Sunrise Real Estate Group Inc 10-Q for FY2021 Q2

Sunrise Real Estate Group Inc (SRRE)

10-Q 2021-08-20 For: 2021-06-30

Added on April 06, 2026

About this 10-Q

Sunrise Real Estate Group Inc filed this 10-Q on August 20, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $5.91M; up 1422.7% from $388.3K a year earlier
Net income: $32.31M; compared with a net loss of $1.21M a year earlier

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


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


		Page
PART I.	FINANCIAL INFORMATION	3
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets as of June 30, 2021 and December 31, 2020	3
	Condensed Consolidated Statements of Operations for The Six Months Ended June 30, 2021 and 2020	4
	Condensed Consolidated Statements of Stockholders’ Equity for The Six Months and Three Months Ended June 30, 2021 and 2020	5
	Condensed Consolidated Statements of Stockholders’ Equity for The Six Months and Three Months Ended June 30, 2021 and 2020	6
	Condensed Consolidated Statements of Cash Flows for The Six Months Ended June 30, 2021 and 2020	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	21
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	29
Item 4.	Controls and Procedures	29

PART II. OTHER INFORMATION		31
Item 1.	Legal Proceedings	31
Item 1A	Risk Factors	31
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	31
Item 3.	Defaults Upon Senior Securities	31
Item 4.	Mine Safety Disclosures	31
Item 5.	Other Information	31
Item 6.	Exhibits	32

SIGNATURES		33


	June 30,		December 31,
	2021		2020
ASSETS

Current assets
Cash and cash equivalents	$	17,841,207	$	40,369,612
Restricted cash (Note 3)		31,310,574		56,051,055
Transactional financial assets (Note 4)		29,383,315		25,012,736
Accounts receivable		45,502		77,464
Real estate property under development (Note 5)		183,090,858		166,236,339
Amount due from an unconsolidated affiliate		17,992,544		549,986
Other receivables and deposits, net (Note 6)		66,422,667		14,596,243
Total current assets		346,086,667		302,893,435

Property and equipment, net (Note 7)		1,279,952		1,384,776
Investment properties, net (Note 8)		26,767,932		27,275,677
Deferred tax assets (Note 18)		1,246,995		955,373
Investment in an unconsolidated affiliate (Note 9)		13,744,299		13,610,330
Goodwill (Note 11)		1,759,696		1,690,029
Other investments (Note 10)		703,535		696,677
Total assets	$	391,589,076	$	348,506,297

LIABILITIES AND SHAREHOLDERS’ EQUITY (DEFICIT)

Current liabilities
Promissory notes payable (Note12)		1,547,676		1,532,591
Accounts payable (Note 15)		17,205,345		20,448,001
Amounts due to directors (Note 13)		517,507		23,409,364
Amount due to an affiliate (Note 16)		32,373,610		31,438,576
Customer deposits (Note 17)		159,840,214		116,163,946
Other payables and accrued expenses (Note 14)		8,241,158		8,586,675
Other taxes payable		184,748		452,528
Income taxes payable (Note 18)		857,847		1,028,220
Total current liabilities		220,768,105		203,059,901

Long-term income tax payable (Note 18)		2,415,666		2,588,213
Deferred government subsidy (Note 19)		5,129,837		5,079,835
Total liabilities		228,313,608		210,727,949

Commitments and contingencies (Note 20)

Shareholders’ equity
Common stock, par value $0.01 per share; 200,000,000 shares Authorized; 68,691,925 shares issued and outstanding as of June 30, 2021 and December 31, 2020, respectively		686,919		686,919
Additional paid-in capital		7,570,008		7,570,008
Statutory reserve (Note 21)		3,986,618		3,986,618
Retained Earnings		124,285,908		100,291,529
Accumulated other comprehensive income		22,650,016		22,981,737
Total deficit of Sunrise Real Estate Group, Inc.		159,179,469		135,516,811
Non-controlling interests		4,095,999		2,261,537
Total shareholders’ equity		163,275,468		137,778,348
Total liabilities and shareholders’ equity	$	391,589,076	$	348,506,297


	Three Months Ended June 30,				Six Months Ended June 30,
	2021		2020		2021		2020

Net revenues	$	5,912,564	$	388,298	$	8,366,933	$	721,983
Cost of revenues		(5,129,429)		(538,453)		(7,430,487)		(1,160,969)
Gross profit (loss)		783,135		(150,155)		936,446		(438,986)

Operating expenses		(813,429)		(1,153,284)		(1,912,086)		(2,348,025)
General and administrative expenses		(748,504)		(733,384)		(1,615,702)		(1,256,803)
Operating profit (loss)		(778,798)		(2,036,823)		(2,591,342)		(4,043,814)

Other income (expenses)
Interest income		252,810		99,860		523,474		159,777
Interest expense		—		16		—		—
Equity in net gain (loss) of an affiliate		33,578,636		131,814		33,109,692		(61,988)
Other income (loss), net		356,327		244,532		502,985		428,937
Total other Income		34,187,773		476,222		34,136,151		526,726

Income (loss) before income taxes		33,408,975		(1,560,601)		31,544,809		(3,517,088)
Income tax benefit (expense)		(775,912)		133,433		(603,593)		301,551
Net income (loss)		32,633,063		(1,427,168)		30,941,216		(3,215,537)
Less: Net (income) loss attributable to non-controlling interests		(328,054)		218,577		(77,644)		479,153
Net income attributable to shareholders of Sunrise Real Estate Group, Inc.	$	32,305,009	$	(1,208,591)	$	30,863,572	$	(2,736,384)
Net income		32,633,063		(1,427,168)		30,941,216		(3,215,537)
Other comprehensive income Foreign currency translation adjustment		2,491,395		(1,810,986)		1,425,097		(4,004,861)
Discontinuation of the equity method for an investment		—		—		—		—
Comprehensive income		35,124,458		(3,238,154)		32,366,313		(7,220,398)

Less: Comprehensive income attributable to non-controlling interests		(392,605)		64,890		(1,834,462)		2,120,392
Total comprehensive income attributable to shareholders		34,731,853		(3,173,264)		30,531,851		(5,100,006)
Earnings per share – basic and fully diluted	$	0.47	$	(0.02)	$	0.45	$	(0.04)

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


											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, December 31, 2020		68,691,925	$	686,919	$	7,570,008	$	3,986,618	$	100,291,529	$	22,981,737	$	2,261,537	$	137,778,348
Profit (loss) for the year										30,863,572				77,644		30,941,216
Discontinuation of the equity method for an investment		—		—		—		—		—		—		—		—
Capital contribution from non-controlling interests of new consolidated subsidiaries		—		—		—		—				—		—
Dividend										(6,869,193)						(6,869,193)
Translation of foreign operations		—		—		—		—		—		(331,732)		1,756,818		1,425,097
Balance, June 30, 2021		68,691,925		686,919		7,570,008		3,986,618		124,285,908		22,650,016		4,095,999		163,275,468


			% of
			Ownership	Relationship
	Date of	Place of	held by the	with the	Principal
Company Name	Incorporation	Incorporation	Company	Company	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 Real Estate 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
Wuhan Gao Feng Hui Consultation Company Limited (“WHGFH”)	November 10, 2010	PRC	60%	Subsidiary	Property brokerage services
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
Zhong Ji Pu Fa Real Estate Company Limited (SHGXL)	March 13, 2012	PRC	100%	Equity investment	Real estate development.
Shanghai Da Er Wei Trading Company Limited (“SHDEW”)	June 6, 2013	PRC	19.91%³	Equity investment	Import and export trading
Shanghai Hui Tian (“SHHT”)	July 25, 2014	PRC	100%	Subsidiary	Investment holding
Huai’an Zhanbao Industrial Co., Ltd. (“HAZB”)	December 6, 2018	PRC	78.46%⁴	Subsidiary	Investment holding
Huai’an Tianxi Real Estate Development Co., Ltd (“HATX”)	October, 2018	PRC	78.46%⁴	Subsidiary	Investment holding


	Amount

Within one year	$	240,259
Two to five years		—
	$	240,259


	Three Months Ended June 30, 2021
	Property
	Brokerage		Real Estate		Investment
	Services		Development		Transaction		Others		Total
Net revenues	$	134,213	$	5,778,351	$	—	$	—	$	5,912,564
Cost of revenues		(184,496)		(4,944,933)		—		—		(5,129,429)
Gross profit		(50,283)		833,418		—		—		783,135

Operating expenses		65,205		(878,634)		—		—		(813,429)
General and administrative expenses		(433,751)		(308,919)		—		(5,834)		(748,504)
Operating loss		(418,829)		(354,135)				(5,834)		(778,798)

Other income (expenses)
Interest income		22,082		229,212		—		1,516		252,810
Interest expense		—		—				—		—
Other income, Net		33,737,237		6,481		191,245				33,934,963
Total other (expenses) income		33,759,319		235,693		191,245		1,516		34,187,773

Income (loss) before income taxes		33,340,490		(118,442)		191,245		(4,318)		33,408,975
Income tax		(644,226)		(131,686)		—		—		(775,912)
Net Income (loss)	$	32,696,264	$	(250,128)	$	191,245	$	(4,318)	$	32,633,063


	Six Months Ended June 30, 2021
	Property
	Brokerage		Real Estate		Investment
	Services		Development		Transaction		Others		Total
Net revenues	$	421,106	$	7,945,827	$	—	$	—	$	8,366,933
Cost of revenues		(503,880)		(6,926,607)		—		—		(7,430,487)
Gross profit		(82,774)		1,019,220		—		—		936,446

Operating expenses		(42,789)		(1,869,297)		—		—		(1,912,086)
General and administrative expenses		(433,714)		(781,944)		—		(400,044)		(1,615,702)
Operating loss		(559,277)		(1,632,021)		—		(400,044)		(2,591,342)

Other income (expenses)
Interest income		51,746		463,633		—		8,095		523,474
Interest expense		—		—		—		—		—
Other income, Net		239,088		16,447		3,357,142		—		33,612,677
Total other (expenses) income		290,088		480,080		33,357,142		8,095		34,136,151

Income (loss) before income taxes		(268,443)		(1,151,941)		33,357,142		(391,949)		31,544,809
Income tax		279,231		(131,686)		—		(751,138)		(603,593)
Net Income (loss)	$	10,788	$	(1,283,627)	$	33,357,142	$	(1,143,087)	$	30,941,216


	Three Months Ended June 30, 2020
	Property
	Brokerage		Real Estate		Investment
	Services		Development		Transaction		Others		Total
Net revenues	$	318,713	$	69,585	$	—	$	—	$	388,298
Cost of revenues		(287,097)		(251,356)		—		—		(538,453)
Gross profit		(31,616)		(181,771)		—		—		(150,155)

Operating expenses		556,671		(596,613)		—		—		(1,153,284)
General and administrative expenses		(384,325)		(260,168)		—		(88,891)		(733,384)
Operating loss		(909,380)		(1,038,552)				(88,891)		(2,036,823)

Other income (expenses)
Interest income		19,631		78,799		—		1,430		99,860
Interest expense		16		—				—		16
Other income, Net		8,327		2,405		365,614				376,346
Total other (expenses) income		27,974		81,204		365,614		1,430		476,222

Income (loss) before income taxes		(881,406)		(957,348)		365,614		(87,461)		(1,560,601)
Income tax		133,433		—		—		—		133,433
Net Income (loss)	$	(747,973)	$	(957,348)	$	365,614	$	(87,461)	$	(1,427,168)


	Six Months Ended June 30, 2020
	Property
	Brokerage		Real Estate		Investment
	Services		Development		Transaction		Others		Total
Net revenues	$	622,812	$	99,171	$	—	$	—	$	721,983
Cost of revenues		(616,048)		(544,921)		—		—		(1,160,969)
Gross profit		6,764		(445,750)		—		—		(438,986)

Operating expenses		(1,070,730)		(1,277,295)		—		—		(2,348,025)
General and administrative expenses		(674,888)		(487,190)		—		(94,725)		(1,256,803)
Operating loss		(1,738,854)		(2,210,235)		—		(94,725)		(4,043,814)

Other income (expenses)
Interest income		32,932		123,899		—		2,946		159,777
Interest expense		—		—		—		—		—
Other income, Net		843		3,046		363,057		—		366,949
Total other (expenses) income		33,775		126,948		363,057		2,946		526,726

Income (loss) before income taxes		(1,705,079)		(2,083,287)		363,057		(91,779)		(3,517,088)
Income tax		301,551		—		—		—		301,551
Net Income (loss)	$	(1,403,528)	$	(2,083,287)	$	363,057	$	(91,779)	$	(3,215,537)

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 (formatted as inline XBRL and contained in Exhibit 101)

Date: August 20, 2021
By: /s/ Zhang, Jian
Zhang, Jian, Chief Executive Officer, Principal Executive Officer

Date: August 20, 2021
By: /s/ Mi, Yong Jun
Mi, Yong Jun, Chief Financial Officer, Principal Financial Officer


	Six Months Ended June 30,
	2021		2020
Cash flows from operating activities
Net income	$	30,941,216	$	(3,215,537)

Adjustments to reconcile net income (loss) to net cash used in operating activities
Depreciation and amortization		3,354,029		2,285,233
Loss (Gain) on disposal of property, plant and equipment		6,577		2,506
Equity loss (gain) from investments in unconsolidated affiliate		(33,901,955)
Changes in assets and liabilities
Accounts receivable		32,662		(2,544)
Real estate property under development		(15,189,068)		(8,463,612)
Customer Deposits		42,451,371		58,645,675
Amount due from unconsolidated affiliates		653,333		(8,680)
Other receivables and deposits		(51,583,755)		(1,496,603)
Deferred tax assets		(281,677)		(302,139)
Net cash from directors		(23,077,991)		(814,352)
Accounts payable		(3,437,334)		1,142,277
Other payables and accrued expenses		(429,214)		393,087
Other taxes payable		(271,713)		16,926
Income taxes payable		(352,695)		(338,827)
Net cash provided by (used in) operating activities		(51,086,214)		47,843,410

Cash flows from investing activities
Purchases of property and equipment		(29,144)		(139,333)
Net Cash from Transactional financial assets		(4,116,473)		711,363
Acquisition of investment		—		(1,412,529)
Dividend distribution of affiliate		16,469,255
Net cash provided by (used in) investing activities		12,323,638		(840,499)

Cash flows from financing activities
Restricted cash		25,243,758		(30,259,077)
Dividends paid to noncontrolling interests		(6,869,193)		—
Net cash provided (used in) financing activities		18,374,565		(30,259,077)

Effect of exchange rate changes on cash and cash equivalents		(2,140,394)		(3,533,568)

Net increase in cash and cash equivalents		(22,528,405)		13,210,266
Cash and cash equivalents at beginning of period		40,369,612		15,900,753


	June 30,		December 31,
	2021		2020

Advances to staff	$	28,577		37,573
Rental deposits		792,870		818,868
Prepaid expense		49,099,885		53,558
Prepaid tax		12,461,677		9,777,311
Other receivables		4,039,658		3,908,933
	$	66,422,667	$	14,596,243


	June 30,		December 31,
	2021		2020

Furniture and fixtures	$	275,564	$	272,878
Computer and office equipment		246,252		210,961
Motor vehicles		727,257		819,945
Properties		2,341,552		2,318,728
		3,590,625		3,622,512
Less: Accumulated depreciation		(2,310,673)		(2,237,736)
	$	1,279,952	$	1,384,776


	June 30,		December 31,
	2021		2020

Accrued staff commission and bonus	$	270,768	$	241,718
Rental deposits received		120,915		92,700
Bid bond		92,861		209,965
Dividends payable to non-controlling interest		208,247		206,217
Other payables		7,548,368		7,836,075
	$	8,241,158	$	8,586,675