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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-QSB

|x | QUARTERLY REPORT UNDER SECTION 13   OR 15(d) OF THE SECURITIES   EXCHANGE ACT OF 1934
|- | -------------------------------------------------------------------------------------
|  |                                                                                      
|  | For the quarterly period ended September 30, 2005                                    
|  |                                                                                      
|o | TRANSITION REPORT UNDER SECTION 13   OR 15(d) OF THE EXCHANGE ACT                    
|  |                                                                                      
|  | For the transition period from __________ to __________                              
|  |                                                                                      
|  | Commission File Number 000-32585                                                     

|SUNRISE   REAL ESTATE DEVELOPMENT GROUP, INC.                      
|-------------------------------------------------------------------
|                                                                   
|(Exact name   of small business issuer as specified in its charter)

|TEXAS                                                              |  | 75-2713701                       
|------------------------------------------------------------------ |  | ---------------------------------
|                                                                   |  |                                  
|(State or   other jurisdiction of   incorporation or organization) |  | (IRS Employer Identification No.)

Suite 1502, No.333, Zhaojiabang Road Shanghai, PRC(Address of principal executive offices.)

86 (21) 64220505(Issuers telephone number)

Check whether the issuer (1) filed all
reports required to be filed by Section 13 or 15(d) of the Exchange Act during
the past 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
x   No  
o

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

State the number of shares outstanding of each of the issuers classes of common equity, as of the latest practicable date: November 14, 2005 - 21,636,614 shares of Common Stock

Transitional Small Business Issuer
Format   Yes
o   No  
x

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FORM 10-QSB

For the Quarter Ended September 30, 2005

INDEX

|           |                                                                                         | Page
|---------- | --------------------------------------------------------------------------------------- | ----
|           |                                                                                         |     
|PART I.    | FINANCIAL INFORMATION                                                                   | 3   
|           |                                                                                         |     
|Item 1.    | Financial Statements                                                                    | 3   
|           | Consolidated Balance   Sheets                                                           | 3   
|           | Consolidated Statements   of Operations                                                 | 4   
|           | Consolidated Statements   of Cash Flows                                                 | 5   
|Item 2.    | Managements Discussion and Analysis of   Financial Condition and Results of Operations | 16  
|Item 3.    | Controls and Procedures                                                                 | 23  
|           |                                                                                         |     
|PART II.   | OTHER INFORMATION                                                                       | 24  
|           |                                                                                         |     
|Item 1.    | Legal Proceedings                                                                       | 24  
|Item 2.    | Unregistered Sales of   Equity Securities and Use of Proceeds                           | 24  
|Item 3.    | Defaults Upon Senior   Securities                                                       | 24  
|Item 4.    | Submission of Matters to a Vote of Security   Holders                                   | 24  
|Item 5.    | Other Information                                                                       | 24  
|Item 6.    | Exhibits                                                                                | 25  
|           |                                                                                         |     
|SIGNATURES |                                                                                         | 26  

2

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PART I - FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

Sunrise Real Estate Development Group, Inc.

Consolidated Balance Sheets

(Expressed in US Dollars)

|                                                                                                                     |  | September   30,   2005 |           | December   31,   2004 |  
|-------------------------------------------------------------------------------------------------------------------- |  | ---------------------- | --------- | --------------------- | -
|                                                                                                                     |  |                        |           |                       |  
|                                                                                                                     |  | (Unaudited)            |          
|ASSETS                                                                                                               |  |                        |           |                       |  
|Current assets                                                                                                       |  |                        |           |                       |  
|Cash and cash   equivalents                                                                                          |  | $                      | 922,141   |                       | $
|Accounts receivable                                                                                                  |  |                        | 1,491,659 |                       |  
|Promissory deposits   (Note 3)                                                                                       |  |                        | 2,718,735 |                       |  
|Other receivables   and deposits (Note 4)                                                                            |  |                        | 430,497   |                       |  
|                                                                                                                     |  |                        |           |                       |  
|Total current   assets                                                                                               |  |                        | 5,563,032 |                       |  
|Plant and equipment  net (Note 5)                                                                                   |  |                        | 560,190   |                       |  
|Deposits for acquisitions of properties (Note 6)                                                                     |  |                        | 2,330,821 |                       |  
|Goodwill                                                                                                             |  |                        | 187,203   |                       |  
|                                                                                                                     |  |                        |           |                       |  
|Total   assets                                                                                                       |  | $                      | 8,641,246 |                       | $
|                                                                                                                     |  |                        |           |                       |  
|LIABILITIES AND SHAREHOLDERS EQUITY                                                                                 |  |                        |           |                       |  
|Current liabilities                                                                                                  |  |                        |           |                       |  
|Bank loan (Note 7)                                                                                                   |  | $                      | 280,501   |                       | $
|Promissory notes payable (Note 8)                                                                                    |  |                        | 1,123,579 |                       |  
|Accounts payable                                                                                                     |  |                        | 2,649     |                       |  
|Venture deposits (Note 9)                                                                                            |  |                        | 994,809   |                       |  
|Amount due to director (Note 10)                                                                                     |  |                        | 165,599   |                       |  
|Other payables and accrued expenses (Note 11)                                                                        |  |                        | 367,827   |                       |  
|Other tax payable   (Note 12)                                                                                        |  |                        | 28,684    |                       |  
|Income tax payable                                                                                                   |  |                        | 59,765    |                       |  
|                                                                                                                     |  |                        |           |                       |  
|Total current   liabilities                                                                                          |  |                        | 3,023,413 |                       |  
|                                                                                                                     |  |                        |           |                       |  
|Commitments and contingencies (Note 13)                                                                              |  |                        |          |                       |  
|Long-term bank loan (Note 7)                                                                                         |  |                        | 1,033,390 |                       |  
|Minority interest                                                                                                    |  |                        | 114,006   |                       |  
|Shareholders equity                                                                                                 |  |                        |           |                       |  
|Common   stock, par value $0.01 per share; 200,000,000 shares authorized; 21,636,614   shares issued and outstanding |  |                        | 216,366   |                       |  
|Additional paid-in   capital                                                                                         |  |                        | 2,233,844 |                       |  
|Statutory reserve (Note 14)                                                                                          |  |                        | 175,004   |                       |  
|Retained earnings                                                                                                    |  |                        | 1,728,795 |                       |  
|Translation reserve                                                                                                  |  |                        | 116,428   |                       |  
|                                                                                                                     |  |                        |           |                       |  
|Total shareholders   equity                                                                                         |  |                        | 4,470,437 |                       |  
|                                                                                                                     |  |                        |           |                       |  
|Total liabilities and shareholders equity                                                                           |  | $                      | 8,641,246 |                       | $
|                                                                                                                     |  |                        |           |                       |  

See accompanying notes to unaudited consolidated condensed financial statements.

3

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Sunrise Real Estate Development Group, Inc.

Consolidated Statements of Operations

(Expressed in US Dollars)

|                                                                |  | Three   Months Ended   September 30, |            | Nine   Months Ended   September 30, |  
|--------------------------------------------------------------- |  | ------------------------------------ | ---------- | ----------------------------------- | -
|                                                                |  |                                      |            |                                     |  
|                                                                |  | 2005                                 |            | 2004                                |  
|                                                                |  |                                      |            |                                     |  
|                                                                |  | (Unaudited)                          |           
|Net   revenue                                                   |  | $                                    | 1,978,409  |                                     | $
|Cost   of revenue                                               |  |                                      | (703,717   | )                                   |  
|                                                                |  |                                      |            |                                     |  
|Gross   profit                                                  |  |                                      | 1,274,692  |                                     |  
|Operating expenses                                              |  |                                      | (327,344   | )                                   |  
|General   and administrative expenses                           |  |                                      | (647,113   | )                                   |  
|                                                                |  |                                      |            |                                     |  
|Operating   profit                                              |  |                                      | 300,235    |                                     |  
|Interest   income                                               |  |                                      | 2,353      |                                     |  
|Other   income, net                                             |  |                                      | 13,084     |                                     |  
|Interest   expenses                                             |  |                                      | (51,423    | )                                   |  
|                                                                |  |                                      |            |                                     |  
|Profit   before income tax and minority interest                |  |                                      | 264,249    |                                     |  
|Income   tax                                                    |  |                                      | (93,580    | )                                   |  
|                                                                |  |                                      |            |                                     |  
|Profit before   minority interest                               |  |                                      | 170,669    |                                     |  
|Minority   interest                                             |  |                                      | (33,108    | )                                   |  
|                                                                |  |                                      |            |                                     |  
|Net   profit                                                    |  | $                                    | 137,561    |                                     | $
|                                                                |  |                                      |            |                                     |  
|Earnings per   share  basic and diluted                        |  | $                                    | 0.01       |                                     | $
|                                                                |  |                                      |            |                                     |  
|Weighted   average common shares outstanding basic and diluted |  |                                      | 21,636,614 |                                     |  
|                                                                |  |                                      |            |                                     |  

See accompanying notes to unaudited consolidated condensed financial statements.

4

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Sunrise Real Estate Development Group, Inc.Consolidated Statements of Cash FlowsIncrease/(Decrease) in Cash and Cash Equivalents

(Expressed in US Dollars)

|                                                                                             |  | Nine Months Ended   September 30, |           
|-------------------------------------------------------------------------------------------- |  | --------------------------------- | ----------
|                                                                                             |  |                                   |           
|                                                                                             |  | 2005                              |           
|                                                                                             |  |                                   |           
|                                                                                             |  | (Unaudited)                       |           
|Cash flows from operating activities                                                         |  |                                   |           
|Net   income                                                                                 |  | $                                 | 1,198,442 
|Adjustments to   reconcile net income to net cash provided by/(used in) operating activities |  |                                   |           
|Depreciation of plant   and equipment                                                        |  |                                   | 98,559    
|Loss on disposal of plant and equipment                                                      |  |                                   | 12,243    
|Minority interest                                                                            |  |                                   | 57,632    
|Change in:                                                                                   |  |                                   |           
|Accounts receivable                                                                          |  |                                   | 821,765   
|Promissory deposits                                                                          |  |                                   | 126,865   
|Other receivables and   deposits                                                             |  |                                   | (37,617   
|Accounts payable                                                                             |  |                                   | (191,172  
|Other payables and   accrued expenses                                                        |  |                                   | (1,274,960
|Other tax payable                                                                            |  |                                   | (86,702   
|Income tax payable                                                                           |  |                                   | 1,858     
|                                                                                             |  |                                   |           
|Net cash provided by/(used in) operating activities                                          |  |                                   | 726,913   
|                                                                                             |  |                                   |           
|Cash   flows from investing activities                                                       |  |                                   |           
|Acquisition of plant and equipment                                                           |  |                                   | (65,775   
|Proceeds from disposal of plant and equipment                                                |  |                                   | 4,777     
|Increase in deposits for acquisition of properties                                           |  |                                   | (798,826  
|Proceeds from disposal of equity interest in subsidiary                                      |  |                                   | 39,714    
|                                                                                             |  |                                   |           
|Net cash   used in investing activities                                                      |  |                                   | (820,110  
|                                                                                             |  |                                   |           
|Cash   flows from financing activities                                                       |  |                                   |           
|Bank loan repayment                                                                          |  |                                   | (195,434  
|Capital contribution from minority interest                                                  |  |                                   | 12,082    
|Proceeds from promissory note                                                                |  |                                   | 120,824   
|Recapitalization of LRY                                                                      |  |                                   |          
|Dividends paid                                                                               |  |                                   |          
|Advances from/(repayments to) director                                                       |  |                                   | 106,432   
|Proceeds from venture deposits                                                               |  |                                   |          
|                                                                                             |  |                                   |           
|Net cash provided by financing activities                                                    |  |                                   | 43,904    
|                                                                                             |  |                                   |           
|Effect of exchange rate changes on cash and cash equivalents                                 |  |                                   | 1,521     
|                                                                                             |  |                                   |           
|Net decrease in cash and cash equivalents                                                    |  |                                   | (47,772   
|Cash   and cash equivalents at beginning of period                                           |  |                                   | 969,913   
|                                                                                             |  |                                   |           
|Cash and cash equivalents at end of period                                                   |  | $                                 | 922,141   
|                                                                                             |  |                                   |           
|Supplemental   disclosure of cash flow Information                                           |  |                                   |           
|Cash paid during the   period:                                                               |  |                                   |           
|Income tax paid                                                                              |  |                                   | 253,679   
|Interest paid                                                                                |  |                                   | 117,362   

See accompanying notes to unaudited consolidated condensed financial statements.

5

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NOTE 1  ORGANIZATION AND DESCRIPTION OF BUSINESS

Sunrise Real Estate Development Group,
Inc. (CY-SRRE) was established in the Cayman Islands on April 30,
2004 as a limited liability company. CY-SRRE was wholly owned by Ace Develop
Properties Limited (Ace Develop), of which Lin Chi-Jung, an
individual, is the principal and controlling shareholder.  Shanghai Xin Ji
Yang Real Estate Consultation Company Limited (SHXJY) was
established in the Peoples Republic of China (the PRC) on
August 14, 2001 as a limited liability company.  SHXJY was originally owned
by a Taiwanese company, of which the principal and controlling shareholder was
Lin Chi-Jung.  On June 8, 2004, all the fully paid up capital of SHXJY was
transferred to CY-SRRE.  On June 25, 2004 SHXJY and two individuals
established a subsidiary, namely, Suzhou Xin Ji Yang Real Estate Consultation
Company Limited (SZXJY) in the PRC.  SHXJY holds 90% of equity
interest in SZXJY.  On December 24, 2004, SHXJY acquired 85% of equity
interest in Beijing Xin Ji Yang Real Estate Consultation Company Limited
(BJXJY), a PRC company incorporated on April 16, 2003 with limited
liability.  On August 9, 2005, SHXJY sold a 10% equity interest in SZXJY to
a company owned by a director of SZXJY, and transferred a 5% equity interest in
SZXJY to CY-SRRE.  Following the disposal and the transfer, CY-SRRE
effectively holds 80% equity interest in SZXJY.

LIN RAY YANG Enterprise Ltd. (LRY) was established in the British Virgin Islands on November 13, 2003 as a limited liability company.  LRY was owned by Ace Develop, Planet Technology Corporation (Planet Tech) and Systems & Technology Corporation (Systems Tech).  On February 5, 2004, LRY established a wholly owned subsidiary, Shanghai Shang Yang Real Estate Consultation Company Limited (SHSY) in the Peoples Republic of China (the PRC) as a limited liability company.  On January 10, 2005, LRY and a PRC third party established a subsidiary, namely, Suzhou Gao Feng Hui Property Management Company Limited (SZGFH) in the PRC.  LRY holds 80% of the equity interest in SZGFH.

SHXJY, SZXJY, BJXJY, SHSY and SZGFH commenced operations in November 2001, June 2004, January 2004, February 2004 and January 2005 respectively.  Each of SXJY, SZXJY, BJXJY, SHSY and SZGFH has been granted a twenty years operation period which can be extended with approvals from relevant PRC authorities.

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

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

6

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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 shares and per share data prior to the acquisition have been restated to reflect the stock issuance as a recapitalization of CY-SRRE and LRY.

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

SRRE and its subsidiaries, namely, CY-SRRE, LRY, SHXJY, SZXJY, BJXJY, SHSY and SZGFH are collectively referred to as the Company hereafter.

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

NOTE 2  BASIS OF PRESENTATIONAND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The accompanying unaudited consolidated condensed financial data as of September 30, 2005 and December 31, 2004 and for the three and nine months ended September 30, 2005 and 2004 have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission.  Amounts at December 31, 2004 have been derived from the audited consolidated financial statements for the year then ended.  Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations.  However, the Company believes that the disclosures are adequate to make the information presented not misleading.  These financial statements should be read in conjunction with the financial statements and the notes thereto included in the Companys audited annual financial statements for the year ended
December 31, 2004.

7

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The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities.  Actual results could differ from these estimates.

In the opinion of Management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position as of September 30, 2005 and December 31, 2004, results of operations for the three and nine months ended September 30, 2005 and 2004, and cash flows for the nine months ended September 30, 2005 and 2004, have been made.  The results of operations for the three and nine months ended September 30, 2005 and 2004 are not necessarily indicative of the operating results for the full year.

Basisof Accounting and Principlesof Consolidation

The consolidated financial statements are prepared in accordance with generally accepted accounting principals in the United States of America and present the financial statements of SRRE and its subsidiaries, CY-SRRE, LRY, SHXJY, SZXJY, BJXJY, SHSY and SZGFH.  All inter-company transactions and balances have been eliminated.

Foreign Currency Translation and Transactions

The functional currency of SRRE, CY-SRRE and LRY is United States Dollars (US$) and the financial records are maintained and the financial statements prepared in US$. The functional currency of SHXJY, SZXJY, BJXJY, SHSY and SZGFH is Renminbi (RMB) and the financial records are maintained and the financial statements 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. Gain and loss resulting from foreign currency transactions are included in the consolidated statement of operations. Assets and liabilities denominated in foreign currencies at the balance sheet date are translated into each companys denominated currency at 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 US$ in accordance with SFAS 52.   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 US$, year-end exchange rates are applied to the consolidated balance sheets, while average period rates are applied to consolidated statements of operations.  Translation gains and losses are recorded in translation reserve as a component of shareholders equity.

Exchange rate between US$ and RMB had a little fluctuation during the periods presented.  The rates ruling as of September 30, 2005 and December 31, 2004 are US$1: RMB8.09 and US$1: RMB8.28, respectively.

8

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Plant, Equipment and Depreciation

Plant and equipment are stated at cost. Depreciation is computed using the straight-line method to allocate the cost of depreciable assets over the estimated useful lives of the assets as follows:

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

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

Use of Estimates

The preparation of financial statements in accordance with generally accepted accounting principles requires the Companys management to make estimates and assumptions that affect 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 revenue and expenses during the reporting period. Actual results could differ from those estimates.

Advertising Costs

All advertising costs incurred in the promotion of the Companys real estate projects are expensed as incurred.

Revenue Recognition

Agency commission revenue from property brokerage is recognized when the property developer and the buyer complete a property sales transaction, which is normally at the time when the property developer receives from the buyer a portion of the sales proceeds in accordance with the terms of the relevant property sales agreement.

Revenue from marketing consultancy services is recognized when services are provided to clients.

Net Earnings per Common Share

The Company computes net earnings per share in accordance with SFAS No. 128, Earnings per Share.  Under the provisions of SFAS No. 128, basic net earnings per share is computed by dividing the net earnings 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 per share gives effect to common stock equivalents, however, potential common stock in the diluted EPS computation are excluded in net loss periods, as their effect is anti-dilutive.

Income Taxes

The Company accounts for income taxes in accordance with SFAS No. 109 Accounting for Income Taxes.  Under SFAS No. 109, deferred tax liabilities or assets at the end of each period are determined using the tax rate expected to be in effect when taxes are actually paid or recovered.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

9

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Guarantees

The Company accounts for its liability for its obligations under a guarantee in accordance with FASB Interpretation No. 45, (FIN45) Guarantors Accounting and Disclosure Requirements for Guarantees, Including Direct Guarantees of Indebtedness of Others. FIN 45 requires that guarantors recognize a liability for certain guarantees at the fair value of the guaranteed obligation at the inception of the guarantee, even if the likelihood of performance under the guarantee is remote. The initial recognition and measurement provisions of FIN 45 are applicable on a prospective basis to guarantees issued or modified after December 31, 2002.

NOTE3 - PROMISSORY DEPOSITS

The balance includes a promissory deposit of $2,471,577 related to a property
underwriting agreement (the Property Underwriting Agreement) entered
into by the Company with a property developer in Suzhou, the PRC. 
According to the Property Underwriting Agreement and certain supplementary
agreements, the Company acts as its sole distribution agent for a commercial
building under development in Suzhou (the Suzhou Property Underwriting
Project), and has placed the foregoing promissory deposit with the
property developer until an agreed sales target of $50.24 million being achieved
on or before  November 25, 2005.  As of November 4, 2005, the Company
has sold a total of 179 units in the building with a total sales price of $39.39
million, which represents 78% of the agreed sales target.

NOTE4- OTHER RECEIVABLES AND DEPOSITS

|                  |  | September 30,   2005 |         | December 31,   2004 |  
|----------------- |  | -------------------- | ------- | ------------------- | -
|                  |  |                      |         |                     |  
|                  |  | (Unaudited)          |        
|Other receivables |  | $                    | 153,703 |                     | $
|Trade deposits    |  |                      | 173,319 |                     |  
|Advances to staff |  |                      | 46,471  |                     |  
|Rental   deposits |  |                      | 57,004  |                     |  
|                  |  |                      |         |                     |  
|                  |  | $                    | 430,497 |                     | $
|                  |  |                      |         |                     |  

NOTE5-PLANT AND EQUIPMENT, NET

|                                 |  | September 30,   2005 |          | December 31,   2004 |  
|-------------------------------- |  | -------------------- | -------- | ------------------- | -
|                                 |  |                      |          |                     |  
|                                 |  | (Unaudited)          |         
|Furniture and fixtures           |  | $                    | 60,415   |                     | $
|Computer   and office equipment  |  |                      | 176,813  |                     |  
|Motor vehicles                   |  |                      | 531,236  |                     |  
|                                 |  |                      |          |                     |  
|                                 |  |                      | 768,464  |                     |  
|Less:   Accumulated depreciation |  |                      | (208,274 | )                   |  
|                                 |  |                      |          |                     |  
|                                 |  | $                    | 560,190  |                     | $
|                                 |  |                      |          |                     |  

10

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NOTE6 DEPOSITS FOR ACQUISITIONS OF PROPERTIES

On November 18, 2004, the Company entered into sales and purchase agreements to acquire two floors of the Suzhou Property Underwriting Project mentioned in Note 3 above at a total consideration of $3.03 million for long-term retention. As of September 30, 2005, deposits amounting to $2.33 million have been paid to the property developer.  The remaining balance of the retention deposit of $0.7 million will be payable in November 2005.  In accordance with the sales and purchase agreements, the properties under development will be completed on or before March 31, 2006.

NOTE7 - BANK LOAN

The bank loan is a 5-year loan that bears interest at a rate of 0.4875% per month; the maturity date of the loan is December 13, 2009.  The bank loan is guaranteed by the developer as mentioned in Note 3 above and will be secured by the properties as mentioned in Note 6 above once the title of the properties is transferred to the Company.

NOTE 8 PROMISSORY NOTES PAYABLE

The balance includes two promissory notes of $1,000,000 and $123,579, respectively. The promissory note of $1,000,000 is unsecured, bears interest at a rate of 5% per annum and will be repayable on December 31, 2005. The promissory note of $123,579 is unsecured, bears interest at a rate of 10% per annum and its terms of repayment are not specifically defined.

NOTE9  VENTURE DEPOSITS

The Company has entered into agreements with two investors, one an independent third party, the other an ex-director of the Company, Chang Shu-Ching.  The purpose of such agreements is to jointly carry out the Suzhou Property Underwriting Project mentioned in Note 3 above. According to these agreements, the Company, Chang Shu-Ching and the independent third party investor are entitled to share 65%, 10% and 25% of the net results of the Suzhou Property Underwriting Project, respectively. Venture deposits have been received from the investors and will not be repayable until the completion of the Suzhou Property Underwriting Project, which is presently anticipated to be in March 2006.

11

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NOTE 10 -RELATED PARTY

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

Amount due to director

Prior to April 25, 2005, the amount due to one of our directors was interest-free.  Thereafter, the amount due to director has borne interest at a rate of 0.8% per month.  As of September 30, 2005, the balance includes principal of $159,026 and accrued interest of $6,573 thereon.  The principal is unsecured, bears interest at a rate of 0.8% per month and will be payable before April 25, 2006.

NOTE11 -OTHER PAYABLESAND ACCRUED EXPENSES

|                                   |  | September 30,   2005 |         | December 31,   2004 |  
|---------------------------------- |  | -------------------- | ------- | ------------------- | -
|                                   |  |                      |         |                     |  
|                                   |  | (Unaudited)          |        
|Accrued   staff commission & bonus |  | $                    | 246,931 |                     | $
|Other   payables                   |  |                      | 120,896 |                     |  
|Accrued   commission               |  |                      |        |                     |  
|                                   |  |                      |         |                     |  
|                                   |  | $                    | 367,827 |                     | $
|                                   |  |                      |         |                     |  

NOTE12  OTHER TAX PAYABLE

Other tax payable represents business tax which is charged at a rate of 5% on the revenue from services.

NOTE 13- COMMITMENTS AND CONTINGENCIES

Operating Lease Commitment

During the nine months ended September 30, 2005 and 2004, the Company incurred lease expenses amounting to $249,942 and $198,847, respectively. As of September 30, 2005, the Company had commitments under operating leases, requiring annual minimum rentals as follows:

|                           |  | September 30,   2005 |         | December 31,   2004 |  
|-------------------------- |  | -------------------- | ------- | ------------------- | -
|                           |  |                      |         |                     |  
|                           |  | (Unaudited)          |        
|Within one year            |  | $                    | 162,133 |                     | $
|Two to five years          |  |                      |        |                     |  
|                           |  |                      |         |                     |  
|Operating lease commitment |  | $                    | 162,133 |                     | $
|                           |  |                      |         |                     |  

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Property Underwriting Commitment

As of September 30, 2005, the Company had commitment under the Property Underwriting Agreement mentioned in Note 3 above as follows:

|                                 |  | September 30,   2005 |            | December 31,   2004 |  
|-------------------------------- |  | -------------------- | ---------- | ------------------- | -
|                                 |  |                      |            |                     |  
|                                 |  | (Unaudited)          |           
|Property underwriting commitment |  | $                    | 15,534,743 |                     | $
|                                 |  |                      |            |                     |  

The management of the Company believes that all the properties will be sold within the underwriting period.

Capital Commitments

As of September 30, 2005, the Company had capital commitments for the acquisition of properties mentioned in Note 6 above as follows:

|                                              |  | September 30,   2005 |         | December 31,   2004 |  
|--------------------------------------------- |  | -------------------- | ------- | ------------------- | -
|                                              |  |                      |         |                     |  
|                                              |  | (Unaudited)          |        
|Commitments for the acquisition of properties |  | $                    | 696,742 |                     | $
|                                              |  |                      |         |                     |  

NOTE 14  STATUTORY RESERVE

According to the relevant corporation laws in the PRC, a PRC company is required to transfer a least 10% of its profit after taxation, 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.

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NOTE 15 CONCENTRATION OF CUSTOMERS

During the three months and nine months ended September 30, 2005 and 2004, the following customers accounted for more than 10% of total net revenue:

|           |  | Percentage   of   Net Sales   Three Months EndedSeptember 30, |    | Percentage   of   Net Sales   Nine Months EndedSeptember 30, |  | Percentage   ofAccounts Receivableas at September 30, |  
|---------- |  | ------------------------------------------------------------- | -- | ------------------------------------------------------------ |  | ----------------------------------------------------- | -
|           |  |                                                               |    |                                                              |  |                                                       |  
|           |  | 2005                                                          |    | 2004                                                         |  | 2005                                                  |  
|           |  |                                                               |    |                                                              |  |                                                       |  
|Customer A |  |                                                               | 13 | %                                                            |  |                                                       | *
|Customer B |  |                                                               |    | *                                                            |  | 33                                                    | %
|Customer C |  |                                                               | 12 | %                                                            |  |                                                       | *
|Customer D |  |                                                               | 24 | %                                                            |  |                                                       | *
|Customer E |  |                                                               | 11 | %                                                            |  | 11                                                    | %
|Customer F |  |                                                               |    | *                                                            |  | 21                                                    | %

| 
|-
|*

NOTE 16  GUARANTEES

In order to distribute all the properties of the Suzhou Property Underwriting Project mentioned in Note 3 above, during the period, the Company entered into property leasing agreements with certain buyers of the properties to guarantee their investment returns at 8.5% and 8.8% per annum for a period of 5 years and 8 years, respectively.  The guarantee period will be started 45 days after the titles of the relevant properties are passed to the buyers.  As of September 30, 2005, the management of the Company considers that no provision should be made for the Companys obligations under the foregoing guarantees.

14

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NOTE 17 PRO-FORMA INFORMATION

The following table reflects the results of operations on a pro-forma basis as if the acquisition of BJXJY had occurred at the beginning of the period shown.

|                                     |  | Nine Months   Ended   September 30,   2004 |            
|------------------------------------ |  | ------------------------------------------ | -----------
|                                     |  |                                            |            
|                                     |  |                                            | (Unaudited)
|Net sales                            |  | $                                          | 6,104,804  
|                                     |  |                                            |            
|Net profit                           |  | $                                          | 1,204,130  
|                                     |  |                                            |            
|Profit per share  basis and diluted |  | $                                          | 0.08       
|                                     |  |                                            |            

The pro-forma financial information is not necessarily indicative of the operating results that would have occurred had the acquisition been consummated as of the dates indicated, nor are they necessarily indicative of the future operating results.

15

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ITEM 2.     MANAGEMENTS DISCUSSION AND ANALYSISOF FINANICAL CONDITION AND RESULTS OF OPERATIONS

Managements Discussion and Analysis contains statements that are forward-looking. These statements are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors discussed in Risk Factors and elsewhere in this report.

OVERVIEW

The following Managements Discussion and Analysis (MD&A) is intended to help the reader understand Sunrise Real Estate Development 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.

In October 2004, the former shareholders of Sunrise Real Estate Development Group, Inc. (Cayman Islands) (CY-SRRE) and LIN RAY YANG Enterprise Ltd. (LRY) acquired a majority of our voting interests in a merger, and the transaction was treated as a reverse acquisition, with CY-SRRE and LRY treated as the acquirer for accounting purposes. Accordingly, the pre-merger financial statements of CY-SRRE and LRY are our historical financial statements. Before the completion of the merger, 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 shares and per share data prior to the acquisition have been restated to reflect the stock issuance as a recapitalization of CY-SRRE and LRY.

SRRE and its subsidiaries, namely, CY-SRRE, LRY, Shanghai Xin Ji Yang Real Estate Consultation Company Limited (SHXJY), Suzhou Xin Ji Yang Real Estate Consultation Company Limited (SZXJY), Beijing Xin Ji Yang Real Estate Consultation Company Limited (BJXJY), Shanghai Shangyang Real Estate Consultation Company Limited (SHSY) and Suzhou Gao Feng Hui Property Management Company Limited (SZGFH) are collectively referred to as the Company hereafter. The principal activities of the Company are the provision of property brokerage services, real estate marketing services, property leasing services and property management services in the PRC.

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RECENT DEVELOPMENTS

Before 2004, our major business was an agency business, whereby our only subsidiary then, SHXJY, was contracted by property developers to market and sell their newly developed property units; in return we earned a commission fee calculated as a percentage of the selling price. Our business operation in SHXJY continues to demonstrate growth in revenue.

In 2004, through another subsidiary, SHSY,
we ventured into a higher risk business model whereby our commission was not
calculated as a percentage of the selling price anymore; instead, under this
model our commission revenue is equivalent to the price difference between the
final selling price and underwriting price (the Underwriting Model).
In this Underwriting Model, we negotiate with the developer for an underwriting
price as low as possible, with the condition that we guarantee all unsold units
will be acquired within a certain period. In return, we are given the
flexibility to establish the final selling price and earn the price difference
between the final selling price and the underwriting price. The risk of this
kind of arrangement is that, if there is any unsold unit upon the expiry period,
we may have to absorb the unsold units from developers at the underwriting price
and hold them in our inventory or as an investment. As per the terms of the
underwriting agreement, there are 2 expiry periods: the first is in the middle of
2005 whereby we have committed to sell 60% of the contracted value and which has
been achieved; the second is on November 25, 2005, whereby we have committed to
sell the remaining 40% of the contracted value. As of November 4, 2005, we have
sold 78% of the contracted value, and the management of the Company believes
that the rest of the contracted value will be sold on or before November 25,
2005.

While we expect revenue to stem from these two subsidiaries businesses, we can provide no assurance that this will result in any increase in profitability.

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

In addition to historical information, this Form 10-QSB contains forward-looking statements. Forward-looking statements are expressions of our current beliefs and expectations, based on information currently available to us, estimates, 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, you 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-QSB. We undertake no obligation to publicly update or revise any forward-looking statement in light of new information, future events, or other occurrences.

17

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RECENTLY ISSUED ACCOUNTING STANDARDS

In December 2003, the Financial Accounting Standards Board (FASB) issued Interpretation 46R (FIN 46R), a revision to Interpretation 46 (FIN 46), Consolidation of Variable Interest Entities.FIN 46R clarifies some of the provisions of FIN 46 and exempts certain entities from its requirements. FIN 46R is effective at the end of the first interim period ending after March 15, 2004. Entities that have adopted FIN 46 prior to this effective date can continue to apply the provisions of FIN 46 until the effective date of FIN 46R or elect early adoption of FIN 46R. The adoption of FIN 46 and FIN 46R did not have a material impact on our financial statements.

In December 2004, the Financial
Accounting Standards Board (FASB) issued a revision of FASB Statement No. 123,
(FASB 123R) Accounting for Stock-Based Compensation. This Statement
supersedes APB Opinion No. 25, Accounting for Stock Issued to Employees,
and its related implementation guidance. FASB 123R establishes standards for the
accounting for transactions in which an entity exchanges its equity instruments
for goods or services. It also addresses transactions in which an entity incurs
liabilities in exchange for goods or services that are based on the fair value
of the entity, equity instruments or that may be settled by the issuance of
those equity instruments. FASB 123R focuses primarily on accounting for
transactions in which an entity obtains employee services in share-based payment
transactions. FASB 123R does not change the accounting guidance for share-based
payment transactions with parties other than employees provided in FASB 123 as
originally issued and EITF Issue No. 96-18, Accounting for Equity Instruments
That Are Issued to Other Than Employees for Acquiring, or in Conjunction with
Selling, Goods or Services. FASB 123R does not address the accounting for
employee share ownership plans, which are subject to AICPA Statement of Position
93-6, Employers Accounting for Employee Stock Ownership Plans. For small
business issuers, FASB 123R is effective for fiscal years beginning after
December 15, 2005.  We do not believe the adoption of FASB 123R will have a
material impact on our financial statements.

APPLICATION OFCRITICAL ACCOUNTING POLICIES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.  Critical accounting policies for us include revenue recognition, impairment of goodwill, and accounting for income taxes.

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Goodwill

SFAS 142, Goodwill and Other Intangible Assets,requires that goodwill be tested for impairment on an annual basis (December 31 for us) and between annual tests if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying value. These events or circumstances could include a significant change in the business climate, legal factors, operating performance indicators, competition, sale or disposition of a significant portion of the Company. Application of the goodwill impairment test requires judgment, including the determination of the fair value of the Company. The fair value of the Company is estimated using a discounted cash flow methodology. This requires significant judgments including estimation of future cash flows, which is dependent on internal forecasts, estimation of the long-term rate of growth for our business, the useful life over which cash flows will occur, and the
determination of our weighted average cost of capital. Changes in these estimates and assumptions could materially affect the determination of fair value and/or goodwill impairment for the Company.

Income Taxes

SFAS 109, Accounting for Income Taxes,establishes financial accounting and reporting standards for the effect of income taxes. The objectives of accounting for income taxes are to recognize the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that have been recognized in an entitys financial statements or tax returns. Judgment is required in assessing the future tax consequences of events that have been recognized in our financial statements or tax returns. Variations in the actual outcome of these future tax consequences could materially impact our financial position or results of our operations.

Revenue Recognition

Agency commission revenue from property brokerage is recognized when the property developer and the buyer complete a property sales transactions, which is normally at the time when the property developer receives from the buyer a portion of the sales proceeds in accordance with the terms of the relevant property sales agreement.

Revenue from marketing consultancy services is recognized when services are provided to clients.

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RESULTS OF OPERATIONS

We provide the discussion and analysis of our changes in financial condition and results of operations for the three and nine months ended September 30, 2005, with comparisons to the historical three and nine months ended September 30, 2004.

1.     Revenue

The following table shows the net revenue breakdown by business line:

|                   |  | Three Months Ended Sep 30, |           | Nine Months Ended Sep 30, | 
|------------------ |  | -------------------------- | --------- | ------------------------- | 
|                   |  |                            |           |                           | 
|                   |  | 2005                       |           | %   to total              | 
|                   |  |                            |           |                           | 
|Agency sales       |  |                            | 1,713,609 |                           | 
|Underwriting sales |  |                            | 264,800   |                           | 
|                   |  |                            |           |                           | 
|Net revenue        |  |                            | 1,978,409 |                           | 
|                   |  |                            |           |                           | 

The net revenue of the Third Quarter,
2005 was $1,978,409, which decreased 39% from $3,265,135 of the Third
Quarter, 2004. Total net revenue of the first three quarters of 2005 was
$6,206,707, which increased 2% from $6,104,804 of the first three quarters
of 2004. Agency sales represented 87% of net revenues in the Third Quarter, 2005
and 68% in the first three quarters. Underwriting sales represented 13% of net
revenue in the Third Quarter, 2005 and 32% in the first three quarters of 2005.
All revenue in the first three quarters, 2004 were from agency sales.  We
expect that total net revenue in 2005 will be higher than 2004.

a)     Agency sales

Our net revenue, after sales tax, are
mainly agency commission fees derived from SHXJY. The primary reason for the
decrease in commission income from agency business is that two agency projects
were successfully launched and completed in the Third Quarter, 2004 and
generated significant net revenue of $1,765,955, while for the Third Quarter
2005, several projects are in the start-up stages and have not yet contributed
any commission revenue in the Third Quarter of 2005.  We estimate that the
agency sales revenue on the real estate projects will continue to be achieved in
the Fourth Quarter of 2005.

b)     Underwriting sales

In February 2004, SHSY entered into an agreement to underwrite an office building in Suzhou, known as Suzhou Sovereign Building.  We started selling units in the building in December 2004. As of October 8, 2005, we have sold a total of 169 units with a total sales price of $37.33 million. As of November 4, 2005, we have sold a total of 179 units with a total sales price of $39.39 million.  The net revenue from underwriting sales decreased when compared with prior quarters of 2005.  During the Third Quarter of 2005, the property developer did not receive the predetermined level of deposits from the buyers and the relevant underwriting sales revenue was not confirmed.  As a result, the Company is not ready to recognize the corresponding sales revenue.  However, as the completion of the project is approaching, the property developer will gradually receive all the sales proceeds from the buyers, which is the time when the Company can recognize

the underwriting sales revenue.

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The management is confident that the
underwriting sales will be improved in the next two quarters.  Property
underwriting sales is comparatively a higher risk business model compared to our
pure commission based agency business.  Under this higher risk business
model, the Underwriting Model, our commission is not calculated as a percentage
of the selling price; instead, our commission revenue is equivalent to the price
difference between the final selling price and underwriting price. In the
Underwriting Model, we negotiate with developer for an underwriting price as low
as possible, with the condition that we guarantee all unsold units will be
acquired within a certain a period. In return, we are given the flexibility to
establish the final selling price and earn the price difference between the final
selling price and the underwriting price. The risk of this kind of arrangement
is that, if there is any unsold unit upon the expiry period, we may have to
absorb the unsold property units from developers at the underwriting price and
hold them in our inventory or as an investment.

2.     Cost of Revenue

Cost of revenue in the Third Quarter, 2005
was $703,717, decreased 24% from $924,554 in the Third Quarter, 2004. Total cost
of revenue in the first three quarters of 2005 was $1,850,985, decreased 20% from
$2,319,358 in the first three quarters of 2004. The primary difference was due to
the booking of advertising expenses as incurred. The advertising costs incurred
in the first three quarters of 2005 and 2004 are $362,284 and $754,343
respectively.

For most of the projects handled by the
Company, advertising costs are borne by corresponding property developers. For
some of the projects, we committed to bear all advertising costs on our own in
exchange for a higher agency commission rate.  All advertising costs
incurred in the promotion of the Companys property projects are expensed
as incurred.  We plan to spend more on advertisement in the Fourth Quarter
of 2005 to support the agency and underwriting sales activity. Due to the
cyclical nature of our business, we have no guarantee that the advertising costs
can be matched to the related revenue.  Advertising costs are usually
incurred according to the timeline specified in project budgeting. It is
budgeted according to a percentage of our expected sales amount. Due to the
nature of property marketing and its sales cycle, advertising costs are usually
incurred two to three months prior to the formal sales launch activities. In
some cases, advertising costs and activities may take place before period-end,
while sales launch activities take place after period-end. As advertising
costs are expensed as incurred, there is a possibility that advertising costs
incurred in the current period are not exactly matching with the related revenue
earned.

3.     Operating Expenses

Operating expenses in the first three quarters of 2005 were $989,935, decreased 9% from $1,083,133 in the first three quarters of 2004. Operating expenses in the Third Quarter, 2005 were $327,344, decreased 41% from $555,924 in the Third Quarter, 2004. The primary reason is that some of the operating expenses, e.g., traveling expenses and allowances, were incurred in proportion to net revenue. Accordingly, net revenue in the Third Quarter, 2005 decreased 39% when compared with that in the Third Quarter, 2004, thereby causing a related decrease in operating expenses.

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4.     General and Administrative Expenses

The general and administrative expenses in the first three quarters of 2005 was $1,802,876, increased 64% from $1,099,751 in the first three quarters of 2004. The general and administrative expenses in the Third Quarter, 2005 were $647,113, increased 77% from $365,566 in the Third Quarter, 2004. The increase in general and administrative expenses for the first three quarters of 2005 when compared with the corresponding quarters of 2004 was mainly due to:

| | i.   | The increase in professional fees for   the maintenance of the Companys listing status, e.g., audit,   legal and other professional fees.    The professional fees for the first   three quarters of 2005 were $107,942. No such   expenses were incurred in the corresponding quarters of 2004.
| | ---- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |      |                                                                                                                                                                                                                                                                                                  
| | ii.  | The increase in overhead expenses of SRRE,
e.g., salary, rental and office expenses. The overhead expenses of SRRE were
$353,576. No such expenses were incurred in the corresponding quarters of
2004.                                                                                          
| |      |                                                                                                                                                                                                                                                                                                  
| | iii. | Following the establishment of SZXJY on   June 25, 2004, general   and administrative expenses increased in the first three quarters of 2005 when compared with the corresponding quarters of 2004.                                                                                              

5.     InterestExpenses

The interest expenses in the first three quarters of 2005 were $124,341, increased 397% from $25,000 in the first three quarters of 2004. The interest expenses in the Third Quarter, 2005 were $51,423, increased 106% from $25,000 in the Third Quarter, 2004. The interest expenses were mainly incurred for the bank loan and promissory notes payable.

LIQUIDITY AND CAPITAL RESOURCES

The Company meets its working capital and capital investment requirements mainly by using operating cash flows and, to a limited extent, bank loan.

Our accounts receivable balance at September 30, 2005 was $1,491,659.

We ended the period with a cash position of $922,141. We had positive operating cash flow of $726,913. This is primarily attributable to the decrease in accounts receivables.

22

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We anticipate that our available funds and cash flows generated from operations will be sufficient to meet our anticipated needs for working capital expenditures and business expansion through 2005. We may need to raise additional funds in the future, however, in order to fund acquisitions, develop new projects, or if our business otherwise grows more rapidly than we currently predict. If we do need to raise such additional funds, we expect to raise those funds through the issuance of additional shares of our equity securities in one or more public or private offerings, or through credit facilities obtained with lending institutions.  There can be no guarantee that we will be able to obtain such funding, whether through the issuance of debt or equity, on terms satisfactory to management and our board of directors.

ITEM 3.     CONTROLS AND PROCEDURES

Based on the most recent evaluation, which was completed as of the end of the period covered by this Form 10-QSB, the Chief Executive Officer and Chief Financial Officer have concluded that the Companys disclosure controls and procedures were effective at September 30, 2005, to ensure that information required to be disclosed in reports that the Company files or submits under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized, and reported within the time periods specified in Securities and Exchange Commission rules and forms. There were no changes in the Companys internal controls over financial reporting during the quarter ended September 30, 2005 that have materially affected, or are reasonably likely to materially affect, the Companys internal controls over financial reporting.

23

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PART II- OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS

The Company is not a party to any legal proceedings of a material nature.

ITEM 2.     UNREGISTERED SALES OFEQUITY SECURITIESAND USE OF PROCEEDS

None

ITEM 3.DEFAULTSUPON SENIOR SECURITIES

None

ITEM 4.     SUBMISSION OF MATTERSTO A VOTE OF SECURITY HOLDERS

None

ITEM 5.     OTHER INFORMATION

None

24

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ITEM 6.     EXHIBITS

|(a)   Exhibits: Exhibit Number and Brief Description.
|-----------------------------------------------------
|                                                     
|2.1                                                  
|                                                     
|2.2                                                  
|                                                     
|3.1                                                  
|                                                     
|3.1(a)                                               
|                                                     
|3.2                                                  
|                                                     
|31.1                                                 
|                                                     
|31.2                                                 
|                                                     
|32.1                                                 

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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 DEVELOPMENT GROUP, INC.
|------------------------- | -------------------------------------------
|                          |                                            
|Date: November   14, 2005 | By:                                        
|                          |                                            
|                          |                                            
|                          |                                            
|                          |                                            
|Date: November   14, 2005 | By:                                        
|                          |                                            
|                          |                                            

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