operating expenses for 2025 were $1,249,826, a decrease of 11.2% from $1,407,030 in 2024. In 2025, the expenses related to property management and house sales represented 47%, and 53% of the total operating expenses.

Property Management

In 2025, the operating expenses for property management increased by 2.4% compared to the amount in 2024. The primary reason for the increase was due to relevant property renewing cost.

House sales

The operating expenses related to our house sales business in 2025 decreased by 20.3% compared to 2024. This decrease was mainly due to the less in our sales promotion activities in HATX project and Linyi project.

General and Administrative Expenses

The general and administrative expenses in 2025 were $3,170,528, which was a 12% increase from $2,835,557 in 2024. The primary reason for the increase in 2025 was due to the recognition of the impairment loss on the receivable from Wu Shao Hao of $0.8 million.

Operating Loss

In 2025, we had an operating loss of $3,728,261, representing a increased loss from an operating loss of $2,129,033 in 2024.

The increase in operating loss in 2025 was primarily driven by a decline in gross profit of $1.4 million due to lower house sales revenue.

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Major Related Party Transaction

A related party is an entity that can control or significantly influence the management or operating policies of another entity to the extent one of the entities may be prevented from pursuing its own interests. A related party may also be any party the entity deals with that can exercise that control.

Amount Due To Directors

The amounts due to directors as of December 31, 2025 were $760,267. The amounts due were as follows:

Amount Due To Lin Chi-Jung

The amount due to Lin Chi-Jung as of December 31, 2025 was $739,646, which is unsecured, interest-free and has no fixed term of repayment.

Amount Due To Lin Hsin Hung

The balance due to Lin Hsin Hung as of December 31, 2025 was $20,621, which is unsecured, interest-free and has no fixed term of repayment.

Amount Due From An Unconsolidated Affiliates

The unpaid portion of dividend announced of SHDEW, an unconsolidated affiliate, in the amount of $16,783,832.

Amount Due to Affiliates

As of December 31, 2025, the amount due to Shanghai Shengji (“SHSJ”) a shareholder of HATX, of $26,706,145 and JXSY, of $503,592, was an intercompany transfer for day-to-day operations.

LIQUIDITY AND CAPITAL RESOURCES

In 2025, our principal sources of cash were revenues from our receipts in advance from real estate development projects, property management business, as well as the dividend distribution from our affiliates. Most of our cash resources were used to fund our property development investment and revenue related expenses, such as salaries and commissions paid to the sales force, daily administrative expenses and the maintenance of regional offices.

We ended the period with a cash position of $16,868,011.

Net cash used in the Company’s operating activities in 2025 was $15,934,293, representing an decrease of receipts in cash in the amount of $11,748,459 as compared to the cash used for 2024. The increase was primarily attributable to an increase in accounts receivable of $7,062,166, resulting from house sales settled through government-issued housing vouchers (“Fang Piao”), and an increase in amounts due from unconsolidated affiliates of $6,565,232. Subsequent to December 31, 2025, a significant portion of the housing voucher receivables has been collected from the relevant government authority.

Net cash provided by the Company’s investment activities was $10,282,651, representing a increase of $8,129,156 as compared to the cash provided in investing activities for 2024. The increase in cash from investment activities was primarily attributable to increase of cash from transactional financial assets in 2025.

Net cash used by the Company’s financing activities was $NIL, representing a increase from $NIL in 2024.

The cash needs for 2026 were for the funds required to finance the Company’s future projects in property agency and real estate developments.

If our business otherwise grows more rapidly than we predict, we plan to raise funds through the issuance of additional shares of our equity securities in one or more public or private offerings. We will also consider raising funds through credit facilities obtained with

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lending institutions and affiliates, as we have done previously, but there can be no guarantee that we will be able to obtain such funds through the issuance of debt or equity with terms satisfactory to management and our board of directors.

Management believes that the Company will generate sufficient cash flows to fund its operations and to meet its obligations on a timely basis for the next twelve months by successfully implementing its business plans, obtaining continued support from its lenders to roll over debts when they became due, and securing additional financing as needed. We have been able to secure new bank lines of credit from banks and secure additional loans from affiliates to fund our operations to date. However, if events or circumstances occur such that the Company is unable to successfully implement its business plans, fails to obtain continued support from its lenders or to secure additional financing, the Company may be required to suspend operations or cease business entirely.

Indebtedness

The Company’s indebtedness is described under “Note 11-Promissory Notes Payable” and “Note 12- Amounts Due to Directors” to the Company’s accompanying consolidated financial statements for the years ended December 31, 2025 and 2024 in Item 8.

Promissory Notes: As of December 31, 2025, the Company had an aggregate amount due under outstanding promissory notes to parties other than banks in the amount of $1,422,718 bearing interest at a rate of 0%. The interest expense on promissory notes amounted to $NIL and $NIL as of December 31, 2025 and 2024, respectively.

Advances from Directors: The Company has also financed its operations in part with advances from officers and directors. The Company had loans with unpaid principals and interest expenses as of December 31, 2025 and December 31, 2024 totaling $760,267 and $743,387, respectively. The balances are unsecured and interest free.

Amount due to affiliates: As of December 31, 2025, the amount due to SHSJ and Jiaxing Shangyang (“JXSY”), in the amount of $26,706,145, was intercompany transfers for day-to-day operation.

OFF BALANCE SHEET ARRANGEMENTS

We do not have any outstanding derivative financial instruments, off-balance sheet guarantees, interest rate swap transactions or foreign currency forward contracts. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit support to us or that engages in leasing, hedging or research and development services with us.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

Not applicable.

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ITEM 8. FINANCIAL STATEMENTSAND SUPPLEMENTARY DATA

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


	Page
Report of Independent Registered Public Accounting Firm	32

Consolidated Balance Sheets as of December 31, 2025 and 2024	34

Consolidated Statements of Operations for the years ended December 31, 2025 and 2024	35

Consolidated Statements of Comprehensive Loss for the years ended December 31, 2025 and 2024	36

Consolidated Statements of Stockholders’ Equity for the years ended December 31, 2025 and 2024	37

Consolidated Statements of Cash Flows for the years ended December 31, 2025 and 2024	38

Notes to Consolidated Financial Statements	39 - 55

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and

Stockholders of Sunrise Real Estate Group, Inc.

Opinion on the Financial Statements

We have audited the accompanying balance sheets of Sunrise Real Estate Group, Inc. and subsidiaries (the Company) as of December 31, 2025 and 2024, and the related statements of operations, comprehensive income, stockholders’ equity, and cash flows for each of the years in the two years’ period ended December 31, 2025, and the related notes (collectively referred to as the financial statements). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Going Concern Matter

As discussed in Note 2 to the financial statements, the Company has incurred recurring losses from operations in recent years, including net losses of $21,423,479 and $18,332,392 for the fiscal years ended December 31, 2025 and 2024, respectively, primarily attributable to the prolonged downturn in the People's Republic of China real estate industry. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management’s plans in regard to this matter are described in Note 2. After consideration of management's plans, substantial doubt about the Company's ability to continue as a going concern has been alleviated. Our opinion is not modified with respect to this matter.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Real Estate Property Under Development Impairment

During the year ended December 31, 2025, the Company recorded impairment loss on real estate property under development totaling $21.8 million. As disclosed in Note 2 to the consolidated financial statements, real estate property under development is subject to valuation adjustments when the carrying amount exceeds fair value. An impairment loss is recognized only if the carrying amount of the asset is not recoverable and exceeds fair value.

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Significant judgment is exercised by management in evaluating the recoverability and fair value of the real estate property noted above. Given these factors, the related audit effort in evaluating these management judgments was challenging, subjective, and complex and required a high degree of auditor judgment.

How We Addressed the Matter in our Audit

To test management's impairment assessment, our audit procedures included evaluating the appropriateness of the valuation methodology applied to each asset group, assessing the reasonableness of key assumptions including projected selling prices and discount rates by reference to available market data and comparable property information, and testing the mathematical accuracy of management's calculations. We also considered the impact of current market conditions in the People's Republic of China real estate industry on the recoverability of the relevant assets.

/s/ RH CPA

PCAOB ID: 6398

We have served as the Company’s auditor since 2017.

Little Neck, NY

April 13, 2026

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SUNRISE REAL ESTATE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Expressed in U.S. Dollars)


		December 31,			December 31,
		2025			2024
ASSETS

Current assets
Cash and cash equivalents		$	16,751,284		$	19,945,761
Restricted cash (Note 3)			116,727			1,122,324
Transactional financial assets (Note 4)			21,174,389			23,966,573
Accounts receivable, net (Note 5)			7,511,486			328,427
Real estate property under development (Note 6)			35,714,480			63,953,601
Amount due from unconsolidated affiliates (Note 10)			15,616,299			15,964,637
Other receivables and deposits, net (Note 7)			5,757,294			8,249,209
Total current assets			102,641,959			133,530,532

Property and equipment, net (Note 8)			306,251			433,302
Investment properties, net (Note 9)			24,331,944			26,721,490
Investments in unconsolidated affiliates (Note 10)			13,715,866			13,381,808
Other investments, net (Note 11)			312,152			632,373
Total assets		$	141,308,172		$	174,699,505

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current liabilities
Promissory notes payable (Note 12)			1,422,718			1,391,130
Amounts due to directors (Note 13)			760,267			743,387
Accounts payable (Note14)			14,585,403			16,871,500
Customer deposits (Note 15)			17,105,723			17,502,037
Amount due to an affiliate (Note 16)			27,209,737			33,823,253
Other payables and accrued expenses (Note 17)			2,857,269			7,109,119
Other taxes payable			91,191			278,236
Income Taxes payable (Note 18)			4,329			6,105
Total current liabilities			64,036,637			77,724,767

Long-term income tax payable (Note 18)			—			—
Total liabilities			64,036,637			77,724,767

Commitments and contingencies (Note 20)

Stockholders’ equity
Common stock, par value $0.01 per share; 200,000,000 shares Authorized; 68,691,925 and 68,691,925 shares issued and outstanding as of December 31, 2025 and 2024, respectively			686,919			686,919
Additional paid-in capital			8,110,008			8,110,008
Statutory reserve (Note 19)			3,893,120			3,893,120
Retained earnings			82,052,439			90,363,630
Accumulated other comprehensive income			8,302,758			6,095,427
Total equity of Sunrise Real Estate Group, Inc.			103,045,244			109,149,104
Non-controlling interests			(25,773,709)			(12,174,366)
Total stockholders’ equity			77,271,535			96,974,738

Total liabilities and stockholders’ equity		$	141,308,172		$	174,699,505

See accompanying notes to consolidated financial statements.

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SUNRISE REAL ESTATE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Expressed in U.S. Dollars)


		Years Ended December 31,
		2025			2024
Net revenues		$	13,276,464		$	15,608,835
Cost of revenues			(12,584,371)			(13,495,281)
Gross profit			692,093			2,113,554

Operating expenses			(1,249,826)			(1,407,030)
General and administrative expenses			(3,170,528)			(2,835,557)
Operating profit (loss)			(3,728,261)			(2,129,033)

Other income (expenses)
Interest income			132,898			398,280
Interest expense			(1,697,121)			(2,249,624)
Real estate property under development Impairment			(21,771,383)			(11,321,232)
Other assets impairment			(1,388,966)			—
Unrealized gain on equity securities			6,841,061			—
Other income (loss)			195,013			(2,946,548)
Total Other Income (Expenses)			(17,688,498)			(16,119,124)

Income (Loss) before income taxes			(21,416,759)			(18,248,157)
Income taxes (Note 19)			(6,720)			(84,235)
Net income /(loss)			(21,423,479)			(18,332,392)
Less: Net (income) loss attributable to non-controlling interests			13,112,288			9,281,240
Net income (loss) attributable to stockholders of Sunrise Real Estate Group, Inc.		$	(8,311,191)		$	(9,051,152)

Earnings (loss) per share - basic and fully diluted		$	(0.12)		$	(0.13)

Weighted average common shares outstanding
- Basic and fully diluted			68,691,925			68,691,925

See accompanying notes to consolidated financial statements.

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SUNRISE REAL ESTATE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Expressed in U.S. Dollars)


		Years Ended December 31,
		2025			2024
Net income /(loss)		$	(21,423,479)		$	(18,332,392)

Other comprehensive income (loss)
- Foreign currency translation adjustment			1,720,276			(967,567)
Total comprehensive income (loss)			(19,703,203)			(19,299,959)
Less: Comprehensive loss attributable to non-controlling interests			13,599,343			9,101,670

Total comprehensive income (loss) attributable to stockholders of Sunrise Real Estate Group, Inc.		$	(6,103,860)		$	(10,198,289)

See accompanying notes to consolidated financial statements.

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SUNRISE REAL ESTATE GROUP, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Expressed in U.S. Dollars)


		Common Stock														Accumulated						Total
		Number of					Additional						Retained			Other			Non-			Stockholders’
		shares					Paid-in			Statutory			Earnings			Comprehensive			controlling			(Deficit)
		issued		Amount			Capital			Reserve			(Deficits)			Income			Interests			Equity
Balance, December 31, 2024		68,691,925		$	686,919		$	8,110,008		$	3,893,120		$	90,363,630		$	6,095,427		$	(12,174,366)		$	96,974,738
Profit (loss) for the year		—			—			—			—			(8,311,191)			—			(13,112,288)			(21,423,479)
Company dissolution		—			—			—			—			—			—			—			—
Common stock issued to employees and consultants for services		—			—			—			—			—			—			—			—
Dividend distributions		—			—			—			—			—			—			—			—
Translation of foreign operations		—			—			—			—			—			2,207,331			(487,055)			1,720,276
Balance, December 31, 2025		68,691,925			686,919			8,110,008			3,893,120			82,052,439			8,302,758			(25,773,709)			77,271,535


		Common Stock														Accumulated						Total
		Number of					Additional						Retained			Other			Non-			Stockholders’
		shares					Paid-in			Statutory			Earnings			Comprehensive			controlling			(Deficit)
		issued		Amount			Capital			Reserve			(Deficits)			Income			Interests			Equity
Balance, December 31, 2023		68,691,925		$	686,919		$	8,110,008		$	3,986,618		$	99,169,737		$	7,311,786		$	(3,072,696)		$	116,192,372
Profit (loss) for the year		—			—			—			—			(9,051,152)			—			(9,281,240)			(18,332,392)
Company Cancellation		—			—			—			(93,498)			245,045			—			(69,222)			82,325
Common stock issued to employees and consultants for services		—			—			—			—			—			—			—			—
Dividend distributions		—			—			—			—			—			—			—			—
Translation of foreign operations		—			—			—			—			—			(1,216,359)			248,792			(967,567)
Balance, December 31, 2024		68,691,925			686,919			8,110,008			3,893,120			90,363,630			6,095,427			(12,174,366)			96,974,738

See accompanying notes to consolidated financial statements.

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SUNRISE REAL ESTATE GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Expressed in U.S. Dollars)


		Years ended December 31,
		2025			2024
Cash flows from operating activities
Net income (loss)		$	(21,423,479)		$	(18,332,392)

Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation and amortization			1,722,071			1,868,369
Loss (gain) on disposal of property and equipment			—			128,095
Other assets impairment			1,388,966			—
Unrealized gain on equity securities			(6,841,061)			—
Real estate property under development impairment			21,771,383			11,321,232
Changes in assets and liabilities
Accounts receivable			(7,062,166)			218,722
Net Cash from directors			—			281,202
Real estate property under development			7,450,529			12,413,819
Customer deposits			(781,178)			(5,531,661)
Amount due from unconsolidated affiliates			(6,565,232)			2,250,419
Other receivables and deposits			1,568,565			945,643
Accounts payable			(2,626,995)			(7,729,593)
Other payables and accrued expenses			(4,343,506)			(136,568)
Taxes payable			(1,884)			(1,912,698)
Other Tax payable			(190,306)			34,727
Net cash provided by (used in) operating activities			(15,934,293)			(4,180,684)

Cash flows from investing activities
Acquisition of property, plant and equipment			—			(18,716)
Acquisition of investment			157,951			—
Transactional financial assets			10,124,700			2,172,211
Net cash provided by investing activities			10,282,651			2,153,495

Cash flows from financing activities
Advances from an affiliate			—			—
Dividends paid			—			—
Restricted cash			—			—
Net cash (used in) financing activities			—			—

Effect of exchange rate changes on cash, cash equivalents and restricted cash			1,451,568			(81,857)

Net increase (decrease) in cash, cash equivalents and restricted cash			(4,200,074)			(2,109,046)
Cash, cash equivalents, and restricted cash at beginning of year			21,068,085			23,177,131
Cash, cash equivalents, and restricted cash at end of year		$	16,868,011		$	21,068,085
Supplemental disclosure of cash flow information
Income taxes paid		$	2,459		$	2,006,516
Interest paid			—			—

See accompanying notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 — ORGANIZATION AND DESCRIPTION OF BUSINESS

Sunrise Real Estate Group, Inc. (“SRRE”) and its subsidiaries (collectively referred to as “the Company”, “our” or “us”) was incorporated in Texas on October 10, 1996, under the name of Parallax Entertainment, Inc. (“Parallax”). On December 12, 2003, Parallax changed its name to Sunrise Real Estate Development Group, Inc. On April 25, 2006, Sunrise Estate Development Group, Inc. filed Articles of Amendment with the Texas Secretary of State, changing its name to Sunrise Real Estate Group, Inc., effective May 23, 2006.

As of December 31, 2025, the Company has the following major subsidiaries and equity investments.


						% of
						Ownership		Relationship
		Date of		Place of		held by the		with the
Company Name		Incorporation		Incorporation		Company		Company		Principal Activity
Sunrise Real Estate Development Group, Inc. (CY-SRRE)		April 30, 2004		Cayman Islands		100	%	Subsidiary		Investment holding
Lin Ray Yang Enterprise Limited (“LRY”)		November 13, 2003		British Virgin Islands		100	%	Subsidiary		Investment holding
Shanghai Xin Ji Yang Real Estate Consultation Company Limited (“SHXJY”)		August 20, 2001		PRC		100	%	Subsidiary		Property brokerage services
Shanghai Shang Yang Investment Management and consultation Company Limited (“SHSY”)		February 5, 2004		PRC		100	%	Subsidiary		Property brokerage services
Suzhou Xi Ji Yang Real Estate Consultation Company Limited (“SZXJY”)		June 25, 2004		PRC		75	%	Subsidiary		Property brokerage services
Linyi Shangyang Real Estate Development Company Limited (“LYSY”)		October 13, 2011		PRC		34	%²	Subsidiary		Real estate development
Sanya Shang Yang Real Estate Consultation Company Limited (“SYSY”)		September 18, 2008		PRC		100	%	Subsidiary		Property brokerage services
Shanghai Rui Jian Design Company Limited (“SHRJ”)		August 15, 2011		PRC		100	%	Subsidiary		Property brokerage services
Linyi Rui Lin Construction and Design Company Limited (“LYRL”)		March 6, 2012		PRC		100	%	Subsidiary		Investment holding
Wuhan Yuan Yu Long Real Estate Development Company Limited (“WHYYL”)		December 28, 2009		PRC		49	%	Equity investment		Real estate development
Shanghai Da Er Wei Trading Company Limited (“SHDEW”)		June 6, 2013		PRC		19.91	%³	Equity investment		Import and export trading
Shanghai Hui Tian (“SHHT”)		July 25, 2014		PRC		100	%	Subsidiary		Investment holding
Shanghai Shangyang Tianxi (“SHTX”)		July 25, 2014		PRC		19.91	%	Subsidiary		Investment holding
Huaian Zhanbao Industrial Co., Ltd. (“HAZB”)		December 6, 2018		PRC		78.46	% ⁴	Subsidiary		Investment holding
Huaian Tianxi Real Estate Development Co., Ltd (“HATX”)		October, 2018		PRC		78.46	% ⁴	Subsidiary		Investment holding
Shanghai Taobuting Media Co., Ltd. (“TBT”)		July 1, 2020		PRC		7.5	%	Subsidiary		Streaming platform
Shangyang International PTE. LTD.		August 19, 2022		SINGAPORE		100	%	Subsidiary		Investment holding
Shanghai Da Er Wei Industry Co., Ltd.		Oct. 20, 2020		PRC		19.58	%	Subsidiary		Investment holding
Shanghai Zhuangyanting Trading Co., Ltd.		Sep. 21, 2023		PRC		19.9	%	Subsidiary		Investment holding
Shanghai Shifengmei Brand Mgmt. Co., Ltd.		Nov. 27, 2023		PRC		19.9	%	Subsidiary		Investment holding
Shanghai Aoyue Bio - Tech Co., Ltd.		Nov. 27, 2023		PRC		19.9	%	Subsidiary		Investment holding
Shanghai Maitinghao Trading Co., Ltd.		Sep. 21, 2023		PRC		19.9	%	Subsidiary		Investment holding
Shanghai Xinshangyang Media Comu. Co., Ltd.		Dec. 25, 2024		PRC		100	%	Subsidiary		Streaming platform

The Company and a shareholder of LYSY, who holds 46% equity interest in LYSY, entered into a voting agreement that the Company is entitled to exercise the voting rights in respect of her 46% equity interest in LYSY. The Company effectively holds 80% voting rights in LYSY and therefore considers LYSY as a subsidiary of the Company. On May 27, 2020, LYRL received 10% of the issued and outstanding shares of LYSY from Nanjing Longchang Real Estate Development Group. LYRL owned 34% of LYSY following the purchase.

In December 2019, SHDEW had an employee stock bonus where its employees received their issued shares. This resulted in the dilution of our ownership of SHDEW from 20.38% to 19.91%. According to the shareholder resolution in October 31,2023, SHDEW would close down the operations at the end of the year 2026.

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CY-SRRE was established in the Cayman Islands on April 30, 2004 as a limited liability company. CY-SRRE was wholly owned by Ace Develop Properties Limited (“Ace Develop”), a corporation, of which Lin Chi-Jung, an individual, is the principal and controlling shareholder. SHXJY was established in the People’s Republic of China (“PRC”) on August 20, 2001 as a limited liability company. SHXJY was originally owned by a Taiwanese company, of which the principal and controlling shareholder was Lin Chi-Jung. On June 8, 2004, all the fully paid up capital of SHXJY was transferred to CY-SRRE. On June 25, 2004, SHXJY and two individuals established a subsidiary, SZXJY in the PRC, at which point in time, SHXJY held a 90% equity interest in SZXJY. On August 9, 2005, SHXJY sold 10% equity interest in SZXJY to a company owned by a director of SZXJY and transferred 5% equity interest in SZXJY to CY-SRRE. Following the disposal and the transfer, CY-SRRE effectively held 80% equity interest in SZXJY.

LRY was established in the British Virgin Islands on November 13, 2003 as a limited liability company. LRY was owned by Ace Develop, Planet Technology Corporation (“Planet Tech”) and Systems & Technology Corporation (“Systems Tech”). On February 5, 2004, LRY established a wholly owned subsidiary, SHSY in the PRC as a limited liability company.

Also on August 31, 2004, SRRE, LRY and Lin Chi-Jung, an individual and agent for beneficial shareholders of LRY, i.e., Ace Develop, Planet Tech and SystemsTech, entered into an exchange agreement under which SRRE issued 10,000,000 shares of common stock to the beneficial shareholders, or their designees, in exchange for all outstanding capital stock of LRY. The transaction was closed on October 5, 2004. Lin Chi-Jung was Chairman of the Board of Directors of SRRE, the President of LRY and the principal and controlling shareholder of Ace Develop. Regarding the 10,000,000 shares of common stock of SRRE issued in this transaction, SRRE issued 8,500,000 shares to Ace Develop, 750,000 shares to Planet Tech and 750,000 shares to Systems Tech.

As a result of the acquisition, the former owners of CY-SRRE and LRY hold a majority interest in the combined entity. Generally accepted accounting principles require in certain circumstances that a company whose shareholders retain the majority voting interest in the combined business be treated as the acquirer for financial reporting purposes. Accordingly, the acquisition has been accounted for as a “reverse acquisition” arrangement whereby CY-SRRE and LRY are deemed to have purchased SRRE. However, SRRE remains the legal entity and the Registrant for Securities and Exchange Commission reporting purposes. All shares and per share data prior to the acquisition have been restated to reflect the stock issuance as a recapitalization of CY-SRRE and LRY.

On January 10, 2005, LRY and a PRC third party established a subsidiary, SZGFH, a limited liability company in the PRC, with LRY holding 80% of the equity interest in SZGFH. On May 8, 2006, LRY acquired 20% of the equity interest in SZGFH from the third party. Following the acquisition, LRY effectively held 100% of the equity interest in SZGFH. The Company sold SZGFH in 2017.

On November 24, 2006, CY-SRRE, SHXJY, a shareholder of SZXJY and a third party established a subsidiary, SZSY in the PRC, with CY-SRRE holding 12.5% equity interest, SHXJY holding 26% equity interest and the shareholder of SZXJY holding 12.5% equity interest in SZSY. At the date of incorporation, SRRE and the shareholder of SZXJY entered into a voting agreement that SRRE is entitled to exercise the voting right in respect of its 12.5% equity interest in SZSY. Following that, SRRE effectively holds 51% of the voting rights in SZSY. SZSY was dissolved in 2024 for no more business.

On September 24, 2007, CY-SRRE sold 5% equity interest in SZXJY to a company owned by a director of SZXJY. Following the disposal, CY-SRRE effectively holds 75% equity interest in SZXJY.

In October 2011, SHXJY purchased 24% interest in Linyi Shang Yang Real Estate Consultation Company Limited (“LYSY”) and acquired approximately 103,385 square meters of land for the purpose of developing the land into villa-style residential housing. On March 6, 2012, SHXJY established a wholly-owned subsidiary, namely Linyi Rui Lin Construction and Design Company Limited (“LYRL”). SHXJY’s 24% equity interest in LYSY was then transferred to LYRL. On May 27, 2020, LYRL received 10% of the issued and outstanding shares of LYSY from Nanjing Longchang Real Estate Development Group. LYRL owned 34% of LYSY following the purchase. The Company and a shareholder of LYSY, Zhang Shu Qin, who holds 46% equity interest in LYSY, entered into a voting agreement that the Company is entitled to exercise the voting rights in respect of her 46% equity interest in LYSY. The Company effectively holds 80% voting rights in LYSY and therefore considers LYSY as a subsidiary of the Company.

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On March 6, 2012, SHXJY established a subsidiary in the PRC — LYRL. The equity interest in LYRL is held by three Chinese individuals in trust for SHXJY. At the date of its incorporation, SHXJY transferred its 24% equity interest in LYSY to LYRL. On August 2014, all the equity interest in LYRL was transferred to SHRJ.

On June 6, 2013, SHSY and LYRL together with 4 investors established a company, Shanghai Daerwei (“SHDEW”), in the PRC focusing on the cosmetics and skincare business. SHSY holds 12.6% equity interest and LYRL holds 7.3% equity interest in SHDEW. As the Company does not have significant influence in SHDEW, we adopted the alternative measurement accounting method for the SHDEW investment. According to the shareholder resolution in October 31,2023, SHDEW would close down the operations at the end of the year 2026.

On July 25, August 19 and October 15, 2014 respectively, the Company established three investment holding company separately, namely SHHT, SHSYTX and SZSYHT. These three companies were wholly owned subsidiary to the Company and have not commenced their operations. In the year 2017, SHSYTX has transferred its shares of 76.92% to other shareholders and has 19.9% as of 2020. SZSYHT has transferred all of its shares to other shareholders.

In October 2018, HATX purchased the property in Huai’an, Qingjiang Pu district with an area of 78,030 square meters. In December 2018 we established HAZB with a 78.46% ownership for the purpose of real estate investment and in March 2019, HAZB purchased 100% of HATX and tis land usage rights to the Huaian property. The Huaian project, named Tianxi Times, started its first phase development in early 2019 with a GFA of 82,218 sqm totaling 679 units, and started its second phase in middle 2020 with a GFA of 99,123 sqm totaling 873 units. As of March 25, 2026, the Company sold 655 units out of 679 units of the first phase and 600 units out of 873 of second phase.

The principal activities of the Company are real estate development, including property marketing, leasing and management services in the PRC.

NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting and Principles of Consolidation

The Company’s consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”).

The consolidated financial statements include the financial statements of Sunrise Real Estate Group, Inc. and its subsidiaries. All significant inter-company accounts and transactions have been eliminated on consolidation.

Investments in business entities, in which the Company does not have control but can exercise significant influence over operating and financial policies, are accounted for using the equity method.

Use of Estimates

The preparation of financial statements in accordance with U.S GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and the liquidation of liabilities in the normal course of business. The Company has incurred a net loss of $21,423,479 for the fiscal year ended December 31, 2025, and has experienced recurring losses from operations in recent years, primarily attributable to the prolonged downturn in the real estate industry. As of December 31, 2025, the company has positive retained earnings of $82,052,439. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for a period of one year from the date these financial statements are issued.

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Management has evaluated these conditions and has developed plans to mitigate the circumstances that give rise to this uncertainty. These plans include reducing operating expenses and general expenses through cost-cutting initiatives, increasing revenue through new business. However, there can be no assurance that these plans will be successfully implemented or that they will be sufficient to enable the Company to meet its obligations as they come due.

Fair Value

The Company follows the provisions of Accounting Standards Codification (“ASC”) 820, Fair Value Measurements and Disclosures (“ASC 820”). It clarifies the definition of fair value, prescribes methods for measuring fair value, and establishes a fair value hierarchy to classify the inputs used in measuring fair value as follows:

Level 1-Inputs are unadjusted quoted prices in active markets for identical assets or liabilities available at the measurement date.

Level 2-Inputs are unadjusted quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets and liabilities in markets that are not active, inputs other than quoted prices that are observable, and inputs derived from or corroborated by observable market data.

Level 3-Inputs are unobservable inputs which reflect the reporting entity’s own assumptions on what assumptions the market participants would use in pricing the asset or liability based on the best available information.

The carrying amounts reported in the accompanying consolidated balance sheets for cash and cash equivalents, restricted cash, accounts receivable, promissory deposits, amount due from an unconsolidated affiliate, other receivables and deposits, deferred tax assets, bank loans, promissory notes payable, accounts payable, customer deposits, amounts due to directors, other payables and accrued expenses, other taxes payable and income taxes payable approximate their fair value based on the short-term maturity of these instruments.

The following are the major categories of assets and liabilities measured at fair value on a recurring basis as of December 31, 2025.


Description		Level 1			Level 2			Level 3			Total
Wealth management investment products			2,665,447									2,665,447
Investment in transactional equity securities			18,508,942			—						18,508,942
Total		$	21,174,389		$	—		$	—		$	21,174,389

The following are the major categories of assets and liabilities measured at fair value on a recurring basis as of December 31, 2024.


Description		Level 1			Level 2			Level 3			Total
Wealth management investment products			7,372,801									7,372,801
Investment in transactional equity securities			16,593,772									16,593,772
Total		$	23,966,573		$	—		$	—		$	23,966,573

Assets measured at fair value on a nonrecurring basis, during the year ended December 31, 2025, the Company recognized an impairment loss related to real estate property under development, which were written down to their estimated fair value. This represents a nonrecurring fair value measurement. For the year ended December 31, 2025, the Company recognized total impairment losses for Linyi project approximately $12.5 million, including approximately $10.9 million related to the Tianxi Garden project and $1.6 million related to Phase 3.For the year ended December 31, 2024, the Company recognized impairment losses of approximately $11.3 million, all of which related to the Tianxi Garden project. As of December 31, 2025, accumulated impairment losses were approximately $42.0 million for the Tianxi Garden project and Phase 3. Both projects are located at the junction of Xiamen Road and Hong Kong Road in Linyi City Economic Development Zone, Shandong Province, PRC. In September 2020, LYSY expanded additional 51,312 square meters for 228 million RMB for future development. The project was delayed for building because of not prosperous real estate market and triggered impairment testing.

For the years ended December 31, 2025, the Company recognized $9.6 million impairments for Huaian Tianxi project. Accumulated impairment losses totaled $9.6 million for Huaian Tianxi project.

Fair value measurement: The fair value of the real estate property under development was determined to be $35,714,480 and $63,953,601 as of December 31, 2025 and 2024, respectively. This resulted in an impairment loss of $21,771,383 and $11,321,232, which was recognized in the “Real estate property under development Impairment” line item in the Consolidated Statements of Operations for the

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year ended December 31, 2025 and 2024, respectively. The aggregate project-level impairment losses are denominated in RMB and may differ from the amounts reported in the Consolidated Statements of Operations due to the use of different translation rates (average rate for the income statement versus year-end rate for the balance sheet) in accordance with ASC 830.

Due to continued deterioration in the real estate market conditions during 2025, the Company recognized impairment losses not only on undeveloped land parcels but also on certain completed residential units held for sale.

For the Linyi Tianxi Garden project, fair value continues to be estimated using the income approach (discounted cash flow analysis), consistent with the prior year. Fair value was estimated using a discounted cash flow analysis. Significant unobservable inputs included a discount rate of 10% and operating expenses of 8.2% of projected revenue. The measurement is classified as Level 3 as it relies primarily on management’s assumptions regarding future cash flows and a risk-adjusted discount rate.

For the completed units held for sale in Linyi Phase 3 and the Huai’an Tianxi project, the Company applied the market approach (comparable sales method). This approach became applicable in 2025 as these units are completed and observable transaction data from similar nearby properties became available. Adjustments were made for differences in location, property condition, building characteristics, and other relevant factors. These adjustments reflect management’s evaluation of key unobservable inputs such as locational premiums or discounts and physical condition differentials that market participants would consider. Significant unobservable inputs included a listing-to-transaction price discount ranging from 8% to 17% (weighted average approximately 12%), based on management’s discussions with local real estate agents, and an estimated selling and administrative cost deduction of approximately 5% of listing price.

The Company assessed recoverability under ASC 970. As the carrying amounts exceeded the estimated net realizable value, impairment was measured at fair value. There were no transfers between fair value hierarchy levels during the year.

Concentrations of Credit Risk

Financial instruments that potentially expose the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, accounts receivable, other receivables and deposits, and amount due from an unconsolidated affiliate. The Company places its cash and cash equivalents with reputable financial institutions with high credit ratings.

The Company conducts credit evaluations of customers and generally does not require collateral or other security from customers. The Company establishes an allowance for doubtful accounts primarily based upon the age of the receivables and factors relevant to determining the credit risk of specific customers. The amount of receivables ultimately not collected by the Company has generally been consistent with management’s expectations and the allowance established for doubtful accounts.

Major Customers

During the year ended December 31, 2025 and 2024, there was no single customer that represented more than 10% of our net revenues.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and all high liquidity investments with an original maturity of three months or less.

The Company maintains cash and cash equivalents with various banks in the PRC which are not insured or otherwise protected. Should any of these banks holding the Company’s cash deposits become insolvent, or if the Company is otherwise unable to withdraw funds for any reason, the Company could lose the cash on deposit with that particular bank.

Foreign Currency Translation and Transactions

The functional currency of SRRE, CY-SRRE and LRY is U.S. dollars (“$”) and their financial records are maintained and the financial statements prepared in U.S. dollars. The functional currency of the Company’s subsidiaries and affiliates in China is Renminbi (“RMB”) and their financial records and statements are maintained and prepared in RMB.

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Foreign currency transactions during the year are translated into each company’s denominated currency at the exchange rates ruling at the transaction dates. Gain and loss resulting from foreign currency transactions are included in the consolidated statement of operations. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated into each company’s denominated currency at year-end exchange rates. All exchange differences are dealt with in the consolidated statements of operations.

The financial statements of the Company’s operations based outside of the United States have been translated into U.S. dollars in accordance with ASC830. Management has determined that the functional currency for each of the Company’s foreign operations is its applicable local currency. When translating functional currency financial statements into U.S. dollars, year-end exchange rates are applied to the consolidated balance sheets, while average exchange rates as to revenues and expenses are applied to consolidated statements of operations. The effect of foreign currency translation adjustments are included as a component of accumulated other comprehensive income in shareholders’ equity.

The exchange rates as of December 31, 2025 and December 31, 2024 were $1: RMB7.0228 and $1: RMB7.1884 respectively.

The RMB is not freely convertible into foreign currency and all foreign exchange transaction must take place through authorized institutions. No representation is made that the RMB amounts could have been, or could be, converted into U.S. dollars at the rate used in translation.

Real Estate Property under Development

Real estate property under development, which consists of residential unit sites and commercial and residential unit sites under development, is stated at the lower of carrying amounts or fair value.

Expenditures for land development, including cost of land use rights, deed tax, and pre-development costs and engineering costs, are capitalized and allocated to development projects by the specific identification method. Costs are allocated to specific units within a project based on the ratio of the sales value of units to the estimated total sales value times the total project costs.

In accordance with ASC 970, Real Estate - General, real estate property under development and completed units held for sale are carried at the lower of cost or net realizable value. Impairment is assessed when events or changes in circumstances indicate that the carrying amount of a property may not be recoverable through its development and sale. Such indicators may include, but are not limited to, a significant decline in market value, project delays, or adverse changes in market demand or economic conditions.

The impairment test under ASC 970 involves the following steps:

1.The Company assesses recoverability by comparing the carrying amount of the property to its estimated net realizable value.

2.If the carrying amount exceeds the estimated net realizable value, an impairment loss is recognized. The loss is measured as the difference between the carrying amount and the property’s fair value.

For the year ended December 31, 2025, the Company recognized $22.1 million of impairment losses on real estate property under development and completed units held for sale. Accumulated impairment losses totaled $53.2 million as of December 31, 2025.

Details of the valuation techniques and significant unobservable inputs used in determining fair value are disclosed in Note 2 – Fair Value Measurements.

Capitalization of Interest

Interest incurred during and directly related to real estate development projects is capitalized to the related real estate property under development during the active development period, which generally commences when borrowings are used to acquire real estate assets and ends when the properties are substantially complete or the property becomes inactive. Interest is capitalized based on the interest rate applicable to specific borrowings or the weighted average of the rates applicable to other borrowings during the period. Interest

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capitalized to real estate property under development is expensed as a component of cost of real estate sales when related units are sold. All other interest is expensed as incurred.

Property and Equipment, Net

Property and equipment are stated at cost less accumulated depreciation and any impairment losses. Depreciation is computed using the straight-line method to allocate the cost of depreciable assets over the estimated useful lives of the assets as follows:


		Estimated
		Useful Life
		(in years)
Furniture and fixtures		5-10
Computer and office equipment		3-5
Motor vehicles		5
Properties		20

Maintenance, repairs and minor renewals are charged directly to the statement of operations as incurred. Additions and improvements are capitalized. When assets are disposed of, the related cost and accumulated depreciation thereon are removed from the accounts and any resulting gain or loss is included in the statement of operations.

Investment Properties, Net

Investment properties are stated at cost less accumulated depreciation and any impairment losses. Depreciation is computed using the straight-line method to allocate the cost of depreciable assets over their respective estimated useful lives of 20 years.

Significant additions that extend property lives are capitalized and are depreciated over their respective estimated useful lives. Routine maintenance and repair costs are expensed as incurred.

Impairment of Long-lived Assets

In accordance with ASC 360, “Accounting for the Impairment or Disposal of Long-Lived Assets” (“ASC 360”), the Company is required to review its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value.

Customer Deposits

Customer deposits consist of amounts received from customers relating to the sale of residential units in the PRC. In the PRC, customers will generally obtain permanent financing for the purchase of their residential unit prior to the completion of the project. The lending institution will provide the funding to the Company upon the completion of the financing rather than the completion of the project. The Company receives these funds and recognizes them as a liability until the revenue can be recognized.

Long Term Investments

The Company accounts for long term investments in equities as follows.

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Investments in Unconsolidated Affiliates

The Company holds several equity investments with ownership interests ranging from 19.58% to 19.91%, including SHDEW, DEWSY, SHAY, SHZYT and others. The Company has determined that it does not exercise significant influence over these investees. These investments are accounted for using the measurement alternative under ASC 321. The investments are carried at cost, less any impairment, and adjusted for observable price changes in orderly transactions for an identical or similar investment of the same issuer, if any.

The Company performs impairment assessments whenever events or changes in business circumstances indicate that the carrying value may not be fully recoverable. An impairment loss is recorded when there has been a loss in value of the investment that is other than temporary.

During the years ended December 31, 2025 and 2024, the Company provideda $325,809 allowance for impairment loss on investments in unconsolidated affiliates

Other Investments

Where the Company has no significant influence, the investment is classified as other investments in the balance sheet and is carried under the measurement alternative method. The measurement alternative measures the equity investment at cost less impairment, adjusted for observable price changes in orderly transactions for an identical or similar investment of the same issuer.

During the year ended December 31, 2025 and 2024, the Company provided no allowance for impairment loss on other investments.

Revenue Recognition

Comprehensive Income (Loss)

In accordance with ASC 220-10-55, comprehensive income (loss) is defined as all changes in equity except those resulting from investments by owners and distributions to owners. The Company’s only components of comprehensive loss during the years ended December 31, 2025 and 2024 were net loss and foreign currency translation adjustments.

Net Earnings (Loss) per Common Share

The Company computes net earnings (loss) per share in accordance with ASC 260, “Earnings per Share” (“ASC 260”). Under the provisions of ASC 260, basic net earnings (loss) per share is computed by dividing net earnings (loss) available to common shareholders for the period by the weighted average number of shares of common stock outstanding during the period. The calculation of diluted net

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earnings (loss) per share recognizes common stock equivalents, however; potential common stock in the diluted EPS computation is excluded in net loss periods, as their effect is anti-dilutive.

Stock-Based Compensation

The Company accounts for equity instruments issued to employees in accordance with the provisions of ASC 718 Stock Compensation (ASC 718) and Equity-Based Payments to Non-employees pursuant to ASC 2018-07 (ASC 2018-07). The fair values of stock options were determined using the Black-Scholes options pricing model.

Income Taxes

Recently Adopted Accounting Standards

In January 1, 2023, the Company adopted ASU 2022-02, Financial Instruments - Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures, which requires disclosure of gross write-offs of finance receivables by year of origination. The adoption of this standard did not have a material impact on our disclosures.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which would require additional transparency for income tax disclosures, including the income tax rate reconciliation table and cash taxes paid both in the United States and foreign jurisdictions. This standard is effective for annual periods beginning after December 15, 2024. We are currently assessing the impact this standard will have on our disclosures.

New Accounting Pronouncements

Accounting standards that have been issued or proposed by FASB that do not require adoption until a future date are not expected to have a material impact on the financial statements upon adoption. The Company does not discuss new accounting pronouncements that are not anticipated to have an impact on or are unrelated to its financial condition, results of operations, cash flows or disclosures.

NOTE 3 — RESTRICTED CASH

The Company is required to maintain certain deposits with the bank for those home buyers that has applied for a housing loan from their bank. This deposit is a percentage to each home buyer’s bank loan for the purpose of purchasing in our project. Once we complete the handover to the buyer, these deposits become unrestricted. As of December 31, 2025 and December 31, 2024, the Company held cash deposits of $116,727 and $1,122,324, respectively.

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NOTE 4 — TRANSACTIONAL FINANCIAL ASSETS

As of December 31, 2025 and December 31, 2024, we have $21,174,389 and $23,966,573 invested in bank wealth management investment products. The investments have short maturity periods and can be rolled into a maturity date of our choosing or automatically rolled into subsequent maturity period. The annualized rate of return may range from 2.08% to 2.70% depending on the amount and time period invested.

NOTE 5 – ACCOUNTS RECEIVABLE

The increase in accounts receivable as of December 31, 2025 was primarily attributable to sales transactions settled through government-issued housing vouchers (“Fang Piao”), a policy instrument introduced by local PRC governments to stimulate residential property demand. Under this arrangement, revenue is recognized upon transfer of control of the property to the buyer, with the corresponding receivable representing the outstanding redemption amount of the housing vouchers from the relevant government authority. The Company considers these receivables fully collectible based on the government-backed nature of the vouchers.

As of December 31, 2025, the accounts receivable is $7,511,486, included HATX amount of $7,479,421.

NOTE 6 — REAL ESTATE PROPERTY UNDER DEVELOPMENT

Real estate property under development represents the Company’s real estate development project in Linyi, the PRC (“Linyi Project”), which is located on the junction of Xiamen Road and Hong Kong Road in Linyi City Economic Development Zone, Shandong Province, PRC. This project covers a site area of approximately 103,385 square meters for the development of villa-style residential housing buildings. The Company acquired the site and commenced construction of this project during the fiscal year of 2012. We sold 119 of 121 Phase 1 villas, sold all 84 units in Phase 2, and sold 34 units out of 51 units in Phase 3 as of March 25, 2026.

In October 2018, HATX purchased the property in Huai’an, Qingjiang Pu district with an area of 78,030 square meters (“sqm”). In December 2018, we established HAZB with a 78.46% ownership for the purpose of real estate investment, and in March 2019, HAZB purchased 100% of HATX and its land usage rights to the Huai’an property. The Huai’an project, named Tianxi Times, started its first phase development in early 2019 with a gross floor area (“GFA”) of 82,218 sqm totaling 679 units, and started its second phase in 2020 with a GFA of 99,123 sqm totaling 873 units. As of March 25, 2026, the Company sold 655 units, respectively, out of 679 units of the first phase and sold 600 units out of 873 of the second phase.

As of December 31, 2025, land use rights included in real estate property under development totaled $35,714,480.

NOTE 7 — OTHER RECEIVABLES AND DEPOSITS


		December 31,			December 31,
		2025			2024
Advances to staff		$	272,344		$	85,662
Rental deposits			7,937			703,326
Prepaid expense			22,408			21,910
Prepaid tax			4,650,319			5,500,285
Other receivables			804,287			1,938,027
		$	5,757,294		$	8,249,209

Prepaid tax is taxes prepaid from the apartment sold but have not delivered to the owner of HATX project with the amount of $3,344,606 and Linyi project with the amount of $1,305,713.

Other receivables and deposits as of December 31, 2025 are stated net of allowance for doubtful accounts of $1,666,129 (2024: $1,629,137). Other receivables of $804,287 mainly consists of $574,645 of proxy payment repair and maintenance fund of HATX project.

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NOTE 8 — PROPERTY AND EQUIPMENT, NET


		December 31,			December 31,
		2025			2024
Furniture and fixtures		$	116,162		$	90,761
Computer and office equipment			208,462			204,016
Motor vehicles			575,817			23,079
Properties			1,568,644			2,104,706
			2,469,086			2,422,562
Less: Accumulated depreciation			2,162,835			1,989,260
		$	306,251		$	433,302

During the year ended December 31, 2025, depreciation and amortization expense for property and equipment amounted to $127,051.

NOTE 9 — INVESTMENT PROPERTIES, NET


		December 31,			December 31,
		2025			2024
Investment properties		$	40,078,489		$	40,519,088
Less: Accumulated depreciation			(15,746,545)			(13,797,598)
		$	24,331,944		$	26,721,490

During the year ended December 31, 2025, depreciation and amortization expense for investment properties amounted to $1,609,793.

NOTE 10 — INVESTMENTS IN AND AMOUNT DUE FROM UNCONSOLIDATED AFFILIATES

The investments in unconsolidated affiliates primarily consist of SHDEW (19.91%), DEWSY (19.58%), SHAY (19.91%), SHZYT(19.91%), SHSFM(19.91%), SHMTH(19.91%) and SHTX (19.91%). As of December 31, 2025, the investment amount in SHDEW was $12,606,140, DEWSY was $231,322, SHAY was $157,690, SHZYT was $283,316, SHSFM was $35,894, SHMTH was $89,734, and SHTX was $28,454.

SHDEW was established in June 2013 as a skincare and cosmetic company. SHDEW is developing its own skincare products. SHDEW sells products under its own brands as well as the products of third parties. The products include skincare, cosmetics, personal care products such as soaps, shampoos, skin care devices and children’s apparel. SHDEW is improving its own online shopping platform where consumers can purchase its cosmetics and skincare products as well as products imported into China. The online shopping platform has been in operation since 2017.

NOTE 11 — OTHER INVESTMENTS, NET

According to ASU 2016-01, where the Company has no significant influence, the investment is classified as other investments in the balance sheet and is carried under the measurement alternative method. The measurement alternative measures the equity investment at cost less impairment, adjusted for observable price changes in orderly transactions for an identical or similar investment of the same issuer. As of December 31, 2025 and December 31, 2024, the carrying amount of the Company’s measurement alternative investments was $312,152 and $632,373, respectively.

The Company performs impairment assessment of its investments under the measurement alternative whenever events or changes in circumstances indicate that the carrying value of the investment may not be fully recoverable. Impairment charges in connection with the measurement alternative investments of nil were recorded in others, net in the Consolidated Statements of Operations and Comprehensive Income/(Loss) for the years ended December 31, 2025 and 2024, respectively.

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NOTE 12 — PROMISSORY NOTES PAYABLE

The promissory notes payable consists of the following unsecured notes to unrelated parties. Included in the balances are promissory notes with outstanding principal and unpaid interest of an aggregate of $1,422,718 and $1,391,130 as of December 31, 2025 and December 31, 2024, respectively.

The promissory note with a principal as of December 31, 2025 amounting to $711,359 bears interest at a rate of 0% per annum, is unsecured and has no fixed term of repayment. As of December 31, 2025, and December 31, 2024, the outstanding principal and unpaid interest related to this promissory note amounted to $711,359 and $695,565, respectively.

During the years ended December 31, 2025 and 2024, there were no interest expenses related to these promissory notes.

NOTE 13 — AMOUNTS DUE TO DIRECTORS


		December 31,			December 31,
		2025			2024
Lin Chi-Jung		$	739,646		$	723,786
Lin Hsin-Hung			20,621			19,601
		$	760,267		$	743,387

(a)	The balance due to Lin Chi-Jung consists of temporary advances.

The balances are unsecured, interest-free and have no fixed term of repayment.

(b)	The balances due to Lin Hsin-Hung was unsecured, interest-free and have no fixed term of repayment.

NOTE 14 — ACCOUNTS PAYABLE

As of December 31, 2025, and 2024, the balances of accounts payable were $14,585,403 and $16,871,500 respectively. The balance of accounts payable as of December 31, 2025 included an unpaid development fee of Linyi project of $3,912,115 and HATX project of $9,593,178. The remaining balance was due to agents of the operating business.

NOTE 15 — CUSTOMER DEPOSITS

Customer deposits consisted of the sales from real estate development project (the Linyi project and the HATX project) which cannot be recognized as revenue at the accounting period and deposits received for rental.

The Linyi project has started pre-sales in November 2013 and in the year of 2019, the Project has recognized its revenue along with customer deposit, as of December 31, 2025, the pre-sales amounted to $3,303,621. The HATX project has started pre-sales in December 2019, as of December 31, 2025 the pre-sales amounted to $13,771,637.

NOTE 16 — AMOUNT DUE TO AFFILIATES

As of December 31, 2025, the amount due to Shanghai Shengji (“SHSJ”) a shareholder of HATX, $26,706,145 and JXSY, $503,592, was an intercompany transfer for day-to- day operations.

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NOTE 17 — OTHER PAYABLES AND ACCRUED EXPENSES


		December 31,			December 31,
		2025			2024
Accrued staff commission and bonus		$	34,930		$	35,082
Rental deposits received			185,947			322,799
Bid bond			54,348			58,427
Other payables			2,582,045			6,692,811
Dividends payable to non-controlling interest			—			—
		$	2,857,269		$	7,109,119

Other payables are advances from unrelated parties are unsecured, interest-free and have no fixed term of repayment, it’s mainly from the advance from SHSJ, our related party, at the amount of $2,430,969 for the benefit of HATX project.

NOTE 18 — INCOME TAXES PAYABLE

The 2017 Tax Act was enacted on December 22, 2017. Due to the complexities involved in the accounting for the 2017 Tax Act, the SEC issued SAB 118, which provides guidance on the application of US GAAP for income taxes in the period of enactment. SAB 118 requires companies to include in their financial statements a reasonable estimate of the impact of the 2017 Tax Act, to the extent such an estimate has been determined. As a result, our financial results reflect the income tax effects of the 2017 Tax Act for which the accounting is complete, as well as provisional amounts for those impacts for which the accounting is incomplete but a reasonable estimate could be determined.

The Tax Legislation significantly revises the U.S. corporate income tax by, among other things, lowering the corporate income tax rate to 21%, implementing a modified territorial tax system and imposing a one-time repatriation tax on deemed repatriated earnings and profits of U.S.-owned foreign subsidiaries (the Toll Charge). As a fiscal-year taxpayer, certain provisions of the Tax Legislation impacted the Company in fiscal 2018, including the change in the corporate income tax rate and the Toll Charge, while other provisions will be effective starting at the beginning of fiscal 2019, including the implementation of a modified territorial tax system. The U.S. federal income tax rate reduction was effective as of January 1, 2018.


		Year Ended December 31,
		2025			2024
Income /(loss) before income tax expense
Income /(loss) from China operations		$	(4,998,477)		$	(6,476,555)
Income /(loss) from non-China operations			—			(448,716)

Total income /(loss) before income tax expense			(4,998,477)			(6,925,271)

Income tax expense applicable to China operations
Current tax			6,720			68,230
Deferred tax			—			—

Subtotal income tax expense applicable to China operations			6,720			68,230
Non-China income tax expense/(benefit)			—			—
Total income tax expense		$	6,720		$	68,230

In 2025, of the $NIL income tax expense, was for PRC tax, mainly attributable to the non-U.S. subsidiaries of the Company’s business operations and $0 was for U.S. corporate income tax, resulting primarily from a one-time transition tax recognized in the fourth quarter of 2017 that represented management’s estimate of the amount of U.S. corporate income tax based on the deemed repatriation to the United States of the Company’s share of previously deferred earnings of certain non-U.S. subsidiaries of the Company mandated by the U.S. Tax Reform. The Company may make an election to pay the one-time transition tax over eight years commencing in April 2021 or pay in a single lump sum.

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Effective Tax Rate

The following is reconciliation between the U.S. federal statutory rate and the Company’s effective tax rate:

SUNRISE REAL ESTATE GROUP INC 10-K