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EX-32.2 - FLURIDA GROUP INCv204290_ex32-2.htm
EX-31.2 - FLURIDA GROUP INCv204290_ex31-2.htm
EX-32.1 - FLURIDA GROUP INCv204290_ex32-1.htm
EX-31.1 - FLURIDA GROUP INCv204290_ex31-1.htm
 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-K/A
 (Mark One)
 
¨
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the fiscal year ended December 31, 2009
 
OR
 
¨
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from _____________ to _____________

Commission file number 333-151200

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
Securities registered pursuant to Section 12(b) of the Act: None
 
Securities registered pursuant to Section 12(g) of the Act: None
 

 
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes ¨     No ¨
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.  Yes ¨     No ¨
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ¨     No ¨
 
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
 
Large accelerated filer ¨
Accelerated filer ¨
   
Non-accelerated filer ¨
Smaller reporting company x
(Do not check if a smaller reporting company)
  
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act.) Yes ¨ No x

The aggregate market value of the Registrant’s Common Stock held by non-affiliates of the Registrant (based upon the closing price of the Registrant’s Common Stock as of June 30, 2009) was approximately $1,327,214 (based on 6,861,027 shares of common stock outstanding held by non-affiliates on such date).  Shares of the Registrant’s Common Stock held by each executive officer and director and by each entity or person that, to the Registrant’s knowledge, owned 5% or more of the Registrant’s outstanding Common Stock as of December 31, 2009 have been excluded in that such persons may be deemed to be affiliates of the Registrant.  This determination of affiliate status is not necessarily a conclusive determination for other purposes.

The number of outstanding shares of Registrant’s Common Stock, $0.001 par value, was 38,990,827 shares as of March 31, 2010.

 

 
 
TABLE OF CONTENTS
  
PART I
 
4
Item 1.  Description of Business
 
4
Item 2.  Description of Property
 
8
Item 3.  Legal Proceedings
 
8
Item 4. Submission of Matters to a Vote of Security Holders
 
8
Item 5.  Market for Common Equity and Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities
 
9
Item 6. Selected Consolidated Financial Data
 
10
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation
 
10
Item 7A.  Quantitative and Qualitative Disclosures About Market Risk
 
18
Item 8.  Financial Statements
 
F-1
Item 9.  Changes In and Disagreements With Accountants on Accounting and Financial Disclosures
 
19
Item 9A.  Controls and Procedures
 
19
Item 9B.  Other Information
 
20
Item 10.  Directors, Executive Officers, Promoters, Control Persons and Corporate Governance; Compliance with Section 16(a) of the Exchange Act
 
20
Item 11. Executive Compensation
 
21
Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
 
25
Item 13.  Certain Relationships and Related Transactions, and Director Independence
 
27
Item 14. Principal Accountant Fees and Services
 
29
Item 15. Exhibits
  
29

 
2

 

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
AND INFORMATION
 
This Annual Report on Form 10-K/A, the other reports, statements, and information that we have previously filed or that we may subsequently file with the Securities and Exchange Commission, or SEC, and public announcements that we have previously made or may subsequently make include, may include, incorporate by reference or may incorporate by reference certain statements that may be deemed to be “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 and are intended to enjoy the benefits of that act. Unless the context is otherwise, the forward-looking statements included or incorporated by reference in this Form 10-K/A and those reports, statements, information and announcements address activities, events or developments that Flurida Group, Inc. (hereinafter referred to as “we,” “us,” “our,” “our Company” or “Flurida Group”) expects or anticipates, will or may occur in the future. Any statements in this document about expectations, beliefs, plans, objectives, assumptions or future events or performance are not historical facts and are forward-looking statements. These statements are often, but not always, made through the use of words or phrases such as “may,” “should,” “could,” “predict,” “potential,” “believe,” “will likely result,” “expect,” “will continue,” “anticipate,” “seek,” “estimate,” “intend,” “plan,” “projection,” “would” and “outlook,” and similar expressions. Accordingly, these statements involve estimates, assumptions and uncertainties, which could cause actual results to differ materially from those expressed in them. Any forward-looking statements are qualified in their entirety by reference to the factors discussed throughout this document. All forward-looking statements concerning economic conditions, rates of growth, rates of income or values as may be included in this document are based on information available to us on the dates noted, and we assume no obligation to update any such forward-looking statements. It is important to note that our actual results may differ materially from those in such forward-looking statements due to fluctuations in interest rates, inflation, government regulations, economic conditions and competitive product and pricing pressures in the geographic and business areas in which we conduct operations, including our plans, objectives, expectations and intentions and other factors discussed elsewhere in this Report.
 
Certain risk factors could materially and adversely affect our business, financial conditions and results of operations and cause actual results or outcomes to differ materially from those expressed in any forward-looking statements made by us, and you should not place undue reliance on any such forward-looking statements. Any forward-looking statement speaks only as of the date on which it is made and we do not undertake any obligation to update any forward-looking statement or statements to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. The risks and uncertainties we currently face are not the only ones we face. New factors emerge from time to time, and it is not possible for us to predict which will arise. There may be additional risks not presently known to us or that we currently believe are immaterial to our business. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. If any such risks occur, our business, operating results, liquidity and financial condition could be materially affected in an adverse manner. Under such circumstances, you may lose all or part of your investment.
 
The industry and market data contained in this report are based either on our management’s own estimates or, where indicated, independent industry publications, reports by governmental agencies or market research firms or other published independent sources and, in each case, are believed by our management to be reasonable estimates. However, industry and market data is subject to change and cannot always be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process and other limitations and uncertainties inherent in any statistical survey of market shares. We have not independently verified market and industry data from third-party sources. In addition, consumption patterns and customer preferences can and do change. As a result, you should be aware that market share, ranking and other similar data set forth herein, and estimates and beliefs based on such data, may not be verifiable or reliable.

 
3

 
 
PART I
 
Item 1.  Description of Business
 
General
 
Organization

Flurida Group, Inc. is a Nevada corporation formed on December 19, 2006, with registered address at 502 East John Street, Carson City, NV 89706.  Flurida Group, Inc. transacts its business in the U.S. as Flurida Group USA, Inc. located in the State of Illinois and has principal office at 800 West Fifth Avenue, Suite 210, Naperville, IL 60563.

Besides USA operation, Flurida Group, Inc. also established one representative office in China and one subsidiary in Europe:

Flurida Group Qingdao Office. (“Flurida Qingdao”): Flurida Group Qingdao Office is registered on December 10, 2007.  It is a representative office on behalf of Flurida Group, Inc. to conduct the business of trading services, distribution, and marketing of the appliance parts in China. The Flurida Group Qingdao Office is located at Room 301, Unit 1, Yulong Building, 19 Miaoling Road, Qingdao, China 266061.  The company closed its Flurida Qingdao China office in July, 2009.

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.

Flurida Group, Inc. is headquartered in 800 West Fifth Avenue, Suite 210, Naperville, IL 60563, USA.  Our telephone number is 630-778-8519.

Business

Our business is the sale of appliance parts in Asia, Europe, North and South America.  Our business is the sale of appliance parts in Asia, Europe, North and South America.

Our Products

We sell 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.
 
4

 
 
¨
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.  Flurida Group Inc’s motor part is designed and specified for the refrigerators or freezers made by Electrolux, an US company located at Springfield, TN.
Flurida also supplies the motors and motor assemblies to Electrolux Europe facilities in Italy, Hungary.
 
In 2009, the Company sold total quantity of 152,684 icemakers and 1,673,784 motors to an US company, Electrolux, located at Springfield, TN for $ 6,401,011 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 1500 icemakers and VDE to Electrolux Australia for $ 52,924. The icemakers and motors were manufactured and supplied by Zhong Nan Fu Rui, and were shipped out at FOB shipping point at Qingdao, China.

In 2009, , the company sold total quantity of 33,600 Motor, 6,548 Dac Box, and 89,856 Magnet to Electrolux Hungry for $ 155,342; The magnets 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 total quantity of 73,840 Motor, 3,000 Timer, 39,360 Dac Box, and 103,824 Magnet, 14,830 Lamp, 18,600 Fan to Electrolux Italy for $ 504,437. 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 total quantity of 429 Dac Box to Electrolux Sweden for $ 1971. The dac Boxes were manufactured and supplied by Qingdao Fubida Electronics Co., Ltd., and all of those parts were shipped out at FOB shipping point at Qingdao, China.

In 2009, the Company sold total quantity of 272,160 motors to another US company, Master Precision Global (MPG), a sub-assembler to Electrolux, for $1,032,303.
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

Also, the company sold some related refrigerator appliance parts and 56 icemakers to Electrolux North Carolina for $ 8,583; and sold 1512 motors and 1000 Thermosat to an IL company, Exact Peplacement Parts. The parts were manufactured and supplied by Zhong Nan Fu Rui, and were shipped out at FOB shipping point at Qingdao, China.

Also, the company sold some related refrigerator appliance parts in US for $ 30,010. The parts were manufactured and supplied by Zhong Nan Fu Rui and Shanghai Fulu International Trading Co., Ltd.
 
In 2009, the Company sold thermostats and other related key parts for icemakers and motors, to Zhong Nan Fu Rui, Qingdao Fubida Electronics Co., Ltd, and ChuZhou FuDa 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, and then sold to Zhong Nan Fu Rui, Qingdao Fubida Electronics Co., Ltd and ChuZhou FuDa Electronics Co., Ltd. The total cost for all the parts purchased is $278,918. Then, Flurida Group, Inc. adds averaged 5% - 10% margin based on the cost of purchase, so, $ 312,806 were sold and invoiced to Zhong Nan Fu Rui and Qingdao Fubida Electronics Co., Ltd and ChuZhou FuDa Electronics Co., Ltd

 
5

 

In summary, as of December 31, 2009, the Company incurred the total revenue of $8,547,390 and cost of goods sold $7,747,634 respectively.
 
Our Supplier

The products we 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 we would have paid a non-related party in arm’s-length transactions, Mr. Ding may face a conflict in calculating the price the products are sold to us and the determining amount of products we purchase.  However, because Mr. Ding has a fiduciary duty to us and our shareholders, he has indicated that he will assure strict adherence to this provision of the agreement and will not require us to purchase a quantity of products in excess of that which we can reasonably afford or reasonably expect to sell in within two to three months of our purchase of the products.

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.
 
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.

 
6

 

Customers

We sell our product to refrigerator manufacturers such as Electrolux North America, Electrolux Italy, Electrolux Hungary, Electrolux Australia, B/S/H, Liebherr, Haier, Midea, Melin.

Markets

We sell our products in United States, Mexico, Canada, China, South Korea, Italy, Germany, Holland, and Spain.

Marketing

Our products will be sold directly by our officers, directors and employees to customers and potential customers.  We will locate these customers primarily by personal contacts or referrals.

Our Competition and Our Market Position

Competition within the appliance parts industry is intense. We will compete with both large scale state-owned enterprises and smaller scale private companies. In addition, we also face competition from international appliance parts resellers.  Many of our competitors have substantially greater financial, marketing, personnel and other resources than we do.

Our major competitor in ice maker market is Japan Servo Co., Ltd. which is headquartered in Japan. Japan Servo develops, manufactures and sells consumer and industrial small motors, as fans, blowers and sensors, and motor application products.  Japan Servo's Indonesia factory, PT.Japan Servo Batam produces an aluminum icemaker. We believe based upon our knowledge of the industry that we are about 25% the size of Japan Servo.  Japan Servo currently primarily sells to GE and Electrolux in USA.

Our other major competitor for ice maker and ice water dispensing system products is Mid-South Industries Inc. (MSI) Headquartered in Gadsden, AL, United States.   MSI mainly designs, produces and sells automobile parts, telecommunication parts and refrigeration parts. MSI experienced a major financial problem in 2005 year which caused them to lose the businesses with Electrolux. MSI still produces a small volume of icemaker and has the capability to design and produce icemaker and ice water system products.

Our major competitors in motors for refrigerators or freezers are AO Smith in USA market, EBM in Germany, MES in Switzerland for Europe market, and Hua Yi Co., Ltd. in China market.

We compete with these and other suppliers based upon:

(1)
Our larger and more focused design group

 
7

 

(2)
We offer a wider range of products.

(3)
Our products are cost effective, but with highest quality control standard, all passed the ISO 9000 and UL certification.

(4)
We sell in a broader market throughout the world while our most competitors’ products are only sold in regional markets.

Research and Development

We have not incurred research and development expenses in the last two fiscal years.

Our Intellectual Property

We have no intellectual property.

Our Employees

We have the following number of full time employees:

Clerical –  0
Operations – 5
Administrative – 1
Management – 3
Sales – 1

We have no part time employees.  We have no collective bargaining agreement with our employees.  We consider our relationship with our employees to be excellent.

Additional Information

We are a public company and file annual, quarterly and special reports and other information with the SEC. We are not required to, and do not intend to, deliver an annual report to security holders. You may read and copy any document we file at the SEC’s public reference room at 100 F Street, N.E., Washington, D.C. 20549. You can request copies of these documents by writing to the SEC and paying a fee for the copying cost. Please call the SEC at 1-800-SEC-0330 for more information about the operation of the public reference room. Our filings are also available, at no charge, to the public at http://www.sec.gov.
 
Item 2.  Description of Property
 
Please update the following:

We rent the following property:

 Flurida Group USA, Inc.

Address: City/State/Zip is located at 800 West Fifth Avenue, Suite 210, Naperville, IL 60563.
 
 
¨
Number of Square Feet:  1500 Square Feet
 
¨
Name of Landlord: Eight Hundred Corporate Building Partnership
 
¨
Term of Lease: ThreeYear from Oct 1, 2007 to Sep 30, 2010
 
¨
Monthly Rental: $1705
 
¨
Adequate for current needs: √ Yes

We do not intend to renovate, improve, or develop properties. We are not subject to competitive conditions for property and currently have no property to insure. We have no policy with respect to investments in real estate or interests in real estate and no policy with respect to investments in real estate mortgages. Further, we have no policy with respect to investments in securities of or interests in persons primarily engaged in real estate activities.
 
Item 3.  Legal Proceedings

We are not a party to any material legal proceedings nor are we aware of any circumstance that may reasonably lead any third party to initiate material legal proceedings against us.
 
Item 4.       Submission of Matters to a Vote of Security Holders

None

 
8

 

PART II
 
Item 5.  Market for Common Equity and Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities

MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Trading History

Our common stock is quoted on the Over-The-Counter Bulletin Board under the symbol “FLUG.”
 
Bid Information*

Financial Quarter Ended
 
High Bid
   
Low Bid
 
December 31, 2009
  $ 0.55     $ 0.10  
September 30, 2009
  $ 0.55     $ 0.10  
June 30, 2009
  $ 0.20     $ 0.10  
March 31, 2009
  $ 0.20     $ 0.10  

* The quotation do not reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions.

Dividends

We have never declared or paid any cash dividends on our common stock. For the foreseeable future, we intend to retain any earnings to finance the development and expansion of our business, and we do not anticipate paying any cash dividends on our common stock. Any future determination to pay dividends will be at the discretion of the Board of Directors and will be dependent upon then existing conditions, including our financial condition and results of operations, capital requirements, contractual restrictions, business prospects and other factors that the Board of Directors considers relevant. Each holder of our Series A preferred stock is entitled to a 10% per annum cumulative dividend.

 
9

 

There are no restrictions in our articles of incorporation or bylaws that prevent us from declaring dividends. The Nevada Revised Statutes, however, prohibit us from declaring dividends where, after giving effect to the distribution of the dividend:
 
 
we would not be able to pay our debts as they become due in the usual course of business; or

 
our total assets would be less than the sum of our total liabilities plus the amount that would be needed to satisfy the rights of stockholders who have preferential rights superior to those receiving the distribution, unless otherwise permitted under our articles of incorporation.

Securities Authorized for Issuance Under Equity Compensation Plans

At December 31, 2009, we have one compensation plan in place, entitled 2009 Stock Incentive Plan. This plan was approved by our Board of Directors on July 10, 2009.
  
Number of
Securities to
be issued under
Plan
 
Weighted-Average
exercise price of
outstanding options
   
Number of securities
remaining available
for
further issuance
 
5,000,000
  $ 0.60       5,000,000  
 
 Item 6. Selected Consolidated Financial Data

Not required.
 
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operation

Overview

Our business is the sale of appliance parts in Asia, Europe, North and South America.  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”)

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.

 
10

 

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.
 
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.

We sell 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.

 
¨
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.  Flurida Group Inc’s motor part is designed and specified for the refrigerators or freezers made by Electrolux, an US company located at Springfield, TN. Flurida also supplies the motors and motor assemblies to Electrolux Europe facilities in Italy, Hungary.

In 2009, the Company sold total quantity of 152,684 icemakers and 1,673,784 motors to an US company, Electrolux, located at Springfield, TN for $ 6,401,011 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 1500 icemakers and VDE to Electrolux Australia for $ 52,924. The icemakers and motors were manufactured and supplied by Zhong Nan Fu Rui, and were shipped out at FOB shipping point at Qingdao, China.

In 2009, , the company sold total quantity of 33,600 Motor, 6,548 Dac Box, and 89,856 Magnet to Electrolux Hungry for $ 155,342; The magnets 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.

 
11

 

Also, the company sold total quantity of 73,840 Motor, 3,000 Timer, 39,360 Dac Box, and 103,824 Magnet, 14,830 Lamp, 18,600 Fan to Electrolux Italy for $ 504,437. 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 total quantity of 429 Dac Box to Electrolux Sweden for $ 1971. The dac Boxes were manufactured and supplied by Qingdao Fubida Electronics Co., Ltd., and all of those parts were shipped out at FOB shipping point at Qingdao, China.

In 2009, the Company sold total quantity of 272,160 motors to another US company, Master Precision Global (MPG), a sub-assembler to Electrolux, for $1,032,303.
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

Also, the company sold some related refrigerator appliance parts and 56 icemakers to Electrolux North Carolina for $ 8,583; and sold 1512 motors and 1000 Thermosat to an IL company, Exact Peplacement Parts. The parts were manufactured and supplied by Zhong Nan Fu Rui, and were shipped out at FOB shipping point at Qingdao, China.

Also, the company sold some related refrigerator appliance parts in US for $ 30,010. The parts were manufactured and supplied by Zhong Nan Fu Rui and Shanghai Fulu International Trading Co., Ltd.
 
In 2009, the Company sold thermostats and other related key parts for icemakers and motors, to Zhong Nan Fu Rui, Qingdao Fubida Electronics Co., Ltd, and ChuZhou FuDa 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, and then sold to Zhong Nan Fu Rui, Qingdao Fubida Electronics Co., Ltd and ChuZhou FuDa Electronics Co., Ltd. The total cost for all the parts purchased is $278,918. Then, Flurida Group, Inc. adds averaged 5% - 10% margin based on the cost of purchase, so, $ 312,806 were sold and invoiced to Zhong Nan Fu Rui and Qingdao Fubida Electronics Co., Ltd and ChuZhou FuDa Electronics Co., Ltd

In summary, as of December 31, 2009, the Company incurred the total revenue of $8,547,390 and cost of goods sold $7,747,634 respectively.

 
12

 

Results of Operations

For the fiscal years ended December 31, 2009 vs. December 31, 2008.

Revenue

We had no revenue for the fiscal year ended December 31, 2007.

For the fiscal year ended December 31, 2008, we had revenue of $1,013,697 from parts, motors and icemaker sales.

For the fiscal year ended December 31, 2009, we had revenue of $ 8,547,390 from the sales of 2,070,016 pieces motors and 153,880 pieces icemakers, 46,337 pieces dac boxes, 193,680 pieces magnet, 3,000 pieces timers, 14,830 pieces lamps, 18,600 pieces fans to the Company’s Europe, North and South America customers.
 
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.

As there was no revenue realized in the fiscal year ended December 31, 2007, there was no cost of goods sold incurred.

During the year ended December 31, 2008, the Company incurred the total cost of goods sold of $ 963,065 for the purchases of parts, motor, and icemakers for the total sales of $ 1,013,697 to Electrolux, a US Company.

During the year ended December 31, 2009, the Company incurred the total cost of goods sold of $ 7,747,634 for the purchases of parts, motor, and icemakers for the total sales of $ 8,547,390.

The cost of goods sold in the Statements of Operations includes costs of products purchased from suppliers, shipping costs or freight in costs for the products shipping FOB port China, warehouse costs, and other costs if any directly related to the products inspection, duty and custom taxes of products, internal transfer costs if any. The selling, general and administrative expense includes operation expense such as travel, professional, office rent, telephone, wages and salaries for management and administrative employees, and other expense related to operation. There was no allocation of portion of any selling, general and administrative expense to the cost of goods sold.
 
Our gross margin may not be comparable to those of other entities, since some other entities may include all or allocate portion of the costs related to their distribution network into cost of goods sold.
 
13

 
Expense

Our expenses consist of selling, general and administrative expenses.

   
2009
   
2008
   
2007
 
Expense
                 
Administration Expense
    135.00       8,380.10       0.00  
Bank Service Charges
    1,217.92       1,355.21       199.24  
Business operation tax
    2,869.80       3,660.87       0.00  
Business Registration
    764.73       1,022.36       215.00  
Certification Fee
    47,327.76       3,230.00       0.00  
Computer and Internet Expenses
    2,664.51       0.00       0.00  
Dues and Subscriptions
    189.00       0.00       0.00  
Edgar SEC Filing fee
    2,306.00       6,570.00       0.00  
Flurida Europe Operating Expenses
    27,032.10       29,959.17       0.00  
Fuel charge
    368.48       0.00       0.00  
GIFT AND PROMOTION
    179.93       0.00       0.00  
Industry Show
    17,517.08       0.00       0.00  
Insurance Expense
    9,218.70       1,484.17       1,015.60  
Meals and Entertainment
    2,881.20       0.00       0.00  
Office Supplies
    3,839.15       68.45       768.66  
Organization Cost
    0.00       0.00       12,058.00  
Parking fee
    90.00       0.00       0.00  
Payroll Europe
    0.00       31,632.82       0.00  
Payroll Expense - ER
                       
Federal Unemployment Tax
    280.00       0.00       0.00  
Hosing public accumulate fund -ER
    361.48       1,514.81       0.00  
Social insurance-ER
    1,785.09       5,019.62       0.00  
State Unemployment Tax
    1,554.26       0.00       0.00  
US Medicare Tax - ER
    4,164.77       0.00       0.00  
US Social Security Tax -ER
    15,836.47       0.00       0.00  
Payroll Expense - ER - Other
    916.62       3,564.83       0.00  
Total Payroll Expense - ER
    24,898.69       10,099.26       0.00  
Payroll Expenses - EE
                       
Federal Tax Withholding
    48,444.80       0.00       0.00  
Housing public accumulate fund -EE
    361.47       1,514.81       0.00  
Net Wage Payment-EE
    12,743.33       47,067.93       0.00  
Social Insurance-EE
    606.06       1,704.19       0.00  
Payroll Expense - EE - Other
    0.00       568.99       0.00  
State Tax Withholding
    9,683.45       0.00       0.00  
US Medicare Tax -EE
    4,164.77       0.00       0.00  
US Net Salaries payment - EE
    211,381.52       0.00       0.00  
US Social Security Tax - EE
    15,836.47       0.00       0.00  
Total Payroll Expenses - EE
    303,221.87       50,855.92       0.00  
Postage & Shipping
    4,282.19       3,449.18       0.00  
Professional Fees
                       
Accounting service
    29,000.00       0.00       0.00  
Auditing Factory
    2,110.00       0.00       0.00  
Legal fee
    12,600.00       25,250.00       0.00  
SEC Auditing
    529.00       15,000.00       0.00  
Professional Fees - Other
    8,688.60       38,883.39       0.00  
Total Professional Fees
    52,927.60       79,133.39       0.00  
Rent Expense
    23,701.96       20,580.00       6,115.00  
Telephone Expense
    5,742.93       1,871.68       332.99  
Transfer Agent Service
                       
Set up & Application Fee
    1,250.00       1,475.00       0.00  
Transfer Agent Service - Other
    400.00       0.00       0.00  
Total Transfer Agent Service
    1,650.00       1,475.00       0.00  
Travel Expense
                       
air agent fee
    192.19       0.00       0.00  
Airfare
    29,216.27       3,022.69       0.00  
Car Rental
    899.33       245.91       0.00  
Hotel Expense
    16,485.32       2,576.49       0.00  
Local Transportation
    52.45       0.00       0.00  
Travel Expense - Other
    5,183.88       840.43       5.81  
Total Travel Expense
    52,029.44       6,685.52       5.81  
Utilities
    962.49       0.00       0.00  
Total Expense
    588,018.53       261,513.10       20,710.30  

 
14

 

We had essentially no revenue and $1500 organization cost for setting up Flurida Group, Inc. in the state of Nevada in the fiscal year ended December 31, 2006, and no revenue for 2007 and the organization cost of $12,058.14 incurred for registering Flurida Group European branch in Italy on December 2007, which was expensed by the Company as selling, general, and administrative expense for the year 2007.  Started from January 2008, Qingdao, China representative office hired 7 employees for assisting the operation of the business, and one Sale representative in European branch, which incurred a payroll expense of $ 92,588 for the period end December 31, 2008.  For maintaining and operating the Italy branch, amount of $ 29,959.17 was expensed.
Start from July 1, 2009, Flurida Qingdao Representative Office was closed, and there’s no more payroll expenses incurred since then. And Flurida Group USA hired two employees to taking care of the office and marketing activities, which incurred a payroll expense of $ 328,121 for the year end December 31, 2009. For maintaining and operating the Italy branch, amount of $ 27,032 was expensed. In order to increasing the sales in Europe and North America, the Company expensed $ 47,328 certification fees on the products we sold or exported in the period of January 1 to December 31, 2009. Due to the raise of sale volume and customers, the Company had travel expenses of $ 52,029.

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 year ended December 31, 2006, December 31, 2007 and December 31, 2008 due to the net operation loss. We incurred income tax expense of $31,703 for the year ended December 31, 2009.
 
15

 
Net Income (Loss)

We incurred net losses of ($1500) for the period ended December 31, 2006, net loss of ($19,119) for the period ended December 31, 2007 and ($194,079) for the period ended December 31, 2008, and had a net income of $ 191,065 for the period ended December 31, 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.

Liquidity and Capital Resources

Flurida Group, Inc

   
At December 31
   
At December 31
   
At December 31
 
   
2009
   
2008
   
2007
 
                   
Current Ratio
    1.70       2.71       1.06  
Cash
  $ 700,959     $ 605,932     $ 1,249,499  
Working Capital
  $ 1,285,950     $ 1,075,377     $ 69,952  
Total Assets
  $ 3,116,683     $ 1,703,514     $ 1,249,499  
Total Liabilities
  $ 1,830,733     $ 628,137     $ 1,179,547  
                         
Total Equity
  $ 1,285,950     $ 1,075,377     $ 69,953  
                         
Total Debt/Equity
    1.42       0.58       16.86  

*Current Ratio = Current Assets /Current Liabilities

** Total Debt / Equity = Total Liabilities / Total Shareholders Equity.

The Company’s overall working capital was increased in 2009 comparing to the year 2008, and 2007, due to the overall increase of sales and the increase of the accounts receivable; however, the Company’s current ratio was decreased in 2009 comparing to the year 2008 due to the increase of the accounts payable.
 
Currently the Company has a sales agreement with Electrolux, such agreement require the Company to supply the motors, ice makers, and other parts based on Electrolux’s needs. The management projected that the needs for our Company’s products shall be stable with slight increase worldwide. However, due to the consignment arrangement with Electrolux, the Company would keep certain level of consignment inventory to meet the Electrolux’s requirements. In addition, due to the consignment terms with Electrolux, the sales would be recognized when the Electrolux withdraw the products or the consignment inventory at Electrolux’s warehouse for 60 days. In our due course of business dealing with Electrolux’s consignment sales, all the sales incurred in 2009 were for the products withdrew before the 60 days terms, i.e., the products might be considered as sales automatically based on the consignment terms. After the products withdrew by Electrolux, the Company may receive the payment in 30 days. Therefore, in general, there would be at least 90 days to collect payment after the products shipped to Electrolux’s warehouse. Such long payment cycle may cause the Company to set up the similar payment terms or arrangement with the Company’s suppliers, for example, the major supplier, Zhong Nan Fu Rui. Accordingly, the accounts payables would be increased too. Therefore, the management projected that the trend of decrease of current ratio may be continued in the year 2010, due to the possibilities of late payment of accounts receivables, and the increase of the accounts payables.
 
Our activities for generating cash flows were operating activities in 2009 and 2008. There were no investing and financing activities incurred for the year 2009, and 2008. The management will continue to focus on the operating activities, particularly focus on marketing, customer services, and general administrative activities to improve overall operation effectiveness. Specifically, the management believes that within the operating activities, the efforts of collecting accounts receivables and making payments of accounts payables still are the primary factors for the changes of cash flows in the year 2010 or later.
 
16

 
The Company had cash and cash equivalents of $1,249,499 at December 31, 2007 and $ 69,952 of working capital, and $ 605,932 at December 31, 2008 and $ 1,075,377 of working capital and $ 700,959 at December 31, 2009 and $ 1,285,950 of working capital.

The total debt of $1,179,547 for December 31, 2007 includes the $1500 initial organization cost loan from shareholders, plus the loan $1,178,047 from shareholders convertible to common shares at the annual interest rate of 8%.  As of April 15, 2008, all the loans from shareholders converted to common shares and the initial organization cost $1500 for the loan from shareholders was pay off at 2008.

On April 1, 2008, seven non-affiliated loan holders asked for repayment of their loans in the aggregate amount of $ 25,067 plus the total interest accrued $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. Therefore, as of April 15, 2008, total shares issued and outstanding are 38,990,827.

Among the loan holders set forth above, the following individuals are officers, or directors, or the shareholders of more that 5% of issued common stock:

During the year ended December 31, 2008, the executive and non-executive officers and directors have advanced the Company for the amount of $ 609,200 (The Following Table). All the loans are converted to common shares for total common shares of 6,092,000 on April 15, 2008.

Name
 
Title
 
Loans Convert
to Common
Share
(4/15/2008)
 
Jianfeng Ding
 
CEO
  $ 300,000.00  
Yaru Huang
 
CFO
       
Ying Zhong
 
Chief Representative, China Office
  $ 200,000.00  
Fenglan  Li
 
Financial Manager
  $ 15,000.00  
Fuling  Li
 
Operation Manager
  $ 10,000.00  
Xiaoyong Fu
 
Board Member
  $ 75,000.00  
Gian Franco Barbieri
 
Manager Director, Flurida Europe Company
  $ 9,200.00  
Total
      $ 609,200.00  

Therefore, among the total loan amount of $1,164,906 converted to common shares at price of $0.10 per share on April 15, 2008, for the total shares of 11,649,067 shares, the total of $ 609,200 are from officers, directors, or shareholders of more than 5% of common shares.

As a result, the total debt of $ 628,137 for December 31, 2008 includes the account payable of $ 626,868 and the credit card payable of $ 1,269.

There were no new shares issued during the period ending December 31, 2009. Therefore, as of December 31, 2009 total shares issued and outstanding are 38,990,827

The total debt of $ 1,830,733 for December 31, 2009 includes $1,333,197 account payable to ZNFR Mechanical electronics Co, $ 91,841 account payable to SHFL International Trading co, $ 361,052 account payable to Qingdao Fubida Eletronic Co, other account payable of $ 43,986 and credit card payable of $ 656.

 
17

 

Our independent auditor has indicated that our lack of operating history and financial resources raise substantial 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 supplier, Zhong Nan Fu Rui, which is 100% owned by the founder, Jianfeng Ding, Zhong Nan Fu Rui’s current customers can be served by the Company for the same quality of products and services. Besides, as of December 31, 2009, the cash and cash equivalent balance was $700,959 , the management believes that the revenues will be generated and its cash flows will be maintained to cover its operational costs and the risk of going concern in long term is significantly low.

Interest Rate Risk

We do not have significant interest rate risk, as our debt obligations (i.e., notes payables to shareholders which can be converted to common stocks).  The annual interest rate of notes payable is 8%, and the interest expense would be accrued if the notes were not converted to common shares, and the notes holders request the Company for repayment of principles plus the interest.  Seven non-affiliated loan holders asked the Company for repayment of notes plus interest on April 1, 2008.  All remaining loan holders converted their loans to common shares on April 15, 2008.
 
Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Not required.
 
 
18

 
 
Item 8. Financial Statements
 
FLURIDA GROUP, INC.
(A Development Stage Enterprise)

 
Audited Financial Statements

As of December 31, 2009, 2008, and 2007

 
F-1

 

Table of Contents

Independent Auditor’s Report on the Consolidated Financial Statements
F-3
   
Balance Sheets
F-4
   
Statement of Operation
F-5
   
Shareholders Equity
F-6
   
Cash Flow Statement
F-7
   
Notes to Financial Statements
F-8

 
F-2

 

Independent Registered Public Accounting Firm’s Auditor’s Report on the
Consolidated Financial Statements

Board of Directors and Shareholders of Flurida Group, Inc.

We have audited the accompanying consolidated balance sheets of Flurida Group, Inc. and Subsidiary Companies as of December 31, 2009, 2008, and 2007, and the related consolidated statements of operation, shareholders’ equity, and cash flows for year ended December 31, 2009, 2008, 2007, and the cumulative period from December 19, 2006 (date of inception) through December 31, 2009.  These consolidated financial statements are the responsibility of the Company’s management.  Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audit in accordance with standards of the Public Company Accounting Oversight Board (United States).  Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.  An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements.  An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.  We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Flurida Group, Inc. and Subsidiary Companies as of December 31, 2009, 2008, and 2007, and the results of its operations and their cash flows for the year ended December 31, 2009, 2008, 2007, and the cumulative period from December 19, 2006 (date of inception) through December 31, 2009 in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note E to the financial statements, the Company’s short operating history and financial resources 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.

As discussed in Note F, Error Corrections for the Financial Statements, the Company restated the previously issued financial statements as an error in recognition, presentation, measurement, or disclosure in financial statements resulting from mathematical mistake based on Statement of Financial Accounting Standards (SFAS) No. 154.  In the previous issued financial statements dated April 6, 2009, the sales revenue for the period January 1, 2008 through December 31, 2008 had a mathematical error, and accordingly financial statements were restated for the fiscal year 2008.

/s/ Enterprise CPAs, Ltd.
 
Enterprise CPAs, Ltd.
 
Chicago, IL
 
April 14, 2010

 
F-3

 

FLURIDA GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEETS
   
December 31
   
December 31
   
December 31
 
   
2009
   
2008
   
2007
 
         
As Adjusted
       
         
(Note F)
       
ASSETS
                 
Current assets:
                 
Cash and cash equivalents
  $ 700,959     $ 605,932     $ 1,249,499  
Accounts receivable, net
    876,375       479,431       -  
Inventory
    1,253,869       618,151       -  
Total Current Assets
  $ 2,831,203     $ 1,703,514     $ 1,249,499  
                         
Property, plant and equipment, net
    -       -       -  
                         
Other assets:
                       
Loan to Supplier
  $ 278,091     $ -     $ -  
Accrued Interest Receivable
    7,389       -       -  
Total Other Assets
  $ 285,480     $ -     $ -  
                         
TOTAL ASSETS
  $ 3,116,683     $ 1,703,514     $ 1,249,499  
                         
LIABILITIES & EQUITY
                       
Current liabilities:
                       
Loans from shareholders
  $ -     $ -     $ 1,179,547  
Account Payable
    1,830,077       626,868       -  
Credit Card Payable
    656       1,269       -  
Total Current Liabilities
  $ 1,830,733     $ 628,137     $ 1,179,547  
                         
Stockholders' Equity:
                       
Common stock, $0.001 par value;
                       
200,000,000 shares authorized;
                       
38,990,827 shares issued and outstanding.
  $ 38,991     $ 38,991     $ 27,292  
                         
Paid-in capital
    1,221,613       1,221,613       63,406  
                         
Deficit accumulated during the development stage
    (23,633 )     (214,698 )     (20,619 )
                         
Accumulated other comprehensive Income(Loss)
    48,979       29,471       (126 )
                         
Total stockholders' equity
  $ 1,285,950     $ 1,075,377     $ 69,953  
                         
TOTAL LIABILITIES & EQUITY
  $ 3,116,683     $ 1,703,514     $ 1,249,499  

 
F-4

 

FLURIDA GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF OPERATION
                     
Cumulative from
 
                     
December 19, 2006
 
                     
(Date of Inception)
 
   
Year Ended
   
Year Ended
   
Year Ended
   
Through
 
   
December 31,
   
December 31,
   
December 31,
   
December 31,
 
   
2009
   
2008
   
2007
   
2009
 
         
As Adjusted
             
         
(Note F)
             
Revenues:
  $ 8,547,390     $ 1,013,697     $ -     $ 9,561,087  
Cost of Goods Sold
  $ 7,747,634     $ 963,065     $ -     $ 8,710,699  
Gross Profit
  $ 799,756     $ 50,632     $ -     $ 850,388  
Operating expenses:
                               
Research and development
    -       -       -       -  
                                 
Selling, general and administrative expenses
    588,019       261,513       20,710       871,742  
                                 
Depreciation and amortization expenses
    -       -       -       -  
                                 
Total Operating Expenses
    588,019       261,513       20,710       871,742  
                                 
Operating Income (Loss)
  $ 211,737     $ (210,881 )   $ (20,710 )   $ (21,354 )
                                 
Investment income, net
  $ 11,031     $ 17,427     $ 1,591     $ 30,049  
Interest Expense, net
    -       625       -     $ 625  
Income before taxes
  $ 222,768     $ (194,079 )   $ (19,119 )   $ 8,070  
Income tax expense
    31,703       -       -     $ 31,703  
Net Income (Loss)
  $ 191,065     $ (194,079 )   $ (19,119 )   $ (23,633 )
                                 
Net Income (Loss) per common share-Basics
  $ 0.00     $ (0.00 )   $ (0.00 )   $ (0.00 )
Net Income (Loss) per common share-Diluted
  $ 0.00     $ (0.00 )   $ (0.00 )   $ (0.00 )
                                 
Other comprehensive Income(Loss), net of tax:
                               
Foreign currency translation adjustments
    19,508       29,597       (126 )     48,979  
Total other comprehensive Income(Loss)
  $ 19,508     $ 29,597     $ (126 )   $ 48,979  
Comprehensive Income (Loss)
  $ 210,573     $ (164,482 )   $ (19,245 )   $ 25,346  

 
F-5

 

FLURIDA GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
FOR THE PERIOD ENDED DECEMBER 31, 2009
                     
Deficit
             
                     
Accumulated
   
Accumulated
       
               
Additional
   
During the
   
Other
   
Total
 
   
Common Stock
   
Paid-in
   
Development
   
Comprehensive
   
Stockholders'
 
   
Shares
   
Amount
   
Capital
   
Stage
   
Income (Loss)
   
Equity
 
Net loss for the year ended December 31 , 2006
                    $ (1,500 )         $ (1,500 )
                                         
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 shareholder @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 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 Loss for the period ended December 31, 2008
                          $ (194,079 )   $ -     $ (194,079 )
Balance, December 31, 2008
    38,990,827     $ 38,991     $ 1,221,613     $ (214,698 )   $ 29,471     $ 1,075,377  
                                                 
Adjustment for Exchange rate changes
                                  $ 19,508     $ 19,508  
                                                 
Net Income for the year ended December 31, 2009
                          $ 191,065             $ 191,065  
                                                 
Balance, December 31, 2009
    38,990,827     $ 38,991     $ 1,221,613     $ (23,633 )   $ 48,979     $ 1,285,950  

 
F-6

 

FLURIDA GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF CASH FLOWS
                     
Cumulative
 
                     
from December
 
                     
19, 2006 (Date
 
   
Year Ended
   
Year Ended
   
Year Ended
   
of Inception) to
 
   
December 31
   
December 31
   
December 31
   
December 31
 
   
2009
   
2008
   
2007
   
2009
 
         
As Adjusted
             
         
(Note F)
             
Operating Activities:
                       
Net Income (Loss)
  $ 191,065     $ (194,079 )   $ (19,119 )   $ (23,633 )
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  
Inventory
    (635,718 )     (618,151 )     -       (1,253,869 )
Loan to supplier
    (278,091 )     -       -       (278,091 )
Increase in accrued interest receivable
    (7,389 )     -               (7,389 )
Increase in account receivable
    (396,944 )     (479,431 )     -       (876,375 )
Decrease  in other payable
    -       (1,500 )     -       (1,500 )
Increase in account payable
    1,203,209       626,868       -       1,830,077  
Decrease in credit card payable
    (613 )     1,269       -       656  
Net cash provided by operating activities
  $ 75,519     $ (660,024 )   $ (19,119 )   $ (605,124 )
                                 
Investing Activities:
                               
Organization cost
    -       -       -          
Net cash provided by investing activities
  $ -     $ -     $ -     $ -  
                                 
Financing Activities:
                               
Proceeds from issuance of common stock
    -       -       90,698       90,698  
Proceeds from loan from shareholders
    -       -       1,178,046       1,179,546  
Repay loans to shareholders
    -       (25,066 )     -       (25,066 )
Proceeds from loan from shareholders
    -       11,926       -       11,926  
Net cash provided by financing activities
  $ -     $ (13,140 )   $ 1,268,744     $ 1,257,104  
                                 
Effect of  Exchange Rate on Cash
  $ 19,508     $ 29,597     $ (126 )   $ 48,979  
Net increase (decrease) in cash and cash equivalents
  $ 95,027     $ (643,567 )   $ 1,249,499     $ 700,959  
Cash and cash equivalents at beginning of the year
  $ 605,932     $ 1,249,499     $ -     $ -  
Cash and cash equivalents at end of year
  $ 700,959     $ 605,932     $ 1,249,499     $ 700,959  

 
F-7

 

FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO 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 representative office in China and one subsidiary in Europe:

Flurida Group Qingdao Office. (“Flurida Qingdao”): Flurida Group Qingdao Office is registered on December 10, 2007.  It is a representative office on behalf of Flurida Group, Inc. to conduct the business of trading services, distribution, and marketing of the appliance parts in China. The Flurida Group Qingdao Office is located at Room 301, Unit 1, Yulong Building, 19 Miaoling Road, Qingdao, China 266061.  The company closed its Flurida Qingdao China office in July, 2009.

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’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.
 
Basis of accounting

The financial statements reflect the assets, revenues and expenditures of the Company on the accrued basis of accounting.

 
 
F-8

 

FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE B – SIGNIFICANT ACCOUNTING POLICIES

Basis of Accounting (Continued)

The cost of goods sold in the Statements of Operations includes costs of products purchased from suppliers, shipping costs or freight in costs for the products shipping FOB port China, warehouse costs, and other costs if any directly related to the products inspection, duty and custom taxes of products, internal transfer costs if any.  The selling, general and administrative expense includes operation expense such as travel, professional, office rent, telephone, wages and salaries for management and administrative employees, and other expense related to operation.  There was no allocation of portion of any selling, general and administrative expense to the cost of goods sold.
 
Principles of Consolidation

The consolidated financial statements of the Company include the accounts of Flurida Group USA, Flurida Group Qingdao Office, and Flurida Group European S.R.L.  All significant intercompany balances and transactions have been eliminated in consolidation.

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 Chines Yuan Renminbi to be its functional currency in Flurida Qingdao office; and European Euro to be its functional currency.  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.


 
F-9

 

FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE B – SIGNIFICANT ACCOUNTING POLICIES
 
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 December 31, 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”) 96-18, the measurement date of shares issued for services is the date at which the counterparty’s performance is complete.

Basics and Diluted Net Loss Per Common Share

The Company computes per share amounts in accordance with FASB ASC 260, “Earnings per Share”.  ASC 260 requires presentation of basis and diluted EPS.  Basic EPS is computed by dividing the income (loss) available to Common Shareholders by the weighted-average number of common shares outstanding for the period.  Diluted EPS is based on the weighted-average number of shares of common stock and common stock equivalents outstanding during the periods.
 
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.

In 2006, the Company did not issue any shares to any shareholders.  Therefore, in 2006, there are no outstanding common shares available.  The diluted and basics net loss per common share for the period from December 19 (Date of inception) to December 31, 2006, is zero. And the following table I illustrated the calculations for basics and diluted net loss per common share for the year 2007 and 2008. Table II shows the calculations for basics and diluted net loss per common share for the year 2009 and cumulative period from December 19 (Date of inception) through December 31, 2009.
   
The equation from computing basic and diluted EPS is:

 
Income available to common shareholders/Weighted-average shares
 
F-10

 
FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Basics and Diluted Net Loss Per Common Share (Continued)
 
Year 2007
Basic & Diluted EPS Computation
                       
Net Loss
                  $ (19,119 )
Loss available to common stockholders
                  $ (19,119 )
 
Dates
 
Shares
   
Fraction of
Period
   
Weighted -
 
Outstanding
 
Outstanding
   
On Daily Basis
   
Average Shares
 
August 20, 2007
    25,997,760     134 / 365       9,544,383  
December 24, 2007
    1,294,000    
8 / 365
      28,362  
Weighted-average shares
                  9,572,745  
                       
Basic & Diluted Net Loss Per Common Share
  $ (0.00 )              

Basics and Diluted Net Loss Per Common Share ( Continued)
    
Year 2008
Basic & Diluted EPS Computation
                       
Net Loss
                  $ (194,079 )
Loss available to common stockholders
                  $ (194,079 )

Dates
 
Shares
   
Fraction of
Period
   
Weighted -
 
Outstanding
 
Outstanding
   
On Daily Basis
   
Average Shares
 
January 1, 2008
    27,291,760    
1
      27,291,760  
April 15, 2008
    11,699,067     260/365        8,333,582  
December 31, 2008
    0    
0
      0  
Weighted-average shares
                  35,625,342  
                       
Basic & Diluted Net Loss Per Common Share
  $ (0.01 )              
 
F-11

 
FLURIDA GROUP, INC. AND SUBSIDIARIES
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
Basics and Diluted Net Loss Per Common Share ( Continued)
 
Table II
   
Year 2009
Basic & Diluted EPS Computation
                       
                         
Net Income
                  $ 191,065  
Income available to common stockholders
                  $ 191,065  

Dates
 
Shares
   
Fraction of
Period
   
Weighted -
 
Outstanding
 
Outstanding
   
On Daily Basis
   
Average Shares
 
January 1, 2009
    38,990,827     1       38,990,827  
December 31, 2009
    0    
0
      0  
December 31, 2009
                  38,990,827  
                       
Weighted-average shares
  $ 0.00                

Cumulative Period From December 19 2006 to December 31, 2009

Basic & Diluted EPS Computation
     
       
Net Loss December 31, 2006
  $ (1,500 )
Net Loss December 31, 2007
  $ (19,119 )
Net Loss December 31, 2008
  $ (194,079 )
Net Income December 31, 2009
  $ 191,065  
Loss available to common stockholders
  $ (23,633 )

Dates
 
Shares
   
Fraction of Period
   
Weighted -
 
Outstanding
 
Outstanding
   
On Daily Basis
   
Average Shares
 
                   
December 19, 2006
    0     0       0  
                       
August 20, 2007
    25,997,760    
864/1107
      20,290,935  
                       
December 24, 2007
    1,294,000    
737/1107
      861498  
                       
April 15, 2008
    11,699,067    
625/1107
      6,605,164  
                       
December 31, 2009
    0    
0
      0  
                       
Weighted-average shares
                  27,757,597  
                       
Basic & Diluted Net Loss Per Common Share
  $ (0.00 )              
 
 
F-12

 

FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenues

Net revenues include sales of appliance parts in Asia, Europe, and North America.  The summary of sales revenue by countries was listed as follows:

Summary of Revenues by Countries

   
Year 2009
   
Year 2008
   
Year 2007
 
                   
USA
  $ 7,519,909.00     $ 960,476.00       -  
Australia
    52,924.00       -       -  
Hungary
    155,343.00       -       -  
Italy
    504,437.00       -       -  
Sweden
    1,971.00       -       -  
China*
    312,806.00       53,221.00       -  
Total
  $ 8,547,390.00     $ 1,013,697.00     $ -  

* China's sales were related party transactions.
 
 Flurida Group, Inc recognizes revenue for these products when it is realized or realizable and earned. Revenue is considered realized and earned when persuasive evidence of an arrangement exists.  For general sales, revenues are recognized 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.

On June, 2008, the Company signed a sales agreement with Electrolux, such agreement require the Company to supply the motors, ice makers, and other parts based on Electrolux’s needs.  The revenue for consignment sales would be recognized when the Electrolux withdraw the products or the consignment inventory at Electrolux’s warehouse for 60 days.

Under the term of the consignment sales 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 sites for consigned inventory. And Flurida Group, Inc is facilitated to use of Electrolux’s storage locations at such sites to the sale of products to Electrolux.  Electrolux will provide labor resources for receipt, stock up and pulls of consigned products.

F-13

 
FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenues (Continued)

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 60 days with no activity due to non communicated demand change will no longer qualify for consignment, and will be considered as withdrawn product after 60 days.  Accordingly, title passage and invoicing shall occur on such products per the term.
 
As of December 31, 2009, the Company had total revenue of $ 8,547,390, including $6,401,011 consignment sales to Electrolux, and $ 2,146,379 general sales.  For the $6,401,011 consignment sales, $6,373,306 was for the sales recorded as a result of Electrolux’s withdrawal of products from the consignment locations; and $27,705 was due to the pass of 60 days with no activities based on the signed consignment sales agreement with Electrolux.
 
In 2009, the Company sold total quantity of 152,684 icemakers and 1,673,784 motors to an US company, Electrolux, located at Springfield, TN for $ 6,401,011 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 1500 icemakers and VDE to Electrolux Australia for $ 52,924. The icemakers and motors were manufactured and supplied by Zhong Nan Fu Rui, and were shipped out at FOB shipping point at Qingdao, China.
 
In 2009, , the company sold total quantity of 33,600 Motor, 6,548 Dac Box, and 89,856 Magnet to Electrolux Hungry for $ 155,342; The magnets 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.

F-14

 
FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenues (Continued)
 
Also, the company sold total quantity of 73,840 Motor, 3,000 Timer, 39,360 Dac Box, and 103,824 Magnet, 14,830 Lamp, 18,600 Fan to Electrolux Italy for $ 504,437. 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 total quantity of 429 Dac Box to Electrolux Sweden for $ 1971. The dac Boxes were manufactured and supplied by Qingdao Fubida Electronics Co., Ltd., and all of those parts were shipped out at FOB shipping point at Qingdao, China.

In 2009, the Company sold total quantity of 272,160 motors to another US company, Master Precision Global (MPG), a sub-assembler to Electrolux, for $1,032,303. 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

Also, the company sold some related refrigerator appliance parts and 56 icemakers to Electrolux North Carolina for $ 8,583; and sold 1512 motors and 1000 Thermosat to an IL company, Exact Peplacement Parts. The parts were manufactured and supplied by Zhong Nan Fu Rui, and were shipped out at FOB shipping point at Qingdao, China.

Also, the company sold some related refrigerator appliance parts in US for $ 30,010.  The parts were manufactured and supplied by Zhong Nan Fu Rui and Shanghai Fulu International Trading Co., Ltd.

In 2009, the Company sold thermostats and other related key parts for icemakers and motors, to Zhong Nan Fu Rui, Qingdao Fubida Electronics Co., Ltd, and ChuZhou FuDa 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, and then sold to Zhong Nan Fu Rui, Qingdao Fubida Electronics Co., and ChuZhou FuDa Electronics Co., Ltd. The total cost for all the parts purchased is $278,918. Then, Flurida Group, Inc. adds averaged 5% - 10% margin based on the cost of purchase, so, $ 312,806 were sold and invoiced to Zhong Nan Fu Rui and Qingdao Fubida Electronics Co., Ltd and ChuZhou FuDa Electronics Co., Ltd. For all the sales of $312,806, the Company took titles and responsible for the risks of loss to the parts prior to selling them to Zhong Nan Fu Rui, Qingdao Fubida Electronics Co., Ltd., and Chuzhou FuDa Electronics Co., Ltd.

 
 
F-15

 

FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
Revenues (Continued)
 
In summary, as of December 31, 2009, the Company incurred the total revenue of $8,547,390 and cost of goods sold $7,747,634 respectively. The cost of goods sold is also discussed in details in Note C, Related Party Transactions.
 
Inventory

Inventories are stated at the lower of cost or market with cost being determined on a first-in, first-out basis.

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 and Anderson site for consigned inventory. And Flurida Group, Inc is facilitated to use of Electrolux’s storage locations at such sites 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 60 days with no activity due to non communicated demand change will no longer qualify for consignment, and will be considered as withdrawn product after 60 days. Accordingly, title passage and invoicing shall occur on such product per the term.
 
According to the Section 6, Consignment Inventory Agreement with Electrolux, parts residing in the consigned inventory for 60 days with no activity due to non-communicated demand change will no longer qualify for consignment and will be considered as withdrawn product after 60 days.  Accordingly, title passage and invoicing shall occur on such product per the terms defined in Title section of the Consignment Inventory Agreement.
 
F-16

 
FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
According to the definitions of the Consignment Inventory Agreement, the “Communicated Demand Change” is defined as a change as push out the usage plan; push in the usage plan; quantity change or stop (no longer) use change:

 
·
For Push Out plan change: A push out plan of no more than 45 calendar days push out time will be accepted as a “communicated demand change”.
 
·
For Push In plan change: A push in change subject to confirmation of Electrolux, which depends on the transit time limitation and parts availability.
 
·
For Quantity change: An increase quantity change subject to confirmation of Electrolux, which depends on safety inventory status, transit time limitation and parts availability.  An decrease quantity change will be seem as a Push Out change stated above if the total quantity in-process, in-transit and in-inventory can be used up eventually within 12 months from the date of change.  A decrease quantity change will be seem as a Stop Use change stated below if the total quantity in-process, in-transit and in-inventory can not be used up eventually within 12 months from the date of change.
 
·
For Stop (no longer) Use change:  An official notice in written should be done by Electrolux no longer than 12 weeks before the needed date (planned using date) on the Electrolux supplier website or in any previous official requirements.

As of December 31, 2009, the Company incurred total amount of $24,931.20 consignment inventory with no activity for 60 days, and the sales revenue was recognized for $27,705.  The invoice amount for $27,705 is still outstanding accounts receivable.
  
At the year ended December 31, 2008, there’s total $618,151 inventory for the Company that had sold out in the 1st quarter of 2009.  The consignment inventory amount was $501,727.
 
At the year ended December 31, 2009, there was $1,253,869 inventory for Flurida Group, Inc.
 
As of December 31, 2009, there were 39,372 icemakers and 61,992 motors in Electrolux Juarez warehouse for $602,091 as of consignment inventory.  Also, there were 122,472 motors in Electrolux Anderson warehouse for $293,071 as of consignment inventory.  Therefore, total consignment inventory was $895,262.
 
 
F-17

 

FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
The company also had 151,200 motor at total cost of $ 358,706 that had been shipped out at FOB shipping point Qingdao, China. Those purchases haven’t considered as a sale or a consignment inventory at the year ended December 31, 2009. Therefore, it’s the inventory of $358,706 for Flurida Group, Inc.
 
As a result, the company had total of $1,253,869 inventory in the fiscal year end of 2009.
 
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 Flurida Group USA hired two employees to taking care of the office and marketing activities.

The consolidated total payroll expense for the year ended December 31, 2009 and 2008 was listed as follows:
   
2009
   
2008
 
Payroll - Europe
    -       31,632.82  
Payroll Expense - ER
               
Federal Unemployment Tax
    280.00       -  
Hosing public accumulate fund -ER
    361.48       1,514.81  
Social  insurance-ER
    1,785.09       5,019.62  
State Unemployment Tax
    1,554.26       -  
US Medicare Tax - ER
    4,164.77       -  
US Social Security Tax -ER
    15,836.47       -  
Payroll Expense - ER - Other
    916.62       3,564.83  
Total Payroll Expense - ER
    24,898.69       10,099.26  
Payroll Expenses - EE
               
Federal Tax Withholding
    48,444.80       -  
Housing public accumulate fund -EE
    361.47       1,514.81  
Net Wage Payment-EE
    12,743.33       47,067.93  
Payroll Expense - EE - Other
    -       568.99  
Social Insurance-EE
    606.06       1,704.19  
State Tax Withholding
    9,683.45       -  
US Medicare Tax -EE
    4,164.77       -  
US Net Salaries payment - EE
    211,381.52       -  
US Social Security Tax - EE
    15,836.47       -  
Total Payroll Expenses - EE
    303,221.87       50,855.92  
                 
Total Payroll Expenses
    328,120.56       92,588.00  

 
 
F-18

 

FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
The housing public accumulated fund and social insurance were paid by both employer and employees in China; the employee portion of housing public accumulated fund and social insurance was withheld by employer, and then submitted to local tax authority in China.

There was no payroll expense incurred in USA in 2008, 2007, and 2006.
 
Operating Expense

For the year ended December 31, 2009, 2008, and 2007, the company had a total of $ 588,019, $261,513, and $ 20,710 operating expenses respectively.

Comprehensive Income

The company’s comprehensive income is comprised of net income, unrealized gains and losses on marketable securities classified foreign currency translation adjustments, and unrealized gains and losses on derivative financial instruments related to foreign currency hedging.

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.

Income Tax
 
The Company uses the liability method of accounting for income taxes pursuant to FASB ASC 740-10-50.  Under this method, deferred income taxes are recorded to reflect the tax consequences in future years of temporary differences between the tax basis of the assets and liabilities and their financial amounts at year end.
 
For federal income tax purposes, substantially all expenses must be deferred until the Company commences business and then they may be written off over a 60-month period. These expenses will not be deducted for tax purposes and will represent a deferred tax asset. The Company has provided a valuation allowance in the full amount of the deferred tax asset since there is no assurance of future taxable income. Tax deductible losses can be carried forward for 20 years until utilized for federal income tax purposes.

 
F-19

 
 
 

 
FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

The Company has incurred net losses since inception. The Company has not reflected any benefit of such net operating loss carry forward in the accompanying financial statements for the year 2008, and 2007 respectively.  In the year 2009, the Company incurred operating income of $211,737, and after carry forward the total deductible carry forward loss of $37,296 at USA operation, the Company incurred the net income tax expense of $31,703 for the year 2009.

The income tax benefit differed from the amount computed by applying the US federal income tax rate of 34% to net loss as a result of the following:

   
2009
   
2008
   
2007
 
   
%
   
%
   
%
 
Computed expected tax benefit
    (34.00 )     (34.00 )     (34.00 )
State income tax, net of federal benefit
    (7.30 )     (7.30 )     (7.30 )
Change in federal tax rate apportionment
    19.00       19.00          
Change in valuation allowance
    22.30       22.30          
                         
Income tax benefit
    (41.30 )     -       -  

As of 2009, the total $37,296 of operation loss incurred in USA was carried forward.  The remaining balance of operation loss in Italy can be carried forward in 20 years starting from the date the operating loss occurred.

The tax effect of temporary differences that give rise to significant portions of the deferred tax assets as of December 31, 2009, 2008, and 2007 are presented below:

Deferred Tax Assets:
   
2009
   
2008
   
2007
 
Organizational start-up costs
  $ -     $ -     $ -  
Valuation allowance
    -       -       -  
                         
Net deferred tax assets
  $ -       -     $ -  

 
In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during periods in which those temporary differences become deductible.

In the years 2009, 2008, and 2007, there were no deferred tax assets.
 
F-20

 
FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 
NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
The Company filed Form 1120 to Internal Revenue Service and IL 1120 to the State of Illinois.  There was 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 reported income tax return to Italy government and there was no income tax incurred in Italy due to the net operating loss.
 
Accrued Interest Receivable

In July 1st, 2009, the company loan $ 278,090 to its main supplier Zhong Nan Fu Rui Mechanical electronics Co., Ltd at interest rate of 5.31%, term July 1, 2009 to June 30, 2010. As of December 31, 2009, total of $ 7,389 accrued interest receivable was incurred.

Account Payable

As of December 31, 2009, and 2008, the company had a total of $ 1,830,077, and $ 626,868 account payable respectively.

 For the amount of $ 1,830,077 was included $ 1,333,197 was due to ZNFR Mechanical electronics Co, $ 91,841 was duo to SHFL International Trading co, $ 361,052 was due to Qingdao Fubida Eletronic Co, and other account payable of $ 43,986.

Recent Accounting Pronouncements

Business Combinations —The new guidance on business combinations retains the underlying concepts of the previously issued standard in that the acquirer of a business is required to account for the business combination at fair value. As with previous guidance, the assets and liabilities of the acquired business are recorded at their fair values at the date of acquisition. The excess of the purchase price over the estimated fair values are recorded as goodwill. The new pronouncement results in some changes to the method of applying the acquisition method of accounting for business combinations in a number of significant aspects. Under the new guidance, all acquisition costs are expensed as incurred and in-process research and development costs are recorded at fair value as an indefinite-lived intangible asset. Prior to the adoption, in-process research and development costs were immediately expensed and acquisition costs were capitalized. Further, the new guidance generally requires restructuring charges associated with a business combination to be expensed subsequent to the acquisition date.

Fair Value Measurements and Disclosures — The pronouncements define fair value, establish guidelines for measuring fair value, and expand disclosures regarding fair value measurements.

 
F-21

 
 
FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 
NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Variable Interest Entities and Transfers of Financial Assets and Extinguishments of Liabilities — The pronouncement on transfers of financial assets and extinguishments of liabilities removes the concept of a qualifying special-purpose entity and removes the exception from applying variable interest entity accounting to qualifying special-purpose entities. The new guidance on variable interest entities requires an entity to perform an ongoing analysis to determine whether the entity’s variable interest or interests give it a controlling financial interest in a variable interest entity. The pronouncements are effective for fiscal years beginning after November 15, 2009.
 
Management does not anticipate that the adoption of these standards will have a material impact on the financial statements.

NOTE C – RELATED PARTY TRANSACTIONS

The following related party transactions were identified in balance sheets and statements of operations, and listed as follows:

Summary of Related Party Transactions in Balance Sheets

   
12/31/2009
   
12/31/2008
   
12/31/2007
 
Accounts Receivable Balance from:
       
Chuzhou Fuda
  $ 24,438.47       -       -  
Zhong Nan Fu Rui
    30,726.21       18,551.00       -  
Total Accounts Receivable from Related Party
  $ 55,164.68     $ 18,551.00       -  
                         
Loans to Supplier:
                 
Zhong Nan Fu Rui
    278,090.83       -       -  
                         
Accrued Interest Receivable from:
         
Zhong Nan Fu Rui
    7,389.00       -       -  
                         
Accounts Payable to:
                 
Qingdao Fubida Electronic Co.
    361,052.36       -       -  
Shanghai Fulu International
    92,615.09       -       -  
Zhong Nan Fu Rui
    1,362,348.10       610,813.35       -  
Total Accounts Payable to Related Party
  $ 1,816,015.55     $ 610,813.35       -  

Summary of Related Party Transactions in Statements of Operation

   
12/31/2009
   
12/31/2008
   
12/31/2007
 
Revenue from:
                 
Zhong Nan Fu Rui
  $ 280,857.05     $ 53,221.44       -  
Qingdao Fubida Electronic Co.
    7,510.80       -       -  
Chuzhou Fuda
    24,438.47       -       -  
                         
Total Revenues from Related Party
  $ 312,806.32     $ 53,221.44       -  
                         
Cost of Goods Sold:
                 
Zhong Nan Fu Rui
    3,524,053.00     $ 912,381.27       -  
Qingdao Fubida Electronic Co.
    3,256,052.00       -       -  
Shanghai Fulu International
    70,459.00       -       -  
                         
Total Cost of Goods Sold from Related Party
  $ 6,850,564.00     $ 912,381.27       -  

Accounts Receivable & Revenue

Accounts receivable balance of $24,438.47 from Chuzhou Fuda was due to the sales of appliance parts, for the total sales revenue of $24,438.47 as of December 31, 2009.  The accounts receivable balance of $30,726.21 was due to the total sales of ice maker and motor parts to Zhong Nan Fu Rui, for the total sales of $280,857.05 to Zhong Nan Fu Rui in 2009.

There was accounts receivable balance of $18,551 for the sales of ice maker and motor parts $53,321.44 to Zhong Nan Fu Rui in 2008.

There were no related party sales transactions in 2007.

Accounts Payable

Accounts payable balance of $361,052.36 to Qingdao Fubida was due to the purchase of icemakers, magnets, and DAC boxes for the total purchase cost of $3,474,445 in the year 2009.  Accounts payable balance of $92,615.09 to Shanghai Fulu was due to the purchase of icemakers and magnets for the total purchase cost of $123,570 in the year 2009.  Accounts payable balance of $1,362,348.10 to Zhong Nan FU Rui was due to the purchase of icemakers and motors for the total purchase cost of $4,506,418 in the year 2009.

Accounts payable balance of $610,813.35 to Zhong Nan Fu Rui was due to the purchase of icemakers and motors for the year 2008.

There were no related party purchase transactions in 2007.
 
F-22

 
FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE C – RELATED PARTY TRANSACTIONS (Continued)

Common Shares Issued to Executive and Non-Executive Officers and Directors

As of December 31, 2008, total 32,129,960 shares were issued to officers and directors.  Please see the Table III below for details:

Table III:
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
    28,997,760       325,998       74.37 %
Total
    32,129,760     $ 637,197.76       82.39 %

* Based on total issued shares as of December 31, 2008: 38,990,827

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 December 31, 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
    30,129,760     $ 635,198       77.26 %

* Based on total issued shares as of December 31, 2009: 38,990,827.

 
F-23

 

FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE C – RELATED PARTY TRANSACTIONS (Continued)

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 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.

 
F-24

 

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.

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 the year ended 2008, the Company had ending inventory of $ 618,151 that was purchased from Zhong Nan Fu Rui, include 17,640 icemakers and 119,448 motor. And all of those had been sold in the 1st quarter 2009, and the same amount $ 618,151 of cost of good sold was incurred in year 2009.

 
F-25

 

FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE C – RELATED PARTY TRANSACTIONS (Continued)

Cost of Goods Sold ( Continued)

In 2009, Flurida Group, Inc. purchased 170,924 icemakers and 1,006,372 motors from Zhong Nan Fu Rui at total cost of $ 4,506,418 for FOB shipping point at Qingdao, China. In the period of January 1 to December 31, 2009, the company had sold 824,148 motors and 136,700 icemakers, and the cost of good sold was $ 3,5,24,053.

The total parts price 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 1,247,380 motors,14,830 lamps, 50 icemakers, 18,600 fans, 15,156 magnets, and 46,337 dac boxes from Qingdao Fubida Electronics Co., Ltd. at total cost of $ 3,474,445 for FOB shipping point at Qingdao, China. In the period of January 1 to December 31, 2009, the company had sold 1,156,660 motors and 50 icemakers, 18,600 fans, 14,830 lamps, 15,156 magnets, and 46,337 dac boxes and the cost of good sold was $ 3,256,052.

In addition, Flurida Group, Inc. purchased 178, 524 magnets, 4998 icemakers, and 3000 timers from Shanghai Fulu International Trading Co., Ltd., at total cost of $123,570 for FOB shipping point at Shanghai, China. In the period of January 1 to December 31, 2009, the company had sold 210 icemakers, 178,524 magnets, and 3,000 timers and the cost of good sold was $ 70,459.

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 $ 278,918 in 2009.

Therefore, in the year ended December 31, 2009, the Company incurred a total cost of good sold of $ 7,747,634.

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.

 
F-26

 

FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

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 $ (194,079). Therefore, the total stockholders’ equity balance at December 31, 2008 was $ 1,075,377.

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 December 31, 2009.  .

Therefore, as of December 31, 2009 total shares issued and outstanding are 38,990,827.

NOTE E – GOING CONCERN

The Company’s short operating history and financial resources raise substantial 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.  In 2009, the Company generated sales revenue of $8,547,390, and cumulative net income of $25,346 from December 19, 2006 (date of inception) through December 31, 2009.  The Company’s single most concentrated customer is Electrolux located in various countries.  If Electrolux discontinue the purchase which may be very unlikely in neare future, the Company may face the ability to continue as a going concern.  However, due to the close relationship between the Company and it’s suppliers, Zhong Nan Fu Rui and Qingdao Fubida Electronics Co., which are 100% owned by the founder, Jianfeng Ding, Zhong Nan Fu Rui and Qingdao Fubida Electronics Co.’s current customers can be served by the Company for the same quality of products and services.  Besides, as of December 31, 2009, the cash and cash equivalent balance was $700,959 , the management believes that the revenues will be generated and its cash flows will be maintained to cover its operational costs and the risk of going concern in long term is significantly low.

 
F-27

 

FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE F – ERROR CORRECTION FOR FINANCIAL STATEMENT

In the previous issued audited financial statements dated April 6, 2009, the Sales Revenue incurred for the period January 1, 2008 through December 31, 2008, was recognized when the products were delivered into customer’s warehouse, which include some consignment inventories of the Company that the title of the products might not be transferred to the customer yet.  In accordance with the Securities and Exchange Commission’s (“SEC”) Staff Accounting Bulletin (“SAB”) No. 104, “Revenue Recognition,”: Revenue is considered realized and earned when persuasive evidence of an arrangement exists; delivery has occurred or services have been rendered; the Company’s fee to its customer is fixed or determinable; and collection of the resulting receivable is reasonably assured; revenues are recognized 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. Therefore, the comparative financial statements of prior periods have been adjusted to apply the correct method retrospectively.  The following financial statement line items for the period January 1, 2008 through December 31, 2008 was affected by the change of the financial data.

Also in the following Consolidated Balance Sheets, as of December 31, 2008, the error in the previous issued financial statement has adjusted.   The total inventory was corrected to $ 618,151; therefore, the total current assets were $ 1,703,514.  And the deficit accumulated was adjusted to $ (214,698); therefore, the total stockholder’s equity was $ 1,075,377.

 
F-28

 

FLURIDA GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED BALANCE SHEETS

   
December 31
   
December 31
 
   
2008
   
2008
 
   
As Reported
   
As Adjusted
 
ASSETS
           
Current assets:
           
Cash and cash equivalents
  $ 605,932     $ 605,932  
Accounts receivable, net
    479,431       479,431  
Total Current Assets
  $ 1,085,363     $ 1,085,363  
                 
Property, plant and equipment, net
    -       -  
                 
Other assets
               
Consignment Inventory
  $ 530,170     $ 501,727  
Inventory
    116,424       116,424  
Total Other Assets
  $ 646,594     $ 618,151  
                 
TOTAL ASSETS
  $ 1,731,957     $ 1,703,514  
                 
LIABILITIES & EQUITY
               
Current liabilities:
               
Account Payable
    626,868       626,868  
Credit Card Payable
  $ 1,269     $ 1,269  
Total Current Liabilities
  $ 628,137     $ 628,137  
                 
Stockholders' Equity:
               
Common stock, $0.001 par value;
               
200,000,000 shares authorized;
               
38,990,83 shares issued and outstanding.
  $ 38,991     $ 38,991  
                 
Paid-in capital
    1,221,613       1,221,613  
                 
Deficit accumulated during the development stage
    (186,255 )     (214,698 )
                 
Accumulated other comprehensive Income
    29,471       29,471  
                 
Total stockholders' equity
  $ 1,103,820     $ 1,075,377  
                 
TOTAL LIABILITIES & EQUITY
  $ 1,731,957     $ 1,703,514  

 
F-29

 

FLURIDA GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF LOSS

   
Year Ended
   
Year Ended
 
   
December 31,
   
December
31,
 
   
2008
   
2008
 
   
As Reported
   
As Adjusted
 
Revenues:
  $ 1,543,867     $ 1,013,697  
Cost of Goods Sold
  $ 1,464,792     $ 963,065  
Gross Profit
  $ 79,075     $ 50,632  
Operating expenses:
               
Research and development
    -       -  
                 
Selling, general and administrative expenses
    261,513       261,513  
                 
Depreciation and amortization expenses
    -       -  
                 
Total Operating Expenses
    261,513       261,513  
                 
Operating Loss
  $ (182,438 )   $ (210,881 )
                 
Investment income, net
  $ 17,427     $ 17,427  
Interest Expense, net
    625       625  
Loss before income taxes
    (165,636 )     (194,079 )
Loss tax expense
    -       -  
Net Loss
  $ (165,636 )   $ (194,079 )
                 
Net Loss per common share-Basics
  $ (0.00 )   $ (0.00 )
Net Loss per common share-Diluted
  $ (0.00 )   $ (0.00 )
                 
Other comprehensive Income(Loss), net of tax:
               
Foreign currency translation adjustments
    29,597       29,597  
Total other comprehensive Income
    29,597       29,597  
Comprehensive Loss
  $ (136,039 )   $ (164,482 )


 
F-30

 

FLURIDA GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
FOR THE PERIOD ENDED DECEMBER 31, 2008

                     
Deficit
             
(As Adjusted)
                   
Accumulated
   
Accumulated
       
               
Additional
   
During the
   
Other
   
Total
 
   
Common Stock
   
Paid-in
   
Development
   
Comprehensive
   
Stockholders'
 
   
Shares
   
Amount
   
Capital
   
Stage
   
Income (Loss)
   
Equity
 
Net loss for the year ended December 31 , 2006
                    $ (1,500 )         $ (1,500 )
                                         
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 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  
                                                 
Net Loss for the period ended December 31, 2008
                          $ (194,079 )   $ 29,597     $ (164,482 )
                                                 
Balance, December 31, 2008
    38,990,827     $ 38,991     $ 1,221,613     $ (214,698 )   $ 29,471.23     $ 1,075,377  


 
F-31

 

FLURIDA GROUP, INC.
(A Development Stage Enterprise)
CONSOLIDATED STATEMENT OF CASH FLOWS

   
Year Ended
   
Year Ended
 
   
December 31
   
December 31
 
   
2008
   
2008
 
   
As Reported
   
As Adjusted
 
Operating Activities:
           
Net Loss
  $ (165,636 )   $ (194,079 )
                 
Adjustments to reconcile net loss to net cash provided by operating activities:
               
Non-cash portion of share based legal fee expense
    5,000       5,000  
Consignment Inventory
    (530,170 )     (501,727 )
Inventory
    (116,424 )     (116,424 )
Increase in account receivable
    (479,431 )     (479,431 )
Decrease  in other payable
    (1,500 )     (1,500 )
Increase in account payable
    626,868       626,868  
Increase in credit card payable
    1,269       1,269  
Net cash provided by operating activities
  $ (660,024 )   $ (660,024 )
                 
Investing Activities:
               
Organization cost
    -       -  
Net cash provided by investing activities
  $ -     $ -  
                 
Financing Activities:
               
Proceeds from issuance of common stock
    -       -  
Repay loans to shareholders
    (25,066 )     (25,066 )
Proceeds from loan from shareholders
    11,926       11,926  
Net cash provided by financing activities
    (13,140 )     (13,140 )
                 
Effect of  Exchange Rate on Cash
  $ 29,597     $ 29,597  
Net increase (decrease) in cash and cash equivalents
  $ (643,567 )   $ (643,567 )
Cash and cash equivalents at beginning of the year
  $ 1,249,499     $ 1,249,499  
Cash and cash equivalents at end of year
  $ 605,932     $ 605,932  

 
F-32

 
 
Item 9. Changes In and Disagreements With Accountants on Accounting and Financial Disclosures

None
 
Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

The Company’s Chief Executive Officer/Chief Financial Officer has evaluated the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of December 31, 2009. Based upon such evaluation, the Chief Executive Officer/ Chief Financial Officer has concluded that, as of December 31, 2009, the Company’s disclosure controls and procedures were not effective. This conclusion by the Company’s Chief Executive Officer/ Chief Financial Officer does not relate to reporting periods after December 31, 2009.

Management’s Report on Internal Control Over Financial Reporting

Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness of our internal control over financial reporting as of December 31, 2009 based on the framework stated by the Committee of Sponsoring Organizations of the Treadway Commission. Furthermore, due to our financial situation, we will be implementing further internal controls as we become operative so as to fully comply with the standards set by the Committee of Sponsoring Organizations of the Treadway Commission.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act. Our internal control system was designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes, in accordance with generally accepted accounting principles. Because of inherent limitations, a system of internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate due to change in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Based on its evaluation as of December 31, 2009, our management concluded that our internal controls over financial reporting were not effective as of December 31, 2009. A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

The material weakness relates to the following:

1.  Accounting and Finance Personnel Weaknesses – Our current accounting staff is relatively small and we do not have the required infrastructure of meeting the higher demands of being a U.S. public company. This material weakness also relates to a lack of personnel with expertise in preparing financial statements in accordance with U.S. GAAP, in addition to the small size of the staff.

2.  Lack of Internal Audit Function – We lack sufficient resources to perform the internal audit function.

In order to mitigate these material weaknesses to the fullest extent possible, all work of the CFO is reviewed by the CEO. All unexpected results are investigated. At any time, if it appears that any control can be implemented to continue to mitigate such weaknesses, it will be immediately implemented. The Company is in the process of complying with SOX 404 during 2009 and will be implementing additional internal controls over accounting and financial reporting.

This annual report does not include an attestation report of the Company s registered public accounting firm regarding internal control over financial reporting. Management s report was not subject to attestation by our registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this Annual Report on Form 10-K/A.

 
19

 

Changes in Internal Control Over Financial Reporting

No change in the Company’s internal control over financial reporting occurred during the quarter ended December 31, 2009, that materially affected, or is reasonably likely to materially affect, the Company s internal control over financial reporting.
 
Item 9B. Other Information

None.

PART III
 
Item 10. Directors, Executive Officers, Promoters, Control Persons and Corporate Governance; Compliance with Section 16(a) of the Exchange Act

Directors and Officers

The board of directors elects our executive officers annually.  A majority vote of the directors who are in office is required to fill vacancies.  Each director shall be elected for the term of one year, and until his successor is elected and qualified, or until his earlier resignation or removal. Our director and executive officer is as follows:

Name
 
Age
 
Position
Jianfeng Ding
 
52
 
Chairman of the Board, President, and CEO
Yaru Huang
 
41
 
Chief Financial Officer and Chief Accounting Officer
Xiaoyong Fu
 
47
 
Director
Ying Zhong
 
37
 
Chief Representative, Director

Ding, Jianfeng.  Jianfeng Ding joined us in December 19, 2006 Chairman of Board of Directors, Chief Executive Officer.  From September 1998 to December 2006, he was President of Flurida Industries (Hong Kong) Co., Ltd., a Hong Kong corporation doing business of distribution of appliance parts.  In 1981, he graduated from Hang Zhou Electronic Technical University majoring in mechanical engineering.  From 1985-1989, he studied at Xi’an Electronic Science University on Application of Computer Science.

Huang, Yaru.  Yaru Huang joined us in December 19, 2006 as Chief Financial Officer and Chief Accounting Officer.  From September 1998 to December 2006, she was vice-president of Flurida Industries (Hong Kong) Co., Ltd., a Hong Kong corporation doing business of distribution of appliance parts.  In June 2002, she received a Master of Business Administration Degree at Keller Graduate School of Management, from DeVry University.  In September 1990, she received a degree of Bachelor of Science from Lnzhou Enginerring Institute of Survey and Design, Railway Ministry in Lanzhou.  In September 1989, she graduated from Lanzhou Engineering Institute of Survey and Design Academy of Chinese Railway Ministry.
 
 Xiaoyong Fu.  He has been a director since our inception in December 2006.  From 04/1997 to 06/2004, he was Senior Design Engineer, Maytag Corporation, Appliance Manufacturer.  From 07/2004 to 10/2005, he was Manager of Technology, Jacuzzi Whirlpool Bath, Bath Products.  From 11/2005 to 09/2007, he was Senior Design Engineer, Electrolux Major Appliance, Appliance Manufacturer.  From 09/2007 to date, he has been Senior Engineer, GE – Energy, Gas Turbines.  In 07/1984, he received a Bachelor of Mechanical Engineering, Tsinghua University.  In 10/1987, he received a Master of Nuclear Engineering, China Institute of Atomic.  In 05/1997, he received a Ph.D. of Mechanical Engineering, Purdue University.

Ying Zhong joined us in Oct/2007.  From Jan/2004 to Sep/2007, she was Vice President, New Business Development of Flurida Industries (Hong Kong) Ltd., which manufactures and distributes household appliance components.  From Feb/2003 to Dec/2003, she was Manager, Chicago Office of Flurida Industries (Hong Kong) Ltd., which manufactures and distributes household appliance components. From Sep/1995 to Aug/2001, she was Operational Assistant Manager of Young’s Engineering Shanghai Office, which provides Mechanical and Electrical Engineering service to construction industry.  In Sep/2001, she received a Master Degree of Business Administration from University of Illinois at Chicago.  In July/1993, she received a Bachelor Degree of Law from Hua Qiao University.

Family Relationships

Jianfeng Ding and Yaru Huang are husband and wife.

 
20

 

Legal Proceedings

No officer, director, promoter or significant employee has been involved in the last five years in any of the following:

 
¨
Any bankruptcy petition filed by or against any business of which such person was a general partner or executive officer either at the time of the bankruptcy or within two years prior to that time;

 
¨
Any conviction in a criminal proceeding or being subject to a pending criminal proceeding (excluding traffic violations and other minor offenses);

 
¨
Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of competent jurisdiction, permanently or temporarily enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities; and

 
¨
Being found by a court of competent jurisdiction (in a civil action), the Commission or the Commodity Futures Trading Commission to have violated a federal or state securities or commodities law, and the judgment has not been reversed, suspended, or vacated.

Code of Ethics

We do not currently have a Code of Ethics applicable to our principal executive, financial or accounting officer.

Compliance with Section 16(a) of the Exchange Act
 
Compliance is not required.
 
Item 11. Executive Compensation

Summary Compensation Table

The table below summarizes all compensation awarded to, earned by, or paid to our Principal Executive Officer, our two most highly compensated executive officers other than our PEO who occupied such position at the end of our latest fiscal year and up to two additional executive officers who would have been included in the table below except for the fact that they were not executive officers at the end of our latest fiscal year, by us, or by any third party where the purpose of a transaction was to furnish compensation, for all services rendered in all capacities to us or our subsidiary for the latest two fiscal years ended December 31, 2009, and December 31, 2008.
   
Name
 
Title
 
Year
 
Salary
   
Bonus
   
Stock
awards
   
Option
awards
   
Non equity
incentive plan
compensation
   
Non
qualified
deferred
compensation
   
All other
compensation
   
Total
 
Jianfeng Ding
 
Chairman CEO
 
2008
   
0
     
0
     
0
     
0
     
0
     
0
     
0
     
0
 
       
2009
   
150,000
     
0
     
0
     
0
     
0
     
0
     
0
     
0
 
Yaru Huang
 
CFO
 
2008
   
0
     
0
     
0
     
0
     
0
     
0
     
0
     
0
 
       
2009
   
60,000
     
0
     
0
     
0
     
0
     
0
     
0
     
0
 
Ying Zhong
 
Director
 
2008
2009
   
0
40,000
                                                         

 
21

 

Compensation Agreements

We have the following oral compensation agreements:

Mr. Jianfeng Ding, Chairman, CEO, and President:

Main responsibilities of the position are as follows:

 
1.
Board Administration and Support — Supports operations and administration of Board by advising and informing Board members, interfacing between Board and staff, and supporting Board's evaluation of chief executive.

 
2.
Program, Product and Service Delivery — Oversees design, marketing, promotion, delivery and quality of programs, products and services

 
3.
Financial, Tax, Risk and Facilities Management — Recommends investment activities, issue quarterly and annual reports for Board approval and prudently manages organization's resources within those guidelines according to current laws and regulations

 
4.
Human Resource Management — Effectively manages the human resources of the organization according to authorized personnel policies and procedures that fully conform to current laws and regulations

 
5.
Community and Public Relations — Assures the organization and its mission, programs, products and services are consistently presented in strong, positive image to relevant shareholders.

 
6.
Raising capitals – Oversees capital raising planning and implementation, including identifying resource requirements, establishing strategies to approach investors, submitting proposals and administrating capital raise records and documentation.

Employment period is three years from December 2006 to December 2009.  Annual salary will be $150,000 starting to pay at January, 2009.  The salaries accrued from December 2006 and December 2008 will be waived by Jianfeng Ding.  Accordingly, there is no salary payment for Jianfeng Ding in 2006, 2007, and 2008, respectively.

 
22

 

Ms. Yaru Huang, CFO

Main responsibilities of the position are as follows:

1.              Oversee the corporate finance in accordance with the General Accepted Accounting Principles of the United States, General Principles of Corporate Finance, and Financial Management System developed by the company.

2.              Implement the directives of the CEO and the Board of Directors in the following financial areas: allocation of all the corporate capital and management of the company’s capital or other investments.

3.              Develop corporate financial plan, control auditing analysis, raise capitals legally, make use of the corporate assets effectively, and make every efforts to increase the corporate economic benefits.

4.              Supervise and manage the finances of the subsidiaries of the company. Employment period is three years from December 2006 to December 2009. Annual salary will be $60,000 starting to pay at January, 2009.

The salaries accrued from December 2006 to December 2008 will be waived by Yaru Huang. Accordingly, there is no salary payment for Yaru Huang in 2006, 2007, and 2008, respectively.

Employment period is three years from December 2006 to December 2009.  Annual salary will be $60,000 starting to pay at January, 2009.

Ying Zhong, Chief Representative of Flurida Group Qingdao Office

Main responsibilities of the position are as follows:

Makes all day-to-day administrative decisions regarding human resource, financing, marketing, manufacturing, and customer services in the Flurida Quingdao office.  Regularly report to the CEO about these decisions.

She does not provide any input to the CEO concerning any other management or supervision issues with respect to any other operations of the company.

Employment period is three years from October 2007 to October 2010.  Annual salary will be $60,000 starting to pay at April, 2009.  The salaries accrued from October 2007 to December 2008 will be waived by Ying Zhong.  Accordingly, there is no salary payment for Ying Zhong in 2007, and 2008, respectively.

Gian Franco Barbieri, General Manager of Flurida Europe.

Main responsibilities of the position are as follows:

 
1.
In charge of general management of Europe Flurida SRS.

 
23

 

 
2.
Report to CEO about decisions regarding human resource, financing, marketing, manufacturing, and customer services.  Take charge of the allocation of all the resources in Europe Flurida.

Employment period is three years from January 2008 to December 2010. The annual salaries of $20,000 for the above employees will be paid starting on January 1, 2010.
 
Compensation Committee Interlocks and Insider Participation

We have no compensation committee (or other board committee performing equivalent functions).   The board of directors will make decisions for the compensation of executive officers.  Currently, there are four directors: Jianfeng Ding, Yaru Huang, Ying Zhong are also executive officers and shareholders with more than 5% of issued common stocks; Director Xiayong Fu is an outside director without participating the Company’s daily management function.  Xiaoyong Fu is not compensated for serving as director.  During the last completed fiscal year, there are no other individuals participated in deliberations of the registrant’s board of directors concerning executive officer compensation.
 
Outstanding Equity Awards At Fiscal Year-End

OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END December 31, 2009

Name 
 
Number of
Securities
Underlying
Unexercised
Options
(#)
Exercisable
   
Number of
Securities
Underlying
Unexercised
Options
(#)
Unexercisable
   
Equity
Incentive
Plan
Awards:
Number of
Securities
Underlying
Unexercised
Unearned
Options (#)
   
Option
Exercise
Price
($)
   
Option
Expiration
Date
   
Number of
Shares or
Units of
Stock That
Have Not
Vested
(#)
   
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested
($)
   
Equity
Incentive
Plan
Awards:
Number
Of
Unearned
Shares,
Units or
Other
Rights That
Have Not
Vested
(#)
   
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares,
Units or
Other
Rights
That Have
Not
Vested
($)
 
Jianfeng Ding
    0       0       0       0       0       0       0     0       0  
Yaru Huang
    0       0       0       0       0       0       0     0       0  
                                                                         
Ying Zhong
    0       0       0       0       0       0       0     0       0  

 
24

 

No option awards, unexercised options, unvested stock awards or equity incentive plan awards were granted to our named executive officers during fiscal year ended at December 31, 2009.

Director Compensation

The following table summarizes the compensation paid to Flurida Group’ directors for the fiscal year ended December 31, 2009:
 
Name
 
Fees
Earned
or
Paid in
Cash
   
Stock
Awards
($)
   
Option
Awards
($)
   
Non-Equity
Incentive Plan
Compensation
($)
   
All Other
Compensation
($)
   
Total
($)
 
Jianfeng Ding
   
 0
     
0
     
0
     
0
     
0
     
0
 
Yaru Huang
   
0
     
0
     
0
     
0
     
0
     
0
 
Xiaoyong Fu
   
0
     
0
     
0
     
0
     
0
     
0
 
Ying Zhong
   
 0
     
0
     
0
     
0
     
0
     
0
 

No director was paid in any form of compensation as of December 31, 2009.

Section 16(a) Beneficial Ownership Reporting Compliance

Our officers, directors and 10% shareholders are not subject to the reporting requirements of Section 16 (a).

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following tables set forth the ownership, as of the date of this prospectus, of our common stock by each person known by us to be the beneficial owner of more than 5% of our outstanding common stock, our directors, and our executive officers and directors as a group.  To the best of our knowledge, the persons named have sole voting and investment power with respect to such shares, except as otherwise noted.  There are not any pending or anticipated arrangements that may cause a change in control.

The information presented below regarding beneficial ownership of our voting securities has been presented in accordance with the rules of the Securities and Exchange Commission and is not necessarily indicative of ownership for any other purpose. Under these rules, a person is deemed to be a "beneficial owner" of a security if that person has or shares the power to vote or direct the voting of the security or the power to dispose or direct the disposition of the security. A person is deemed to own beneficially any security as to which such person has the right to acquire sole or shared voting or investment power within 60 days through the conversion or exercise of any convertible security, warrant, option or other right. More than one person may be deemed to be a beneficial owner of the same securities. The percentage of beneficial ownership by any person as of a particular date is calculated by dividing the number of shares beneficially owned by such person, which includes the number of shares as to which such person has the right to acquire voting or investment power within 60 days, by the sum of the number of shares outstanding as of such date plus the number of shares as to which such person has the right to acquire voting or investment power within 60 days. Consequently, the denominator used for calculating such percentage may be different for each beneficial owner. Except as otherwise indicated below and under applicable community property laws, we believe that the beneficial owners of our common stock listed below have sole voting and investment power with respect to the shares shown.  The business address of the shareholders is 800 West Fifth Avenue, Suite 210B, Naperville, IL 60563.

 
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Name
 
Number of
Shares of
Common stock
   
Percentage
 
             
Jianfeng Ding [1]
   
13,498,880
     
34.62
%
Yaru Huang [1]
   
13,498,880
     
34.62
%
Ying Zhong
   
2,000,000
     
5.13
%
Xiaoyong Fu
   
750,000
     
1.92
%
All executive officers and directors as a group [4 persons]
   
32,129,760
     
77.26
%

[1] Owned 13,498,880 shares in the name of Jianfeng Ding and 13,498,880 shares in the name of Yaru Huang, husband and wife.

This table is based upon information derived from our stock records. Unless otherwise indicated in the footnotes to this table and subject to community property laws where applicable, each of the shareholders named in this table has sole or shared voting and investment power with respect to the shares indicated as beneficially owned. Except as set forth above, applicable percentages are based upon 38,990,827 shares of common stock outstanding as of March 22, 2010.

Securities authorized for issuance under equity compensation plans

5,000,000 shares of Common Stock

 
26

 

Item 13. Certain Relationships and Related Transactions, and Director Independence.

On August 20, 2007, two founders of the Company, Jianfeng Ding and Yaru Huang purchased 25,997,760 shares at $0.001 per share.  The proceeds of $25,997.76 were received from Jianfeng Ding and Yaru Huang.

On October 29, 2007, Director of the company, Xiaoyong Fu, advanced the amount of $ 50,000 for an option of converting the loan to 500,000 shares at $ 0.10 per share, and on December 31, 2007, he loaned additional $ 25,000 for an option of converting the loan to 250,000 shares at $ 0.1 per share. On December 4, 2007, Chief Representative, Ying Zhong advanced $ 200,000 for an option to purchase 2,000,000 shares at $ 0.1 per share. Moreover, on December 21, 2007, Jianfeng Ding and Yaru Huang advanced $ 300,000 to purchase additional 3,000,000 shares at $ 0.1 per share.  All the above loan amount of $ 575,000 was converted to 5,750,000 common shares on April 15, 2008.

The products we 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.  Zhong Nan Fu Rui is the exclusive supplier of the products we sell. 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. Although the distribution agreement requires that the purchase price we will pay for these products will be comparable to what we would have paid a non-related party in arm’s-length transactions, Mr. Ding may face a conflict in calculating the price the products are sold to us and the determining amount of products we purchase.  However, because Mr. Ding has a fiduciary duty to us and our shareholders, he has indicated that he will assure strict adherence to this provision of the agreement and will not require us to purchase a quantity of products in excess of that which we can reasonably afford or reasonably expect to sell in within two to three months of our purchase of the products.

 
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In fiscal year 2006, we sold no products to and purchased no products from Zhong Nan Fu Rui.  In fiscal year 2007, we sold no products to and purchased no products from Zhong Nan Fu Rui.  To date in fiscal year 2008, we sold $34,670.43 in products to and purchased $747,260.64 in products from Zhong Nan Fu Rui.  The products that we sold were icemaker parts made in the United States, such as thermostats, switches, motors, and coating materials. The products that we purchased were icemakers, fan motors, crush motors, and solenoids for ice water system.

During the six months ended June 30, 2008, the executive and non-executive officers and directors have advanced the Company for the amount of $ 609,200 (Table II).  All the loans are converted to common shares for total common shares of 6,092,000 on April 15, 2008.

Name
 
Title
 
Loans
Amount
(12/31/2007)
   
Loans
Convert to
Common
Share
(4/15/2008)
   
% of
Common
Share
 
Jianfeng Ding
 
CEO
 
$
300,000.00
   
$
300,000.00
     
74.37
%
Yaru Huang
 
CFO
                       
Ying Zhong
 
Chief Representative, China Office
 
$
200,000.00
   
$
200,000.00
     
5.13
%
Fenglan  Li
 
Financial Manager
 
$
15,000.00
   
$
15,000.00
     
0.42
%
Fuling  Li
 
Operation Manager
 
$
10,000.00
   
$
10,000.00
     
0.29
%
Xiaoyong Fu
 
Board Member
 
$
75,000.00
   
$
75,000.00
     
1.92
%
Gian Franco Barbieri
 
Manager Director, Flurida Europe Company
 
$
9,200.00
   
$
9,200.00
     
0.26
%
Total
     
$
609,200.00
   
$
609,200.00
     
82.39
%

Therefore, among the total loan amount of $1,164,906.70 converted to common shares at price of $0.10 per share on April 15, 2008, for the total shares of 11,649,067 shares, the total of $609,200 or 6,092,000 shares are from executive and non-executive officers, directors, or shareholders of more than 5% of common shares.

We rent the following property from Mr. Ding:  Flurida Group Qingdao Office.  The rent is approximately $250 per month.  We believe the rent paid for this space was comparable to what we would have paid a non-related party in arm’s-length transactions.

Except as set forth above, we have not entered into any material transactions with any director, executive officer, and promoter, beneficial owner of five percent or more of our common stock, or family members of such persons.

Director Independence

Our board of directors has determined that we do not have a board member that qualifies as “independent” as the term is used in Item 7(d)(3)(iv)(B) of Schedule 14A under the Securities Exchange Act of 1934, as amended, and as defined by Rule 4200(a)(15) of the NASDAQ Marketplace Rules.

 
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Item 14. Principal Accountant Fees and Services

Enterprise CPA was our independent auditors for the fiscal years ended December 31, 2009 and 2008.

The following table shows the fees paid or accrued by us for the audit and other services provided by our auditor for fiscal 2008 and 2009.
 
   
2008
   
2009
 
             
Audit Fees
  $ 24,000       25,000  
Audit-Related Fees
               
Tax Fees
               
All Other Fees
               
Total
  $ 24,000       25,000  

As defined by the SEC, (i) “audit fees” are fees for professional services rendered by our principal accountant for the audit of our annual financial statements and review of financial statements included in our Form 10-Q, or for services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements for those fiscal years; (ii) “audit-related fees” are fees for assurance and related services by our principal accountant that are reasonably related to the performance of the audit or review of our financial statements and are not reported under “audit fees;” (iii) “tax fees” are fees for professional services rendered by our principal accountant for tax compliance, tax advice, and tax planning; and (iv) “all other fees” are fees for products and services provided by our principal accountant, other than the services reported under “audit fees,” “audit-related fees,” and “tax fees.”

Under applicable SEC rules, the Audit Committee is required to pre-approve the audit and non-audit services performed by the independent auditors in order to ensure that they do not impair the auditors’ independence. The SEC’s rules specify the types of non-audit services that an independent auditor may not provide to its audit client and establish the Audit Committee’s responsibility for administration of the engagement of the independent auditors. Until such time as we have an Audit Committee in place, the Board of Directors will pre-approve the audit and non-audit services performed by the independent auditors.

Consistent with the SEC’s rules, the Audit Committee Charter requires that the Audit Committee review and pre-approve all audit services and permitted non-audit services provided by the independent auditors to us or any of our subsidiaries. The Audit Committee may delegate pre-approval authority to a member of the Audit Committee and if it does, the decisions of that member must be presented to the full Audit Committee at its next scheduled meeting.
 
Item 15. 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

 
29

 

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly 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
 
12/02/2010
 
/s/ Jianfeng Ding

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed 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
 
12/02/2010
/s/ Yaru Hang
 
Yaru Hang
 
Principal Financial Officer and Principal Accounting Officer
 
12/02/2010
/s/ Xiaoyong Fu
 
Xiaoyong Fu
 
Director
 
12/02/2010
/s/ Ying Zhong
 
Ying Zhong
 
Director
 
12/02/2010

 
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