UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~March 3031, ~~2024~~2025

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

For the transition period from to

Commission File Number 000-32585

SUNRISE REAL ESTATE GROUP, INC.

(Exact name of registrant as specified in its charter)

Texas

75-2713701

(State or other jurisdiction of

incorporation or organization)

(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~~6067-~~8018~~3830

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
N/A	N/A	N/A

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 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 whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or aan ~~smaller~~emerging ~~reporting~~growth company. See the definitions of “large accelerated filer,” “accelerated filer,” ~~and~~ “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. ~~(Check one):~~


Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	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 pursuant to Section 13(a) of the Exchange Act. ☐

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: ~~November 19~~May 8, ~~2024~~2025 –68,691,925 shares of Common Stock

Table of Contents

FORM 10-Q

For the Quarter Ended ~~September~~March 3031, ~~2023~~2025

INDEX


		Page
PART I.	FINANCIAL INFORMATION	3
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of ~~September~~March 3031,~~2024~~2025 and December 31, ~~2023~~2024	3
	Condensed Consolidated Statements of Operations for The Three Months ~~and Nine Months~~ Ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024	4
	Condensed Consolidated Statements of ~~Stockholders’~~Comprehensive ~~Equity~~Gain for ~~the~~The Three Months ~~and Nine Months~~ Ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024	5
	Condensed Consolidated Statements of ~~Cash~~Stockholders’ ~~Flows~~Equity for The ~~Nine~~Three Months Ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024	76
	Condensed Consolidated Statements of Cash Flows for The Three Months Ended March 31, 2025 and 2024	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1918
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2524
Item 4.	Controls and Procedures	2624

PART II.	OTHER INFORMATION	2725
Item 1.	Legal Proceedings	2725
Item 1A	Risk Factors	2725
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	2725
Item 3.	Defaults Upon Senior Securities	2725
Item 4.	Mine Safety Disclosures	2725
Item 5.	Other Information	2725
Item 6.	Exhibits	2826

SIGNATURES		2927

Table of Contents

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

SUNRISE REAL ESTATE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(Expressed in U.S. Dollars)


	~~September~~March 3031,		December 31,
	~~2024~~2025		~~2023~~2024
ASSETS

Current assets
Cash and cash equivalents	$	2316,~~765~~563,~~079~~578	$	2019,~~453~~945,~~464~~761
Restricted cash (Note 3)		1773,~~879,923~~025		21,~~723~~122,~~667~~324
Transactional financial assets (Note 4)		19,~~416~~928,~~798~~654		2623,~~505~~966,~~532~~573
Accounts receivable		253,771		552,964
Accounts receivable, net		6,556,034		328,427
Real estate property under development (Note 5)		8254,~~177~~879,~~354~~667		8863,~~742~~953,~~269~~601
Amount due from an unconsolidated affiliate		16,377,001		16,203,433
Amount due from an unconsolidated affiliate (Note 9)		15,987,758		15,964,637
Other receivables and deposits, net (Note 6)		97,~~094~~258,~~516~~970		98,~~321~~249,~~913~~209
Total current assets		~~152~~121,~~964~~947,~~442~~686		~~164~~133,~~503~~530,~~242~~532

Property and equipment, net (Note 7)		~~484~~397,~~927~~398		~~728~~433,~~094~~302
Investment properties, net (Note 8)		2826,~~137~~317,~~772~~840		2826,~~910~~721,~~575~~490
Investment in an unconsolidated affiliate (Note 9)		13,~~601~~400,~~446~~823		13,~~091~~381,~~335~~808
Other investments (Note 10)		~~648~~633,~~707~~272		~~641~~632,~~810~~373
Total assets	$	~~195~~162,~~837~~697,~~294~~019	$	~~207~~174,~~875~~699,~~056~~505

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)

Current liabilities
Promissory notes payable (Note 11)		1,427,063		1,411,891
Promissory notes payable (Note 12)		1,393,107		1,391,130
Accounts payable (Note 14)		21,390,605		24,885,181
Accounts payable (Note 15)		14,404,920		16,871,500
Amounts due to directors (Note 12)		469,966		472,104
Amounts due to directors (Note 13)		744,444		743,387
Amount due to an affiliate (Note 15)		34,126,077		32,068,741
Amount due to an affiliate (Note 16)		27,320,026		33,823,253
Customer deposits (Note 16)		18,813,194		23,318,011
Customer deposits (Note 17)		17,163,463		17,502,037
Other payables and accrued expenses (Note 13)		7,305,181		7,352,352
Other payables and accrued expenses (Note 14)		7,033,021		7,109,119
Other taxes payable		~~243~~249,~~220~~245		~~247~~278,~~516~~236
Income taxes payable (Note 17)		4,114		1,926,888
Income taxes payable (Note 18)		1,884		6,105
Dividends payables		—		—
Total current liabilities		68,310,110		77,724,767
Total current liabilities		83,779,420		91,682,684

Long-term income tax payable (Note 17)		—		—
Long term income tax payable (Note 18)		—		—
Total liabilities		8368,~~779~~310,~~420~~110		9177,~~682~~724,~~684~~767

Commitments and contingencies (Note 18)
Commitments and contingencies (Note 19)

Shareholders’ equity
Common stock, par value $0.01 per share; 200,000,000 shares Authorized; 68,691,925 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		686,919		686,919
Common stock, par value $0.01 per share; 200,000,000 shares Authorized; 68,691,925 shares issued and outstanding as of March 31, 2025 and December 31, 2024, respectively		686,919		686,919
Additional paid-in capital		8,110,008		8,110,008
Statutory reserve (Note 20)		3,893,120		3,~~986~~893,~~618~~120
Retained Earnings		9489,~~974~~449,~~603~~016		9990,~~169~~363,~~737~~630
Accumulated other comprehensive income		85,~~814~~771,~~140~~892		76,~~311~~095,~~786~~427
Total deficit of Sunrise Real Estate Group, Inc.		116,478,790		119,265,068
Total Equity of Sunrise Real Estate Group, Inc.		107,910,955		109,149,104
Non-controlling interests		(413,~~420~~524,~~916~~046)		(312,~~072~~174,~~696~~366)
Total shareholders’ equity		~~112~~94,~~057~~386,~~874~~909		~~116~~96,~~192~~974,~~372~~738
Total liabilities and shareholders’ equity	$	~~195~~162,~~837~~697,~~294~~019	$	~~207~~174,~~875~~699,~~056~~505

See accompanying notes to consolidated financial statements.

Table of Contents

SUNRISE REAL ESTATE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(Expressed in U.S. Dollars)


	Three Months Ended ~~September~~March 3031,				~~Nine Months Ended September 30,~~
	~~2024~~2025		~~2023~~2024		~~2024~~		~~2023~~
Net revenues	$	79,~~221~~787,~~619~~786	$	51,~~396~~899,~~884~~714	$	~~13,569,743~~	$	~~18,173,550~~
Cost of revenues		(59,~~705~~888,~~763~~924)		(41,~~655~~906,~~403~~846)		~~(11,371,990)~~		~~(15,792,338)~~
Gross profit (loss)		1(101,~~515,856~~138)		~~741~~(7,~~481~~132)		~~2,197,753~~		~~2,381,212~~

Operating expenses		(15346,~~464~~541)		(~~510~~317,~~739~~855)		~~(686,943)~~		~~(1,451,338)~~
General and administrative expenses		(~~751~~607,~~212~~870)		(~~713~~690,~~444~~817)		~~(2,126,643)~~		~~(2,254,036)~~
Operating profit (loss)		~~749~~(1,~~180~~055,549)		(~~482~~1,~~702~~015,804)		~~(615,833)~~		~~(1,324,162)~~

Other income (expenses)
Interest income		34,405		238,756		156,303		734,176
Interest income (expense)		(16,451)		54,697
Interest expense		(~~562~~414,~~991~~647)		(~~344~~563,~~822~~476)		~~(1,689,165)~~		~~(1,708,866)~~
Other income (loss), net		3,073,545		(416,345)		(3,471,645)		(31,549)
Other income (expense), net		(758,945)		(3,273,960)
Total other Income		2,544,959		(522,411)		(5,004,507)		(1,006,239)
Total Other Income (expense)		(1,190,043)		(3,782,739)

Income (loss) before income taxes		3(2,~~294~~245,~~139~~592)		(14,~~005~~798,~~113~~543)		~~(5,620,340)~~		~~(2,330,401)~~

Income tax benefit		(1,885)		(146)
Income tax benefit (expense)		(21,673)		(178,281)		(190,889)		(539,596)
Net income (loss)		(2,247,477)		(4,798,689)

Less: Net (income) loss attributable to non-controlling Interests		1,332,863		791,709
Net income (loss)		3,272,466		(1,183,394)		(5,811,229)		(2,869,997)
Net income (loss) attributable to shareholders of Sunrise Real Estate Group, Inc.	$	(914,614)	$	(4,006,980)
Less: Net (income) loss attributable to non-controlling interests		(142,424)		276,876		1,334,382		654,148

Net income attributable to shareholders of Sunrise Real Estate Group, Inc.	$	3,130,042	$	(906,518)	$	(4,476,847)	$	(2,215,849)
Earnings per share – basic and fully diluted	$	(0.01)	$	(0.06)
Net income (loss)		3,272,466		(1,183,394)		(5,811,229)		(2,869,997)

Other comprehensive income (loss) Foreign currency translation adjustment		2,352,355		856,355		1,557,738		(4,470,536)
Weighted average common shares outstanding
Discontinuation of the equity method for an investment		—		—		—		—
- Basic and fully diluted		68,691,925		68,691,925
Comprehensive income (loss)		5,624,821		(327,039)		(4,253,491)		(7,340,533)
Less: Comprehensive income (loss) attributable to non-controlling interests		(104,786)		195,492		1,348,220		1,036,679
Total comprehensive income (loss) attributable to shareholders		5,520,035		(131,547)		(2,905,271)		(6,303,854)
Earnings per share – basic and fully diluted	$	0.05	$	(0.01)	$	(0.07)	$	(0.03)

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

See accompanying notes to ~~unaudited condensed~~ consolidated financial statements.

Table of Contents

SUNRISE REAL ESTATE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF ~~STOCKHOLDERS’~~COMPREHENSIVE ~~EQUITY~~INCOME (UNAUDITED)

(Expressed in U.S. Dollars)


	Three Months Ended March 31,										~~Accumulated~~				~~Total~~
	~~Common Stock~~2025		2024		~~Additional~~				~~Retained~~		~~Other~~				~~Stockholders’~~
	Number of				Paid-in		Statutory		Earnings		Comprehensive		Non-controlling		(Deficit)
Net Income (loss)	$	(2,247,477)	$	(4,798,689)
	~~shares issued~~		~~Amount~~		~~Capital~~		~~Reserve~~		~~(Deficits)~~		~~Income~~		~~Interests~~		~~Equity~~
Balance, December 31, 2022		68,691,925	$	686,919	$	8,110,008	$	3,986,618	$	109,300,636	$	9,447,265	$	13,207,067	$	144,738,513
Other comprehensive income (loss)
Profit (loss) for the period		—		—		—		—		(2,215,849)		—		(654,148)		(2,869,997)
- Foreign currency translation adjustment		(340,352)		(324,923)
Dividend		—		—		—		—		—		—		—		—
Total comprehensive income (loss)		(2,587,829)		(5,123,612)
Translation of foreign operations		—		—		—		—		—		(4,088,005)		(382,531)		(4,470,536)
Less: Comprehensive (income) loss attributable to non-controlling interests		1,349,680		786,806
Balance, September 30, 2023		68,691,925		686,919		8,110,008		3,986,618		107,084,787		5,359,260		12,170,388		137,397,980

Total comprehensive income (loss) attributable to stockholders of Sunrise Real Estate Group, Inc.	$	(1,238,149)	$	(4,336,806)


											Accumulated				Total
	Common Stock				Additional				Retained		Other				Stockholders’
	Number of				Paid-in		Statutory		Earnings		Comprehensive		Non-controlling		(Deficit)
	shares issued		Amount		Capital		Reserve		(Deficits)		Income		Interests		Equity
Balance, June 30, 2023		68,691,925	$	686,919	$	8,110,008	$	3,986,618	$	107,991,305	$	4,584,289	$	12,365,880	$	137,725,019
Profit (loss) for the		—		—		—		—		(906,518)		—		(276,876)		(1,183,394)
Translation of foreign operations		—		—		—		—		—		774,971		81,384		856,355
Balance, September 30, 2023		68,691,925		686,919		8,110,008		3,986,618		107,084,787		5,359,260		12,170,388		137,397,980

See accompanying notes to consolidated financial statements.

Table of Contents

SUNRISE REAL ESTATE GROUP, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

(Expressed in U.S. Dollars)


															~~Accumulated~~	Accumulated					~~Total~~	Total
	Common Stock					~~Additional~~	Additional					~~Retained~~	Retained		~~Other~~	Other					~~Stockholders’~~	Stockholders’
	Number of					~~Paid-in~~	Paid-in		~~Statutory~~	Statutory		~~Earnings~~	Earnings		~~Comprehensive~~	Comprehensive		~~Non-controlling~~	Non-controlling		~~(Deficit)~~	(Deficit)
	shares issued		~~Amount~~	Amount		~~Capital~~	Capital		~~Reserve~~	Reserve		~~(Deficits)~~	(Deficits)		~~Income~~	Income		~~Interests~~	Interests		~~Equity~~	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
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 period	—	—		—	—		—	—		—	—		~~(4,476,847)~~	(914,614)		—	—		~~(1,334,382)~~	(1,332,863)		~~(5,811,229)~~	(2,247,477)
Termination of company within the consolidated statements	—			—			—			(93,498)			281,713			—			(69,222)			118,993
Discontinuation of the equity method for an investment		—			—			—			—			—			—			—			—
Translation of foreign operations	—			—			—			—			—			1,502,354			55,384			1,557,738
Capital contribution from non-controlling interests of new consolidated subsidiaries		—			—			—			—			—			—			—			—
Balance, September 30, 2024	68,691,925			686,919			8,110,008			3,893,120			94,974,603			8,814,140			(4,420,916)			112,057,874
Translation of foreign operations		—			—			—			—			—			(323,535)			(16,817)			(340,352)
Balance, March 31, 2025		68,691,925			686,919			8,110,008			3,893,120			89,449,016			5,771,892			(13,524,046)			94,386,909


															~~Accumulated~~	Accumulated					~~Total~~	Total
	Common Stock					~~Additional~~	Additional					~~Retained~~	Retained		~~Other~~	Other					~~Stockholders’~~	Stockholders’
	Number of					~~Paid-in~~	Paid-in		~~Statutory~~	Statutory		~~Earnings~~	Earnings		~~Comprehensive~~	Comprehensive		~~Non-controlling~~	Non-controlling		~~(Deficit)~~	(Deficit)
	shares issued		~~Amount~~	Amount		~~Capital~~	Capital		~~Reserve~~	Reserve		~~(Deficits)~~	(Deficits)		~~Income~~	Income		~~Interests~~	Interests		~~Equity~~	Equity
Balance, June 30, 2024	68,691,925		$	686,919		$	8,110,008		$	3,986,618		$	91,562,848		$	6,493,369		$	(4,525,702)		$	106,314,060
Balance, December 31, 2023		68,691,925		$	686,919		$	8,050,008		$	3,986,618		$	99,169,737		$	7,311,786		$	(3,072,696)		$	116,192,372
Profit (loss) for the	—			—			—			—			3,130,042			—			142,424			3,272,466
Profit (loss) for the period		—			—			—			—			(4,006,980)			—			(791,709)			(4,798,689)
Termination of company within the consolidated statements	—			—			—			(93,498)			281,713			—			(69,222)			118,993
Discontinuation of the equity method for an investment		—			—			—			—			—			—			—			—
Translation of foreign operations	—			—			—			—			—			2,320,771			31,584			2,352,355
Capital contribution from non-controlling interests of new consolidated subsidiaries		—			—			—			—			—			—			—			—
Balance, September 30, 2024	68,691,925			686,919			8,110,008			3,893,120			94,974,603			8,814,140			(4,420,916)			112,057,874
Translation of foreign operations		—			—			—			—			—			(329,826)			4,903			(324,923)
Balance, March 31, 2024		68,691,925			686,919			8,050,008			3,986,618			95,162,757			6,981,960			(3,859,502)			111,068,760

See accompanying notes to consolidated financial statements.

Table of Contents

SUNRISE REAL ESTATE GROUP, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Expressed in U.S. Dollars)


	~~Nine~~Three Months Ended ~~Sept.~~March 3031,
	~~2024~~2025		~~2023~~2024
Cash flows from operating activities
Net income (loss)	$	(52,~~811~~247,~~229~~477)	$	(24,~~869~~798,~~997~~689)

Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation and amortization		1454,~~267,958~~201		1499,~~305,903~~869
Loss (Gain) on disposal of property, plant and equipment		128,243		34,088
Changes in assets and liabilities
Accounts receivable		~~300~~(6,~~982~~229,397)		72472,~~476~~970
Real estate property under development		79,~~416~~168,~~179~~131		1(396,~~178,217~~897)
Customer Deposits		(4363,~~690,658~~576)		(61,~~647~~132,~~288)~~364
Amount due from unconsolidated affiliates		1(6,~~689~~554,~~962~~099)		2558,~~587,348~~856
Other receivables and deposits		~~323~~1,~~109~~002,324		(~~659~~175,~~587~~370)
Deferred tax assets		—		—
Accounts payable		(2,491,456)		(101,049)
Net cash from directors		(7,113)		64,082
Other payables and accrued expenses		(86,231)		169,212
Accounts payable		(3,710,779)		2,629,388
Dividends		—		—
Other payables and accrued expenses		(124,460)		(88,738)
Interest payable on amount due to directors		1		(13,438)
Dividend		—		(10,219,272)
Other taxes payable		(29,397)		(4,407)
Other taxes payable		(6,861)		(1,750)
Income taxes payable		(4,231)		(858,940)
Income taxes payable		(1,917,026)		(947,886)
Net cash provided by (used in) operating activities		(7,381,207)		(3,515,519)
Net cash provided by (used in) operating activities		(5,141,693)		(13,563,016)

Cash flows from investing activities
Purchases of property and equipment		(17,624)		(5,487)
Acquisition of property, plant and equipment		—		(310)
Net Cash from Transactional financial assets		7,273,189		2,795,775
Net cash from transactional financial assets		4,073,450		4,570,522
Dividend distribution of affiliates		—		—
Net cash provided by (used in) investing activities		4,073,450		4,570,212
Net cash provided by (used in) investing activities		7,255,565		2,790,288

Cash flows from financing activities
Dividends paid to shareholders		—		—
Restricted cash		—		—
Net cash provided by (used in) financing activities		—		—

Effect of exchange rate changes on cash and cash equivalents		~~353~~(423,~~999~~725)		(2160,~~150,~~564)

Net increase in cash and cash equivalents		2(3,~~467~~731,~~871~~482)		~~(12~~894,~~923,292)~~129
Cash and cash equivalents at beginning of period		2321,~~177~~068,~~131~~085		7723,~~070~~177,~~510~~131
Cash and cash equivalents at end of period	$	2517,~~645~~336,~~002~~603	$	6424,~~147~~071,~~218~~260

Supplemental disclosure of cash flow information
Income taxes paid	$	21,~~098,086~~885	$	1862,~~539,747~~884
Interest paid		—		—

See accompanying notes to consolidated financial statements.

Table of Contents

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – ORGANIZATION AND DESCRIPTION OF BUSINESS

Sunrise Real Estate Group, Inc. (“SRRE”) was incorporated in ~~the State of~~ Texas on October 10, 1996, under the name of Parallax Entertainment, Inc. SRRE, together with its subsidiaries and equity investment described below, ~~are~~is collectively referred to as “the Company”, “we”, “our”, or “us”. The Company is primarily engaged in the provision of property brokerage services, which include property marketing, leasing, and management services,; and real estate development in the People’s Republic of China (the “PRC”).

As of ~~September~~March 3031, ~~2024~~2025, the Company has the following major subsidiaries and equity investment.


			% 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 Shang Yang Real Estate Consultation Company Limited (“SZSY”)	November 24, 2006	PRC	75.25%1	Subsidiary	Property brokerage and management 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 Xin Xing Yang Real Estate Brokerage Company Limited (“SHXXY”)	September 28, 2011	PRC	20%	Equity investment	Property brokerage services
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
UnnnShanghai Taobuting Media Co., Ltd. (“TBT”)	July 1, 2020	PRC	7.5%	Subsidiary	Streaming platform
Shangyang International PTE. LTD. (“SYIP”)	August 19,2022	SINGAPORE	100%	Subsidiary	Investment holding
Shangyang International PTE. LTD.	August 19,2022	SINGAPORE	100%	Subsidiary	Investment holding
Shanghai Da Er Wei Industry Co., Ltd.(“DEWSY”)	Oct. 20, 2020	PRC	19.58%	Subsidiary	Investment holding
Shanghai Da Er Wei Industry Co., Ltd.	Oct. 20, 2020	PRC	19.58%	Subsidiary	Investment holding
Shanghai Aoyue Bio-tech Co., Ltd. (“SHAY”)	Nov. 27, 2023	PRC	19.91%	Subsidiary	Investment holding
Shanghai Zhuangyanting Trading Co., Ltd.	Sep. 21, 2023	PRC	19.9%	Subsidiary	Investment holding
Shanghai Zhuangyanting Trading Co., Ltd. (“SHZYT”)	Sep. 21, 2023	PRC	19.91%	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

1.	After an equity transaction in February 2015, the Company held equity in subsidiaries of SZSY as follows: SZXJY 49%, SHXJY 26% and Sunrise Real Estate Development Group, Inc. (CY-SRRE) 12.5%, totaling 75.25% equity interest in SZSY.

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.

3. OnIn ~~January~~December 282019, ~~2013,~~SHDEW ~~CY-SRRE,~~had ~~SZXJY~~an ~~and~~employee anstock ~~unrelated~~bonus ~~party~~where ~~established~~its aemployees ~~subsidiary~~received their issued shares. This resulted in the ~~PRC,~~dilution ~~SHXJYB,~~of ~~with~~our ~~CY-SRRE~~ownership ~~holding~~of 15SHDEW from 20.38% ~~equity~~to ~~interest~~19.91%. ~~and~~According ~~SZXJY~~to ~~holding~~a ~~60%~~resolution ~~equity~~adopted ~~interest~~by the shareholders of SHDEW in ~~SHXYJB~~October 31,2023, SHDEW will close its operations at the end of 2026.

4. InWe ~~December~~established ~~2019,~~HATX ~~SHDEW~~for ~~had~~real anestate ~~employee~~development ~~stock bonus where its employees received their issued shares. This resulted~~ in ~~the~~Huai’an ~~dilution~~through ofHAZB, ~~our ownership~~ of ~~SHDEW~~which ~~from~~we 20have 78.3846% ~~to 19~~ownership.~~91%.~~

The accompanying condensed consolidated balance sheet as of December 31, 2024, which has been derived from the audited consolidated financial statements and the accompanying unaudited condensed consolidated financial statements, have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted pursuant to those rules and regulations and the Company believes that the disclosures made are adequate to make the information not misleading.

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~~The~~In ~~accompanying~~the opinion of management, these condensed consolidated ~~balance~~financial ~~sheet~~statements asreflect all adjustments which are of ~~December~~a ~~31,~~normal ~~2023,~~recurring ~~which~~nature ~~has~~and ~~been~~which ~~derived~~are ~~from~~necessary ~~the~~to ~~audited~~present ~~consolidated~~fairly the financial ~~statements~~position ~~and~~of ~~the~~Sunrise ~~accompanying~~Real ~~unaudited~~Estate ~~condensed~~as ~~consolidated~~of ~~financial~~March ~~statements~~31, ~~has~~2025 ~~been~~and ~~prepared~~the ~~pursuant~~results toof operations for the ~~rules~~three ~~and~~months ~~regulations~~ended ofMarch ~~the~~31, ~~Securities~~2025 and ~~Exchange~~2024, ~~Commission~~and (the ~~“SEC”).~~cash ~~Certain~~flows ~~information~~for ~~and~~the ~~note~~three ~~disclosures~~months ~~normally~~ended ~~included~~March in31, ~~annual~~2025 and 2024. These condensed consolidated financial statements ~~prepared~~and related notes should be read in ~~accordance~~conjunction with ~~accounting~~the ~~principles~~Company’s ~~generally~~annual ~~accepted~~report inon Form 10-K for the ~~United~~fiscal ~~States~~year ofended ~~America~~December ~~(“U~~31, 2024.S. ~~GAAP”)~~The ~~have~~results ~~been~~of ~~condensed~~operations orfor ~~omitted~~the ~~pursuant~~three tomonths ~~those~~ended ~~rules~~March ~~and~~31, ~~regulations~~2025 ~~and~~are ~~the~~not ~~Company~~necessarily ~~believes~~indicative ~~that~~of the ~~disclosures~~results ~~made~~which ~~are~~may ~~adequate~~be toexpected ~~make~~for the ~~information~~entire ~~not~~fiscal ~~misleading~~year.

In the opinion of the Company’s management, these condensed consolidated financial statements reflect all adjustments which are of a normal recurring nature and which are necessary to present fairly the financial position of the Company as of September 30, 2024 and the results of operations for the nine months ended September 30, 2024 and 2023, and the cash flows for the nine months ended September 30, 2024 and 2023. These condensed consolidated financial statements and related notes should be read in conjunction with the Company’s annual report on Form 10-K for the fiscal year ended December 31, 2023. The results of operations for the nine months ended September 30, 2024, are not necessarily indicative of the results which may be expected for the entire fiscal year.

The preparation of condensed consolidated financial statements in conformity with U.S. GAAP requires the Company 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 financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting and Principles of Consolidation

The condensed 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, ofin which the Company does not have control but has the ability to exercise significant influence over operating and financial policies, are accounted for using the equity method.

Foreign Currency Translation and Transactions

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

Foreign currency transactions during the period are translated into each company’s denominated currency at the exchange rates ruling at the transaction dates. ~~Gains~~Gain and ~~losses~~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 period-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, period-end exchange rates are applied to the condensed 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 is included as a component of accumulated other comprehensive income in shareholders’ equity.

The exchange rates as of ~~September~~March 3031, ~~2024,~~2025 and December 31, ~~2023~~2024 are $1: ~~RMB7~~RMB 7.~~0074~~1782 and $1: RMB7.~~095~~1884, respectively.

The RMB is not freely convertible into foreign currency and all foreign exchange ~~transaction~~transactions 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.

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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.

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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 360, “Property, Plant and Equipment” (“ASC 360”), 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 assets is not recoverable and exceeds fair value. The carrying amount is not recoverable if it exceeds the sum of the undiscounted cash flows expected to be generated by the assets.

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 (“sqm”) tofor ~~develop~~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 asat the end of ~~October~~May 3115, 2024. Phase 2 was divided into north and south ~~area~~areas and completed construction of 84 units at the end of 2020. All units have been sold during phase 2 as of May 15, 2024. Phase 3 began construction in the first quarter of 2021 and the Company sold 22 and pre-sold 3212 units out of 51 units as of ~~October~~May 3115, ~~2024~~2025. In September 2020, the Company expanded the Linyi project by purchasing an additional 54,312 sqm 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 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 ~~October~~May 3115, ~~2024~~2025, the Company sold ~~660~~655 units, respectively, out of 679 units of the first phase and sold ~~503~~596 units out of 873 of the second phase.

Long Term Investments

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

Investment in Unconsolidated Affiliates

Affiliates are entities over which the Company has significant influence, but which it does not control. The Company generally considers an ownership interest of 20% or higher to represent significant influence. Investments in unconsolidated affiliates are accounted for by the equity method of accounting. Under this method, the Company’s share of the post-acquisition profits or losses of affiliates is recognized in the income statement and its shares of post-acquisition movements in other comprehensive income are recognized in other comprehensive income. Unrealized gains on transactions between the Company and its affiliates are eliminated to the extent of the Company’s interest in the affiliates; unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.

When the Company’s share of losses in an affiliate equals or exceeds its interest in the affiliate, the Company does not recognize further losses, unless the Company has incurred obligations or made payments on behalf of the affiliate.

The Company is required to perform an impairment assessment of its investments whenever events or changes in business circumstances indicate that the carrying value of the investment may not be fully recoverable. An impairment loss is recorded when there has been a loss in ~~the~~ value of the investment that is ~~not~~other than temporary. The Company did not record any impairment losses in any of the periods reported.

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Other Investments

Where the Company has no significant influence, the investment is classified as other assets in the balance sheet and is carried under the measurement alternative which is measured at cost less impairment, adjusted for observable price changes in orderly transactions for an identical or similar investment of the same issuer. Investment income is recognized by the Company when the investee declares a dividend and the Company believes it is collectible. The Company periodically evaluates the carrying value of its investment under the measurement alternative method in the case of the investment in SHDEW and any decline in value is included in impairment of cost of the investment.

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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 ~~over time by measuring the progress towards complete satisfaction of that performance obligation. Otherwise, revenue is recognized~~ at a point in time when the customer obtains control of the asset.

All revenues represent gross revenues less sales and business tax.

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 adopted ASC 606 on January 1, 2018 using the modified retrospective approach with no restatement of comparative periods and no cumulative-effect adjustment to retained earnings recognized as of the date of adoption. A significant portion of the Company’s revenue is derived from development and sales of condominium real estate property in the PRC, with revenue previously recognized using the percentage of completion method. Under the new standard, to recognize revenue over time similar to the percentage of completion method, contractual provisions need to provide the Company with an enforceable right to payment and the Company has no alternative use of the asset. Historically, all contracts executed ~~by the Company~~ contained an enforceable right to home purchase payments and the Company had no alternative use of assets., ~~Therefore~~therefore, the adoption of ASC 606 did not have a material impact on the Company’s consolidated financial statements.

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 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.

Recently Adopted Accounting Standards

OnIn 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.

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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.

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NOTE 3 – RESTRICTED CASH

The Company is required to maintain certain deposits with the bank for those home buyers that ~~have~~has applied for a housing loan from their bank. This deposit is a percentage ofto each home buyer’s bank loan for the purpose of purchasing ~~a home~~ in our project. Once we complete the ~~transfer~~handover h to the buyer, these deposits become unrestricted. As of ~~September~~March 3031, ~~2024~~2025, and December 31, ~~2023~~2024, the Company held cash deposits of $1773,~~879,923~~025 and $21,~~723~~122,~~667~~324, respectively.

NOTE 4 – TRANSACTIONAL FINANCIAL ASSETS

As of ~~September~~March 3031, ~~2024~~2025, we ~~had~~have $19,~~416~~928,~~798~~654 invested in bank wealth management investment products. The investments ~~have~~are short ~~term~~termed with maturity periods and can be rolled into a maturity date of our choosing or automatically rolled into subsequent maturity ~~periods~~period. The annualized rate of return may range from 2.08% to 23.765% depending on the amount and time period invested.

NOTE 5 – 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 sqm 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, and sold all 84 ~~villas~~units ~~out~~in Phase 2 as of ~~all~~May 8415, ~~units~~2025. inAs to Phase 23, we sold 22 and pre-sold 3212 units out of 51 units ~~in Phase 3~~ as of ~~October~~May 3115, ~~2024~~2025.

In October 2018, HATX purchased the property in Huai’an, Qingjiang Pu district with an area of 78,030 ~~sqm~~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 ~~its~~tis 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 ~~October~~May 3115, ~~2024~~2025, the Company sold ~~660~~655 units, respectively, out of 679 units of the first phase and ~~pre-~~sold ~~503~~596 ~~units~~ out of 873 of the second phase.

As of March 31, 2025, land use rights included in real estate property under development totaled $54,879,667.

As of September 30, 2024, land use rights included in real estate property under development totaled $82,177,354.

NOTE 6 – OTHER RECEIVABLES AND DEPOSITS, NET


	~~September~~March 3031,		December 31,
	~~2024~~2025		~~2023~~2024
Advances to staff	$	11127,~~825~~966		2085,~~042~~662
Rental deposits		~~721~~704,~~735~~339		~~719~~703,~~354~~326
Prepaid expense		2621,~~600~~941		4821,~~462~~910
Prepaid tax		54,~~465~~551,~~673~~035		65,~~242~~500,~~218~~285
Other receivables		21,~~762~~853,~~256~~689		21,~~283~~938,~~757~~027
	$	97,~~094~~258,~~516~~970	$	98,~~321~~249,~~913~~209

Other receivables and deposits as of ~~September~~March 3031, ~~2024~~2025 and December 31, ~~2023~~2024 were stated net of allowance for doubtful accounts of $1,~~993~~631,~~120~~452 and $1,~~265~~629,~~984~~137, respectively.

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NOTE 7 – PROPERTY AND EQUIPMENT, NET


	~~September~~March 3031,		December 31,
	~~2024~~2025		~~2023~~2024
Furniture and fixtures	$	~~245~~108,~~601~~922	$	~~260~~90,~~488~~761
Computer and office equipment		~~208~~216,~~732~~891		~~189~~204,~~592~~016
Motor vehicles		23564,~~673~~195		~~609~~23,~~003~~079
Properties		21,~~159~~535,~~070~~996		2,~~136~~104,~~116~~706
		2,~~637~~426,~~079~~004		32,~~195~~422,~~199~~562
Less: Accumulated depreciation		(2,~~152~~028,~~152~~606)		(21,~~467~~989,~~105~~260)
	$	~~484~~397,~~927~~398	$	~~728~~433,~~094~~302

Depreciation and amortization expense for property and equipment amounted to $3739,~~945~~346 and $7349,~~826~~032 for the ~~nine~~three months ended ~~September~~March 3031, ~~2024,~~2025 and ~~2023~~2024, respectively.

NOTE 8 – INVESTMENT PROPERTIES, NET


	~~September~~March 3031,		December 31,
	~~2024~~2025		~~2023~~2024
Investment properties	$	4140,~~565~~576,~~690~~665	$	4140,~~123~~519,~~783~~088
Less: Accumulated depreciation		(1314,~~427~~258,~~918~~825)		(1213,~~213~~797,~~208~~598)
	$	2826,~~137~~317,~~772~~840	$	2826,~~910~~721,~~575~~490

Depreciation and amortization expense for investment properties amounted to $1441,~~068,721~~781 and $1446,~~134,245~~560 for the ~~nine~~three months ended ~~September~~March 3031, ~~2024,~~2025 and ~~2023~~2024, respectively.

NOTE 9 – INVESTMENT IN AND AMOUNT DUE FROM AN UNCONSOLIDATED ~~AFFILIATE~~AFFILIATES

The investments in unconsolidated affiliates primarily consist of SHDEW (19.91)%, DEWSY (19.586%), ~~SHAY (19.91%), SHZYT (19.91%)~~ and SHTX (19.59%). As of ~~September~~March 3031, ~~2024~~2025, the investment amount in SHDEW was $12,~~644~~343,~~638~~768, DEWSY was ($~~558~~545,~~832),~~535 ~~SHAY was ($85,254), SHZYT was ($284,181)~~ and in SHTX was $2827,~~541~~862.

SHDEW was established in June 2013 as a skincare and cosmetic company. ~~SHDEW~~which ~~develops~~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.

On October 31 2023, SHDEW held a shareholder meeting that agreed to SHDEW’s dissolution by 2026. SHDEW’s management did not prepare any immediate dissolution plans at the time of said shareholders’ meeting, but SHDEW’s management will prepare a dissolution plan.

NOTE 10 – 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 ~~September~~March 3031, ~~2024~~2025, and December 31, ~~2023~~2024, the carrying amount of the Company’s measurement alternative investments was $~~648~~633,~~707~~272 and $~~641~~632,~~810~~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 ~~September~~March 3031, ~~2024~~2025, and ~~2023~~2024, respectively.

NOTE 11 – 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 $1,393,107 and $1,391,130 as of March 31, 2025, and December 31, 2024, respectively.

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The promissory note with a principal amount as of March 31, 2025 of $696,553 bears interest at a rate of 0% per annum, is unsecured and has no fixed term of repayment. As of March 31, 2025, and December 31, 2024, the outstanding principal and unpaid interest related to this promissory note amounted to $696,553 and $695,565, respectively.

For the three months ended March 31, 2025, the interest expense related to these promissory notes was $0.

NOTE 11 – 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 $1,427,063 and $1,411,891 as of September 30, 2024 and December 31, 2023, respectively.

The promissory note with a principal as of September 30, 2024 amounting to $713,531 bears interest at a rate of 0% per annum, is unsecured and has no fixed term of repayment. As of September 30, 2024, and December 31, 2023, the outstanding principal and unpaid interest related to this promissory note amounted to $713,531 and $705,946, respectively.

For the nine months ended September 30, 2024, the interest expense related to these promissory notes was $NIL.

NOTE 12 – AMOUNTS DUE TO DIRECTORS


	~~September~~March 3031,		December 31,
	~~2024~~2025		~~2023~~2024
Lin Chi-Jung	$	~~456~~724,~~493~~252	$	~~451~~723,~~640~~786
Lin Hsin-Hung		1320,~~473~~192		2019,~~464~~601
	$	~~469~~744,~~966~~444	$	~~472~~743,~~104~~387

(a) The balance due tofrom 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 are unsecured, interest-free and have no fixed term of repayment.

NOTE 13 – OTHER PAYABLES AND ACCRUED EXPENSES


	~~September~~March 3031,		December 31,
	~~2024~~2025		~~2023~~2024
Accrued staff commission and bonus	$	33,~~483~~708	$	4435,~~572~~082
Rental deposits received		~~246~~298,~~464~~841		~~188~~322,~~355~~799
Bid bond		6062,~~650~~692		7858,~~763~~427
Dividends payable to non-controlling interest		—		189,977
Dividends payable to no controlling interest		—		—
Other payables		6,~~964~~637,~~584~~780		6,~~850~~692,~~685~~811
	$	7,~~305~~033,~~181~~021	$	7,~~352~~109,~~352~~119

NOTE 14 – ACCOUNT PAYABLE

~~Account~~As ~~payable~~of ~~was~~March ~~mostly~~31, ~~derived~~2025 ~~from~~and ~~our~~December ~~property~~31, ~~development~~2024, the balances of ~~the~~accounts ~~Linyi~~payable ~~project~~were $14,404,920 and ~~the~~$16,871,500 ~~HATX project~~respectively. AsThe balance of ~~September~~accounts ~~30,~~payable ~~2024,~~as ~~and~~of ~~December~~March 31, ~~2023,~~2025 ~~the~~included ~~Company’s~~unpaid ~~account~~development ~~payable~~fee ~~amounted~~of toLinyi project of $212,~~390~~852,~~605~~295 and HATX project of $2410,~~885~~494,~~181,~~996. ~~respectively~~The remaining balance was due to agents of the operating business.

NOTE 15 – AMOUNT DUE TO AFFILIATES

As of ~~September~~March 3031, ~~2024~~2025, the amount due to Shanghai Shengji (“SHSJ”), a shareholder of HATX, ~~was~~ $3326,~~620~~826,~~433.~~664 ~~The~~and ~~amount due to~~ JXSY, ~~was~~ $~~505~~493,~~644~~362, ~~which~~ was an intercompany transfer for day-to-day operations.

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NOTE 16 – CUSTOMER DEPOSITS

Customer deposits ~~were~~consisted ~~mostly~~of ~~derived~~the sales from ~~our~~real ~~property~~estate development ofproject (the Linyi project and the HATX project,) which ~~was~~cannot ~~pre-sale~~be ~~collection~~recognized ~~from~~as ~~our~~revenue ~~customers.~~at Asthe ofaccounting ~~September~~period ~~30, 2024,~~ and ~~December 31, 2023, the Company’s customer~~ deposits ~~amounted~~received tofor ~~$18,813,194 and $23,318,011, respectively~~rental.

The Linyi project has started pre-sales in November 2013 and as of March 31, 2025, the pre-sales amounted to $3,225,199. The HATX project started pre-sales in December 2019, as of March 31, 2025 the pre-sales amounted to $13,905,586.

~~NOTE 17 – INCOME TAX PAYABLE~~14

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NOTE 17 – 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.

NOTE 18 – COMMITMENTS AND CONTINGENCIES

Operating Lease Commitments

The Company leases certain of its office properties under non-cancellable operating lease arrangements. Payments under operating leases are expensed on a straight-line basis over the periods of their respective terms, and the terms of the leases do not contain rent escalation, or contingent rent, renewal, or purchase options. There are no restrictions placed upon the Company by entering into these leases. Rental expenses under operating leases for the ~~nine~~three months ended ~~September~~March 3031, ~~2024~~2025 and ~~2023~~2024 were $557,~~047~~078 and $572,~~782~~030, respectively.

As of ~~September~~March 3031, ~~2024~~2025, the Company had the following operating lease obligations.


	Amount
Within one year	$	527,~~196~~366
Two to five years		—
	$	527,~~196~~366

NOTE 19 – STATUTORY RESERVE

According to the relevant corporation laws in the PRC, a PRC company is required to transfer at least 10% of its profit after taxes, as determined under accounting principles generally accepted in the PRC, to the statutory reserve until the balance reaches 50% of its registered capital. The statutory reserve can be used to make good on losses or to increase the capital of the relevant company.

According to the Law of the PRC on Enterprises with Wholly-Owned Foreign Investment, the Company PRC’s subsidiaries are required to make appropriations from after-tax profits as determined under accounting principles generally accepted in the PRC (“PRC GAAP”) to non-distributable reserves. These reserve funds include one or more of the following: (i) a general reserve, (ii) an enterprise expansion reserve and (iii) a staff bonus and welfare fund. A wholly-owned PRC subsidiary is not required to make appropriations to the enterprise expansion reserve but annual appropriations to the general reserve are required to be made at 10% of the profit after tax as determined under PRC GAAP at each year-end, until such fund has reached 50% of its respective registered capital. The staff welfare and bonus reserve isare determined by the board of directors. The general reserve is used to offset future losses. The subsidiary may, upon a resolution passed by the stockholders, convert the general reserve into capital. The staff welfare and bonus reserve are used for the collective welfare of the employees of the subsidiary. The enterprise expansion reserve is for the expansion of the subsidiary operations and can be converted to capital subject to approval by the relevant authorities. These reserves represent appropriations of the retained earnings determined in accordance with Chinese law.

In addition to the general reserve, the Company’s PRC subsidiaries are required to obtain approval from the local PRC government prior to distributing any registered share capital. Accordingly, both the appropriations to general reserve and the registered share capital of the Company’s PRC subsidiary are considered as restricted net assets and are not distributable as cash dividends. As of March 31, 2025, and December 31, 2024, the Company’s statutory reserve fund was $3,893,120 and $3,893,120, respectively.

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In addition to the general reserve, the Company’s PRC subsidiaries are required to obtain approval from the local PRC government prior to distributing any registered share capital. Accordingly, both the appropriations to general reserve and the registered share capital of the Company’s PRC subsidiary are considered as restricted net assets and are not distributable as cash dividends. As of September 30, 2024, and December 31, 2023, the Company’s statutory reserve fund was $3,893,120 and $3,986,618, respectively.

NOTE 20 - SEGMENT INFORMATION

The Company’s ~~chief~~Chief ~~executive~~Executive ~~officer~~Officer and ~~chief~~Chief ~~operating~~Financial ~~officer~~Officer have been identified as the chief operating decision makers. The Company’s chief operating decision makers direct the allocation of resources to operating segments based on the profitability and cash flows of each respective segment.

The Company evaluates performance based on several factors, including net revenue, cost of revenue, operating expenses, and income from operations. The following tables show the operations of the Company’s operating segments:


	Three Months Ended ~~September~~March 3031, ~~2024~~2025
	Property		Real Estate		Investment
	~~Brokerage~~Management		~~Real Estate~~Development		~~Investment~~Transaction		Others		Total
	Services		Development		Transaction		Others		Total
Net revenues		66,702	$	9,721,084	$	—	$	—	$	9,787,786
Net revenues	$	267,547	$	6,954,072	$	—	$	—	$	7,221,619
Cost of revenues		(152,856)		(9,736,068)		—		—		(9,888,924)
Cost of revenues		(258,216)		(5,447,547)		—		—		(5,705,763)
Gross profit		(86,154)		(14,984)		—		—		(101,138)
Gross profit		9,331		1,506,525		—		—		1,515,856

Operating expenses		~~270~~(57,~~514~~331)		(~~285~~289,~~978~~210)		—		—		(15346,~~464~~541)
General and administrative expenses		(~~198~~282,~~156~~391)		(~~547~~220,~~222~~204)		—		(5105,~~834~~275)		(~~751~~607,~~212~~870)
Operating gain (loss)		81,689		673,325		—		(5,834)		749,180
Operating loss		(425,876)		(524,398)		—		(105,275)		(1,055,549)

Other income (expenses)
Interest income		21(22,~~398~~637)		116,~~491~~000		—		~~1,516~~186		34(16,~~405~~451)
Interest expense		—		(~~562~~414,~~991~~647)		—		—		(~~562~~414,~~991~~647)
Other income, Net		~~(199,100)~~—		(721,~~855~~925)		37,~~264,790~~371		—(744,391)		3(758,~~073,545~~945)
Total other (expenses) income		(~~177~~22,~~702~~637)		(~~543~~430,~~645~~572)		37,~~264,790~~371		1(744,~~516~~205)		2(1,~~544~~190,~~959~~043)

Income (loss) before income taxes		(96448,~~013~~513)		~~129~~(954,~~680~~970)		37,~~264,790~~371		(4849,~~318~~480)		3(2,~~294~~245,~~139~~592)
Income tax		—		(211,~~673~~885)		—		—		(211,~~673~~885)
Net Income (loss)	$	(96,013)	$	108,007	$	3,264,790	$	(4,318)	$	3,272,466
Net Income(loss)	$	(448,513)	$	(956,855)	$	7,371	$	(849,480)	$	(2,247,477)

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	~~Nine~~Three Months Ended ~~September~~March 3031, 2024
	Property		Real Estate		Investment
	~~Brokerage~~Management		~~Real Estate~~Development		~~Investment~~Transaction		Others		Total
	Services		Development		Transaction		Others		Total
Net revenues		37,984	$	1,861,730	$	—	$	—	$	1,899,714
Net revenues	$	396,653	$	13,173,090	$	—	$	—	$	13,569,743
Cost of revenues		(130,203)		(1,776,643)		—		—		(1,906,846)
Cost of revenues		(583,791)		(10,788,199)		—		—		(11,371,990)
Gross profit		(92,220)		85,088		—		—		(7,132)
Gross profit		(187,138)		2,384,891		—		—		2,197,753

Operating expenses		84(101,~~741~~984)		(~~771~~215,~~684~~871)		—		—		(~~686~~317,~~943~~855)
General and administrative expenses		(~~635~~207,~~165~~630)		(~~840~~319,~~010~~356)		—		(~~651~~163,~~468~~831)		(2690,~~126,643~~817)
Operating loss		(~~737~~401,~~562~~834)		~~773~~(450,~~197~~139)		—		(~~651~~163,~~468~~831)		(~~615~~105,~~833~~804)

Other income (expenses)
Interest income		3312,~~116~~538		279,~~239~~027		—		9533,~~948~~132		~~156~~54,~~303~~697
Interest expense		—		(1563,~~689,165~~476)		—		—		(1563,~~689,165~~476)
Other income, Net		—		11(2,~~216~~739)		4416,~~259~~206		(3,~~527~~287,~~120~~427)		(3,~~471~~273,~~645~~960)
Total other (expenses) income		3312,~~116~~538		(1557,~~650,710~~188)		4416,~~259~~206		(3,~~431~~254,~~172~~295)		(53,~~004~~782,~~507~~739)

Income (loss) before income taxes		(~~704~~389,~~446~~296)		~~877~~(1,~~513~~007,327)		4416,~~259~~206		(43,~~082~~418,~~640~~126)		(54,~~620~~798,~~340~~543)
Income tax		—		~~(190,889)~~146		—		—		~~(190,889)~~146
Net Income (loss)	$	(704,446)	$	(1,068,402)	$	44,259	$	(4,082,640)	$	(5,811,229)
Net Income(loss)	$	(389,296)	$	(1,007,473)	$	16,206	$	(3,418,126)	$	(4,798,689)


	Three Months Ended September 30, 2023
	Property
	Brokerage		Real Estate		Investment
	Services		Development		Transaction		Others		Total
Net revenues	$	79,886	$	5,316,998	$	—	$	—	$	5,396,884
Cost of revenues		(233,735)		(4,421,668)		—		—		(4,655,403)
Gross profit		(153,849)		895,330		—		—		741,481

Operating expenses		(127,621)		(383,118)		—		—		(510,739)
General and administrative expenses		(201,502)		(506,108)		—		(5,834)		(713,444)
Operating loss		(482,972)		6,104		—		(5,834)		(482,702)

Other income (expenses)
Interest income		76,150		161,090		—		1,516		238,756
Interest expense		(241,926)		(102,896)		—		—		(344,822)
Other income, Net		(183,425)		(7,820)		(225,100)		—		(416,345)
Total other (expenses) income		(349,201)		50,374		(225,100)		1,516		(522,411)

Income (loss) before income taxes		(832,173)		56,478		(225,100)		(4,318)		(1,005,113)
Income tax		(178,281)		—		—		—		(178,281)
Net Income (Loss)	$	(1,010,454)	$	56,478	$	(225,100)	$	(4,318)	$	(1,183,394)

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	Property		Real Estate		Investment
	Management		Development		Transaction		Others		Total
As of March 31, 2025
Real estate property under development	$	—	$	54,879,667	$	—	$	—	$	54,879,667
Total assets		10,776,352		87,336,526		33,962,749		30,621,392		162,697,019

As of March 31, 2024
Real estate property under development	$	—	$	88,985,534	$	—	$	—	$	88,985,534
Total assets		11,708,106		116,834,374		35,595,948		39,341,512		203,479,940


	Nine Months Ended September 30, 2023
	Property
	Brokerage		Real Estate		Investment
	Services		Development		Transaction		Others		Total
Net revenues	$	281,895	$	17,891,655	$	—	$	—	$	18,173,550
Cost of revenues		(681,416)		(15,110,922)		—		—		(15,792,338)
Gross profit		(399,520)		2,780,732		—		—		2,381,212

Operating expenses		(214,049)		(1,237,289)		—		—		(1,451,338)
General and administrative expenses		(777,135)		(974,675)		—		(502,226)		(2,254,036)
Operating loss		(1,390,704)		568,768		—		(502,226)		(1,324,162)

Other income (expenses)
Interest income		30,557		461,424		—		242,195		734,176
Interest expense		315,464		(315,464)		—		(1,708,866)		(1,708,866)
Other income, Net		(47,671)		(10,733)		26,855		—		(31,549)
Total other (expenses) income		298,350		135,227		26,855		(1,466,671)		(1,006,239)

Income (Loss) before income taxes		(1,092,354)		703,995		26,855		(1,968,897)		(2,330,401)
Income tax		(539,596)		—		—		—		(539,596)
Net Income (loss)	$	(1,631,950)	$	703,995	$	26,855	$	(1,968,897)	$	(2,869,997)


	Property
	Brokerage		Real Estate		Investment
	Services		Development		Transaction		Others		Total
As of September 30, 2024
Real estate property under development	$	—	$	82,177,354	$	—	$	—	$	82,177,354
Total assets		13,903,448		109,910,281		33,666,951		38,356,614		195,837,394

As of September 30, 2023
Real estate property under development		—		121,416,669		—		—		121,416,669
Total assets	$	19,730,404	$	149,942,466	$	51,945,174	$	64,402,471	$	286,020,515

NOTE 21 – RELATED PARTY TRANSACTIONS

WeThe ~~rented~~Company anreached ~~office~~a ~~about~~new ~~71sqm~~office inlease ~~Pudong,~~for ~~Shanghai~~a ~~from~~term ~~SHDEW,~~of ~~our~~12 ~~related~~months ~~party~~with ~~for~~SHDEW ~~$2,600~~in ~~per~~the ~~month~~amount ~~for~~of ~~one year period~~$30,340.

The specific time of allocation of the disclosed dividends due from SHDEW in the amount of $15,691,664 has not been determined.

We paid the loan principal to SHSJ of $6,965,535 in the first quarter of 2025. The remaining loan principal due to SHSJ is $18,110,390 as of March 31, 2025. The accrued interest of the loan is $417,932 as of March 31, 2025.

NOTE 22 - SUBSEQUENT EVENT

In accordance with ASC Topic 855, “Subsequent Events”, which establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued, the Company has evaluated all events or transactions that occurred from October 1, 2024, through the date the Company issued the interim financial statements and identified no reportable eventsNone.

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ITEM 2 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANICAL CONDITION AND RESULTS OF OPERATIONS

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

In addition to historical information, this Form 10-Q contains forward-looking statements. Forward-looking statements are based on our current beliefs and expectations, information currently available to us, estimates and projections about our industry, and certain assumptions made by our management. These statements are not historical facts. We use words such as “anticipates”, “expects”, “intends”, “plans”, “believes”, “seeks”, “estimates”, and similar expressions to identify our forward-looking statements, which include, among other things, our anticipated revenue and cost of our agency and investment business.

Because we are unable to control or predict many of the factors that will determine our future performance and financial results, including future economic, competitive, and market conditions, our forward-looking statements are not guarantees of future performance. They are subject to risks, uncertainties, and errors in assumptions that could cause our actual results to differ materially from those reflected in our forward-looking statements. We believe that the assumptions underlying our forward-looking statements are reasonable. However, the investor should not place undue reliance on these forward-looking statements. They only reflect our view and expectations as of the date of this Form 10-Q. We undertake no obligation to publicly update or revise any forward-looking statement in light of new information, future events, or other occurrences.

There are several risks and uncertainties, including those relating to our ability to raise money and grow our business and potential difficulties in integrating new acquisitions with our current operations, especially as they pertain to foreign markets and market conditions. These risks and uncertainties can materially affect the results predicted. The Company’s future operating results over both the short and long term will be subject to annual and quarterly fluctuations due to several factors, some of which are outside our control. These factors include but are not limited to fluctuating market demand for our services, and general economic conditions.

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 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.

SRRE and its subsidiaries, namely, CY-SRRE, LRY, Shanghai Xin Ji Yang Real Estate Consultation Company Limited (“SHXJY”), Shanghai Shang Yang Real Estate Consultation Company, Ltd. (“SHSY”), Suzhou ~~Gao Feng Hui Property Management Company, Ltd, (“SZGFH”), Suzhou~~ Shang Yang Real Estate Consultation Company (“SZSY”), Suzhou Xin Ji Yang Real Estate Consultation Company, Ltd. (“SZXJY”), Linyi Shang Yang Real Estate Development Company Ltd (“LYSH”), Shangqiu Shang Yang Real Estate Consultation Company, Ltd., (“SQSY”), Wuhan Gao Feng Hui Consultation Company Ltd.(WHGFH), Sanya Shang Yang Real Estate Consultation Company, Ltd. (“SYSH”), Shanghai Rui Jian Design Company, Ltd., (“SHRJ”), and Wuhan Yuan Yu Long Real Estate Development Company, Ltd. (“WHYYL”), ~~and Shanghai Da Er Wei Trading Company Limited (“SHDEW”)~~ are sometimes hereinafter collectively referred to as “the Company”, “we”, “our”, or “us”.

19The principal activities of the Company are real estate development and sales, real estate investments, property leasing services and property management services in the PRC.

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

RECENT DEVELOPMENTS

Our major business is real estate agency sales, real estate marketing services, real estate investments, property leasing services, property management services, and real estate development in the PRC. Additionally, we expand our business to the field of financial activities such as entity investment, fund management, financial services and so on.

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.

In October 2011, we established LYSY and own 34% of the company. During the first quarter of 2012, we acquired approximately 103,385 ~~sqm~~square meters for the purpose of developing villa-style residential housing. The LYSY project has divided into three phases. Phase 1 has completed construction of 121 units in May 2015 and sold 119 units out of all 121 units at the end of ~~October~~May 3115, ~~2024~~2025. Phase 2 was divided into north and south area and completed construction of 84 units at the end of 2020. All 84 units have been sold during phase 2 by the end of ~~October~~May 3115, ~~2024~~2025. Phase 3 began construction in first quarter of ~~2021and~~2021 and sold 22 and pre-sold 3212 units out of ~~51units~~51 asunits at the end of ~~October~~May 3115,~~2024~~ 2025. In September 2020, the Company expanded the Linyi project by purchasing additional 54,312 ~~sqm~~square meters in the amount of 228 million RMB for future development.

SHDEW was established in June 2013 with its business as a skincare and cosmetic company. SHDEW develops its own skincare products as well as improving its online ecommerce platform. SHDEW sells products under its own brands as well as the products from third parties. The products include skincare, cosmetics, personal care products such as soaps, shampoos, skin care devices and children’s apparel. SHDEW has an online shopping app, “庭秘密,” where consumers can purchase its cosmetics and skincare products as well as products imported into China. On October 31st 2023, SHDEW held a shareholder meeting that agreed to SHDEW’s dissolution by end of 2026. There were no immediate dissolution plans at the time of the meeting but SHDEW management will be planning on one.

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 ~~October~~May 3115, ~~2024~~2025, the Company sold ~~and~~655 ~~660~~ units out of 679 units of the first phase and sold ~~503~~596 ~~units~~ out of 873 of the second phase.

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.

NEW ACCOUNTING PRONOUNCEMENTS

2019

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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 revenue recognition, and the useful lives and impairment of property and equipment, and investment properties, the valuation of real estate property under development, the recognition of government subsidies, 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-Q 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.

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

Revenue Recognition

All revenues represent gross revenues less sales and business tax.

The Company adopted ASC 606 on January 1, 2018 using the modified retrospective approach with no restatement of comparative periods and no cumulative-effect adjustment to retained earnings recognized as of the date of adoption. A significant portion of the Company’s revenue is derived from development and sales of condominium real estate property in the PRC, with revenue previously recognized using the percentage of completion method. Under the new standard, to recognize revenue over time similar to the percentage of completion method, contractual provisions need to provide the Company with an enforceable right to payment and the Company has no alternative use of the asset. Historically, all contracts executed contained an enforceable right to home purchase payments and the Company had no alternative use of assets, therefore, the adoption of ASC 606 did not have a material impact on the Company’s consolidated financial statements.

Real Estate Property under Development

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Income Taxes

The Company accounts for income taxes under ASC 740, Income Taxes. Under the asset and liability method of ASC 740, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statements carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period the enactment occurs. A valuation allowance is provided for certain deferred tax assets if it is more likely than not that the Company will not realize tax assets through future operations. Deferred tax assets or liabilities were off-set by a 100% valuation allowance; therefore there has been no recognized benefit as of ~~September~~March 3031, ~~2024~~2025, and December 31, ~~2023~~2024.

RESULTS OF OPERATIONS

We provide the following discussion and analyses of our changes in financial condition and results of operations for the period ended ~~September~~March 3031, ~~2024~~2025 with comparisons to the period ended ~~September~~March 3031, ~~2023~~2024.

Revenue

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


	Three ~~Months~~months ~~Ended~~ended ~~September~~March ~~30,~~31					~~Nine Months Ended September 30,~~
	~~2024~~2025	% toof total	~~2023~~2024	% toof total	% change	~~2024~~	~~% to total~~	~~2023~~	~~% to total~~	~~% change~~
Property management	~~379~~332,~~416~~231	53	~~231~~187,~~974~~417	410	6477	~~1,024,313~~	8	~~717,852~~	4	43
House sales	6,842,203	95	5,164,909	96	33	12,545,429	92	17,455,697	96	(28)
House Sales	9,455,554	97	1,712,297	90	452
Net revenues	4,448,409	100	5,396,883	100	34	13,569,742	100	18,173,549	100	(25)
Net revenue	9,787,785	100	1,899,714	100	415

The net revenue ~~for~~in the ~~third~~first quarter of ~~2024~~2025 was $79,~~221~~787,~~619~~785, which increased ~~34%~~by ~~from $5,396,883 from the third quarter of 2023. The net revenue for the first three quarters of 2024 was $13,569,742, which represented a decrease of 25~~415% from $181,~~173~~899,~~549~~714 ~~from~~in the first ~~three quarters of 2023. For the third~~ quarter of 2024~~, property management and house sales represented 5% and 95% of our net revenues, respectively~~. ~~For~~In the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025, property management, and house sales represented 83%, and 9297% of our total net revenues, respectively. ~~House sales revenue and cost of revenue is recognized when the house is handed over to the resident, thereby completing the transaction.~~ The ~~decrease~~increase in net revenue ~~for~~in the first ~~nine~~quarter ~~months~~ of ~~2024~~2025 was mainly due to ~~less~~the ~~units~~increase ~~were~~in ~~handed~~the ~~over~~recognition ~~for~~of ~~the~~house ~~Huaian~~sales ~~Tianxi~~revenue ~~project~~of in the ~~first~~HATX ~~half~~project ofin ~~2024~~this quarter.

Property Management

Property management represented 83% of our revenue ~~for~~in the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025 and revenue from property management increased by 4377% compared with the same period in ~~2023~~2024 from $187,417 in the first quarter of 2024 to $332,231 in the first quarter of 2025 from an increase in property managed in HATX’s units for commercial use.

22House sales

House sales represented 97% of our revenue in the first quarter of 2025. The Company recognized the house sales revenue of the HATX project in the period.

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House Sales

For the first three quarters of 2024, the Company has recognized house sales of Huaian Tianxi project at a certain portion. House sales represented 92% of our revenue for the first three quarters of 2024.

Cost of Revenue

The following table shows the cost of revenue detail by line of business:


	Three ~~Months~~months ~~Ended~~ended ~~September~~March 3031,					~~Nine Months Ended September 30,~~
	~~2024~~2025	% toof total	~~2023~~2024	% toof total	% change	~~2024~~	~~% to total~~	~~2023~~	~~% to total~~	~~% change~~
Property management	~~190~~443,~~297~~572	35	~~411~~460,~~724~~244	824	(544)	~~1,103,937~~	8	~~1,184,878~~	7	~~(7)~~
House sales	59,~~515~~445,~~466~~351	9795	41,~~243~~446,~~678~~601	9276	30552	~~10,268,052~~	92	~~14,607,459~~	93	~~(30)~~
Cost of revenues	5,705,763	100	4,655,402	100	23	11,371,989	100	15,792,338	100	(28)
Cost of Revenue	9,888,923	100	1,906,845	100	419

The cost of revenue ~~for~~in the ~~third~~first quarter of ~~2024~~2025 was $59,~~705~~888,~~763~~923, ~~which~~an ~~increased~~increase ~~23% from $4,655,402 during the third quarter~~ of ~~2023. The cost of revenues for the first three quarters of 2024 was $11,371,989, which decreased 28~~419% from $151,~~792~~906,~~338~~845 ~~during~~in the ~~first~~same ~~three~~period ~~quarters~~in ~~of 2023~~2024. ~~For~~In the ~~third~~first quarter of ~~2024~~2025, property management, and house sales represented 35%, and 9795% of ~~our cost of revenue, respectively. For~~ the ~~first~~total ~~three quarters of 2024, property management, and house sales represented 8% and 92% of our~~ cost of ~~revenue~~revenues, respectively. The increase in ~~the~~ cost of revenue in ~~the~~first ~~third~~ quarter ~~ended~~of ~~September~~2025 ~~30, 2024~~ was mainly due to the ~~Company~~increase ~~recognizing~~in the recognition of the cost of revenue of ~~Huaian~~the ~~Tianxi~~HATX project ~~as there were an increase~~ in ~~home~~this ~~units being handed over to buyers~~period. ~~While less home units were handed over in the first half of 2024.~~

Property ~~Management~~management

The cost of revenue for property management ~~for~~in the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025 was $1443,~~103~~572,~~937,~~ a decrease of 74% from $1460,~~184,878~~244 in the same period in ~~2023~~2024.

House ~~Sales~~sales

~~For~~House ~~the~~sales ~~first~~represented ~~three~~95% ~~quarters~~ of ~~2024,~~our ~~the Company recognized house sales of~~ cost of revenue ofin ~~Huaian~~the ~~Tianxi~~first ~~project~~quarter atof ~~a certain portion~~2025. ~~House~~The ~~sales~~Company ~~represented~~recognized ~~92%~~its ofhouse ~~our~~sales ~~cost~~ of ~~revenue for~~ the ~~first~~HATX ~~three~~project ~~quarters~~in ofthe ~~2024~~period.

Operating Expenses

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

Three ~~Months~~months ~~Ended~~ended ~~September~~March 3031,

~~Nine Months Ended September 30,~~

~~2024~~2025

% toof total

~~2023~~2024

% toof total

% change

~~2024~~

~~% to total~~

~~2023~~

~~% to total~~

~~% change~~

Property management

~~(178~~132,~~957)~~345

—38

~~164~~99,~~961~~974

3231

~~(208)~~32

~~90,289~~

~~567,225~~

~~(84)~~

House sales

~~194~~214,~~422~~196

~~100~~62

~~345~~217,~~778~~881

6869

(432)

~~596,654~~

~~884,112~~

~~(33)~~

Operating expenses

15346,~~465~~541

100

~~510~~317,~~738~~855

100

~~(97)~~9

~~686,943~~

~~100~~

~~1,451,338~~

~~100~~

~~(53)~~

23The operating expenses in the first quarter of 2025 were $346,541, a increase of 9% from $317,855 compared with the same period of 2024. This was mainly due to the increase in expenses in consulting service. In the first quarter of 2025, the expenses related to property management and house sales represented 38% and 62% of the total operating expenses, respectively.

~~Table~~Property ~~of Contents~~management

The operating expenses for ~~the~~property ~~third~~management ~~quarter of 2024 were $15,465, which decreased 97% from $510,738 for the same period~~ in ~~2023. The total operating expenses for~~ the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025 were $~~686~~132,~~943~~345, which ~~decreased~~increased 5332% from $199,~~451,338~~974 ~~for~~in the same period in ~~2023. For the third quarter of~~ 2024~~, property management and house sales represented 0%, and 100% of the total operating expenses, respectively~~. For the first three quarters of 2024, property management and house sales represented 13%, and 87% of the total operating expense, respectively. The decrease in the overall operating expense resulted from the decrease in property management for the third quarter and the first three quarters of 2024.

~~Property~~House ~~Management~~sales

The operating expenses for ~~property~~house ~~management~~sales ~~for~~in the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025 were $90214,~~289~~196, awhich ~~decrease~~decreased ~~of 84~~2% from $~~567~~217,~~225~~881 in the same period in ~~2023~~2024. ~~The decrease is mainly due to the consulting expenses relating to the business.~~

House Sales

The operating expenses for house sales for the first three quarters of 2024 were $596,654 which decreased 33% from $884,112 in the same period in 2023. The decrease is mainly due to the operations of HATX project.

General and Administrative Expenses

~~General~~The general and administrative expenses in the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025 were $2607,~~216~~870,~~643,~~ a decrease of 612% from $2690,~~254,036,~~817 in the same period in ~~2023~~2024.

~~Other Income, Net~~22

~~Other~~Table ~~loss for the first three quarters~~ of ~~2024 was $3,471,645, an increase of 10,904% from a loss of $31,549 for the same period in 2023. The decrease in income was mainly due to the loss of transactional financial assets.~~Contents

Net Loss

The Company’s net loss declined 53% to $(2,247,477) for the quarter ended March 31, 2025 from $(4,798,689) for the quarter ended March 31, 2024. The net loss declined because of increased revenues recognized from houses sold in the HATX project.

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~~The disclosed dividends due from SHDEW at the amount of $15,691,664 is still not announced the specific time to ~~directors~~allocation.

~~The~~Amounts ~~total~~Due ~~amount~~To ~~due to directors for September 30, 2024, was $469,966. The amounts due are as follows:~~Directors

~~Amount~~The amounts due to ~~Lin~~directors ~~Chi-Jung~~as of March 31, 2025, were $744,444. The amounts due are as follows:

~~The~~Amount ~~balances~~Due ~~due~~ to Lin Chi-Jung ~~consists of temporary advances of $456,493 and are unsecured, interest-free and have no fixed term of repayment.~~

~~Amount~~The amount due to Lin ~~Hsin~~Chi-Jung ~~Hung~~as of March 31, 2025, was $724,252, which includes unpaid loan.

~~The~~Amount ~~amount~~Due ~~of $13,473 represents the salary payable~~ to Lin Hsin -Hung.

~~Amount~~The balance due to ~~affiliate~~Lin Hsin-Hung as of March 31, 2025, was $20,192, which is unsecured, interest-free and payable on demand.

The amounts due to SHSJ and JXSY, of $33,620,433 and $505,644, respectively, were intercompany transfers for day-to-day operation.

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LIQUIDITY AND CAPITAL RESOURCES

~~For~~In the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025, our principal sources of cash were revenues from our house sales ~~collection~~ and property management business~~, as well as the dividend receipt from the 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 $2516,~~645~~563,~~002~~578.

The Company’s operating activities used cash in the amount of $57,~~141~~381,~~693~~207, which was primarily attributable to ~~real~~the ~~estate~~receipts in advance and account payable from our property development projects.

The Company’s investing activities provided cash resources of $74,~~255~~073,~~565~~450, which was primarily attributable to the ~~investment~~withdrawal inof transactional financial assets.

The ~~potential cash needs for 2024 are for investment in transactional financial assets, construction for our development projects in the Huai~~Company’ans ~~project~~financing ~~(HATX)~~activities ~~and~~used ~~the~~cash ~~Linyi~~resources ~~project~~of $Nil.

~~According~~The topotential ~~the~~cash ~~public~~needs ~~records,~~for ~~the~~2025 ~~Market~~would ~~Supervision~~include ~~Administrations~~the investment of ~~Baokang~~transactional ~~County,~~financial ~~which is a county located within Xiangyang City~~assets, ~~Hubei Province, China, conducted an investigation into~~ the ~~business~~rental ~~practices~~guarantee ofpayments ~~SHDEW~~ and ~~some~~promissory ofdeposits ~~its~~for ~~affiliates.~~various ~~SHDEW~~property isprojects inas ~~the~~well ~~business~~as ofour ~~selling~~development ~~cosmetics and other consumer goods online. While we own approximately 19.91%~~ of ~~SHDEW, we do not have any control or influence over its business practices. We are not related to this investigation, and we are unable to evaluate~~ the ~~merits~~Linyi ofproject ~~any allegations. The Baokang county fined SHDEW 20 million RMB~~ and the ~~case~~HATX ~~was closed~~project. ~~For the investigation for Heibei YuHua District, the case was dismissed and all frozen assets were unfrozen. SHDEW is currently not subject to any further investigation regarding these matters.~~

Though the investment of SHDEW has been a main source of cashflow for the Company, we have no assurance that SHDEW will continue to pay dividends in the future.

Capital Resources

~~Considering~~Taking into account our cash position, available credit facilities and cash generated from operating activities, we believe that we have sufficient funds to operate our existing business for the next twelve months. If our business otherwise grows more rapidly than we currently 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 lending institutions. There can be no guarantee that we will be able to obtain such funds through the issuance of debt or equity or obtain funds that are with terms satisfactory to management and our board of directors.

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OFF BALANCE SHEET ARRANGEMENTS

The Company has no off-balance sheet arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

A smaller reporting company is not required to provide the information required by this item.

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ITEM 4. CONTROLS AND PROCEDURES

A.Material ~~Weaknesses~~weaknesses

As discussed in Item 9A of our Annual Report on Form 10-K for the year ended December 31, ~~2023~~2024, we identified one material weakness in the design and operation of our internal controls. The material weakness is related to the Company’s accounting department personnel having limited knowledge and experience in U.S. GAAP. In response to the above identified material weakness and to continue strengthening the Company’s internal control over financial reporting, we are going to undertake the following remediation initiatives:

●	hiring additional personnel with sufficient knowledge and experience in U.S. GAAP; and

●	providing ongoing training course in U.S. GAAP to existing personnel, including our Chief Financial Officer and Financial Controller.

Since the first quarter of 2015, additional qualified accounting personnel have been hired and put into place to assist preparation of financial information, as required for interim and annual reporting, in accordance with generally accepted accounting principles in the U.S. As the newly implemented remediation activities have not operated for a sufficient period of time to demonstrate operating effectiveness, we will continue to monitor and assess our remediation activities to ensure that the aforementioned material weakness is remediated.

B.Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures and internal controls designed to ensure that information required to be disclosed in the Company’s filings under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. The Company’s management, with the participation of its principal executive and financial officers, has evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this Quarterly Report on Form 10-Q. Based upon that evaluation and solely due to the ~~unremediated~~unpremeditated material weakness described above, the Company’s principal executive and financial officers have concluded that such disclosure controls and procedures were ineffective for the purpose for which they were designed as of the end of such period. As a result of this conclusion, the financial statements for the period covered by this report were prepared with particular attention to the ~~unremediated~~unpremeditated material weakness previously disclosed. Accordingly, management believes that the condensed consolidated financial statements included in this report fairly present, in all material respects, the Company’s financial condition, results of operations and cash flows as of and for the periods presented, in accordance with generally accepted accounting principles, notwithstanding the ~~unremediated~~unpremeditated weaknesses.

C.Changes in Internal Control over Financial Reporting

Since the first quarter of 2015, we ~~have~~ put into place additional qualified accounting personnel to address the aforementioned material weakness. This action strengthened our internal controls over financial reporting.

Except for the above, there was no change in the Company’s internal control over financial reporting that was identified in connection with such evaluation that occurred during the period covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

There have been no material developments in any legal proceedings since the disclosures contained in the Registrant’s Form 10-K for the year ended December 31, ~~2023~~2024.

ITEM 1A. RISK FACTORS

Not applicable.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

None.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not Applicable.

ITEM 5. OTHER INFORMATION

None.

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ITEM 6. EXHIBITS

Exhibit Number		Description
31.1*		Section 302 Certification by the Corporation’s Chief Executive Officer.
31.2*		Section 302 Certification by the Corporation’s Chief Financial Officer.
32.1*		Section 1350 Certification by the Corporation’s Chief Executive Officer and Corporation’s Chief Financial Officer.
101		XBRL data files of Financial Statements and Notes contained in this Quarterly Report on Form 10-Q.

104		Cover Page Interactive Data File - The cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document

* Filed herewith

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SIGNATURES

In accordance with the requirements of the Exchange Act, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

SUNRISE REAL ESTATE GROUP, INC.

Date: ~~November~~May 2516, ~~2024~~2025 By: /s/ Zhang, Jian Zhang, Jian, Chief Executive Officer, Principal Executive Officer Date: ~~November~~May 2516, ~~2024~~2025 By: /s/ Mi, Yong Jun Mi, Yong Jun, Chief Financial Officer, Principal Financial Officer

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Filing Compare · SUNRISE REAL ESTATE GROUP INC