UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended March 31, 2016

For the transition period from _______ to _______

Commission file number 333-151200

Issuer's telephone number: (800) 433-9938

N/A

(Former name, former address and former three months, if changed since last report)

Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨ 

Indicate by check mark whether the registrant 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 xNo ¨

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.

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

TABLE OF CONTENTS

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

FLURIDA GROUP, INC. 

Financial Statements

(Unaudited)

As of March 31, 2016 and 2015

Table of Contents

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 AngelesCA 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.

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 quarter ended March 31, 2016, the Company purchased $ 19,822 Furniture and equipment, and $ 444 Computer and data process equipment.

As of March 31, 2016, the company has furniture, Computer and data processing equipment, and equipment at apurchase cost of $ 215,387, and $ 138,073 of accumulated depreciation expense was recorded.

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 March 31, 2016, the company had a total of $ 4,768,897 account receivable from it major customers, which included $ 810,402 of ChuZhou Fuda, $ 3,230,998 of Electrolux North America, $ 358,081 Electrolux Europe and its other subsidiaries, and $ 369,416 other America corporations.

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 $ 6,000,000 with East West Bank located in El Monte, CA. And the maturity date of the Note is from July 10, 2014 to July 31, 2015. On September 25, 2015, the loan was extended from September, 2015 to September 30, 2016. The principal amount of the Note is increased to $8,000,000. The maximum aggregate amount that may be outstanding under all sub-limits (items 1 through 4) shall be the lesser of $ 8,000,000 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.

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:

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

Interest accrued on amounts advanced shall be due and payable on the 25th 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.

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 March 31, 2016, the company had a total of $ 13,610,133 account payable, which was included $ 12,095,896 for Chu Zhou Fu Da, $ 1,378,018 for Fulu Finance Management Limited, $ 54,775 for US suppliers, $ 29,985 for salary and payroll tax payable, and $ 51,459 for all other account payable.

Income Tax Payable

For the fiscal quarter ended March 31, 2016 and 2015, the Company incurred income tax expense of $ 161,423 and $ 221,465 respectively. As of March 31, 2016, the income taxes payable of the Company was $ 290,236.

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 maintainthe 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.

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 maintainthe 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., retainstitle 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 31st 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.

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.

FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)

Inventory (Continued)

As of March 31, 2016, there were 60 pieces dispensers, and 45 pieces motorsin Electrolux Austria warehouse as of consignment inventory. And there were 2,880 pieces Dac boxes, and 2,240 pieces motorsin Electrolux Hungary warehouse as of consignment inventory. The Company has 8,960 pieces motors and 7,560 pieces Dac boxesbeen shipped out at FOB shipping point Nanjing, China to Electrolux Hungary warehouse.Those purchases haven't considered as a sale or a consignment inventory at the period ended March 31, 2016. However, it's the in transit inventories of Flurida Group, Inc.

The Company has 7,224 pieces icemaker stored in the warehouse, Derby Industries LLC, as of consignment inventory for General Electric Company. And 3,360 pieces icemakers were shipped out at FOB shipping point Nanjing, China to Derby Industries LLC.

Moreover, Flurida Appliance had total of 193 pieces ice water dispenser in Carson center and 100 pieces ice water dispenser El Paso warehouse, and there are 110 pieces ice water dispensers been shipped out at FOB shipping point Nanjing, China to Carson center, California.

As a result, as of March 31, 2016, the Company had total inventory at a value $ 374,865.

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 quarter ended March 31, 2016, the Company had total net revenue of $ 9,405,730.

FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenues Recognition (Continued)

For the period January 1 to March 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, Haier America Research & Development Co, Exact Replacement Parts, and others America corporation,for total sales of $ 8,483,601. The icemakers, assembly, motors, wire harness, vegetable dryer, ice and water dispenser, and related parts were manufactured and supplied by ChuZhou FuDaMechanical 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 quarter ended March 31, 2016, the Company sold components and appliance parts to Electrolux –Australia for $ 198,280. 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 Electrolux – Do Brasil for $ 128,916. The motors were manufactured and supplied by ChuZhou FuDaMechanical and Electronics Co., Ltd, and were shipped out at FOB shipping point Nanjing, China.

For the period January 1 to March 31, 2016, the Company sold motors, DAC Boxes, Deflector, and related refrigerator appliance to Europe, which included Electrolux Hungry, Electrolux Sweden, and Gotene Plast AB, for total sales of $120,470. 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 $ 50,775. The icemakers and parts were manufactured and supplied by Chu Zhou Fuda; all the icemakers were shipped out at FOB shipping point Nanjing, China.

FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)

Revenues Recognition (Continued)

For the period of January 1 to March 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. addsaveraged 5% - 10% margin based on the cost of purchase, then sold to them, so, $ 438,070 were sold and invoiced to ChuZhouFuDa for the fiscal quarter ended March 31, 2016.

In summary, for the period of January 1 to March 31, 2016, the Company incurred the total gross sales of $ 9,420,112. And the Company had sales return and allowance and sales discount of $ 14,382, so, a total of $ 9,405,730 net sales were recorded. The cost of goods sold is discussed in details in Note C, Related Party Transactions.

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 quarter ended March 31, 2016 and 2015, the Company had total operating expensesof $ 561,246 and $ 495,024 respectively, which include the research and development expense of $ 1,232 and $ 44,227, and depreciation expenses of $ 9,025 and $ 8,237, and selling, general and administrative expense of $ 550,989 and $ 442,560. 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 $ 33,649 and $ 27,730 for the fiscal quarter ended March 31, 2016 and 2015 respectively.

FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)

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 electronic controlled icemaker, main wire harnesses for controlling the functions of refrigerator products, and D/C motor technology.

The Company had total research and development expense of $ 1,232 and $ 44,227 for fiscal quarter ended March 31, 2016 and 2015 respectively.

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 $ 260,211 and $ 206,392 for the fiscal quarter ended March 31, 2016 and 2015 respectively.

Comprehensive Income

The company's comprehensive income is comprised of net income, unrealized gains and losses on marketable securities classified foreign currency translation adjustments, and unrealized gains and losses on derivative financial instruments related to foreign currency hedging. Due to the significant rate changed in Euro currency hedging, the Company incurred a foreign currency translation loss of $ 5,845 for the fiscal quarter ended March 31, 2016.

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.

FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B – SIGNIFICANT ACCOUNTING POLICIES (Continued)

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.

NOTE C – RELATED PARTY TRANSACTIONS

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

As of March 31, 2016, total 29,162,760 shares were issued to officers and directors. Please see the table below for details:

FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE C – RELATED PARTY TRANSACTIONS (Continued)

Cost of Goods Sold

The Company's purchase is primarily from supplier, 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.

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 $ 7,152,148 for the fiscal quarter ended March 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 $ 414,105 in the period of January 1 to March 31, 2016.

The Company purchase module assembly and vegetable dryer from Fulu industries (HK), Ltd at a cost of $ 958,736 for the fiscal quarter ended March 31, 2016.

FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE C – RELATED PARTY TRANSACTIONS (Continued)

Cost of Goods Sold (Continued)

For the fiscal quarter ended March 31, 2016, the Company had total purchase of $ 8,515,989.

At the quarter ended March 31, 2016, the company had total ending inventory at a value $ 374,865.

For the period of January 1 to March 31, 2016, the company had freight and warehouse cost of $ 21,459, and purchase return and discount of $ 9,000.

Therefore, in the fiscal quarter ended March 31, 2016, the Company incurred a total cost of goods sold of $ 8,384,777.

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.

FLURIDA GROUP, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE D – SHAREHOLDERS' EQUITY (Continued)

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.

There were no new shares issued during the period of January to March 2016.

Therefore, as of March 31, 2016 total shares issued and outstanding are 39,290,827.

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 quarter ended March 31, 2016, the Company generated significant sales revenue of $ 9,405,730. 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 March 31, 2016, the cash and cash equivalent balance was $ 14,084,577, 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.

Exhibit A

Item 2. Management's Discussion and Analysis or Plan 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-Q.

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

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 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. The product launch sites took place in two locations: Los Angeles CA and El Paso TX.  Our goal for 2016 is to complete the design and launch a new condenser motor; a twist flex icemaker; oven circulation fan and wire harnesses for ovens.  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:

For the fiscal quarter ended March 31, 2016, the Company had total net revenue of $ 9,405,730. For the fiscal quarter ended March 31, 2015, the Company had total net revenue of $ 17,401,304.

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. 

Results of Operations

For the fiscal quarter ended March 31, 2016 vs. March 31, 2015.

Revenue

For the fiscal quarter ended March 31, 2016, the Company had net total revenue of $ 9,405,730 to the Company's Europe, Australia, North and South America customers, and Asia, which was decreased 46% more than the fiscal quarter ended March 31, 2015 total net revenue of $ 17,401,304. This decrease was because most of customers' sales went down worldwide. 
 

For the period January 1 to March 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, Haier America Research & Development Co, Exact Replacement Parts, and others America corporation, for total sales of $ 8,483,601. The icemakers, assembly, motors, wire harness, vegetable dryer, ice and water dispenser, and related parts were manufactured and supplied by ChuZhou FuDaMechanical 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 quarter ended March 31, 2016, the Company sold components and appliance parts to Electrolux –Australia for $ 198,280. 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 Electrolux – Do Brasil for $ 128,916. The motors were manufactured and supplied by ChuZhou FuDaMechanical and Electronics Co., Ltd, and were shipped out at FOB shipping point Nanjing, China.

For the period January 1 to March 31, 2016, the Company sold motors,DAC Boxes, Deflector, and related refrigerator appliance to Europe, which included Electrolux Hungry, Electrolux Sweden, and Gotene Plast AB, for total sales of $120,470. 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 $ 50,775. 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 March 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. addsaveraged 5% - 10% margin based on the cost of purchase, then sold to them, so, $ 438,070 were sold and invoiced to ChuZhouFuDa for the fiscal quarter ended March 31, 2016.

In summary, for the period of January 1 to March 31, 2016, the Company incurred the total gross sales of $ 9,420,112. And the Company had sales return and allowance and sales discount of $ 14,382, so, a total of $ 9,405,730 net sales were recorded.

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

Cost of Revenue

Our Costs of Goods Sold, as we expected 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 $ 7,152,148 for the fiscal quarter ended March 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 $ 414,105 in the period of January 1 to March 31, 2016.

The Company purchase module assembly and vegetable dryer from Fulu industries (HK), Ltd at a cost of $ 958,736 for the fiscal quarter ended March 31, 2016.

For the fiscal quarter ended March 31, 2016, the Company had total purchase of $ 8,515,989.

At the quarter ended March 31, 2016, the company had total ending inventory at a value $ 374,865.

For the period of January 1 to March 31, 2016, the company had freight and warehouse cost of $ 21,459, and purchase return and discount of $ 9,000.

Therefore, in the fiscal quarter ended March 31, 2016, the Company incurred a total cost of goods sold of $ 8,384,477 was decreased 47% compared to the fiscal quarter ended March 31, 2015 cost of goods sold of $ 17,401,304. The decrease of cost of goods sold was due to the sales decrease.

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.

Expense

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

Income Taxes

We are subject to income taxes in the U.S. and we incurred income tax expense of $ 161,423 and $ 221,465 for the fiscal quarter ended March 31, 2016 and 2015 respectively. As of March 31, 2016, the Company had income taxes payable of $ 290,236.

Net Income (Loss)

For the reasons set forth above, we had a net income of $ 303,543 and $ 749,781 for fiscal quarter ended March 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 July, 2012, the Company signed a deposit inventory agreement with Electrolux Italia S.p.A., which was effective in January 2013.

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

On July, 2013, Flurida Group, Inc. entered into a managed inventory program agreement with Electrolux Australia, 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

* 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 quarter ended March 31, 2016 comparing to year ended December 31, 2015, due to the overall increase of cash, the Company's current ratio was also increased due to the increase of cash as well.
 

The Electrolux agreements require the Company to supply the motors, ice makers, and other parts based on Electrolux's needs. The payment terms for Electrolux North America customers, which constitute more than 50% of our revenues, were changed from a consignment basis to FOB China port in early 2015. Therefore, we don't have inventory related Electrolux North America customers. The other businesses with Electrolux in Europe still are on a consignment basis.

The Company entered into a promissory note secured renewal business loan agreement in the principal amount of $ 6,000,000 with East West Bank located in El Monte, CA. And the maturity date of the Note is from July 10, 2014 to July 31, 2015. On September 25, 2015, the loan was extended from September, 2015 to December 31, 2016. The principal amount of the Note is increased to $8,000,000. The maximum aggregate amount that may be outstanding under all sub-limits (items 1 through 4) shall be the lesser of $ 8,000,000 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 Company may only draw up to:

The remaining terms of the original loan are unchanged.

Interest accrued on amounts advanced shall be due and payable on the 25th 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. Nothing was outstanding on this loan at March 31, 2016.

The management will continue to focus on improving 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. The Company has continually developed the new products at our Center, including a new condenser motor; a twist flex icemaker; oven circulation fan and wire harnesses for ovens. We are currently working on the development of these new products at our Center, although we cannot predict when, if ever, we will launch these products.

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 2016 and will continue in later years.

The Company had cash and cash equivalents of $ 14,084,577 at March 31, 2016 and $ 4,832,995 working capital and $ 1,825,148 at December 31, 2015 and $ 2,828,774 of working capital.

The total debt of $ 14,395,344 for March 31, 2016 included total of $ 12,095,896 for Chuzhou Fu Da, $ 1,378,018 for Fulu Finance Management Limited, $ 54,775 for US suppliers, $ 29,985 for salary and payroll tax payable, and $ 51,459 for all other account payable, $ 290,236 income tax liabilities, $ 300,000 other payable, and $ 194,975 unearned revenue.

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,Further, as of March 31, 2016, the cash and cash equivalent balance was $ 14,084,577 and account receivable was $ 4,768,897, such that 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.

Not applicable.

Evaluation of Disclosure Controls and Procedures

The Company has established disclosure controls and procedures to ensure that information required to be disclosed in this quarterly report on Form 10-Q was properly recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms. The Company's controls and procedures are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Act is accumulated and communicated to the Company's management, including its principal executive and principal financial officers to allow timely decisions regarding required disclosure.

We carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) at March 31, 2016 based on the evaluation of these controls and procedures required by paragraph (b) of Rule 13a-15 or Rule 15d-15 under the Exchange Act. This evaluation was carried out under the supervision and with the participation of our Chief Executive Officer and Chief Financial Officer. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, at March 31, 2016, our disclosure controls and procedures are not effective.

Changes in Internal Control over Financial Reporting

There have been no changes in the Company's internal control over financial reporting that occurred during the Company's last three month period that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

PART II — OTHER INFORMATION

None.

(a) Unregistered Sales of Equity Securities.

(b) Use of Proceeds.

The Registrant did not sell or otherwise issue any unregistered securities during the three months ended March 31, 2016.

None.

Not applicable.

Not applicable.

(a) Exhibits.

* This exhibit shall not be deemed "filed" for purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 of the Securities Exchange Act of 1934, whether made before or after the date hereof and irrespective of any general incorporation language in any filings.

** XBRL (Extensible Business Reporting Language) information is furnished and not filed or a part of a registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

SIGNATURES

In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

In accordance with the Exchange Act, this Report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.

EXHIBIT INDEX