FLURIDA GROUP INC - FORM 10-K

Attached files

file	filename
EX-32.2 - CERTIFICATION - FLURIDA GROUP INC	flug_ex322.htm
EX-32.1 - CERTIFICATION - FLURIDA GROUP INC	flug_ex321.htm
EX-31.2 - CERTIFICATION - FLURIDA GROUP INC	flug_ex312.htm
EX-31.1 - CERTIFICATION - FLURIDA GROUP INC	flug_ex311.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

(Mark One)

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

	For the fiscal year ended December 31, 2016

o	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.)

11220 Rojas Suite C-3

El Paso Texas

79935

(Address of principal executive offices)

(Zip Code)

Issuer’s telephone number: 800 433 9938

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

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

Common stock, par value $0. 001 per share

(Title of class)

_____________________

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

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 o No x

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 x No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No o

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. o

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	o	Accelerated filer	o
Non-accelerated filer	o	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 o 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, 2016 was approximately $6,007,840 (based on 10,013,067 shares of common stock outstanding held by non-affiliates on such date and $0.60 per share. 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 June 30, 2016 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 38,387,227 shares as of December 31, 2016.

TABLE OF CONTENTS

PART I

Item 1.	Description of Business	4
Item 2.	Description of Property	7
Item 3.	Legal Proceedings	7
Item 4.	Mine Safety Disclosures	7
Item 5.	Market for Common Equity and Related Stockholder Matters and Small Business Issuer Purchases of Equity Securities	8
Item 6.	Selected Consolidated Financial Data	9
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operation	9
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	15
Item 8.	Financial Statements	F-1
Item 9.	Changes In and Disagreements With Accountants on Accounting and Financial Disclosures	16
Item 9A.	Controls and Procedures	16
Item 9B.	Other Information	17
Item 10.	Directors, Executive Officers, Promoters, Control Persons and Corporate Governance; Compliance with Section 16(a) of the Exchange Act	18
Item 11.	Executive Compensation	20
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	23
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	24
Item 14.	Principal Accountant Fees and Services	25
Item 15.	Exhibits	26

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND INFORMATION

This Annual Report on Form 10-K, 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 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.

Table of Contents

PART I

Item 1. Business

Organization

Flurida Group, Inc. is a Nevada corporation formed on December 19, 2006, with registered address at 1955 Baring Blvd, Sparks, NV 89434. Flurida Group, Inc. transacts its business in the U.S. as Flurida Group USA, Inc. located at 11220 Rojas Suite C-3 EI Paso Texas 79935. Our Telephone number is 800 433 9938.

Flurida Group leases a warehouse and research center at 24412 S Main Street, Carson, CA 90745. Flurida Group also has customer service center located at Naperville IL.

Flurida Group formed a U.S. manufacturing subsidiary, Flurida Appliance, Inc, a Nevada corporation, in December 2015, and has its operating office located at 11220 Rojas Suite C-3 EI Paso Texas 79935

Business

The Company's main business includes sourcing, distribution and marketing of appliance components and assemblies in Asia, Europe, North and South America. Those products include icemakers; motors; ice and water dispensing systems; high efficiency motors; crushed motors; commercial vegetable dryer; control modules and established ourselves as a viable supplier of complex cables and harness for the appliance industry. We launched our own brand of finished products called the ice water dispenser system and have started to sell in the U.S Market. We have completed the first phase of lab testing for our condenser motor; the sale of our twist flex icemaker has commenced; the oven circulation fan is in the field test phase and wire harnesses for ovens are in the final approval process. Our focus is to provide our customers with innovative products and solutions thus securing our position as a valued supplier.

These products are manufactured in China by Chuzhou Fuda Mechanical & Electronics Co., Ltd ("ChuZhou Fuda"). Chuzhou Fuda Mechanical & Electronics Co., Ltd., which is related and managed by shareholder and director Jianfeng Ding, is an appliance components and sub-assemblies manufacturer.

We sell the following main types of appliance parts and finished products:

	·	High-efficiency motor: Currently our largest selling product. The high-efficiency motor runs at 1/3 the wattage of a shaded pole motor thus making a more energy efficient product assisting our customers in meeting the US energy consumption standards for appliances.

	·	Automatic Refrigerator Build-in Icemaker and Electronic Icemaker: The automatic refrigerator build-in icemaker and Electronic 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.

	·	Wire harness: includes wires, connectors and terminals which electrically connects our products to the customers' products.

	·	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 with headquarters in Charlotte, NC. Flurida also supplies the motors and motor assemblies to Electrolux Europe facilities in Italy and Hungary.

	·	Ice Crush motor: Ice crush motor is the gear box motor to drive the auger and push the ice in the bucket to blades for ice crush purpose. The product is used for automatic ice crushing on built-in Ice Water Dispensing systems.

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	·	Module: Module is a dispensing module for refrigerator. It is a complete automatic ice making and dispensing system that can dispense cubed ice, crushed ice and water. Module is located in the door of a refrigerator; when press the water or ice paddles, the seal will open to dispensing water or ice cubes.

	·	Damper: A damper controls the rate of airflow from freezer into the refrigerator section. These dampers are being sold to users in China to build refrigerators.

	·	Commercial Vegetable dryer: Targeting the restaurant and hospitality industries, started mass production.

	·	Ice and Water Dispensers: Flurida Group awarded to its new, wholly-owned subsidiary Flurida Appliance, Inc. the right to sell Flurida Group designed appliances called Ice and Water Dispensers manufactured in China by Chuzhou Fuda Mechanical & Electronics Co., Ltd. Flurida Appliances has the right to sell these products throughout the whole world except China. Flurida Appliance started to sell at U.S market, then at some undetermined date in the future possibly in Canada, South American, then Europe. We work together with a water machine company called Cristal Mountain Inc to sell our brand ice water dispenser in US and Canada market. We signed an exclusive sell agent agreement with Crystal Mountain Inc in March 2017

We are an "emerging growth company" ("EGC") that is exempt from certain financial disclosure and governance requirements for up to five years as defined in the Jumpstart Our Business Startups Act ("the JOBS Act"), that eases restrictions on the sale of securities; and increases the number of shareholders a company must have before becoming subject to the U.S. Securities and Exchange Commission's (SEC's) reporting and disclosure rules (See "Emerging Growth Companies" section above). We have elected to use the extended transition period for complying with new or revised accounting standards under Section 102(b)(2) of the Jobs Act, that allows us to delay the adoption of new or revised accounting standards that have different effective dates for public and private companies until those standards apply to private companies. As a result of this election, our financial statements may not be comparable to companies that comply with public company effective dates.

For the fiscal year ended December 31, 2016, the Company had total net revenue of $33,379,726. For the fiscal year ended December 31, 2015, the Company had total net revenue of $64,575,450.

Our Supplier

The Company’s purchase is primarily from supplier, Chuzhou Fuda Mechanical & Electronics Co., Ltd (“ChuZhouFuDa”), which is related and managed by shareholder and director Jianfeng Ding.

Chuzhou Fuda, 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 Chuzhou Fuda, Flurida Group will record the actual costs paid to Chuzhou Fuda as the costs for inventory of Flurida Group, Inc. There is no any relationship for Chuzhou Fuda’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 Chuzhou Fuda, 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.

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Flurida Group also purchased a few products from suppliers, Qingdao Fubida Electronics Co., Ltd. It is also related and managed by shareholder and director Jianfeng Ding, and established in 2003 specializing in home appliance control components and subassemblies manufacturing, and located in Qingdao City, Shandong Province, China. The plant space is around 70,000 sq ft. 14 units injection molding machine up to 600 metric tons.

Customers

We sell our product to refrigerator manufacturers such as Electrolux North America, Electrolux Australia, Haier America Research and Development Co, and GE. We also sold products to our suppliers Chu Zhou Fu Da.

Markets

We sell our products in United States, Mexico, China, Europe, Australia, and South America.

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 Nidec Servo Corp (formal Japan Servo Co., Ltd.) and Nidec Sankyo Corp. Nidec Servo and Nidec Sankyo are both headquartered in Japan. Nidec Servo produces the aluminum tray icemaker. Nidec Sankyo produces twisted icemaker.

Our major competitors in motors for refrigerators or freezers are some smaller Chinese manufactures.

We compete with these and other suppliers based upon:

	(1)	Our larger and more focused design group
	(2)	We offer a wider range of products.
	(3)	We closely follow the world of largest appliance manufacture’s requests.
	(4)	Our products are cost effective, but with highest quality control standard, all passed the ISO 9000 and UL; VDE certification.

Research and Development

We have incurred research and development expenses in the total of $40,011 and $279,769 for year 2016 and 2015 respectively.

Our Intellectual Property

We have no intellectual property.

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Our Employees

We have the following number of full time employees:

Clerical	–	0
Operations	–	1
Administrative	–	1
Management	–	2
Engineers	–	4
Sales	–	2

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, yearly 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

Flurida Group USA, Inc.

Flurida Group USA, Research and Development Center and Warehouse Location

	·	Address: 24412 S Main ST, Carson, CA 90745
	·	Name of Land Lord: Suf Management Inc

	·	Term of Lease: September 1, 2015 to August 31, 2017
	·	Monthly Rent: $4600

	·	Square Feet: Approximately 5,168 square feet
	·	Adequate for current needs: Yes

Flurida Group USA and Flurida Appliances Inc. Operating Office and Warehouse Location

	·	Address: 11220 Rojas Suite C-3 El Paso Texas 79935
	·	Name of Land Lord: Francis Properties, Ltd

	·	Term of Lease: December 2, 2015 to November 30, 2016
		Monthly Rent: $1,750
	·	Square Feet: Approximately 2400 square feet

Adequate for current needs: Yes

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. Mine Safety Disclosures

None

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PART II

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

Trading History

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

Bid Information*

Financial Year Ended	High Bid		Low Bid
December 31, 2016	$	0.45	$	0.45
September 30, 2016	$	0.43	$	0.43
June 30, 2016	$	0.60	$	0.60
March 31, 2016	$	0.35	$	0.35
December 31, 2015	$	0.50	$	0.50
September 30, 2015	$	0.27	$	0.27
June 30, 2015	$	0.27	$	0.27
March 31, 2015	$	0.23	$	0.23

____________

* The quotations 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.

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.

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Securities Authorized for Issuance Under Equity Compensation Plans

At December 31, 2016, 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

N/A

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

The following discussion of our financial condition and results of operations should be read in conjunction with our financial statements and the related notes, and other financial information included in this Form 10-K.

Our Management’s Discussion and Analysis contains not only statements that are historical facts, but also statements that are forward-looking. Forward-looking statements are, by their very nature, uncertain and risky. These risks and uncertainties include international, national, and local general economic and market conditions; our ability to sustain, manage, or forecast growth; our ability to successfully make and integrate acquisitions; new product development and introduction; existing government regulations and changes in, or the failure to comply with, government regulations; adverse publicity; competition; the loss of significant customers or suppliers; fluctuations and difficulty in forecasting operating results; change in business strategy or development plans; business disruptions; the ability to attract and retain qualified personnel; the ability to protect technology; the risk of foreign currency exchange rate; and other risks that might be detailed from time to time in our filings with the Securities and Exchange Commission.

Although the forward-looking statements in this Report reflect the good faith judgment of our management, such statements can only be based on facts and factors currently known by them. Consequently, and because forward-looking statements are inherently subject to risks and uncertainties, the actual results and outcomes may differ materially from the results and outcomes discussed in the forward-looking statements. You are urged to carefully review and consider the various disclosures made by us in this report as we attempt to advise interested parties of the risks and factors that may affect our business, financial condition, and results of operations and prospects.

Overview

Table of Contents

We sell the following main types of appliance parts and finished products:

	·	High-efficiency motor: Currently our largest selling product, the high-efficiency motor runs at 1/3 the wattage of a shaded pole motor thus making a more energy efficient product assisting our customers in meeting the US energy consumption standards for appliances.

	·	Automatic Refrigerator Build-in Icemaker and Electronic Icemaker: The automatic refrigerator build-in icemaker and Electronic 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.

	·	Wire harness: includes wires, connectors and terminals which electrically connects our products to the customers' products.

	·	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 with headquarters in Charlotte, NC. Flurida also supplies the motors and motor assemblies to Electrolux Europe facilities in Italy and Hungary.

	·	Ice Crush motor: Ice crush motor is the gear box motor to drive the auger and push the ice in the bucket to blades for ice crush purpose. The product is used for automatic ice crushing on built-in Ice Water Dispensing systems.

	·	Module: Module is a dispensing module for refrigerator. It is a complete automatic ice making and dispensing system that can dispense cubed ice, crushed ice and water. Module is located in the door of a refrigerator; when press the water or ice paddles, the seal will open to dispensing water or ice cubes.

	·	Damper: A damper controls the rate of airflow from freezer into the refrigerator section. These dampers are being sold to users in China to build refrigerators.

	·	Commercial Vegetable dryer: Targeting the restaurant and hospitality industries, started mass production.

	·	Ice and Water Dispensers: Flurida Group awarded to its new, wholly-owned subsidiary Flurida Appliance, Inc. the right to sell Flurida Group designed appliances called Ice and Water Dispensers manufactured in China by Chuzhou Fuda Mechanical & Electronics Co., Ltd. Flurida Appliances has the right to sell these products throughout the whole world except China. Flurida Appliance started to sell at U.S market, then at some undetermined date in the future possibly in Canada, South American, then Europe.

For the fiscal year ended December 31, 2016, the Company had total net revenue of $ 33,379,726. For the fiscal year ended December 31, 2015, the Company had total net revenue of $ 64,575,450.

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Results of Operations

For the fiscal year ended December 31, 2016 vs. December 31, 2015.

Revenue

For the fiscal year ended December 31, 2016, the Company had net total revenue of $ 38,379,726 to the Company’s Europe, Australia, North and South America customers, and Asia, which was decreased 41% more than the fiscal year ended December 31, 2015 total net revenue of $ 64,575,450.

There are two primary reasons that caused the sales decrease:

	1.	As Euro currency exchange rate significantly increased, our products price became less competitive with the manufactures in European countries. So we gradually lost our share in European market.

	2.	Our main customer in North America has readjusted their orders for suppliers. They redistributed the market share to other suppliers.

For the period January 1 to December 31, 2016, the Company sold icemakers, high efficiency motor, module assembly, wire harness, motors, thermostats, ice and water dispenser, vegetable dryer, and other related refrigerator appliance to North America, which included Electrolux North America, General Electric Company, Exact Replacement Parts, HKF Industries Inc, and others America corporation, for total sales of $ 35,558,147. The icemakers, assembly, motors, wire harness, vegetable dryer, ice and water dispenser, and related parts were manufactured and supplied by ChuZhou FuDa Mechanical and Electronics Co., Ltd; all the icemakers, motors, assembly, wire harness, vegetable dryer, ice and water dispenser, and related parts were shipped out at FOB shipping point Nanjing, China.

For the fiscal year ended December 31, 2016, the Company sold components and appliance parts to Electrolux –Australia for $ 207,084. The components were manufactured and supplied by Chu Zhou Fu Da Mechanical and Electronics; all the icemakers and components were shipped out at FOB shipping point Nanjing, China.

The Company sold Motors and other parts to South America, Which included Electrolux – Do Brasil and CTI S.A , for total of $ 494,933. The motors were manufactured and supplied by ChuZhou FuDa Mechanical and Electronics Co., Ltd, and were shipped out at FOB shipping point Nanjing, China.

For the period January 1 to December 31, 2016, the Company sold motors, DAC Boxes, Deflector, and related refrigerator appliance to Europe, which included Electrolux Hungry, Electrolux Italy, and Gotene Plast AB, for total sales of $351,389. The DAC Boxes, Deflector, Motors, and other related parts were manufactured and supplied by Chu Zhou Fuda; all the DAC Boxes magnets, and motors were shipped out at FOB shipping point Nanjing, China.

The Company also sold icemakers and related parts to Asia for $ 212,572. The icemakers and parts were manufactured and supplied by Chu Zhou Fuda; all the icemakers were shipped out at FOB shipping point Nanjing, China.

For the period of January 1 to December 31, 2016, the Company sold thermostats and other related key parts for icemakers and motors, and sold dampers to ChuZhouFuDa. Flurida Group purchased some of the parts from Wako Electronics, Inc., an US Company located at Louisville, KY 40299. Flurida Group also purchased dampers from ITW Motion, an US company located in Illinois, and then sold to ChuZhouFuDa. Flurida Group, Inc. adds averaged 5% - 10% margin based on the cost of purchase, then sold to them, so, $ 1,607,485 were sold and invoiced to ChuZhouFuDa for the fiscal year ended December 31, 2016.

In summary, for the period of January 1 to December 31, 2016, the Company incurred the total gross sales of $ 38,431,610. And the Company had sales return and allowance and sales discount of $ 51,884, so, a total of $ 38,379,726 net sales were recorded.

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We are as of yet unable to predict the effect of the current economic situation in China will have upon our business.

In the fiscal year ended December 31, 2016 sales, more than 90% of total revenues were generated through Electrolux controlled subsidiaries in various countries. Electrolux Group operated its each subsidiary independently in each country, and all the sales orders and sales contracts were negotiated and signed independently. Accordingly, we believe that lack of one or a few subsidiaries of Electrolux sales order may have effect on our overall sales revenue, but the effects were slightly reduced in 2016 vs 2015. Because we signed separate long-term distribution agreements with various Electrolux subsidiaries, we believe the risk of loss the contracts with Electrolux is significantly reduced.

Cost of Revenue

Our Costs of Goods Sold, as we expected, will increased slightly due to increasing labor and raw materials costs. We anticipate this trend to continue and may adjust our unit price upward to reduce the impact of rising costs.

At the period ended December 31, 2015, the Company had ending inventory $ 222,195 that was majority purchased from ChuZhou FuDa. The Company purchased Icemakers, motors, high efficiency motor, wire harness, dac boxes, deflectors, icemaker dispenser, ice and water dispenser, and other related appliance parts from ChuZhou FuDa, at total cost of $ 28,447,981 for the fiscal year ended December 31, 2016.

To manufacture the related refrigerator appliance parts, Chu Zhou Fu Da needs key parts made in USA, which were purchased through Flurida Group, Inc. in USA. The costs of purchasing the parts were $ 1,436,165 in the period of January 1 to December 31, 2016.

The Company purchase module assembly and vegetable dryer from Fulu industries (HK), Ltd at a cost of $ 3,888,802 for the fiscal year ended December 31, 2016.

For the fiscal year ended December 31, 2016, the Company had total purchase of $ 33,772,948.

At the year ended December 31, 2016, the company had total ending inventory at a value $ 300,825.

For the period of January 1 to December 31, 2016, the company had freight and warehouse cost of $ 77,827, purchase related expense of 11,178, and $ 9,767 purchase return and discount.

Therefore, in the fiscal year ended December 31, 2016, the Company incurred a total cost of goods sold of $ 33,773,557 which was decreased 43% compared to the fiscal year ended December 31, 2015 cost of goods sold of $ 59,246,093. The decrease of cost of goods sold was due to the sales decrease, decreasing labor costs, and raw materials.

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, certification fees, 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.

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Expense

Our operation expenses consist of selling, general and administrative expenses, and research & development expenses, and depreciation expenses:

	Year Ended
	December 31, 2016		December 31, 2015
Total Expense
Administration Expense		8,380		7,762
Automobile Expense		8,643		5,143
Bad Debt Expense		-		320
Bank Service Charges		261,575		268,852
Business Operation Tax		523
Certification		53,321		93,131
Computer and Internet Expenses		4,563		14,456
Depreciation expense		24,169		33,594
Business Registration and Permits		532		1,080
Fuel charge		17,479		10,272
Gift and promotion		19,147		15,918
Industry Show		30,614		16,658.63
Insurance Expense		3,815		1,052.20
Meals and Entertainment		76,592		76,018.78
Office Supplies		26,790		7,386.15
Parking fee		1,590		572.60
Payroll Expense		989,647		728,071
Penalty and Fine Expenses		-		516.85
Postage and Shipping		14,098		19,114.06
Professional Fees		197,624		196,437
Rent Expense		70,929		69,672
Repair & Maintenance		18,878		4,915
Research & Development Expense		40,011		279,769
Service Cost		15,457		46,844
Telephone Expense		25,708		26,337
Travel Expense		268,126		400,254
Utilities		3,160		2,723
Wage		265
Total Expense		2,181,636		2,326,866

For maintaining and operating the expanding business, the Company expensed a total of $ 197,624 commission and consulting fee, and other professional fees. In order to increasing the sales in Europe and North America, the Company expensed $ 53,321 certification fees on the products we sold or exported in the fiscal year ended December 31, 2016. The Company had travel expenses of $ 268,126 and meals/entertainment of $76,592. We started to invest and develop our own brand ice and water dispenser system in 2015, so we spent a lot of R&D funds in 2015. In 2016, most of our jobs were for production and hiring sales personnel rather than R&D expenses.

The Company continued had equipment research and development with 2016 expenses of $ 40,011.

We expect selling, general, and administrative expenses to increase in future periods assuming the trend of increased sales continues.

Income Taxes

We are subject to income taxes in the U.S. and we incurred income tax expense of $ 980,110 and $ 901,615 for the fiscal year ended December 31, 2016 and 2015 respectively. As of December 31, 2016, the Company had income taxes payable of $ 546,667.

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Net Income (Loss)

For the reasons set forth above, we had a net income of $1,466,255 and $2,102,022 for fiscal year ended December 31, 2016 and 2015 respectively.

Commitments and Contingencies

The Company’s purchase is primarily from supplier, Chuzhou Fuda Mechanical & Electronics Co., Ltd (“ChuZhouFuDa”), which is related and managed by director Jianfeng Ding. Chuzhou Fuda is an appliance components and sub-assemblies manufacturer established on March 18, 2008. Chuzhou Fuda is located in Chuzhou City, Anhui Province, China. There was no written supply agreement signed between the Company and Chuzhou Fuda. However, Chuzhou Fuda committed to the Company for the quantity and quality of products the Company ordered.

On June 25, 2013, the Company signed a consignment inventory agreement with Electrolux Hungary S.p.A., which was effective in September 2013.

Foreign Currency Translation

The Company has determined the United States dollars to be its functional currency for Flurida Group USA and European Euro to be its functional currency in European business. Assets and liabilities were translated to U.S. dollars at the period-end exchange rate. Statement of operations amounts were translated to U.S. dollars using the average rate 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

	At December 31,		At December 31,
	2016		2015

Current Ratio		1.48		1.43
Cash	$	12,592,938	$	8,615,550
Working Capital	$	6,908,861	$	4,546,538
Total Assets	$	18,412,322	$	15,296,078
Total Liabilities	$	12,379,216	$	10,677,204

Total Equity	$	6,033,106	$	4,618,874

Total Debt/Equity		2.05		2.31

___________

* Current Ratio = Current Assets /Current Liabilities

** Working Capital = Current Assets - Current Liabilities

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

The Company’s overall working capital was increased in the year ended December 31, 2016 comparing to year ended December 31, 2015, due to the overall increase of the inventory and cash, the Company’s current ratio was also increased as of December 31, 2016 comparing to December 31, 2015 due to the increase of the inventory and cash.

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 payment term has changed from the consignment term to FOB china port in July of 2015. Therefore, we don’t have inventory in Electrolux US and only a certain quantity on the transaction process. The other businesses with Electrolux in Europe still are keeping the consignment term. That’s means the sales incurred were for the products withdrew before the 75 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 7 days with discount through DB Supplier Finance.

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The Company entered into a promissory note secured renewal business loan agreement in the principal amount of $ 5,000,000 with East West Bank located in El Monte, CA, reduced from $8,000,000 the prior year as our borrowing needs decreased. The maturity date of the Note has been amended from September 30, 2016 to September 30, 2017. The maximum aggregate amount that may be outstanding under all sub-limits shall be the lesser of $ 5,000,000 or 80% of eligible accounts receivable and 50% of inventory. The loan is secured by all company inventories, account receivable, and other assets of the Company. The remaining terms of the original loan are unchanged.

Interest accrued on amounts advanced shall be due and payable on the 25^th day of each month commending with the first month after the date of advance. The outstanding principal balance of this note together with all accrued and unpaid interest and all other amount due hereunder, shall be due and payable on December 31, 2016.

The management will continue to improve our current business on marketing, customer services and general administrative activities effectiveness. The Company will continue efforts at a R&D center at our California location. The primary function of the Company’s Research and Development Center is to identify and research new knowledge about scientific and technological topics in order to develop valuable products, processes and services for our customers. We are currently working on the development of the new products at our Center, including a new condenser motor; a twist flex icemaker; oven circulation fan and wire harnesses for ovens, although those products technical approved from our potential customers, we still are waiting the mass production.

Specifically, the management still believes that within the operating activities, the efforts of collecting accounts receivables and making payments of accounts payables still were the primary factors for the changes of cash flows in 2015 and will continue in later years.

The Company had cash and cash equivalents of $12,592,938 at December 31, 2016 and $ 6,908,861 of working capital and $ 8,615,550 at December 31, 2015 and $4,546,538 of working capital.

The total debt of $12,379,216 for December 31, 2016 included total of $ 8,905,532 for Chuzhou Fu Da, $1,623,624 for Fulu Finance Management Limited, $62,343 for US suppliers, $152,484 for salary and payroll tax payable, and $57,160 for all other account payable, $546,667 income tax liabilities, $31,406 unearned revenue, and $1,000,000 of loan from Bank.

Our independent auditor has indicated that our customer concentration may raise doubt about its ability to continue as a going concern. The financial statements do not include adjustments that might result from the outcome of this uncertainty and if the Company is unable to generate significant revenue or secure financing, then the Company may be required to cease or curtail its operations. However, due to the close relationship between the Company and its supplier, Chuzhou Fu Da, which is closely related and directly managed by shareholder and director Jianfeng Ding. Besides, as of December 31, 2016, the cash and cash equivalent balance was $8,615,550 and account receivable was $6,086,397, 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 July 1, 2008. All remaining loan holders converted their loans to common shares on July 15, 2008.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Not required.

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Item 8. Financial Statements

FLURIDA GROUP, INC.

Audited Financial Statements

As of December 31, 2016 and 2015

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Independent Auditor’s Report on the Consolidated Financial Statements			F-2

Balance Sheets			F-3

Statement of Operation			F-4

Shareholders’ Equity			F-5

Cash Flow Statement			F-6

Notes to Financial Statements			F-7

F-1

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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 as of December 31, 2016 and 2015, and the related consolidated statements of operation, shareholders’ equity, and cash flows for year ended December 31, 2016 and 2015. 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, 2016, and 2015, and the results of its operations and their cash flows for the year ended December 31, 2016 and 2015 in conformity with accounting principles generally accepted in the United States of America.

/s/ Enterprise CPAs, Ltd.

Enterprise CPAs, Ltd.

Chicago, IL

April 17, 2017

F-2

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FLURIDA GROUP, INC.
CONSOLIDATED BALANCE SHEETS

	December 31,		December 31,
	2016		2015
ASSETS
Current assets:
Cash and cash equivalents	$	12,592,938	$	8,615,550
Accounts receivable, net		5,394,314		6,086,397
Inventory		300,825		222,195
FX Hedges Investment		-		299,600
Total Current Assets	$	18,288,326	$	15,223,742

Property, plant and equipment, net	$	117,981	$	66,072

Other assets:
Security deposit		6,264		6,264
Total Other Assets	$	6,264	$	6,264

TOTAL ASSETS	$	18,412,322	$	15,296,078

LIABILITIES & EQUITY
Current liabilities:
Account payable	$	10,801,143	$	9,326,168
Income taxes payable		546,667		478,813
Unearned revenue		31,406		272,623
Total current liabilities	$	11,379,216	$	10,077,604

Other Current Liabilities:
Loan from the Bank	$	1,000,000	$	299,600
Other payable		-		300,000
Total Other Current Liabilities	$	1,000,000	$	599,600

Total Liabilities	$	12,379,216	$	10,677,204

Stockholders' Equity:
Common stock, $0.001 par value; 200,000,000 shares authorized; 38,387,227 shares issued and outstanding.	$	38,387	$	39,291
Paid-in capital		890,777		1,251,313
Retained earnings		5,051,215		3,584,960
Accumulated other comprehensive Income (loss)		52,727		(256,690	)

Total stockholders' equity	$	6,033,106	$	4,618,874

TOTAL LIABILITIES & EQUITY	$	18,412,322	$	15,296,078

F-3

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FLURIDA GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATION

	December 31, 2016		December 31, 2015
	Audited		Audited

Revenues:	$	38,379,726	$	64,575,450
Cost of Goods Sold	$	33,773,557	$	59,246,093
Gross Profit	$	4,606,418	$	5,329,357

Operating expenses:
Research and development		40,011		279,769

Selling, general and administrative expenses		2,117,456		2,013,503

Depreciation and amortization expenses		24,169		33,594
Total Operating Expenses	$	2,181,636	$	2,326,866

Operating Income	$	2,424,782	$	3,002,491

Investment income, net	$	24,921	$	10,635
Interest expense, net		3,089		9,489
Income before taxes	$	2,446,614	$	3,003,637
Income tax expense		980,110		901,615
Net income	$	1,466,255	$	2,102,022

Net Income per common share-Basics	$	0.04	$	0.05
Net Income per common share-Diluted	$	0.04	$	0.05

Other comprehensive Income(Loss), net of tax:
Foreign currency translation adjustments		309,417		(396,505	)
Total other comprehensive Income(Loss)	$	309,417	$	(396,505	)
Comprehensive Income (Loss)	$	1,775,672	$	1,705,517

F-4

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FLURIDA GROUP, INC.
CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY

							Additional					Accumulated Other			Total
	Common Stock						Paid-in			Retained		Comprehensive			Stockholders'
	Shares			Amount			Capital			Earnings		Income (Loss)			Equity

Balance, December 31, 2014		39,290,827		$	39,291		$	1,251,313		$	1,482,938	$	139,815		$	2,913,357

Adjustment for Exchange rate changes												$	(396,505	)	$	(396,505	)

Net Income for the year ended December 31, 2015										$	2,102,022				$	2,102,022
Balance, December 31, 2015		39,290,827		$	39,291		$	1,251,313		$	3,584,960	$	(256,690	)	$	4,618,874

Adjustment for Exchange rate changes												$	309,417		$	309,417

Cancelled common stock from 25 Shareholders @ 0.40 per share on October 19, 2016		(903,600	)	$	(904	)	$	(360,536	)						$	(361,440	)

Net Income for the period ended December 31, 2016										$	1,466,255				$	1,466,255
Balance, December 31, 2016		38,387,227			38,387			890,777			5,051,215		52,727			6,033,106

F-5

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FLURIDA GROUP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS

	Year Ended
	December 31, 2016			December 31, 2015
	Audited			Audited
Operating Activities:
Net Income	$	1,466,255		$	2,102,022
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense		24,169			33,594
Inventory		(78,630	)		7,945,289
Account receivable		692,083			(3,031,127	)
Unearned revenue		(241,217	)		(30,448	)
Decrease in other Payable		(300,000	)
Increase/Decrease in income tax payable		67,854			300,815
Increase/Decrease in account payable		1,474,975			(1,929,891	)
Net cash provided by operating activities	$	3,105,489		$	5,390,254

Investing Activities:
Purchase of investment instrument					(299,600	)
Purchase Property		(76,078	)		(21,347	)
Net cash provided by investing activities	$	(76,078	)	$	(320,947	)

Financing Activities:
Proceeds from issuance of common stock		-			-
Loan from the Bank		1,000,000			(500,400	)
Cancellation of common stock		(361,440	)		-
Net cash provided by financing activities	$	638,560		$	(500,400	)

Effect of Exchange Rate on Cash	$	309,417		$	(396,505	)
Net increase (decrease) in cash and cash equivalents	$	3,977,388		$	4,172,402
Cash and cash equivalents at beginning of the period	$	8,615,550		$	4,443,148
Cash and cash equivalents at end of the period	$	12,592,938		$	8,615,550

F-6

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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 1955 Baring Blvd, Sparks, NV 89434. The Company has its operating office located at 11220 Rolas Suite C3, El Paso, TX 79935.

Flurida Group leased a research and development center at 24412 S Main Street, Carson, CA 90745.

Flurida Group Inc also has branch located at Naperville, IL 60564.

Flurida Group Inc has a wholly owned subsidiary Flurida Appliance, Inc, a Nevada corporation to sell Flurida Group designed appliances manufactured in China by Chuzhou Fuda Mechanical & Electronics Co., Ltd. Flurida Appliance has its main operating office located at 11220 Rolas Suite C3, El Paso, TX 79935.

The Company’s main business includes sourcing, distribution and marketing of appliance components and assemblies in Asia, Europe, Australia, North and South America. Those products include ice maker; icemaker dispenser; high efficiency motor, module, crush motor and wire harness, and commercial vegetable dryer. In additionally, the company also launched their own brand of finished products called the ice and water dispenser system which is took place in two locations: Los Angeles CA and El Paso TX.

These parts are manufactured in China by Chuzhou Fuda Mechanical & Electronics Co., Ltd (“ChuZhou Fuda”). ChuZhou Fuda was an appliance components and sub-assemblies manufacturer established on March 18, 2008 and located in Chuzhou City, Anhui Province, China.

NOTE B – SIGNIFICANT ACCOUNTING POLICIES

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.

F-7

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FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continue)

Basis of accounting

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

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 and European Euro to be its functional currency in European business. Assets and liabilities were translated to U.S. dollars at monthly average exchange rate. Statement of operations amounts were translated to U.S. dollars using the first date of each month during the year. Gains and losses resulting from translating foreign currency financial statements are accumulated in other comprehensive income (loss), a separate component of shareholders’ equity.

Property, Plant, and Equipment Depreciation

Property, plant, and equipment are stated at cost. Depreciation is being provided principally by straight line methods over the estimated useful lives of the assets. Expenditures for maintenance and repairs, which do not improve or extend the expected useful lives of the assets, are expensed to operations while major repairs are capitalized.

The equipment were recorded as fixed asset to depreciate over 7 years and the electronic data processing equipment and furniture were recorded as fixed asset to depreciate over 5 years with straight line method.

For the fiscal year ended December 31 2016, the Company purchased $ 75,634 Furniture and equipment, and $ 444 Computer and data process equipment.

As of December 31, 2016, the company has furniture, Computer and data processing equipment, and equipment at a purchase cost of $ 271,198, and $ 153,217 of accumulated depreciation expense was recorded.

F-8

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FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continue)

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.

Basics and Diluted Net Loss Per Common Share

Basic earnings per share is computed by dividing income available to common shareholders (the numerator) by the weighted-average number of common shares outstanding (the denominator) for the period. Diluted earnings per share assume that any dilutive convertible securities outstanding were converted, with related preferred stock dividend requirements and outstanding common shares adjusted accordingly. It also assumes that outstanding common shares were increased by shares issuable upon exercise of those stock options for which market price exceeds the exercise price, less shares which could have been purchased by us with the related proceeds. In periods of losses, diluted loss per share is computed on the same basis as basic loss per share as the inclusion of any other potential shares outstanding would be anti-dilutive.

The Company only issued one type of shares, i.e., common shares only. There are no other types securities were issued. Accordingly, the diluted and basics net loss per common share are the same.

Security Deposit

The Company started having an office in California State from September 2010, which is located at 24412 S Main ST, STE 105, Carson CA 90745. Flurida Group USA Inc made $ 6,264 security deposit for leasing the property.

Account Receivable

As of December 31, 2016, the company had a total of $ 5,394,341 account receivable from it major customers, which included $ 322,248 of ChuZhou Fuda, $ 4,708,163 of Electrolux North America, $ 87,544 Electrolux Europe and its other subsidiaries, and $ 281,386 other America corporations.

F-9

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FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Loans from Bank

The Company entered into a promissory note secured renewal business loan agreement in the principal amount of $8,000,000 with East West Bank located in El Monte, CA. And the maturity date of the Note is from September 30, 2015 to September 30, 2016. On October 4, 2016, the loan was extended from September 30, 2016 to September 30, 2017. The principal amount of the Note is decreased to $5,000,000. The maximum aggregate amount that may be outstanding under all sub-limits (items 1 through 4) shall be the lesser of $5,000,000 or 80% of eligible accounts receivable less than 90 days from invoice date and 50% of inventory. The loan is secured by all company inventories, account receivable, and other assets of the Company.

Effective August 25, 2015, the interest rate on the Notes is amended and restated as “Variable Interest Rate”. Interest in this Note is computed on a 365/360 basis; that is, by applying the ratio of the interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding.

The Company may only draw up to:

	·	$3,000,000 for issuance of Sight Letters of Credit (LC)

	·	$3,000,000 for issuance of Standby Letters of Credit (SBLC)

	·	$5,000,000 for Clean Advance of up to maturity of the line

	·	$4,000,000 for FX Pre-Settlement Risk allowing customer to purchase forward contracts to hedge against FX current risk.

	·	Up to $250,000 for ACH origination services by delivering to Lender a duly executed ACH application on Lender’s standard form, provided, however, the total amount of the ACH processing reserves imposed by Lender in connection with ACH origination services requested by Borrower shall not exceed, and availability under the Loan shall be reduced by, the ACH Sublimit.

The note is allowed to issue letter of credit up to 120 days past loan maturity.

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FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Account Payable

The Company incurred accounts payable including professional fees, purchases, payroll and payroll tax liability, and other service fee payables.

As of December 31, 2016, the company had a total of $10,801,143 account payable, which was included $8,905,532 for Chu Zhou Fu Da, $1,623,624 for Fulu Finance Management Limited, $62,343 for US suppliers, $ 152,484 for salary and payroll tax payable, and $57,160 for all other account payable.

Income Tax Payable

For the fiscal year ended December 31, 2016 and 2015, the Company incurred income tax expense of $980,110 and $901,615 respectively. As of December 31, 2016, the income taxes payable of the Company was $546,667.

Inventory

The inventory was valued at cost of purchase from suppliers.

On July, 2012, Flurida Group, Inc signed deposit inventory agreements with Electrolux Italia S.p.A., which was effective in January 2013. under the term of the agreements, 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 Italia site for consigned inventory. And Flurida Group, Inc is facilitated to use of Electrolux’s storage site located at Treviso, Italy to deposit the products to selling 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 60 days payment term stated in the Frame Agreement. Products residing in the consigned inventory for 30 days with no activity due to non communicated demand change will no longer qualify for consignment, and will be considered as withdrawn product after 30 days. Accordingly, title passage and invoicing shall occur on such product per the term. Effective October, 2016. There was totally no more consignment inventory for Electrolux Italia.

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FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Inventory (Continued)

On June 25, 2013, Flurida Group, Inc signed consignment inventory agreements with Electrolux Hungary S.p.A., which was effective in September 2013. Under the term of the agreements, 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 Hungary site for consigned inventory. Electrolux is responsible, at its own cost, for the suitable storage and administration of the consignment stock. 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.

Products not drawn from the consignment stock within 30 days of delivery shall be deemed to be withdrawn on the 31^st day after delivery to the warehouse. Accordingly, title passage and invoicing shall occur on such product per the term.

On July, 2013, Flurida Group, Inc. entered into a managed inventory program agreement with Electrolux Australia, which was effective in September 2013.

Under the term of the agreements, the supplier, Flurida Group, Inc, agreed to produce, to maintain and transit the customized products per Electrolux’s specification. Electrolux has appointed a third party to manage its warehousing (“Distribution Centre”) who will maintain and operate the inventories. Flurida Group, Inc., retains title and ownership of products while in transit and while stored in Distribution Centre. Title and ownership will pass to Electrolux when they withdraw products from the Distribution Centre. Upon withdrawal, Electrolux will pay for it under the 90 days payment term stated in the Purchase Agreement. Effective November, 2016. There was totally no more consignment inventory for Electrolux Australia.

Stated January 2016, the Company uses Derby Industries LLC to storing the consignment inventory for General Electric Company (GE). Derby Industries LLC, doing business as Derby Supply Chain Solutions, located in Building 6 at General Electric Company Appliance Park in KY, USA. Flurida Group is paid for the warehousing service of the storage of the products. Derby charges the Company monthly for the use of the square footage; meanwhile, provide inbound receipt of goods with proper documentation, on pallets, in containers or boxes; receipt and execution of daily outbound orders to GE; daily transaction and inventory status information available on Derby industries, LLC website.

As of December 31, 2016, there were 6,720 pieces motor in Electrolux Hungary warehouse. And there were 6,384 pieces icemaker stored in the warehouse,

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FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Inventory (Continued)

Derby Industries LLC, as of consignment inventory for General Electric Company. And there were 8,960 pieces motor shipped out at FOB shipping point Nanjing, China to Electrolux Hungary warehouse; and 4,200 pieces icemakers were shipped out at FOB shipping point Nanjing, China to Derby Industries LLC. Those purchases haven’t considered as a sale or a consignment inventory at the period ended December 31, 2016. However, it’s the in transit inventories of Flurida Group, Inc.

Moreover, Flurida Appliance had total of 140 pieces ice water dispenser in Carson center and 97 pieces ice water dispenser El Paso warehouse.

As a result, as of December 31, 2016, the Company had total inventory at a value $300,825.

Revenues Recognition

Revenues include sales of appliance parts in North America, Australia, South America, Europe, and Asia.

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.

For the fiscal year ended December 31, 2016, the Company had total net revenue of $38,379,726.

For the period January 1 to December 31, 2016, the Company sold icemakers, high efficiency motor, module assembly, wire harness, motors, thermostats, ice and water dispenser, vegetable dryer, and other related refrigerator appliance to North America, which included Electrolux North America, General Electric Company, Exact Replacement Parts, HKF Industries Inc, and others America corporation, for total sales of $35,558,147. The icemakers, assembly, motors, wire harness, vegetable dryer, ice and water dispenser, and related parts were manufactured and supplied by ChuZhou FuDa Mechanical and Electronics Co., Ltd; all the icemakers, motors, assembly, wire harness, vegetable dryer, ice and water dispenser, and related parts were shipped out at FOB shipping point Nanjing, China.

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FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenues Recognition (Continued)

For the fiscal year ended December 31, 2016, the Company sold components and appliance parts to Electrolux –Australia for $207,084. The components were manufactured and supplied by Chu Zhou Fu Da Mechanical and Electronics; all the icemakers and components were shipped out at FOB shipping point Nanjing, China.

The Company sold Motors and other parts to South America, Which included Electrolux – Do Brasil and CTI S.A , for total of $494,933. The motors were manufactured and supplied by ChuZhou FuDa Mechanical and Electronics Co., Ltd, and were shipped out at FOB shipping point Nanjing, China.

The Company also sold icemakers and related parts to Asia for $212,572. The icemakers and parts were manufactured and supplied by Chu Zhou Fuda; all the icemakers were shipped out at FOB shipping point Nanjing, China.

For the period of January 1 to December 31, 2016, the Company sold thermostats and other related key parts for icemakers and motors, and sold dampers to ChuZhouFuDa. Flurida Group purchased some of the parts from Wako Electronics, Inc., an US Company located at Louisville, KY 40299. Flurida Group also purchased dampers from ITW Motion, an US company located in Illinois, and then sold to ChuZhouFuDa. Flurida Group, Inc. adds averaged 5% - 10% margin based on the cost of purchase, then sold to them, so, $1,607,485 were sold and invoiced to ChuZhouFuDa for the fiscal year ended December 31, 2016.

In summary, for the period of January 1 to December 31, 2016, the Company incurred the total gross sales of $38,431,610. And the Company had sales return and allowance and sales discount of $51,884, so, a total of $38,379,726 net sales were recorded. The cost of goods sold is discussed in details in Note C, Related Party Transactions.

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FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

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. Due to the significant rate changed in Euro currency hedging, the Company incurred a foreign currency translation income of $ 309,417 for the fiscal year ended December 31, 2016.

Operating Expense

Operating Expenses includes research and development expense, all selling, general and administrative expenses, and depreciation expenses for Flurida Group Inc. For the fiscal year ended December 31, 2016 and 2015, the Company had total operating expenses of $2,181,636 and $2,326,866 respectively, which include the research and development expense of $40,011 and $279,769, and depreciation expenses of $24,169 and $33,594, and selling, general and administrative expense of $ 2,117,456 and $2,013,503. Detail was showed on Exhibit A.

Professional Fee

Professional fees are consist of accounting and auditing fee, legal fee, commission and consulting expenses, SEC filing fee, and other professional expenses. The total professional fees were $197,624 and $196,437 for the fiscal year ended December 31, 2016 and 2015 respectively.

Research and Development Expense

The primary function of the research and development center at Flurida Group Inc. is to discover and create new knowledge about scientific and technological topics in order to develop valuable products, processes and services for our customers. The company has continually developed the new product such as compact electronic icemaker; high capacity Icemaker; synchronous motor and print circuit board assembly for motor. Also we continually develop our brand finished product called counter top ice water dispenser.

The Company had total research and development expense of $40,011 and $279,769 for fiscal year ended December 31, 2016 and 2015 respectively.

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FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

Payroll Expense

Started from June 2014, Flurida Group stayed the salaries amount of officers Jianfeng Ding, Yaru Huang, and Ying Zhong for $350,000, $86,520, $86,520.

The Social Security tax and Medicare tax were paid by both employer and employees in USA; employees also withheld portion of Federal and State tax calculate by each individual’s status. All of the tax was submitted to Internal Revenue Service and local government at a semiweekly basis.

The total payroll expenses were $989,647 and $728,071 for the fiscal year ended December 31, 2016 and 2015 respectively.

Income Tax

Income taxes are provided for tax effects of transactions reported in the financial statements and consist of taxes currently due plus deferred taxes. Deferred taxes are recognized for differences between the bases of assets and liabilities for financial statement and income tax purposes. The differences in asset and liability bases relate primarily to organization and start-up costs (use of different methods and periods to calculate deduction). Deferred taxes are also recognized for operating losses and tax credits that are available to offset future income taxes. The deferred tax assets and/or liabilities represent the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. The components of the deferred tax asset and liability are classified as current and concurrent based on their characteristics. Valuation allowances are provided for deferred tax assets based on management’s projection of the sufficiency of future taxable income to realize the assets.

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FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B - SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.

Derivative Instruments and Hedging Activities — The pronouncement requires additional disclosures about the objectives of derivative instruments and hedging activities, the method of accounting for such instruments, and a tabular disclosure of the effects of such instruments and related hedged items on Financial Statements. The pronouncement does not change the accounting treatment for derivative instruments.

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.

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FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE C – RELATED PARTY TRANSACTIONS

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

As of December 31, 2016, total 29,162,760 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		0.43	%
Ying Zhong		2,000,000		200,000		5.21	%
Jianfeng Ding & Yaru Huang		26,997,760		323,998		70.33	%
Total		29,162,760	$	539,748		75.97	%

_________________

Based on total outstanding issued shares as of December 31, 2016: 38,387,227.

Cost of Goods Sold

The Company’s purchase is primarily from supplier, Chuzhou Fuda Mechanical & Electronics Co., Ltd (“ChuZhouFuDa”), which is related and managed by director Jianfeng Ding.

ChuZhouFuda is an appliance components and sub-assemblies manufacturer established on March 18, 2008. Chuzhou Fuda is located in Chuzhou City, Anhui Province, China. The plant space is around 600,000 sqt with 62 molding machine up to 800 metric ton and 20 assemblies lines for appliance components and assemblies. Chuzhou Fuda, 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 Chuzhou Fuda, Flurida Group will record the actual costs paid to Chuzhou Fuda as the costs for inventory of Flurida Group, Inc. There is no any relationship for Chuzhou Fuda’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 Chuzhou Fuda, 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.

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FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE C – RELATED PARTY TRANSACTIONS (Continued)

Cost of Goods Sold(Continued)

At the period ended December 31, 2015, the Company had ending inventory $222,195 that was majority purchased from ChuZhou FuDa.

The Company purchased Icemakers, motors, high efficiency motor, wire harness, dac boxes, deflectors, icemaker dispenser, ice and water dispenser, and other related appliance parts from ChuZhou FuDa, at total cost of $28,447,981 for the fiscal year ended December 31, 2016.

To manufacture the related refrigerator appliance parts, Chu Zhou Fu Da needs key parts made in USA, which were purchased through Flurida Group, Inc. in USA. The costs of purchasing the parts were $1,436,165 in the period of January 1 to December 31, 2016.

The Company purchase module assembly and vegetable dryer from Fulu industries (HK), Ltd at a cost of $3,888,802 for the fiscal year ended December 31, 2016.

For the fiscal year ended December 31, 2016, the Company had total purchase of $33,772,948.

At the year ended December 31, 2016, the company had total ending inventory at a value $300,825.

For the period of January 1 to December 31, 2016, the company had freight and warehouse cost of $77,827, purchase related expense of 11,178, and $9,767 purchase return and discount.

Therefore, in the fiscal year ended December 31, 2016, the Company incurred a total cost of goods sold of $33,773,557.

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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, 2010, and 2011.

On November 1, 2012, 300,000 shares were issued to Williams Law Group at $ 0.10, for the legal service value of $30,000.

There were no new shares issued during the year of 2013, 2014, and 2015.

On October 19, 2016, the Company bought back 903,600 shares from 25 shareholders at $0.40, for a value of $361,440; the shares were cancelled as of December 31, 2016.

Therefore, as of December 31, 2016 total shares issued and outstanding are 38,387,227.

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FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE E– GOING CONCERN

The Company’s significant customers are Electrolux and its subsidiaries located in various countries. Because of the concentration of the customers and Company’s heavily reliance on the Electrolux and its subsidiaries, the Company’s customer concentration may raise doubt about its ability to continue as a going concern. The financial statements do not include adjustments that might result from the outcome of this uncertainty and if the Company is unable to generate significant revenue or secure financing, then the Company may be required to cease or curtail its operations.

However, in the fiscal year ended December 31, 2016, the Company generated significant sales revenue of $38,379,726. Electrolux and its subsidiaries are operated independently in various countries, the management assess that it is unlikely if Electrolux and its subsidiary discontinue the purchase in near future due to the Company secured a purchase order in next three years with Electrolux and its subsidiaries. In addition, the going concern may be mitigated due to the close relationship between the Company and it’s suppliers. The Company’s purchase is primarily from supplier, Chuzhou Fuda Mechanical & Electronics Co., Ltd (“ChuZhouFuDa”), which is closely related and directly managed by shareholder and director Jianfeng Ding. Besides, as of December 31, 2016, the cash and cash equivalent balance was $12,592,938, 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 is significantly low.

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Exhibit A

	December 31, 2016		December 31, 2015
Administration Expense		8,380		7,762
Automobile Expense		8,643		5,143
Bad Debt Expense		-		320
Bank Service Charges		261,575		268,852
Business Operation Tax		523
Certification		53,321		93,131
Computer and Internet Expenses		4,563		14,456
Depreciation expense		24,169		33,594
Business Registration and Permits		532		1,080
Fuel charge		17,479		10,272
Gift and promotion		19,147		15,918
Industry Show		30,614		16,659
Insurance Expense		3,815		1,052
Meals and Entertainment		76,592		76,019
Office Supplies		26,790		7,386
Parking fee		1,590		573
Payroll Expense		989,647		728,071
Penalty and Fine Expenses		-		517
Postage & Shipping		14,098		19,114
Professional Fees		197,624		196,437
Rent Expense		70,929		69,672
Repair & Maintenance		18,878		4,915
Research & Development Expense		40,011		279,769
Service Cost		15,457		46,844
Telephone Expense		25,708		26,337
Travel Expense		268,126		400,254
Utilities		3,160		2,723
Wage		265
Total Expense		2,181,636		2,326,866

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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 and Chief Financial Officer have 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, 2016. Based upon such evaluation, the Chief Executive Officer and Chief Financial Officer have concluded that, as of December 31, 2016, the Company’s disclosure controls and procedures were not effective. This conclusion by the Company’s Chief Executive Officer and Chief Financial Officer does not relate to reporting periods after December 31, 2016.

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, 2016 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, 2016, our management concluded that our internal controls over financial reporting were not effective as of December 31, 2016. 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.

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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 continues to study the implementation of 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.

Changes in Internal Control Over Financial Reporting

No change in the Company’s internal control over financial reporting occurred during the year ended December 31, 2016, that materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information

None.

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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 directors and executive officers are as follows:

Name	Age	Position
Jianfeng Ding	61	Chairman of the Board, President, and CEO
Yaru Huang	49	Chief Financial Officer and Chief Accounting Officer
Ying Zhong	45	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. As a member of the board, Mr. Ding contributes his knowledge of the Company and a deep understanding of all aspects of our business, products and markets, as well substantial experience developing corporate strategy, assessing emerging industry trends, and business operations.

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 Lanzhou Enginerring Institute of Survey and Design, Railway Ministry in Lanzhou. As a member of the board, Ms. Huang contributes his financial expertise based on his significant industry and financial experience.

Ying Zhong. joined us as director and Vice President 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. As a member of the board, Ms. Zhong contributes significant industry-specific experience and expertise on our products and services.

Family Relationships

Jianfeng Ding and Yaru Huang are husband and wife.

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Legal Proceedings

No officer, director, or persons nominated for such positions, promoter or significant employee has been involved in the last ten 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,

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.

Having any government agency, administrative agency, or administrative court impose an administrative finding, order, decree, or sanction against them as a result of their involvement in any type of business, securities, or banking activity.

Being the subject of a pending administrative proceeding related to their involvement in any type of business, securities, or banking activity.

Having any administrative proceeding been threatened against you related to their involvement in any type of business, securities, or banking activity.

Code of Ethics

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

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires the Company's directors and executive officers, and persons who beneficially own more than 10% of a registered class of the Company's equity securities, to file reports of beneficial ownership and changes in beneficial ownership of the Company's securities with the SEC on Forms 3 (Initial Statement of Beneficial Ownership), 4 (Statement of Changes of Beneficial Ownership of Securities) and 5 (Annual Statement of Beneficial Ownership of Securities). Directors, executive officers and beneficial owners of more than 10% of the Company's Common Stock are required by SEC regulations to furnish the Company with copies of all Section 16(a) forms that they file. Our directors and executive officers have filed such reports as required.

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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, 2016, and December 31, 2015

Executive Compensation

Name	Title	Year	Salary		Bonus		Stock awards		Option awards		Non equity incentive plan compensation		Non qualified deferred compensation and all other compensation		Total compensation

Jianfeng Ding	Chairman CEO	2015		350,000		-		-		-		-		-		350,000
		2016		350,000												350,000

Yaru Huang	CFO	2015		86,520												86,250
		2016		86,520												86,520

Ying Zhong	Vice President	2015		86,520												86,250
		2016		86,520												86,520

Compensation Agreements

We have the following oral compensation agreements:

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

Main responsibilities of the position are as follows:

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.

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

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

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

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

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. The employment was renewed in January 2010 for another three years with annual salary of $200,000 in 2010 and 2011, 2012. Also employment was renewed in January 2014 for another three years with annual salary of $350,000 in 2015 and $350,000 in 2016. We have agreed to increase this amount to $400,000 for the year 2017.

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 was three years from December 2006 to December 2009. Annual salary will be $60,000 starting to pay at January, 2009. The employment was renewed in January 2010 for another three years with annual salary of $70,000 in 2010, $80,000 in 2011 and 2012. Also the employment was renewed in January 2014 for another three years with annual salary of $86,520 in 2015 and in 2016. We have agreed to increase this amount to $90,000 for the year 2017.

Ying Zhong, Vice President, Business Development

Main responsibility of the position are as follows:

	1.	Assist CEO to develop new products and new businesses in different markets

	2.	Handle detail operation of the existing businesses with clients in US, Europe, Australia, South America, which include order process, customer service, etc.

	3.	Manage and assist agents in Europe, Mexico and China to develop and maintain the businesses in these markets.

Employment period was three years from October 2007 to October 2009. 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. The employment was renewed in January 2010 for another three years with annual salary of $70,000 in 2010 and $80,000 in 2011, and 2012. Also the employment was renewed in January 2014 for another three years with annual salary $86,520 in 2015 and 2016. We have agreed to increase this amount to $90,000 for the year 2017.

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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 three directors: Jianfeng Ding, Yaru Huang, Ying Zhong are also executive officers and shareholders with more than 5% of issued common stocks. 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, 2016

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

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, 2016.

Director Compensation

The following table summarizes the compensation paid to Flurida Group’ directors for the fiscal year ended December 31, 2016:

Name	Fees Earned or Paid in Cash		Stock Awards ($)		Option Awards ($)		Non-Equity Incentive Plan Compensation ($)		All Other Compensation ($)		Total ($)

Jianfeng Ding		80,000		0		0		0		0		80,000
Yaru Huang		0		0		0		0		0		0
Ying Zhong		0		0		0		0		0		0

See Executive Compensation table above for additional amounts in the form of salaries paid to these Directors for their role as officers.

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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 11220 Rojas, Suite C-3, El Paso TX 79935

Name	Number of Shares of Common stock		Percentage

Jianfeng Ding [1]		13,498,880		35.17	%
Yaru Huang [1]		13,498,880		35.17	%
Ying Zhong		2,000,000		5.21	%
All executive officers and directors as a group [3 persons]		29,277,760		75.54	%

_________

[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 38,387,227 shares of common stock outstanding as of December 31, 2016.

Securities authorized for issuance under equity compensation plans

5,000,000 shares of Common Stock.

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