Attached files
| file | filename |
|---|---|
| EX-31.2 - FLURIDA GROUP INC | v166508_ex31-2.htm |
| EX-32.1 - FLURIDA GROUP INC | v166508_ex32-1.htm |
| EX-32.2 - FLURIDA GROUP INC | v166508_ex32-2.htm |
| EX-31.1 - FLURIDA GROUP INC | v166508_ex31-1.htm |
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
x
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the
quarterly period ended September 30,
2009
¨
TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE EXCHANGE ACT
For the
transition period from _____________________ to ______________
Commission
file number 000-50903
FLURIDA
GROUP, INC.
((Exact name of
registrant as specified in its charter)
|
Nevada
|
3469
|
26-0688130
|
||
|
(State or other jurisdiction of
incorporation or organization)
|
(Primary Standard
Industrial Classification
Code Number)
|
IRS I.D.
|
|
800
West Fifth Avenue, Suite 210B
Naperville,
IL
|
60563
|
|
|
(Address
of principal executive offices)
|
(Zip
Code)
|
Issuer’s
telephone number: 630-778-8519
N/A
(Former
name, former address and former three months, if changed since last
report)
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 ¨
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.
|
Large
accelerated filer
|
¨
|
Accelerated
filer
|
¨
|
|||
|
Non-accelerated
filer
|
|
¨
|
Smaller
Reporting Company
|
|
x
|
Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).
Yes ¨ No
x
As of
November 1, 2009 there were 38,990,827 shares issued and outstanding of the
registrant’s common stock.
TABLE
OF CONTENTS
|
PART
I — FINANCIAL INFORMATION
|
3 | ||||
|
Item
1.
|
Financial
Statements.
|
3 | |||
|
Item
2.
|
Management’s
Discussion and Analysis or Plan of Operation.
|
21 | |||
|
Item
3.
|
Quantitative
and Qualitative Disclosure about Market Risk
|
31 | |||
|
Item
4.
|
Controls
and Procedures.
|
31 | |||
|
PART
II — OTHER INFORMATION
|
31 | ||||
|
Item
1.
|
Legal
Proceedings.
|
31 | |||
|
Item
2.
|
Unregistered
Sales of Equity Securities and Use of Proceeds.
|
31 | |||
|
Item
3.
|
Defaults
Upon Senior Securities
|
32 | |||
|
Item
4.
|
Submission
of Matters to a Vote of Security Holders.
|
32 | |||
|
Item
5.
|
Other
Information.
|
32 | |||
|
Item
6.
|
Exhibits.
|
32 | |||
2
PART
I — FINANCIAL INFORMATION
Item
1. Financial Statements.
FLURIDA
GROUP, INC.
(A
Development Stage Enterprise)
Financial
Statements
(Unaudited)
Table
of Contents
|
Condensed
Consolidated Balance Sheets
|
4 | |||
|
Condensed
Consolidated Statement of Operation
|
5 | |||
|
Condensed
Consolidated Shareholders Equity
|
6 | |||
|
Condensed
Consolidated Statement of Cash Flows
|
7 | |||
|
Notes
to Condensed Consolidated Financial Statements
|
8 |
3
FLURIDA
GROUP, INC.
(A
Development Stage Enterprise)
CONSOLIDATED
BALANCE SHEETS
|
September
30
|
December
31
|
|||||||
|
2009
|
2008
|
|||||||
|
(
Unaudited)
|
||||||||
|
ASSETS
|
||||||||
|
Current
assets:
|
||||||||
|
Cash
and cash equivalents
|
$ | 1,446,945 | $ | 605,932 | ||||
|
Accounts
receivable, net
|
1,980,046 | 479,431 | ||||||
|
Consignment
Inventory
|
1,337,974 | 646,594 | ||||||
|
Total
Current Assets
|
$ | 4,764,965 | $ | 1,731,957 | ||||
|
Property,
plant and equipment, net
|
$ | - | $ | - | ||||
|
Other
current assets:
|
||||||||
|
Loan
to supplier
|
278,091 | - | ||||||
|
Accrued
Interest receivable
|
3,691 | - | ||||||
|
Total
Other Current Assets
|
$ | 281,782 | $ | - | ||||
|
TOTAL
ASSETS
|
$ | 5,046,747 | $ | 1,731,957 | ||||
|
LIABILITIES
& EQUITY
|
||||||||
|
Current
liabilities:
|
||||||||
|
Loans
from shareholders
|
$ | - | $ | - | ||||
|
Account
Payable
|
3,597,834 | $ | 626,868 | |||||
|
Credit
Card Payable
|
- | 1,269 | ||||||
|
Total
Current Liabilities
|
$ | 3,597,834 | $ | 628,137 | ||||
|
Stockholders'
Equity:
|
||||||||
|
Common
stock, $0.001 par value; 200,000,000 shares authorized; 38,990,827 shares
issued and outstanding.
|
$ | 38,991 | $ | 38,991 | ||||
|
Paid-in
capital
|
$ | 1,221,613 | $ | 1,221,613 | ||||
|
Deficit
accumulated during the development stage
|
145,368 | (186,255 | ) | |||||
|
Accumulated
other comprehensive Income(Loss)
|
42,941 | 29,471 | ||||||
|
Total
stockholders' equity
|
$ | 1,448,913 | $ | 1,103,820 | ||||
|
TOTAL
LIABILITIES & EQUITY
|
$ | 5,046,747 | $ | 1,731,957 | ||||
4
FLURIDA
GROUP, INC.
(A
Development Stage Enterprise)
CONSOLIDATED
STATEMENT OF OPERATION
|
Cumulative
from
|
||||||||||||||||||||
|
Nine
Months Ended
|
Three
Months Ended
|
December 19, 2006
|
||||||||||||||||||
|
September
30
|
September
30
|
(Date of Inception)
|
||||||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
to September 30,
2009
|
||||||||||||||||
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
||||||||||||||||
|
Revenues:
|
$ | 7,767,522 | $ | 916,282 | $ | 3,222,445 | $ | 708,175 | $ | 9,311,389 | ||||||||||
|
Cost
of Goods Sold
|
$ | 7,007,089 | $ | 867,297 | $ | 2,865,007 | $ | 669,592 | $ | 8,471,881 | ||||||||||
|
Gross
Profit
|
$ | 760,433 | $ | 48,985 | $ | 357,438 | $ | 38,583 | $ | 839,508 | ||||||||||
|
Operating
expenses:
|
||||||||||||||||||||
|
Research
and development
|
- | - | - | - | - | |||||||||||||||
|
Selling,
general and administrative expenses
|
436,133 | 199,820 | 214,217 | 67,529 | 719,856 | |||||||||||||||
|
Depreciation
and amortization expenses
|
- | - | - | - | - | |||||||||||||||
|
Total
Operating Expenses
|
436,133 | 199,820 | 214,217 | 67,529 | 719,856 | |||||||||||||||
|
Operating
Income( Loss)
|
$ | 324,300 | $ | (150,835 | ) | $ | 143,221 | $ | (28,946 | ) | $ | 119,652 | ||||||||
|
Investment
income, net
|
$ | 7,323 | $ | 16,671 | $ | 4,378 | $ | 3,980 | $ | 26,341 | ||||||||||
|
Interest
Expense, net
|
- | 625 | - | - | 625 | |||||||||||||||
|
Income(Loss)
before taxes
|
$ | 331,623 | $ | (134,789 | ) | $ | 147,599 | $ | (24,966 | ) | $ | 145,368 | ||||||||
|
Income(Loss)
tax expense
|
- | - | - | - | - | |||||||||||||||
|
Net
Income(Loss)
|
$ | 331,623 | $ | (134,789 | ) | $ | 147,599 | $ | (24,966 | ) | $ | 145,368 | ||||||||
|
Net
Income(Loss) per common share-Basics
|
$ | 0.01 | $ | (0.00 | ) | $ | 0.00 | $ | (0.00 | ) | $ | 0.00 | ||||||||
|
Net
Income(Loss) per common share-Diluted
|
$ | 0.01 | $ | (0.00 | ) | $ | 0.00 | $ | (0.00 | ) | $ | 0.00 | ||||||||
|
Other
comprehensive Income(Loss), net of tax:
|
||||||||||||||||||||
|
Foreign
currency translation adjustments
|
13,470 | 5,652 | 27,430 | (1,705 | ) | 42,941 | ||||||||||||||
|
Total
other comprehensive Income(Loss)
|
$ | 13,470 | $ | 5,652 | $ | 27,430 | $ | (1,705 | ) | $ | 42,941 | |||||||||
|
Comprehensive
Income(Loss)
|
$ | 345,093 | $ | (129,137 | ) | $ | 175,029 | $ | (26,671 | ) | $ | 188,309 | ||||||||
5
FLURIDA
GROUP, INC.
(A
Development Stage Enterprise)
CONSOLIDATED
STATEMENT OF STOCKHOLDERS EQUITY
FOR
THE PERIOD ENDED September 30,
2009 (Unaudited)
|
Deficit
|
||||||||||||||||||||||||
|
Accumulated
|
Accumulated
|
|||||||||||||||||||||||
|
Additional
|
During
the
|
Other
|
Total
|
|||||||||||||||||||||
|
Common
Stock
|
Paid-in
|
Development
|
Comprehensive
|
Stockholders'
|
||||||||||||||||||||
|
Shares
|
Amount
|
Capital
|
Stage
|
Income
(Loss)
|
Equity
|
|||||||||||||||||||
|
Balance,
December 31, 2006
|
$ | (1,500 | ) | $ | (1,500 | ) | ||||||||||||||||||
|
Proceeds
from sale of common stock @0.001 per share on August 20,
2007
|
25,997,760 | $ | 25,998 | $ | - | $ | - | $ | 25,998 | |||||||||||||||
|
Issuance
of common stocks to shareholders @0.05 per share on December 10,
2007
|
1,294,000 | $ | 1,294 | $ | 63,406 | $ | 64,700 | |||||||||||||||||
|
Adjustment
for Exchange rate changes
|
$ | (126 | ) | $ | (126 | ) | ||||||||||||||||||
|
Net
Income(Loss) for the year ended December 31, 2007
|
$ | (19,119 | ) | $ | (19,119 | ) | ||||||||||||||||||
|
Balance,
December 31, 2007
|
27,291,760 | $ | 27,292 | $ | 63,406 | $ | (20,619 | ) | $ | (126 | ) | $ | 69,953 | |||||||||||
|
Issuance
of common stocks to Williams @0.10 per share on April 15,
2008
|
50,000 | $ | 50 | $ | 4,950 | $ | 5,000 | |||||||||||||||||
|
Issuance
of common stocks to convert loans @0.10 per share on April 15,
2008
|
11,649,067 | $ | 11,649 | $ | 1,153,257 | $ | 1,164,906 | |||||||||||||||||
|
Adjustment
for Exchange rate changes
|
$ | 29,597 | $ | 29,597 | ||||||||||||||||||||
|
Net
Income(Loss) for the year ended December 31, 2008
|
$ | (165,636 | ) | $ | - | $ | (165,636 | ) | ||||||||||||||||
|
Balance,
December 31, 2008
|
38,990,827 | $ | 38,991 | $ | 1,221,613 | $ | (186,255 | ) | $ | 29,471 | $ | 1,103,820 | ||||||||||||
|
Adjustment
for Exchange rate changes
|
13,470 | 13,470 | ||||||||||||||||||||||
|
Net
Income(Loss) for the period ended September 30,
2009
|
$ | 331,623 | $ | 331,623 | ||||||||||||||||||||
|
Balance,
September 30, 2009
|
38,990,827 | $ | 38,991 | $ | 1,221,613 | $ | 145,368 | $ | 42,941 | $ | 1,448,913 | |||||||||||||
6
FLURIDA
GROUP, INC.
(A
Development Stage Enterprise)
CONSOLIDATED
STATEMENT OF CASH FLOWS
|
Cumulative
from
|
||||||||||||||||||||
|
Nine
Months Ended
|
Three
Months Ended
|
December 19, 2006
|
||||||||||||||||||
|
September
30
|
September
30
|
(Date of Inception)
|
||||||||||||||||||
|
2009
|
2008
|
2009
|
2008
|
to September 30,
2009
|
||||||||||||||||
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
Unaudited
|
||||||||||||||||
|
Operating
Activities:
|
||||||||||||||||||||
|
Net
Income(Loss)
|
$ | 331,623 | $ | (134,789 | ) | $ | 147,599 | $ | (24,966 | ) | $ | 145,368 | ||||||||
|
Adjustments
to reconcile net income to net cash provided by operating
activities:
|
||||||||||||||||||||
|
Non-cash
portion of share based legal fee expense
|
- | 5,000 | - | - | 5,000 | |||||||||||||||
|
Increase
in Consignment Inventory
|
(691,380 | ) | (324,113 | ) | (16,853 | ) | (137,322 | ) | (1,337,974 | ) | ||||||||||
|
Increase
in account receivable
|
(1,500,615 | ) | (557,499 | ) | 371,057 | (557,499 | ) | (1,980,046 | ) | |||||||||||
|
Increase
in accrued interest receivable
|
(3,691 | ) | - | (3,691 | ) | - | (3,691 | ) | ||||||||||||
|
Decrease in
other payable
|
- | - | - | - | (1,500 | ) | ||||||||||||||
|
Increase
in account payable
|
2,970,966 | 301,042 | 462,886 | 103,337 | 3,597,834 | |||||||||||||||
|
Increase
in credit card payable
|
(1,269 | ) | - | (1,532 | ) | - | - | |||||||||||||
|
Net
cash provided by operating activities
|
$ | 1,105,634 | $ | (710,359 | ) | $ | 959,466 | $ | (616,450 | ) | $ | 424,991 | ||||||||
|
Investing
Activities:
|
||||||||||||||||||||
|
Organization
cost
|
- | - | - | - | - | |||||||||||||||
|
Net
cash provided by investing activities
|
$ | - | $ | - | $ | - | $ | - | $ | - | ||||||||||
|
Financing
Activities:
|
||||||||||||||||||||
|
Proceeds
from issurance of common stock
|
- | - | - | - | 90,698 | |||||||||||||||
|
Loan
to supplier
|
(278,091 | ) | - | (278,091 | ) | - | (278,091 | ) | ||||||||||||
|
Repay
loans to shareholders
|
- | (25,066 | ) | - | - | (25,066 | ) | |||||||||||||
|
Proceeds
from loan from shareholders
|
- | 11,926 | - | - | 1,191,472 | |||||||||||||||
|
Net
cash provided by financing activities
|
$ | (278,091 | ) | $ | (13,140 | ) | $ | (278,091 | ) | $ | - | $ | 979,013 | |||||||
|
Effect
of Exchange Rate on Cash
|
$ | 13,470 | $ | 5,652 | $ | 27,430 | $ | (1,705 | ) | $ | 42,941 | |||||||||
|
Net
increase (decrease) in cash and cash equivalents
|
$ | 841,013 | $ | (717,847 | ) | $ | 708,805 | $ | (618,155 | ) | $ | 1,446,945 | ||||||||
|
Cash
and cash equivalents at beginning of the period
|
$ | 605,932 | $ | 1,249,499 | $ | 738,140 | $ | 1,149,807 | $ | - | ||||||||||
|
Cash
and cash equivalents at end of the period
|
$ | 1,446,945 | $ | 531,652 | $ | 1,446,945 | $ | 531,652 | $ | 1,446,945 | ||||||||||
7
FLURIDA
GROUP, INC. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
A- BUSINESS DESCRIPTION
Flurida
Group, Inc. (the “Company”), incorporated under the laws of Nevada on December
19, 2006, with registered address at 502 East John Street, Carson City, NV
89706. Flurida Group, Inc. operates its business in USA as Flurida
Group USA, Inc., the Company’s wholly owned branch located in the State of
Illinois and has principle office at 800 West Fifth Avenue, Suite 210,
Naperville, IL 60563.
Besides
USA operation, Flurida Group, Inc. also established one subsidiary in
Europe:
Flurida
Group European S.R.L (“Flurida European”): Flurida Group European S.R.L. was
established on December 28, 2007 and is 100% owned by Flurida Group,
Inc. Flurida European is in the business of trading services,
distribution, and marketing of the appliance parts in Europe. The
Flurida European is located at Via locatelli 2, 21010 Vizzola, Ticino,
VA-Italy.
The
company closed its Flurida Qingdao China office in July, 2009.
The
Company’s main business includes sourcing, distribution and marketing of
appliance parts in Asia, Europe, North and South America.
These
parts are manufactured in China by Zhong Nan Fu Rui Mechanical Electronics
Manufacturing Co., Ltd. (“Zhong Nan Fu Rui”). It was established in
2005 specializing in home appliance components and subassemblies manufacturing,
and located in Qingdao City, Shandong Province, China. On September
18, 2007, Flurida Group, Inc. signed a long-term distribution agreement with
Zhong Nan Fu Rui Mechanical Electronics Manufacturing Co., Ltd. Zhong
Nan Fu Rui is a Chinese manufacturing company owned 100% by Mr. Jianfeng Ding,
the founder of the Company.
NOTE
B – SIGNIFICANT ACCOUNTING POLICIES
Basis of
accounting
The
financial statements reflect the assets, revenues and expenditures of the
Company on the accrued basis of accounting.
Principles of
Consolidation
The
consolidated financial statements of the Company include the accounts of Flurida
Group USA and Flurida Group European S.R.L. All significant
intercompany balances and transactions have been eliminated in
consolidation.
8
FLURIDA
GROUP, INC. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
B – SIGNIFICANT ACCOUNTING POLICIES (Continue)
Use of
Estimates
The
preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect certain amounts reported in the
financial statements and disclosures. Accordingly, actual results
could differ from those estimates.
Cash and Cash
Equivalents
The
Company considers all highly-liquid investments with an original maturity of
three months or less when purchased to be cash equivalents.
Foreign Currency
Translation
The
Company has determined the United States dollars to be its functional currency
for Flurida Group USA; People’s Republic of China Chinese Yuan Renminbi to be
its functional currency in China; and European Euro to be its functional
currency in European business. Assets and liabilities were translated to U.S.
dollars at the period-end exchange rate. Statement of operations amounts were
translated to U.S. dollars using the first date of each month during the year.
Gains and losses resulting from translating foreign currency financial
statements are accumulated in other comprehensive income (loss), a separate
component of shareholders’ equity.
Property, Plant, and
Equipment Depreciation
Property,
plant, and equipment are stated at cost. Depreciation is being
provided principally by straight line methods over the estimated useful lives of
the assets. As of September 30, 2009, there were no fixed assets in
the Company’s balance sheets.
Stock-Based
Compensation
The
Company accounts for stock issued for services using the fair value
method. In accordance with Emerging Issues Task Force (“EITF”) 96-98,
the measurement date of shares issued for services is the date at which the
counterparty’s performance is complete.
9
FLURIDA
GROUP, INC. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
B – SIGNIFICANT ACCOUNTING POLICIES (Continue)
Basics and Diluted Net Loss
Per Common Share
Basic
earnings per share is computed by dividing income available to common
shareholders (the numerator) by the weighted-average number of common shares
outstanding (the denominator) for the period. Diluted earnings per share assume
that any dilutive convertible securities outstanding were converted, with
related preferred stock dividend requirements and outstanding common shares
adjusted accordingly. It also assumes that outstanding common shares were
increased by shares issuable upon exercise of those stock options for which
market price exceeds the exercise price, less shares which could have been
purchased by us with the related proceeds. In periods of losses, diluted loss
per share is computed on the same basis as basic loss per share as the inclusion
of any other potential shares outstanding would be anti-dilutive.
The
Company only issued one type of shares, i.e., common shares
only. There are no other types securities were
issued. Accordingly, the diluted and basics net loss per common share
are the same.
Revenues
Flurida Group, Inc recognizes
revenue from product sales upon shipment, which is the point in time when risk
of loss is transferred to the customer, net of estimated returns and
allowances.
The Company had total revenue of
$ 3,222,445, including $ 2,530,378 consignment sales to Electrolux, and $692,067
sales in 3rd quarter ended at September 30, 2009.
From the
period of July to September 2009, the Company sold total quantity of 63,553
icemakers and 680,400 motors to an US company, Electrolux, located at
Springfield, TN for $ 2,530,378 as consignment sales. The icemakers
and motors were manufactured and supplied by Zhong Nan Fu Rui and Qingdao Fubida
Electronics Co., Ltd. All the icemakers and motors were shipped out
at FOB shipping point Qingdao, China.
Also, the
company sold 748 R600a icemakers to Electrolux Australia for $ 31,222. The
icemakers were manufactured and supplied by Zhong Nan Fu Rui, and were shipped
out at FOB shipping point at Qingdao, China.
10
FLURIDA
GROUP, INC. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Revenues
(Continue)
Also, the
company sold total quantity of 8,960 Motors, 4,032 Dac Boxes, and 14,976 Magnets
to Electrolux Hungry for $ 56,212; and sold total quantity of 6,500 Motors,
1,200 Timers, 10,200 Dac Boxes, and 22,284 Magnets to Electrolux Italy for $
123,009. The magnets and timers were manufactured and supplied by Shanghai Fulu
International Trading Co., Ltd.; all the parts were shipped out at FOB shipping
point at Shanghai, China. The motors and other related refrigerator
appliance parts were manufactured and supplied by Zhong Nan Fu Rui and Qingdao
Fubida Electronics Co., Ltd., and all of those parts were shipped out at FOB
shipping point at Qingdao, China.
Also, the
company sold some related refrigerator appliance parts to Electrolux North
Carolina for $ 4,136. The parts were manufactured and supplied by Zhong Nan Fu
Rui, and were shipped out at FOB shipping point at Qingdao, China.
For the
period of July to September, the Company sold total quantity of 90,720 motors to
another US company, Master Precision Global (MPG), a sub-assembler to
Electrolux, for $330,221. And sold total quantity of 15,120 motors to another US
company, Stanco Metal Product, Inc, another sub-assembler to
Electrolux, for $ 34,776. The motors were manufactured and supplied by Zhong Nan
Fu Rui and Qingdao Fubida Electronics Co., Ltd. All the motors were
shipped out at FOB shipping point Qingdao, China
In the
3rd
quarter of 2009, the Company sold thermostats and other related key parts for
icemakers and motors, to Zhong Nan Fu Rui and Qingdao Fubida Electronics Co.,
Ltd. The parts were exclusively used for the icemakers and motors purchase order
by Electrolux. Flurida Group purchased the parts from Wako Electronics, Inc., an
US Company located at Louisville, KY 40299. Flurida Group also sold Rocker
Switch, the key parts for icemakers, to Zhong Nan Fu Rui. The parts, Rocker
Switch, were exclusively used for the icemakers purchase order by Electrolux.
The Company purchased the parts, Rocker Switch, from CW Industries, an US
Company located at Southampton, PA; and also Flurida Group purchased some other
related key parts from corporate America, then sold to Zhong Nan Fu Rui and
Qingdao Fubida Electronics Co., Ltd. The total cost for all the parts purchased
is $94,337. Then, Flurida Group, Inc. adds averaged
5% margin based on the cost of purchase, so, $ 112,490 were sold and invoiced to
Zhong Nan Fu Rui and Qingdao Fubida Electronics Co., Ltd. Flurida Group, Inc.
adopted the cost plus pricing policies.
In
summary, at the nine months period ended September 30, 2009, the Company
incurred the total revenue of $ 7,767,522. The cost of goods sold is discussed
in Note C, Related Party Transactions.
11
FLURIDA
GROUP, INC. AND SUBSIDIARIES
NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Operating
Expense
For the
nine months period ended September 30, 2009 and 2008, the company had a total of
$ 436,133 and $ 199,820 operating expenses respectively, that’s included $
214,217 and $ 67,529 operating expense for the period of April to June 2009 and
2008.
Inventory
On June,
2008, Flurida Group, Inc signed a consigned inventory agreement with Electrolux
Home Products De Mexico, S.A. DEC.V. (Electrolux). Under the term of
the agreement, the supplier, Flurida Group, Inc, agreed to produce, to maintain
the transit the customized products per Electrolux’s specification. Electrolux
maintain a storage location within Electrolux’s Juarez site for consigned
inventory. And Flurida Group, Inc is facilitated to use of Electrolux’s storage
location at such site to the sale of products to Electrolux; Electrolux will
provide labor resources for receipt, stock up, and pulls of consigned products.
Flurida Group, Inc., retains title and ownership of products while in transit to
Electrolux’s site and while stored in the consigned inventory
location.
Title and
ownership will pass to Electrolux when they withdraw products from the consigned
inventory location. Upon withdrawal, Electrolux will pay for it under the
payment term stated in the purchasing order correspond with the withdraw
products.
Products
residing in the consigned inventory for 90 days with no activity due to non
communicated demand change will no longer qualify for consignment, and will be
considered as withdrawn product after 90 days. Accordingly, title passage and
invoicing shall occur on such product per the term.
At the
period ended September 30, 2009, there was a total $ 1,337,974 consignment
inventory for Flurida Group, Inc.
And,
there’s no ending inventory for Flurida Group, Inc at the period ended September
30, 2009.
Income
Tax
The
Company filed extension for corporate tax return Form 1120 to Internal Revenue
Service and IL 1120 to the State of Illinois. There is no income tax
for the State of Nevada. China’s Qingdao representative office
expenditures will be reported in the Company’s U.S. tax return Form
1120. Flurida Group European will report income tax return to Italy
government.
12
FLURIDA
GROUP, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Payroll
Expense
Beginning
at 2008, Flurida Qingdao’s Representative office hired 7 full time employees to
take care of daily management and administrative activities for the
Company. Flurida Group USA began to have payroll for officers at
January 2009.
Start
from July 1, 2009, Flurida Qingdao Representative Office was closed, and there’s
no more payroll expenses incurred since then. And during the 3rd quarter
of 2009, Flurida Group USA hired two employees to taking care of the office and
marketing activities. Therefore, there was total $ 123,204 payroll
expense for the period of July to September, 2009.
For the
nine months period ended September 30, 2009 and 2008, the company incurred a
total of payroll expenses of $ 219,772 and $ 76,000 respectively.
Concentration of credit
risk
The
Company maintains its cash in bank accounts which, at times, may exceed the
federally insured limits. The Company has not experienced any losses
in such accounts and believes it is not exposed to any significant credit risk
on cash.
Recent Accounting
Pronouncements
In
December 2004, the FASB issued Statement of Financial Accounting Standards No.
153 (SFAS 153), “Exchange of Non-monetary Assets.” SFAS 153 amends
the guidance in APB No. 29, “Accounting for Non-monetary Assets.” APB
No. 29 was based on the principle that exchanges of non-monetary assets should
be measured on their fair value of the assets exchanged. SFAS 153
amends APB No. 29 to eliminate the exception for non-monetary exchanges of
similar productive assets and replaces it with a general exception for exchanges
of non-monetary assets that do not have commercial substance if the future cash
flows of the entity are expected to change significantly as a result of the
exchange.
SFAS 151
is effective for financial statements issued for fiscal years beginning after
June 15, 2005. The adoption of SFAS 153 did not have a material
effect on the Company’s financial position or results of
operation. In December 2004, the FASB revised Statement
of Financial Accounting Standards No. 123 (SFAS 123 (R)), “Accounting for
Stock-Based
Compensation.” The SFAS 123(R) revision established for accounting
for transactions in which an entity exchanges its equity instruments for goods
or services and focuses primarily on accounting for transactions in which an
entity obtains employee services in share-based payment
transactions. It does not change the accounting guidance for
share-based payment transactions with parties other than
employees. For public entities that file as small business issuers,
the revisions to SFAS 123 (R) are effective as of the beginning of the first
interim or annual reporting period that begins after December 15,
2005. Adoption of SFAS 123 (R) is not expected to have a material
impact on the Company’s financial position or results of
operations.
13
FLURIDA
GROUP, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting
Pronouncements (Continued)
In May
2005, the FASB issued SFAS no. 154, “Accounting Changes and Error Corrections
(“SFAS No. 154”) which replaces APB Opinion No. 20, “Accounting Changes” and
SFAS No. 3, “Reporting Accounting Changes in Interim Financial Statements-An
Amendment of ABP Opinion No. 28. SFAS No. 154 provides guidance on
the accounting for and reporting of accounting changes and error corrections.
Specifically, this statement requires “retrospective application” of the direct
effect for a voluntary change in accounting principle to prior periods’
financial statements, if it is practical to do so. SFAS No. 154 also
strictly defines the term “restatement” to mean the correction of an error
revising previously issued financial statements.
SFAS No.
154 is effective for accounting changes and corrections of errors made in fiscal
years beginning after December 15, 2005. The management believes that
adoption of SFAS No. 154 will not have a material impact on the results of
operations, financial positions or cash flows.
In July
2006, the FASB issued Financial Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes-an interpretation of FASB Statement No. 109” (“FIN
48”), and supplemented by FASB Financial Staff Position FIN 48-1, Definition of
Settlement in FASB Interpretation No. 48, issued May 2, 2007. FIN 48
specifies how tax benefits for uncertain tax positions are to be recognized,
measured, and derecognized in financial statements; requires certain disclosures
of uncertain tax matters; specifies how reserves for uncertain tax positions
should be classified on the balance sheet; and provides transition and interim
period guidance, among other provisions. FIN 48 is effective for
fiscal years beginning after December 15, 2006 and as a result, is effective for
the Company in the fiscal year 2008.
14
FLURIDA
GROUP, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting
Pronouncements (Continued)
In
September 2006, the FASB issued SFAS No. 157, Fair Value Measurements (“SFAS
157”). SFAS 157 defines fair value, establishes a framework for using fair value
assets and
liabilities, and expends disclosures about fair value measurements. This
statement applies whenever other statements require or permit assets or
liabilities to be measured at fair value. SFAS 157 is effective for fiscal years
beginning after November 15, 2007. The management believes that there is no
material impact on its consolidated results of operations, cash flows, and
financial position.
In
September 2006, the Securities and Exchange Commission (“SEC”) issued Staff
Accounting Bulletin (“SAB”) No. 108, Quantifying Financial Misstatements (“SAB
108”), which expresses the Staff’s views regarding the process of quantifying
financial statement misstatements. Registrants are required to
quantify the impact of correcting all misstatements, including both carryover
and reversing effects of prior year misstatements, on the current year financial
statements. The financial statements would require adjustment when
either approach results in quantifying a misstatement that is material, after
considering all relevant quantitative and qualitative factors. SAB
108 is effective for financial statements covering the first fiscal year ending
after November 15, 2006. The management believes that there is no
material impact on its consolidated results of operations, cash flows, and
financial position.
In
December 2007, the Financial Accounting Standards Board issued FASB Statement
No. 141 (Revised 2007), Business Combinations (“SFAS 141R”). SFAS 141R
provides additional guidance on improving the relevance, representational
faithfulness, and comparability of the financial information that a reporting
entity provides in its financial reports about a business combination and its
effects. This Statement applies prospectively to business combinations for
which the acquisition date is on or after the beginning of the first annual
reporting period beginning on or after December 15, 2008.
In
December 2007, the Financial Accounting Standards Board issued FASB Statement
No. 160, Noncontrolling
Interests in Consolidated Financial Statements—an amendment of ARB
No. 51 (“SFAS 160”). SFAS 160 amends ARB No. 51 to establish
accounting and reporting standards for the noncontrolling interest in a
subsidiary and for the deconsolidation of a subsidiary. This Statement is
effective for fiscal years and interim periods within those fiscal years,
beginning on or after December 15, 2008. The Company is currently
evaluating the impact of adopting SFAS 160 on our financial
statements.
15
FLURIDA
GROUP, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
Recent Accounting
Pronouncements (Continued)
In May
2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted
Accounting Principles.” SFAS 162 identifies the sources of accounting
principles and the framework for selecting the principles used in the
preparation of financial statements of nongovernmental entities that are
presented in conformity with generally accepted accounting principles (GAAP) in
the United States. SFAS 162 is effective 60 days.
following
the SEC’s approval of the Public Company Accounting Oversight Board amendments
to AU Section 411, The Meaning
of Present Fairly in Conformity With Generally Accepted Accounting
Principles. Our Company is currently evaluating the impact of SFAS 162 on
its financial statements but does not expect it to have a material
effect.
Management
does not anticipate that the adoption of these standards will have a material
impact on the financial statements.
NOTE
C – RELATED PARTY TRANSACTIONS
Common Shares Issued to
Executive and Non-Executive Officers and Directors
At July
23, 2009, the Company's founders Jianfeng Ding and Yaru Huang transferred total
2,000,000 of their common shares to Chuanyun Mu and Xia Liu as a gift.
Therefore, as of September 30, 2009, total 30,129,960 shares were issued to
officers and directors. Please see the table below for
details:
|
Name
|
Total
Shares
|
Total Amount
|
Percentage
|
|||||||||
|
Fenglan Li
|
165,000 | 15,750 | 0.42 | % | ||||||||
|
Fuling Li
|
115,000 | 10,750 | 0.29 | % | ||||||||
|
Ying Zhong
|
2,000,000 | 200,000 | 5.13 | % | ||||||||
|
Gian Franco Barbieri
|
102,000 | 9,700 | 0.26 | % | ||||||||
|
Xiaoyong Fu
|
750,000 | 75,000 | 1.92 | % | ||||||||
|
Jianfeng Ding & Yaru
Huang
|
26,997,760 | 323,998 | 69.24 | % | ||||||||
|
Total
|
32,129,760 | $ | 637,197.76 | 77.26 | % | |||||||
* Based
on total issued shares as of September 30, 2009: 38,990,827.
16
FLURIDA
GROUP, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE
C – RELATED PARTY TRANSACTIONS (Continue)
Cost of Goods
Sold
The
Company’s purchase is primarily from supplier, Zhong Nan Fu Rui Mechanical
Electronics Manufacturing Co., Ltd., owned 100% by the founder of the Company,
Jianfeng Ding. Due to Jianfeng Ding, and Yaru Huang, husband and
wife, combined hold 74.37% issued common shares for Flurida Group, Inc., the two
entities, Flurida Group, Inc., and Zhong Nan Fu Rui Mechanical Electronics
Manufacturing Co., Ltd., are under common control according to EITF
02-5.
The
products the Company will sell are manufactured in China by Zhong Nan Fu Rui
Mechanical Electronics Manufacturing Co., Ltd. (“Zhong Nan Fu
Rui”). It was established in 2005 specializing in home appliance
components and subassemblies manufacturing, and located in Qingdao City,
Shandong Province, China. On September 18, 2007, amended June 25,
2008 and further amended on August 4, 2008, Flurida Group, Inc. signed a five
year distribution agreement with Zhong Nan Fu Rui Mechanical Electronics
Manufacturing Co., Ltd. Zhong Nan Fu Rui is a Chinese manufacturing
company owned 100% by Mr. Jianfeng Ding, our president. Under the
terms of the agreement Zhong Nan Fu Rui authorizes Flurida to be its exclusive
sales agent for the ice making product lines, including icemaker and ice water
dispensing systems all over the world. The ice making product lines shall
include the products that Zhong Nan Fu Rui developed before the agreement signed
and the products that will be developed solely by Zhong Nan Fu Rui during the
term of the agreement. Zhong Nan Fu Rui is the exclusive supplier of the
products we sell. Although the distribution agreement requires that the purchase
price we will pay for these products will be comparable to what the Flurida
would have paid a non-related party in market price, Mr. Ding may face a
conflict in calculating the price the products are sold to Flurida and the
determining amount of products the Flurida purchase. However, because
Mr. Ding has a fiduciary duty to Flurida
and the shareholders, he has indicated that he will assure strict adherence to
this provision of the agreement and will not require Flurida to purchase a
quantity of products in excess of that which Flurida can reasonably afford or
reasonably expect to sell in within two to three months of our purchase of the
products.
The
management of Flurida Group, Inc. believes that the purchase price for the parts
from Zhong Nan Fu Rui will be market price. Flurida Group, Inc. and
Zhong Nan Fu Rui are two totally separated entities, i.e., Flurida Group, Inc.
is a USA corporation and will fully comply with USA regulations and USA general
accepted accounting principles; Zhong Nan Fu Rui is a Chinese company and it
will comply with Chinese legal systems.
17
FLURIDA
GROUP, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE
C – RELATED PARTY TRANSACTIONS (Continued)
Cost of Goods Sold
(Continued)
Flurida
Group, Inc. and Zhong Nan Fu Rui will operate independently. Zhong
Nan Fu Rui, as a Chinese local manufacturer, will record their manufacturing
costs and inventories based on the Chinese accounting regulations
rulings. But, when Flurida Group, Inc. purchases the parts from Zhong
Nan Fu Rui, Flurida Group will record the actual costs paid to Zhong Nan Fu Rui
as the costs for inventory of Flurida Group, Inc. There is no any
relationship for Zhong Nan Fu Rui’s manufacturing historic costs with Flurida
Group’s inventory value. Specifically, Flurida’s inventory value is
equal to the purchase price or actual cost of the parts purchased from Zhong Nan
Fu Rui, and the purchase price of the parts will be fair market
price. Flurida Group, Inc. will adopt the first-in and first-out
inventory system according to generally accepted accounting principles in
USA.
The
management of Zhong Nan Fu Rui disclosed to Flurida Group, Inc. that, Zhong Nan
Fu Rui adopted the cost plus pricing policies with market adjustment,
negotiable with customers. Zhong
Nan Fu Rui adopted the cost plus system for all the products for all customers
including the product, icemakers exclusively distributed by Flurida Group,
Inc. Specifically, the selling price is determined by total actual
manufacturing cost of direct manufacturing materials (parts), direct
manufacturing labor, and allocated manufacturing overhead cost, plus 5-10% of
total manufacturing cost. Zhong Nan Fu Rui’s minimum gross profit
margin is 5%.
Flurida
Group also purchased the products from suppliers, Qingdao Fubida Electronics
Co., Ltd and Shanghai Fulu International Trading Co., Ltd on purchase orders
basis.
Qingdao
Fubida Electronics Co., Ltd, owned 100% indirectly by Jianfeng Ding and Yaru
Huang, husband and wife. Qingdao Fubida Electronics Co., Ltd is a manufacturing
company, and it was established in 2003 specializing in home appliance control
components and subassemblies manufacturing, and located in Qingdao City,
Shandong Province, China. The plant space is around 70,000 sq ft. 14units
injection molding machine up to 600 metric tons.
For the
period July to September, 2009, Flurida Group, Inc. purchased icemakers and
motors from Zhong Nan Fu Rui at total cost of $ 2,370,797 for FOB shipping point
at Qingdao, China . The total parts price of $ 2,370,797 from Zhong
Nan Fu Rui consists of 80% of direct manufacturing materials and labor, 10% of
allocated manufacturing overhead, and 10% of profit margin.
18
FLURIDA
GROUP, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE
C – RELATED PARTY TRANSACTIONS (Continued)
Cost of Goods Sold
(Continued)
Flurida
Group, Inc. also purchased motors, timers, and dac boxes from Qingdao Fubida
Electronics Co., Ltd. at total cost of $ 388,202 for FOB shipping point at
Qingdao, China.
In
addition, Flurida Group, Inc. purchased magnets from Shanghai Fulu International
Trading Co., Ltd. a trading company established in 2007, located at Shanghai,
China, 100% owned indirectly by Jianfeng Ding and Yaru Huang, at total cost of
$11,671 for FOB shipping point at Shanghai, China.
To
manufacture the related refrigerator appliance parts, Zhong Nan Fu Rui and
Qingdao Fubida Electronics Co., needs key parts made in USA, which were
purchased through Flurida Group, Inc. in USA. The costs of purchasing
the parts were $94,337 for 3rd quarter
2009.
Therefore,
at the nine months period ended September 30, 2009, the Company incurred a total
cost of good sold of $ 7,007,089 which is included $ 2,865,007 from 3rd
quarter, $ 2,725,788 from 2nd
quarter, and $1,416,293 from 1st quarter
2009.
Loan to
Supplier
At July
1st,
2009, Flurida Group, Inc. loan $ 278,091 to the company’s primary
supplier, Zhong Nan Fu Rui. The outstanding balance bears interest at 5.31%,
pursuant to a written agreement, for the term from July 1st 2009 to
June 30th 2010.
This receivable was subsequently paid in full during June 2010.
NOTE D – SHAREHOLDERS’
EQUITY
During
the year ended December 31, 2008, Flurida Group, Inc has issued total 11,699,067
new shares on April 15, 2008, including 11,649,067 shares issued to loan holders
who converted all the loans to common shares. At the year ended December 31,
2008, Flurida Group, Inc. incurred net loss of $ (165,636). Therefore, the total
stockholders’ equity balance at December 31, 2008 was $
1,103,820.
19
FLURIDA
GROUP, INC. AND SUBSIDIARIES
NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE D – SHAREHOLDERS’
EQUITY (Continue)
On April
15, 2008, 50,000 shares issued to Williams Law Group at $ 0.10, for the legal
service value of $5,000. On April 1, 2008, seven non-affiliated loan
holders asked for repayment of their loans in the aggregate amount of $ 25,066
plus the total interest cost of $624.72, which was paid on the same date, April
1, 2008; meantime, seven additional lenders loaned an aggregate amount of $
9,926. On April 15, 2008, total loan amount of $1,164,906 was
converted to common shares at price of $0.10 per share, for the total shares of
11,649,067 shares, which were issued to the loans holders.
There
were no new shares issued during the period ending September 30,
2009. Therefore, as of September 30, 2009, total shares issued and
outstanding are 38,990,827.
NOTE
E – GOING CONCERN
The
Company’s short operating history and lack of diversified clients basis may
raise doubt about its ability to continue as a going concern. The
financial statements do not include adjustments that might result from the
outcome of this uncertainty and if the Company is unable to generate significant
revenue or secure financing, then the Company may be required to cease or
curtail its operations. However, due to the close relationship
between the Company and it’s major suppliers, Zhong Nan Fu Rui Mechanical
Electronics Manufacturing Co., Ltd., and Qingdao Fubida Electronics Co., Ltd.,
which are 100% owned directly or indirectly by the founders, Jianfeng Ding &
Yaru Huang, Zhong Nan Fu Rui’s and Qingdao Fubida’s current customers can be
served by the Company for the same quality of products and
services. Besides, as of September 30, 2009, the cash and cash
equivalent balance was $1,446,945, and there is cumulative profit of $145,368
for the cumulative period from December 19, 2006 (Date of Inception) to
September 30, 2009. The management believes that the revenues will
continue be generated and its cash flows will be maintained to cover all its
operational costs and the risk of going concern in both short-term and long term
is significantly low.
20
Item
2. Management’s Discussion and Analysis or Plan of
Operation.
This
10−Q contains forward-looking statements. Our actual results could differ
materially from those set forth as a result of general economic conditions and
changes in the assumptions used in making such forward-looking statements. The
following discussion and analysis of our financial condition and results of
operations should be read together with the audited consolidated financial
statements and accompanying notes and the other financial information appearing
else where in this report. The analysis set forth below is provided pursuant to
applicable Securities and Exchange Commission regulations and is not intended to
serve as a basis for projections of future events. Refer also to "Cautionary
Note Regarding Forward Looking Statements" and “Risk Factors”
below.
Overview
Our
business is the sale of appliance parts in Asia, Europe, North and South
America, and Australia. The main products that we sell to these
markets are icemakers, motors, appliance assemblies.
These
parts are manufactured in China by Zhong Nan Fu Rui Mechanical Electronics
Manufacturing Co., Ltd. (“Zhong Nan Fu Rui”) We also purchase parts
for resale from Qingdao Fu Bi Da Co., Ltd. and Shanghai Fu Lu Trading Co.,
Ltd.
Zhong Nan
Fu Rui was established in 2005 specializing in home appliance components and
subassemblies manufacturing, and located in Qingdao City, Shandong Province,
China. On September 18, 2007, amended June 25, 2008 and further
amended on August 4, 2008, Flurida Group, Inc. signed a long-term distribution
agreement with Zhong Nan Fu Rui Mechanical Electronics Manufacturing Co.,
Ltd. Zhong Nan Fu Rui is a Chinese manufacturing company owned 100%
by Mr. Jianfeng Ding, our president.
Qingdao
Fu Bi Da Co., Ltd. was established in 2002 specializing in home appliance
control components and subassemblies manufacturing, and is located in Qingdao
City, Shandong Province, China. Shanghai Fu Lu Trading Co., Ltd. was established
in 2007 and is a trading company that sources products in China for export.
Qingdao Fu Bi Da Co., Ltd. and Shanghai Fu Lu Trading Co., Ltd. are beneficially
owned by Mr. Ding and Ms. Huang. Mr. Ding is the CEO of both
companies.
We sell
primarily the following types of appliance parts:
|
|
¨
|
Automatic Refrigerator Build-in
Icemaker: The automatic refrigerator build-in icemaker is designed
for household refrigeration products, such as refrigerator, under-counter
refrigerator, freezer to make the ice cubes
automatically.
|
|
|
¨
|
Refrigerator Through-Door Ice
Water System: Refrigeration Through-Door Ice Water System is the
system that stores the ice cubes harvested from the icemaker, delivered
and dispensed the ice, crushed ice or water to the refrigerator door
through the electronic control system at the front of the refrigerator
door. The through-door ice water system normally includes the following
assemblies: ice bucket assembly, motor rail assembly, module assembly,
facade assembly, housing assembly. The ice bucket assembly and the motor
rail assembly can be located in the freezer, in the refrigerator door and
or sealed chamber in the refrigerator. The module assembly, facade
assembly and housing assembly vary according to the specific design from
each client.
|
21
|
¨
|
Shade Pole Motor and Motor
Assembly for Refrigerator or Freezers: The shade pole
motor and motor assembly is a key part for refrigerators or
freezers.
|
Results of
Operations
For the three months ended
September 30, 2009 vs. September 30, 2008.
Revenue
The Company had total revenue of
$ 3,222,445, including $ 2,530,378 consignment sales to Electrolux, and $692,067
sales in 3rd quarter ended at September 30, 2009 compared to total revenue of
$ 708,175 for the 3rd quarter ended at September 30,
2008.
From the
period of July to September 2009, the Company sold total quantity of 63,553
icemakers and 680,400 motors to an US company, Electrolux, located at
Springfield, TN for $ 2,530,378 as consignment sales. The icemakers
and motors were manufactured and supplied by Zhong Nan Fu Rui and Qingdao Fubida
Electronics Co., Ltd. All the icemakers and motors were shipped out
at FOB shipping point Qingdao, China.
Also, the
company sold 748 R600a icemakers to Electrolux Australia for $ 31,222. The
icemakers and motors were manufactured and supplied by Zhong Nan Fu Rui, and
were shipped out at FOB shipping point at Qingdao, China.
Also, the
company sold total quantity of 8,960 Motors, 4,032 Dac Boxes, and 14,976 Magnet
to Electrolux Hungry for $ 56,212; and sold total quantity of 6,500 Motors,
1,200 Timers, 10,200 Dac Boxes, and 22,284 Magnets to Electrolux Italy for $
123,009. The magnets and timer were manufactured and supplied by Shanghai Fulu
International Trading Co., Ltd.; all the parts were shipped out at FOB shipping
point at Shanghai, China. The motors and other related refrigerator
appliance parts were manufactured and supplied by Zhong Nan Fu Rui and Qingdao
Fubida Electronics Co., Ltd., and all of those parts were shipped out at FOB
shipping point at Qingdao, China.
Also, the
Company sold some related refrigerator appliance parts to Electrolux North
Carolina for $ 4,136. The parts were manufactured and supplied by Zhong Nan Fu
Rui, and were shipped out at FOB shipping point at Qingdao, China.
For the
period of July to September, the Company sold total quantity of 90,720 motors to
another US company, Master Precision Global (MPG), a sub-assembler to
Electrolux, for $330,221. And sold total quantity of 15,120 motors to another US
company, Stanco Metal Product, Inc, a another sub-assembler to Electrolux, for $
34,776. The motors were manufactured and supplied by Zhong Nan Fu Rui and
Qingdao Fubida Electronics Co., Ltd. All the motors were shipped out
at FOB shipping point Qingdao, China
In the
3rd
quarter of 2009, the Company sold thermostats and other related key parts for
icemakers and motors, to Zhong Nan Fu Rui and Qingdao Fubida Electronics Co.,
Ltd. The parts were exclusively used for the icemakers and motors
purchase order by Electrolux. Flurida Group purchased the parts from
Wako Electronics, Inc., an US Company located at Louisville, KY
40299. Flurida Group also sold Rocker Switch, the key parts for
icemakers, to Zhong Nan Fu Rui. The parts, Rocker Switch, were
exclusively used for the icemakers purchase order by Electrolux. The
Company purchased the parts, Rocker Switch, from CW Industries, an US Company
located at Southampton, PA; and also Flurida Group purchased some other related
key parts from corporate America, then sold to Zhong Nan Fu Rui and Qingdao
Fubida Electronics Co., Ltd. The total cost for all the parts purchased is
$94,337. Then, Flurida Group, Inc. adds averaged 5% margin based on
the cost of purchase, so, $ 112,490 were sold and invoiced to Zhong Nan Fu Rui
and Qingdao Fubida Electronics Co., Ltd. Flurida Group, Inc.
adopted the cost plus pricing policies.
22
Cost of
Revenue
Our Costs
of Goods Sold, as we expected will increased slightly due to increasing Chinese
Yuan’s currency exchange rate, labor costs, and raw materials. We
anticipate this trend to continue and may adjust our unit price upward to reduce
the impact of rising costs.
The
Company’s purchase is primarily from supplier, Zhong Nan Fu Rui Mechanical
Electronics Manufacturing Co., Ltd., owned 100% by the founder of the Company,
Jianfeng Ding. Due to Jianfeng Ding, and Yaru Huang, husband and
wife, combined hold 74.37% issued common shares for Flurida Group, Inc., the two
entities, Flurida Group, Inc., and Zhong Nan Fu Rui Mechanical Electronics
Manufacturing Co., Ltd., are under conmmon control according to EITF
02-5.
The
products the Company will sell are manufactured in China by Zhong Nan Fu Rui
Mechanical Electronics Manufacturing Co., Ltd. (“Zhong Nan Fu
Rui”). It was established in 2005 specializing in home appliance
components and subassemblies manufacturing, and located in Qingdao City,
Shandong Province, China. On September 18, 2007, amended June 25,
2008 and further amended on August 4, 2008, Flurida Group, Inc. signed a five
year distribution agreement with Zhong Nan Fu Rui Mechanical Electronics
Manufacturing Co., Ltd. Zhong Nan Fu Rui is a Chinese manufacturing
company owned 100% by Mr. Jianfeng Ding, our president. Under the
terms of the agreement Zhong Nan Fu Rui authorizes Flurida to be its exclusive
sales agent for the ice making product lines, including icemaker and ice water
dispensing systems all over the world. The ice making product lines shall
include the products that Zhong Nan Fu Rui developed before the agreement signed
and the products that will be developed solely by Zhong Nan Fu Rui during the
term of the agreement. Zhong Nan Fu Rui is the exclusive supplier of the
products we sell. Although the distribution agreement requires that
the purchase price we will pay for these products will be comparable to what the
Flurida would have paid a non-related party in market price, Mr. Ding may face a
conflict in calculating the price the products are sold to Flurida and the
determining amount of products the Flurida purchase. However, because
Mr. Ding has a fiduciary duty to Flurida and the shareholders, he has indicated
that he will assure strict adherence to this provision of the agreement and will
not require Flurida to purchase a quantity of products in excess of that which
Flurida can reasonably afford or reasonably expect to sell in within two to
three months of our purchase of the products.
The
management of Flurida Group, Inc. believes that the purchase price for the parts
from Zhong Nan Fu Rui will be market price. Flurida Group, Inc. and
Zhong Nan Fu Rui are two totally separated entities, i.e., Flurida Group, Inc.
is a USA corporation and will fully comply with USA regulations and USA general
accepted accounting principles; Zhong Nan Fu Rui is a Chinese company and it
will comply with Chinese legal systems.
23
Flurida
Group, Inc. and Zhong Nan Fu Rui will operate independently. Zhong
Nan Fu Rui, as a Chinese local manufacturer, will record their manufacturing
costs and inventories based on the Chinese accounting regulations
rulings. But, when Flurida Group, Inc. purchases the parts from Zhong
Nan Fu Rui, Flurida Group will record the actual costs paid to Zhong Nan Fu Rui
as the costs for inventory of Flurida Group, Inc. There is no any
relationship for Zhong Nan Fu Rui’s manufacturing historic costs with Flurida
Group’s inventory value. Specifically, Flurida’s inventory value is
equal to the purchase price or actual cost of the parts purchased from Zhong Nan
Fu Rui, and the purchase price of the parts will be fair market
price. Flurida Group, Inc. will adopt the first-in and first-out
inventory system according to generally accepted accounting principles in
USA.
The
management of Zhong Nan Fu Rui disclosed to Flurida Group, Inc. that, Zhong Nan
Fu Rui adopted the cost plus pricing policies with market adjustment,
negotiable with customers. Zhong Nan Fu Rui adopted the cost plus
system for all the products for all customers including the product, icemakers
exclusively distributed by Flurida Group, Inc. Specifically, the
selling price is determined by total actual manufacturing cost of direct
manufacturing materials (parts), direct manufacturing labor, and allocated
manufacturing overhead cost, plus 5-10% of total manufacturing
cost. Zhong Nan Fu Rui’s minimum gross profit margin is
5%.
Flurida
Group also purchased the products from suppliers, Qingdao Fubida Electronics
Co., Ltd and Shanghai Fulu International Trading Co., Ltd on purchase orders
basis.
Qingdao
Fubida Electronics Co., Ltd, owned 100% indirectly by Jianfeng Ding and Yaru
Huang, husband and wife. Qingdao Fubida Electronics Co., Ltd is a manufacturing
company, and it was established in 2003 specializing in home appliance control
components and subassemblies manufacturing, and located in Qingdao City,
Shandong Province, China. The plant space is around 70,000 sq ft. 14 units
injection molding machine up to 600 metric tons.
The
management of Zhong Nan Fu Rui disclosed to Flurida Group, Inc. that, Zhong Nan
Fu Rui adopted the cost plus pricing policies with market adjustment,
negotiable with customers. Zhong Nan Fu Rui adopted the cost plus
system for all the products for all customers including the product, icemakers
exclusively distributed by Flurida Group, Inc. Specifically, the
selling price is determined by total actual manufacturing cost of direct
manufacturing materials (parts), direct manufacturing labor, and allocated
manufacturing overhead cost, plus 5-10% of total manufacturing
cost. Zhong Nan Fu Rui’s minimum gross profit margin is
5%.
Flurida
Group also purchased the products from suppliers, Qingdao Fubida Electronics
Co., Ltd and Shanghai Fulu International Trading Co., Ltd on purchase orders
basis.
Qingdao
Fubida Electronics Co., Ltd, owned 100% indirectly by Jianfeng Ding and Yaru
Huang, husband and wife. Qingdao Fubida Electronics Co., Ltd is a manufacturing
company, and it was established in 2003 specializing in home appliance control
components and subassemblies manufacturing, and located in Qingdao City,
Shandong Province, China. The plant space is around 70,000 sq ft. 14units
injection molding machine up to 600 metric tons.
For the
period July to September, 2009, Flurida Group, Inc. purchased icemakers and
motors from Zhong Nan Fu Rui at total cost of $ 2,370,797 for FOB shipping point
at Qingdao, China . The total parts price of $ 2,370,797 from Zhong
Nan Fu Rui consists of 80% of direct manufacturing materials and labor, 10% of
allocated manufacturing overhead, and 10% of profit margin.
24
Flurida
Group, Inc. also purchased motors, timers, and dac boxes from Qingdao Fubida
Electronics Co., Ltd. at total cost of $ 388,202 for FOB shipping point at
Qingdao, China.
In
addition, Flurida Group, Inc. purchased magnets from Shanghai Fulu International
Trading Co., Ltd. a trading company established in 2007, located at Shanghai,
China, 100% owned indirectly by Jianfeng Ding and Yaru Huang, at total cost of
$11,671 for FOB shipping point at Shanghai, China.
To
manufacture the related refrigerator appliance parts, Zhong Nan Fu Rui and
Qingdao Fubida Electronics Co., needs key parts made in USA, which were
purchased through Flurida Group, Inc. in USA. The costs of purchasing
the parts were $94,337 for 3rd quarter
2009.
Therefore,
at the three months period ended September 30, 2009, the Company incurred a
total cost of good sold of $ 2,865,007 compared to $ 669,592 for the
three months period ended September 30, 2008.
Expense
Our
operating expenses consist of selling, general and administrative
expenses.
For the
three months period ended September 30, 2009 and 2008, the company had a total
of $ 214,217 and $ 67,529 operating expenses respectively. The primary reasons
for this increase were increases in payroll expenses from $15990.06 in the
three months ended September 30, 2008 vs. $123,203.66 in the three months ended
September 30, 2009, an increase of $107,213.60 due to increased sales
activity. And the increase in travel expense from $491.03 in the
three months ended September 30, 2008 vs. $8,905.88 in the three months ended
September 30, 2009, an increase of $8,414.85 due to increased sales
activity.
We expect
selling, general, and administrative expenses to increase in future periods as
we initiate a number of marketing and promotional activities.
Income
Taxes
We are
subject to income taxes in the U.S., while the subsidiary in Italy is subject to
the income tax laws of Italy. The representative sales office in
China is not subject to Chinese income tax. We paid
no income taxes for the three months ended September 30, 2008 and September 30,
2009 due to the accumulated net operation loss.
Net Income and
Loss
Due to
the foregoing, we incurred a net loss of ($ 24,966) for the three month period
ended September 30, 2008 and recognized $ 147,599 of net income for
the three month period ended September 30, 2009. For the nine months
period ended September 30, 2009 and 2008, the company had a total of $ 331,623
and $ (134,789) net income (loss) respectively.
For the nine months ended
September 30, 2009 vs. September 30, 2008.
Revenue
For the
nine months period ended September 30, 2009 and 2008, the company had a total
revenue of $ 7,767,522 and $ 916,282 respectively.
25
From the
nine months period ended September 30, 2009, the Company sold total quantity of
156,083 icemakers and 1,527,120 motors to an US company, Electrolux, located at
Springfield, TN for $ 5,969,792 as consignment sales, compare to the nine months
period ended September 30, 2008, the Company sold total quantity of 21,168
icemakers and 181,440 motors to an US company, Electrolux for $ 873,548. The
icemakers and motors were manufactured and supplied by Zhong Nan Fu Rui and
Qingdao Fubida Electronics Co., Ltd. All the icemakers and motors
were shipped out at FOB shipping point Qingdao, China.
Also, as
of September 30, 2009, the company sold 972 icemakers to Electrolux Australia
for $ 37,686. The icemakers were manufactured and supplied by Zhong Nan Fu Rui,
and were shipped out at FOB shipping point at Qingdao, China.
For the
nine months period ended September 30, 2009, the company sold total quantity of
22,400 Motors, 4,052 Dac Boxes, and 74,880 Magnets to Electrolux Hungry for $
105,123; the company also sold total quantity of 424 Dac Boxes to Electrolux
Sweden for $ 1,946; and sold total quantity of 71,760 Motors, 18,600 Fans,
12,830 Lamps, 1,800 Timers, 29,000 Dac Boxes, and 81,828 Magnets to Electrolux
Italy for $ 421, 990. The magnets, fans, lamps, and timers were manufactured and
supplied by Shanghai Fulu International Trading Co., Ltd.; all the parts were
shipped out at FOB shipping point at Shanghai, China. The motors and
other related refrigerator appliance parts were manufactured and supplied by
Zhong Nan Fu Rui and Qingdao Fubida Electronics Co., Ltd., and all of those
parts were shipped out at FOB shipping point at Qingdao, China.
Also, in
the period of January to September, 2009, the Company sold some related
refrigerator appliance parts to Electrolux North Carolina for $ 4,136. The parts
were manufactured and supplied by Zhong Nan Fu Rui, and were shipped out at FOB
shipping point at Qingdao, China.
For the
period of January to September,2009, the Company sold total quantity of 241,920
motors to another US company, Master Precision Global (MPG), a sub-assembler to
Electrolux, for $916,786. And sold total quantity of 15,120 motors to another US
company, Stanco Metal Product, Inc, another sub-assembler to Electrolux, for $
34,776. The motors were manufactured and supplied by Zhong Nan Fu Rui and
Qingdao Fubida Electronics Co., Ltd. All the motors were shipped out
at FOB shipping point Qingdao, China
For the
nine months period ended September 30, 2009 and 2008, the Company sold
thermostats and other related key parts for icemakers and motors, to Zhong Nan
Fu Rui and Qingdao Fubida Electronics Co., Ltd. The parts were
exclusively used for the icemakers and motors purchase order by
Electrolux. Flurida Group purchased the parts from Wako Electronics,
Inc., an US Company located at Louisville, KY 40299. Flurida Group
also sold Rocker Switch, the key parts for icemakers, to Zhong Nan Fu
Rui. The parts, Rocker Switch, were exclusively used for the
icemakers purchase order by Electrolux. The Company purchased the
parts, Rocker Switch, from CW Industries, an US Company located at Southampton,
PA; and also Flurida Group purchased some other related key parts from corporate
America, then sold to Zhong Nan Fu Rui and Qingdao Fubida Electronics Co.,
Ltd. All the parts were sold to Zhong Nan Fu Rui and Qingdao Fubida
Electronics Co., Ltd. For $ 275,286 and $ 42,734 respectively.
.
26
Cost of
Revenue
Our Costs
of Goods Sold, as we expected will increased slightly due to increasing Chinese
Yuan’s currency exchange rate, labor costs, and raw materials. We
anticipate this trend to continue and may adjust our unit price upward to reduce
the impact of rising costs.
The
Company’s purchase is primarily from supplier, Zhong Nan Fu Rui Mechanical
Electronics Manufacturing Co., Ltd., owned 100% by the founder of the Company,
Jianfeng Ding. Due to Jianfeng Ding, and Yaru Huang, husband and
wife, combined hold 74.37% issued common shares for Flurida Group, Inc., the two
entities, Flurida Group, Inc., and Zhong Nan Fu Rui Mechanical Electronics
Manufacturing Co., Ltd., are under conmmon control according to EITF
02-5.
The
products the Company will sell are manufactured in China by Zhong Nan Fu Rui
Mechanical Electronics Manufacturing Co., Ltd. (“Zhong Nan Fu
Rui”). It was established in 2005 specializing in home appliance
components and subassemblies manufacturing, and located in Qingdao City,
Shandong Province, China. On September 18, 2007, amended June 25,
2008 and further amended on August 4, 2008, Flurida Group, Inc. signed a five
year distribution agreement with Zhong Nan Fu Rui Mechanical Electronics
Manufacturing Co., Ltd. Zhong Nan Fu Rui is a Chinese manufacturing
company owned 100% by Mr. Jianfeng Ding, our president. Under the
terms of the agreement Zhong Nan Fu Rui authorizes Flurida to be its exclusive
sales agent for the ice making product lines, including icemaker and ice water
dispensing systems all over the world. The ice making product lines shall
include the products that Zhong Nan Fu Rui developed before the agreement signed
and the products that will be developed solely by Zhong Nan Fu Rui during the
term of the agreement. Zhong Nan Fu Rui is the exclusive supplier of the
products we sell. Although the distribution agreement requires that
the purchase price we will pay for these products will be comparable to what the
Flurida would have paid a non-related party in market price, Mr. Ding may face a
conflict in calculating the price the products are sold to Flurida and the
determining amount of products the Flurida purchase. However, because
Mr. Ding has a fiduciary duty to Flurida and the shareholders, he has indicated
that he will assure strict adherence to this provision of the agreement and will
not require Flurida to purchase a quantity of products in excess of that which
Flurida can reasonably afford or reasonably expect to sell in within two to nine
months of our purchase of the products.
The
management of Flurida Group, Inc. believes that the purchase price for the parts
from Zhong Nan Fu Rui will be market price. Flurida Group, Inc. and
Zhong Nan Fu Rui are two totally separated entities, i.e., Flurida Group, Inc.
is a USA corporation and will fully comply with USA regulations and USA general
accepted accounting principles; Zhong Nan Fu Rui is a Chinese company and it
will comply with Chinese legal systems.
Flurida
Group, Inc. and Zhong Nan Fu Rui will operate independently. Zhong
Nan Fu Rui, as a Chinese local manufacturer, will record their manufacturing
costs and inventories based on the Chinese accounting regulations
rulings. But, when Flurida Group, Inc. purchases the parts from Zhong
Nan Fu Rui, Flurida Group will record the actual costs paid to Zhong Nan Fu Rui
as the costs for inventory of Flurida Group, Inc. There is no any
relationship for Zhong Nan Fu Rui’s manufacturing historic costs with Flurida
Group’s inventory value. Specifically, Flurida’s inventory value is
equal to the purchase price or actual cost of the parts purchased from Zhong Nan
Fu Rui, and the purchase price of the parts will be fair market
price. Flurida Group, Inc. will adopt the first-in and first-out
inventory system according to generally accepted accounting principles in
USA.
27
The
management of Zhong Nan Fu Rui disclosed to Flurida Group, Inc. that, Zhong Nan
Fu Rui adopted the cost plus pricing policies with market adjustment,
negotiable with customers. Zhong Nan Fu Rui adopted the cost plus
system for all the products for all customers including the product, icemakers
exclusively distributed by Flurida Group, Inc. Specifically, the
selling price is determined by total actual manufacturing cost of direct
manufacturing materials (parts), direct manufacturing labor, and allocated
manufacturing overhead cost, plus 5-10% of total manufacturing
cost. Zhong Nan Fu Rui’s minimum gross profit margin is
5%.
Flurida
Group also purchased the products from suppliers, Qingdao Fubida Electronics
Co., Ltd and Shanghai Fulu International Trading Co., Ltd on purchase orders
basis.
Qingdao
Fubida Electronics Co., Ltd, owned 100% indirectly by Jianfeng Ding and Yaru
Huang, husband and wife. Qingdao Fubida Electronics Co., Ltd is a manufacturing
company, and it was established in 2003 specializing in home appliance control
components and subassemblies manufacturing, and located in Qingdao City,
Shandong Province, China. The plant space is around 70,000 sq ft. 14 units
injection molding machine up to 600 metric tons.
The
management of Zhong Nan Fu Rui disclosed to Flurida Group, Inc. that, Zhong Nan
Fu Rui adopted the cost plus pricing policies with market adjustment,
negotiable with customers. Zhong Nan Fu Rui adopted the cost plus
system for all the products for all customers including the product, icemakers
exclusively distributed by Flurida Group, Inc. Specifically, the
selling price is determined by total actual manufacturing cost of direct
manufacturing materials (parts), direct manufacturing labor, and allocated
manufacturing overhead cost, plus 5-10% of total manufacturing
cost. Zhong Nan Fu Rui’s minimum gross profit margin is
5%.
Flurida
Group also purchased the products from suppliers, Qingdao Fubida Electronics
Co., Ltd and Shanghai Fulu International Trading Co., Ltd on purchase orders
basis.
Qingdao
Fubida Electronics Co., Ltd, owned 100% indirectly by Jianfeng Ding and Yaru
Huang, husband and wife. Qingdao Fubida Electronics Co., Ltd is a manufacturing
company, and it was established in 2003 specializing in home appliance control
components and subassemblies manufacturing, and located in Qingdao City,
Shandong Province, China. The plant space is around 70,000 sq ft. 14units
injection molding machine up to 600 metric tons.
During the
nine months period ended September 30, 2009, Flurida Group, Inc.
purchased icemakers and motors from Zhong Nan Fu Rui at total cost of $
3,469,160 for FOB shipping point at Qingdao, China . The total parts
price of $ 3,469,160 from Zhong Nan Fu Rui consists of 80% of direct
manufacturing materials and labor, 10% of allocated manufacturing overhead, and
10% of profit margin.
Flurida
Group, Inc. also purchased motors, timers, and dac boxes from Qingdao Fubida
Electronics Co., Ltd. at total cost of $ 3,261,574 for FOB shipping
point at Qingdao, China.
In
addition, Flurida Group, Inc. purchased magnets and other parts from Shanghai
Fulu International Trading Co., Ltd. a trading company established in 2007,
located at Shanghai, China, 100% owned indirectly by Jianfeng Ding and Yaru
Huang, at total cost of $ 31,763 for FOB shipping point at Shanghai,
China.
To
manufacture the related refrigerator appliance parts, Zhong Nan Fu Rui and
Qingdao Fubida Electronics Co., needs key parts made in USA, which were
purchased through Flurida Group, Inc. in USA. The costs of purchasing
the parts were $ 244,592 for the period of January to September
2009.
28
Therefore,
at the nine months period ended September 30, 2009, the Company incurred a total
cost of good sold of $ 7,007,089 compared to
$ 867,297 for the nine months period ended
September 30, 2008.
Expense
Our
operating expenses consist of selling, general and administrative
expenses.
For the
nine months period ended September 30, 2009 and 2008, the company had a total of
$ 436,133 and $ 199,820 operating expenses
respectively. The primary reasons for this increase were increases in payroll
and professional expenses from $131,144 in the nine months ended September 30,
2008 vs. $270,708 in the nine months ended September 30, 2009, an increase
of $139,564 due to increased sales activity. And the increase in
travel expense from $4,636 in the nine months ended September 30, 2008 vs.
$35,375 in the nine months ended September 30, 2009, an increase of $30,739 due
to increased sales activity.
We expect
selling, general, and administrative expenses to increase in future periods as
we initiate a number of marketing and promotional activities.
Income
Taxes
We are
subject to income taxes in the U.S., while the subsidiary in Italy is subject to
the income tax laws of Italy. The representative sales office in
China is not subject to Chinese income tax. We paid
no income taxes for the nine months ended September 30, 2008 and September 30,
2009 due to the accumulated net operation loss.
Net Income and
Loss
Due to
the foregoing, we incurred a net loss of (134,789) for the nine month
period ended September 30, 2008 and recognized $ 331,623 of net
income for the nine month period ended September 30, 2009.
Commitments
and Contingencies
The
Company has signed a long-term distribution agreement with Zhong Nan Fu Rui
Mechanical Electronics Manufacturing Co., Ltd. Zhong Nan Fu Rui is a
Chinese manufacturing company owned 100% by Mr. Jianfeng Ding, also the founder
of Flurida Group, Inc. Also, on June 2008, the company signed a
consigned inventory agreement with an US company, Electrolux Home Products DE
Mexico, S.A.DEC.V (Electrolux).
Foreign
Currency Translation
The
Company has determined the United States dollars to be its functional currency
for Flurida Group USA; People’s Republic of China Chinese Yuan Renminbi to be
its functional currency in Flurida Qingdao office; and European Euro to be its
functional currency for our Italian subsidiary. Assets and
liabilities were translated to U.S. dollars at the period-end exchange
rate. The exchange rate of issuance of common stocks to shareholders
was used as one U.S. dollar to 6.83 Chinese Yuan
(RMB). Statement of operations amounts were translated to U.S.
dollars using the historic rate, i.e., the rate at first date of each month
during the year. Gains and losses resulting from translating foreign
currency financial statements are accumulated in other comprehensive income
(loss), a separate component of shareholders’ equity.
29
Liquidity
and Capital Resources
|
At September 30
|
At September 30
|
|||||||
|
2009
|
2008
|
|||||||
|
Current
Ratio
|
1.40 | 4.67 | ||||||
|
Cash
|
$ | 1,446,945 | 531,652 | |||||
|
Working
Capital
|
$ | 1,448,913 | 1,110,721 | |||||
|
Total
Assets
|
$ | 5,046,747 | 1,413,263 | |||||
|
Total
Liabilities
|
$ | 3,597,834 | 302,542 | |||||
|
Total
Equity
|
$ | 1,448,913 | 1,110,722 | |||||
|
Total
Debt/Equity
|
2.48 | 0.27 | ||||||
*Current
Ratio = Current Assets /Current Liabilities
** Total
Debt / Equity = Total Liabilities / Total Shareholders Equity.
The
Company had cash and cash equivalents of $1,446,945 at September 30, 2009 and
the working capital of $1,448,913.
The total
debt of $3,597,834 for September 30, 2009 that is the amount of accounts
payable.
Our
independent auditor has indicated that there is substantial doubt about our
ability to continue as a going concern due to the Company’s short operating
history and accumulated operation loss. The financial statements do
not include adjustments that might result from the outcome of this uncertainty
and if the Company is unable to generate significant revenue or secure
financing, then the Company may be required to cease or curtail its
operations. However, due to the close relationship between the
Company and it’s major suppliers, Zhong Nan Fu Rui Mechanical Electronics
Manufacturing Co., Ltd., and Qingdao Fubida Electronics Co., Ltd., which are
100% owned directly or indirectly by the founders, Jianfeng Ding & Yaru
Huang, Zhong Nan Fu Rui’s and Qingdao Fubida’s current customers can be served
by the Company for the same quality of products and
services. Besides, as of September 30, 2009, the cash and cash
equivalent balance was $1,446,945, the management believes that the revenues
will be generated and its cash flows will be maintained to cover all its
operational costs and the risk of going concern in long term is significantly
low.
30
Item
3. Quantitative and Qualitative Disclosure about Market
Risk
Not
applicable.
Item
4. Controls and Procedures.
Evaluation of Disclosure
Controls and Procedures
The
Company has established disclosure controls and procedures to ensure that
information required to be disclosed in this quarterly report on Form 10-Q was
properly recorded, processed, summarized and reported within the time periods
specified in the Commission's rules and forms. The Company’s controls
and procedures are designed to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the Act is
accumulated and communicated to the Company’s management, including its
principal executive and principal financial officers to allow timely decisions
regarding required disclosure. A control system, no matter how
well conceived or operated, can provide only reasonable, not absolute, assurance
that the objectives of the control system are met.
We
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) at September 30, 2009 based on the evaluation of these
controls and procedures required by paragraph (b) of Rule 13a-15 or Rule 15d-15
under the Exchange Act. This evaluation was carried out under the
supervision and with the participation of our Chief Executive Officer and Chief
Financial Officer. Based upon that evaluation, our Chief Executive Officer and
Chief Financial Officer concluded that, at September 30, 2009, our disclosure
controls and procedures are effective.
Changes in internal control
over financial reporting
There
have been no changes in the Company's internal control over financial reporting
that occurred during the Company's last fiscal quarter that has materially
affected, or is reasonably likely to materially affect, the Company's internal
control over financial reporting.
PART
II — OTHER INFORMATION
Item
1. Legal Proceedings.
None.
Item
2. Unregistered Sales of Equity Securities and Use of
Proceeds.
(a) Unregistered Sales of Equity
Securities.
31
The
Registrant did not sell any unregistered securities during the three months
ended September 30, 2009.
(b) Use of
Proceeds.
The
Registrant did not sell any unregistered securities during the three months
ended September 30, 2009.
Item
3. Defaults Upon Senior Securities
None.
Item
4. Submission of Matters to a Vote of Security Holders.
The
Registrant did not submit any matters to a vote of its security holders during
the three-months ended September 30, 2009.
Item
5. Other Information.
Not
applicable.
Item
6. Exhibits.
(a)
Exhibits.
|
Exhibit
No.
|
Document Description
|
|
31.1
|
CERTIFICATION
of CEO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION
302 OF THE SARBANES-OXLEY ACT OF 2002.
|
|
31.2
|
CERTIFICATION
of CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION
302 OF THE SARBANES-OXLEY ACT OF 2002.
|
|
32.1
|
CERTIFICATION
of CEO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION
906 OF THE SARBANES-OXLEYACT OF 2002
|
|
32.2
|
CERTIFICATION
of CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION
906 OF THE SARBANES-OXLEYACT OF
2002
|
* This
exhibit shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934 or otherwise subject to the liabilities of that
section, nor shall it be deemed incorporated by reference in any filing under
the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made
before or after the date hereof and irrespective of any general incorporation
language in any filings.
32
SIGNATURES
In
accordance with the requirements of the Exchange Act, the registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Flurida
Group, Inc., a Nevada corporation
|
Title
|
|
Name
|
|
Date
|
|
Signature
|
|
Principal
Executive
Officer
|
Jianfeng
Ding
|
November
16, 2009
|
/s/
Jianfeng Ding
|
In
accordance with the Exchange Act, this Report has been signed below by the
following persons on behalf of the Registrant and in the capacities and on the
dates indicated.
|
SIGNATURE
|
|
NAME
|
|
TITLE
|
|
DATE
|
|
/s/
Jianfeng Ding
|
Jianfeng
Ding
|
Principal
Executive Officer
and
Director
|
November
16, 2009
|
|||
|
/s/
Yaru Hang
|
Yaru
Hang
|
Principal
Financial Officer
and
Principal Accounting
Officer
|
November
16, 2009
|
33
EXHIBIT
INDEX
|
Exhibit
No.
|
Document Description
|
|
31.1
|
CERTIFICATION
of CEO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION
302 OF THE SARBANES-OXLEY ACT OF 2002.
|
|
31.2
|
CERTIFICATION
of CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION
302 OF THE SARBANES-OXLEY ACT OF 2002.
|
|
32.1
|
CERTIFICATION
of CEO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION
906 OF THE SARBANES-OXLEYACT OF 2002
|
|
32.2
|
CERTIFICATION
of CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION
906 OF THE SARBANES-OXLEYACT OF
2002
|
* This
exhibit shall not be deemed “filed” for purposes of Section 18 of the
Securities Exchange Act of 1934 or otherwise subject to the liabilities of that
section, nor shall it be deemed incorporated by reference in any filing under
the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made
before or after the date hereof and irrespective of any general incorporation
language in any filings.
34