UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549





FORM
10-Q





x
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934





For the
quarterly period ended June 30,
2010





 ̈
TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE EXCHANGE ACT


For the
transition period from _____________________ to ______________





Commission
file number 000-50903





FLURIDA
GROUP, INC.


((Exact name of
registrant as specified in its charter)





Nevada
            
            3469
            
            26-0688130(State or other jurisdiction of
              incorporation or organization)
            
            (Primary Standard
              Industrial Classification
              Code Number)
            
            IRS I.D.





800
      West Fifth Avenue, Suite 210B
              Naperville,
      IL
            
            60563(Address
      of principal executive offices)
            
            (Zip
      Code)





Issuer’s
telephone number:  630-778-8519





N/A


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





Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 12 months (or for such shorter period
that the registrant was required to file such reports), and (2) has been subject
to such filing requirements for the past 90 days.


Yes x
 No  ̈





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer," "accelerated filer" and "smaller
reporting company" in Rule 12b-2 of the Exchange Act.





Large
      accelerated filer
            
             ̈
            
            Accelerated
      filer
            
             ̈Non-accelerated
      filer
            
             ̈
            
            Smaller
      Reporting Company
            
            x





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act).


Yes   ̈No
x





As of
August 1, 2010 there were 38,990,827  shares issued and outstanding of
the registrant’s common stock.










TABLE
OF CONTENTS


PART
      I — FINANCIAL INFORMATION
              3Item
      2. Management’s Discussion and Analysis or Plan of
    Operation.
              24Item
      3.  Quantitative and Qualitative Disclosure about Market
      Risk
              31Item
      4.  Controls and Procedures.
              31PART
      II — OTHER INFORMATION
              31Item
      1.  Legal Proceedings.
              31Item
      2.  Unregistered Sales of Equity Securities and Use of
      Proceeds.
              32Item
      3.  Defaults Upon Senior Securities
              32Item
      4. (Removed and Reserved).
              32Item
      5.  Other Information.
              32Item
      6.  Exhibits.
              32


2




PART
I — FINANCIAL INFORMATION





FLURIDA
GROUP, INC.
 (A
Development Stage Enterprise)
 
 Financial
Statements
 (Unaudited)
 
 As
of June 30, 2010 and 2009
  3
 
 Table
of Contents
 
 Condensed
      Consolidated Balance Sheets
                5Condensed
      Consolidated Statement of Operation
                6Condensed
      Consolidated Shareholders Equity
                7Condensed
      Consolidated Statement of Cash Flows
                8Notes
      to Condensed Consolidated Financial Statements
                9
  4
  FLURIDA
GROUP, INC.
 (A
Development Stage Enterprise)
 CONSOLIDATED
BALANCE SHEETS
 
 June 30
                          
                          
                          December 31
                          
                          
                          December 312010
                          
                          
                          2009
                          
                          
                          2008(
      Unaudited)ASSETSCurrent
      assets:Cash
      and cash equivalents
                          
                          $
                          127,783
                          
                          
                          $
                          700,959
                          
                          
                          $
                          605,932Accounts
      receivable, net
                          
                          
                          2,189,032
                          
                          
                          
                          876,375
                          
                          
                          
                          479,431Inventory
                          
                          
                          1,748,336
                          
                          
                          
                          1,253,869
                          
                          
                          
                          618,151Total
      Current Assets
                          
                          $
                          4,065,151
                          
                          
                          $
                          2,831,203
                          
                          
                          $
                          1,703,514Property,
      plant and equipment, net
                          
                          $
                          12,778
                          
                          
                          $
                          -
                          
                          
                          $
                          -Other
      assets:Loan
      to Supplier
                          
                          $
                          278,091
                          
                          
                          $
                          278,091
                          
                          
                          $
                          -Accrued
      Interest Receivable
                          
                          
                          14,772
                          
                          
                          
                          7,389
                          
                          
                          
                          -Overpayment
      Credit
                          
                          
                          15,129
                          
                          
                          
                          -
                          
                          
                          
                          -Total
      Other Assets
                          
                          $
                          307,992
                          
                          
                          $
                          285,480
                          
                          
                          $
                          -TOTAL
      ASSETS
                          
                          $
                          4,385,921
                          
                          
                          $
                          3,116,683
                          
                          
                          $
                          1,703,514LIABILITIES
      & EQUITYCurrent
      liabilities:Account
      Payable
                          
                          $
                          2,934,123
                          
                          
                          $
                          1,830,077
                          
                          
                          $
                          626,868Unearned
      Revenue
                          
                          
                          60,000
                          
                          
                          
                          -
                          
                          
                          
                          -Credit
      Card Payable
                          
                          
                          -
                          
                          
                          
                          656
                          
                          
                          
                          1,269Total
      Current Liabilities
                          
                          $
                          2,994,123
                          
                          
                          $
                          1,830,733
                          
                          
                          $
                          628,137Stockholders'
      Equity:Common
      stock, $0.001 par value;200,000,000
      shares authorized;38,990,827
      shares issued and outstanding.
                          
                          $
                          38,991
                          
                          
                          $
                          38,991
                          
                          
                          $
                          38,991Paid-in
      capital
                          
                          
                          1,221,613
                          
                          
                          
                          1,221,613
                          
                          
                          
                          1,221,613Deficit
      accumulated during the development stage
                          
                          
                          121,747
                          
                          
                          
                          (23,633
                          )
                          
                          
                          (214,698
                          )Accumulated
      other comprehensive Income(Loss)
                          
                          
                          9,447
                          
                          
                          
                          48,979
                          
                          
                          
                          29,471Total
      stockholders' equity
                          
                          $
                          1,391,798
                          
                          
                          $
                          1,285,950
                          
                          
                          $
                          1,075,377TOTAL
      LIABILITIES & EQUITY
                          
                          $
                          4,385,921
                          
                          
                          $
                          3,116,683
                          
                          
                          $
                          1,703,514
  5
 
 FLURIDA
GROUP, INC.
 (A
Development Stage Enterprise)
 CONSOLIDATED
STATEMENT OF OPERATION
 
 Cumulative
      fromSix
      Months Ended
                  
                  
                  Three
      Months Ended
                  
                  
                  December
      19, 2006June
      30
                  
                  
                  June
      30
                  
                  
                  (Date
      of Inception)2010
                  
                  
                  2009
                  
                  
                  2010
                  
                  
                  2009
                  
                  
                  to June 30, 2010Unaudited
                  
                  
                  Unaudited
                  
                  
                  Unaudited
                  
                  
                  Unaudited
                  
                  
                  UnauditedRevenues:
                  
                  $
                  5,437,803
                  
                  
                  $
                  4,545,077
                  
                  
                  $
                  3,251,138
                  
                  
                  $
                  3,040,753
                  
                  
                  $
                  14,998,890Cost
      of Goods Sold
                  
                  
                  4,872,493
                  
                  
                  
                  4,142,081
                  
                  
                  
                  2,933,763
                  
                  
                  
                  2,725,788
                  
                  
                  
                  13,583,192Gross
      Profit
                  
                  $
                  565,310
                  
                  
                  $
                  402,996
                  
                  
                  $
                  317,375
                  
                  
                  $
                  314,965
                  
                  
                  $
                  1,415,698Operating
      expenses:Research
      and development
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -Selling,
      general and administrative expenses
                  
                  
                  427,145
                  
                  
                  
                  221,916
                  
                  
                  
                  229,088
                  
                  
                  
                  84,178
                  
                  
                  
                  1,298,887Depreciation
      and amortization expenses
                  
                  
                  168
                  
                  
                  
                  -
                  
                  
                  
                  168
                  
                  
                  
                  -
                  
                  
                  
                  168Total
      Operating Expenses
                  
                  $
                  427,313
                  
                  
                  $
                  221,916
                  
                  
                  $
                  229,256
                  
                  
                  $
                  84,178
                  
                  
                  $
                  1,299,055Operating
      Income( Loss)
                  
                  $
                  137,997
                  
                  
                  $
                  181,080
                  
                  
                  $
                  88,119
                  
                  
                  $
                  230,787
                  
                  
                  $
                  116,643Investment
      income, net
                  
                  
                  7,383
                  
                  
                  
                  2,946
                  
                  
                  
                  3,692
                  
                  
                  
                  2,450
                  
                  
                  
                  37,432Interest
      Expense, net
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  625Income(Loss)
      before taxes
                  
                  
                  145,380
                  
                  
                  
                  184,026
                  
                  
                  
                  91,811
                  
                  
                  
                  233,237
                  
                  
                  
                  153,450Income(Loss)
      tax expense
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  31,703Net
      Income(Loss)
                  
                  $
                  145,380
                  
                  
                  $
                  184,026
                  
                  
                  $
                  91,811
                  
                  
                  $
                  233,237
                  
                  
                  $
                  121,747Net
      Income(Loss) per common share-Basics
                  
                  $
                  0.00
                  
                  
                  $
                  0.00
                  
                  
                  $
                  0.00
                  
                  
                  $
                  0.01
                  
                  
                  $
                  0.00Net
      Income(Loss) per common share-Diluted
                  
                  $
                  0.00
                  
                  
                  $
                  0.00
                  
                  
                  $
                  0.00
                  
                  
                  $
                  0.01
                  
                  
                  $
                  0.00Other
      comprehensive Income(Loss), net of tax:Foreign
      currency translation adjustments
                  
                  
                  (39,532
                  )
                  
                  
                  (13,962
                  )
                  
                  
                  (23,703
                  )
                  
                  
                  485
                  
                  
                  
                  9,447Total
      other comprehensive Income(Loss)
                  
                  $
                  (39,532
                  )
                  
                  $
                  (13,962
                  )
                  
                  
                  (23,703
                  )
                  
                  
                  485
                  
                  
                  $
                  9,447Comprehensive
      Income(Loss)
                  
                  $
                  105,848
                  
                  
                  $
                  170,064
                  
                  
                  $
                  68,108
                  
                  
                  $
                  233,722
                  
                  
                  $
                  131,194
  6
  FLURIDA
GROUP, INC.
 (A
Development Stage Enterprise)
 CONSOLIDATED
STATEMENT OF STOCKHOLDERS EQUITY
 FOR
THE PERIOD ENDED June 30, 2010
 
 DeficitAccumulated
                              
                              
                              AccumulatedAdditional
                              
                              
                              During
      the
                              
                              
                              Other
                              
                              
                              TotalCommon Stock
                              
                              
                              Paid-in
                              
                              
                              Development
                              
                              
                              Comprehensive
                              
                              
                              Stockholders'Shares
                              
                              
                              Amount
                              
                              
                              Capital
                              
                              
                              Stage
                              
                              
                              Income (Loss)
                              
                              
                              EquityNet
      loss for the year ended December 31 , 2006
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              $
                              (1,500
                              )
                              
                              
                              
                              
                              $
                              (1,500
                              )Balance,
      December 31, 2006
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              $
                              (1,500
                              )
                              
                              
                              
                              
                              $
                              (1,500
                              )Proceeds
      from sale of common stock @0.001 per share on August 20,
    2007
                              
                              
                              25,997,760
                              
                              
                              $
                              25,998
                              
                              
                              $
                              -
                              
                              
                              $
                              -
                              
                              
                              
                              
                              
                              $
                              25,998Insurance
      of common stocks to shareholder @0.05 per share on December 10,
      2007
                              
                              
                              1,294,000
                              
                              
                              $
                              1,294
                              
                              
                              $
                              63,406
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              $
                              64,700Adjustment
      for Exchange rate changes
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              $
                              (126
                              )
                              
                              $
                              (126
                              )Net
      loss for the year ended December 31, 2007
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              $
                              (19,119
                              )
                              
                              
                              
                              
                              
                              $
                              (19,119
                              )Balance,
      December 31, 2007
                              
                              
                              27,291,760
                              
                              
                              $
                              27,292
                              
                              
                              $
                              63,406
                              
                              
                              $
                              (20,619
                              )
                              
                              $
                              (126
                              )
                              
                              $
                              69,953Insurance
      of common stocks to Williams @ 0.10 per share on April 15,
      2008
                              
                              
                              50,000
                              
                              
                              $
                              50
                              
                              
                              $
                              4,950
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              $
                              5,000Insurance
      of common stocks to convert loans @0.10 per share on April 15,
      2008
                              
                              
                              11,649,067
                              
                              
                              $
                              11,649
                              
                              
                              $
                              1,153,257
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              $
                              1,164,906Adjustment
      for Exchange rate changes
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              $
                              29,597
                              
                              
                              $
                              29,597Net
      Loss for the period ended December 31, 2008
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              $
                              (194,079
                              )
                              
                              $
                              -
                              
                              
                              $
                              (194,079
                              )Balance,
      December 31, 2008
                              
                              
                              38,990,827
                              
                              
                              $
                              38,991
                              
                              
                              $
                              1,221,613
                              
                              
                              $
                              (214,698
                              )
                              
                              $
                              29,471
                              
                              
                              $
                              1,075,377Adjustment
      for Exchange rate changes
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              $
                              19,508
                              
                              
                              $
                              19,508Net
      Income for the year ended December 31, 2009
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              $
                              191,065
                              
                              
                              
                              
                              
                              
                              $
                              191,065Balance,
      December 31, 2009
                              
                              
                              38,990,827
                              
                              
                              $
                              38,991
                              
                              
                              $
                              1,221,613
                              
                              
                              $
                              (23,633
                              )
                              
                              $
                              48,979
                              
                              
                              $
                              1,285,950Adjustment
      for Exchange rate changes
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              $
                              (39,532
                              )
                              
                              $
                              (39,532
                              )Net
      Income for the year ended June 30, 2010
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              
                              $
                              145,380
                              
                              
                              
                              
                              
                              
                              $
                              145,380Balance,
      June 30, 2010
                              
                              
                              38,990,827
                              
                              
                              $
                              38,991
                              
                              
                              $
                              1,221,613
                              
                              
                              $
                              121,747
                              
                              
                              $
                              9,447
                              
                              
                              $
                              1,391,798
  7
  FLURIDA
GROUP, INC.
 (A
Development Stage Enterprise)
 CONSOLIDATED
STATEMENT OF CASH FLOWS
 Cumulative
      fromSix
      Months EndedJune
    30
                                      
                                      
                                      Three
      Months EndedJune
    30
                                      
                                      
                                      December
      19, 2006(Date of
      Inception)2010
                                      
                                      
                                      2009
                                      
                                      
                                      2010
                                      
                                      
                                      2009
                                      
                                      
                                      to
      June 30, 2010Operating
      Activities:
                                      
                                      Unaudited
                                      
                                      
                                      Unaudited
                                      
                                      
                                      Unaudited
                                      
                                      
                                      Unaudited
                                      
                                      
                                      UnauditedNet
      Income(Loss)
                                      
                                      $
                                      145,380
                                      
                                      
                                      $
                                      184,026
                                      
                                      
                                      $
                                      91,811
                                      
                                      
                                      $
                                      233,237
                                      
                                      
                                      $
                                      121,747Adjustments
      to reconcile net income to net cash providedby
      operating activities:Non-cash
      portion of share based legal fee expense
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      5,000Depreciation
      Expense
                                      
                                      
                                      168
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      168
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      168Inventory
                                      
                                      
                                      (494,467
                                      )
                                      
                                      
                                      (674,527
                                      )
                                      
                                      
                                      (373,204
                                      )
                                      
                                      
                                      (276,055
                                      )
                                      
                                      
                                      (1,748,336
                                      )Account
      Receivable
                                      
                                      
                                      (1,312,657
                                      )
                                      
                                      
                                      (1,871,672
                                      )
                                      
                                      
                                      (609,629
                                      )
                                      
                                      
                                      (1,539,651
                                      )
                                      
                                      
                                      (2,189,032
                                      )Loan
      to Supplier
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (278,091
                                      )Accrued
      Interest Receivable
                                      
                                      
                                      (7,383
                                      )
                                      
                                      
                                      
                                      
                                      
                                      
                                      (3,692
                                      )
                                      
                                      
                                      
                                      
                                      
                                      
                                      (14,772
                                      )Overpayment
      Credit
                                      
                                      
                                      (15,129
                                      )
                                      
                                      
                                      
                                      
                                      
                                      
                                      (15,129
                                      )
                                      
                                      
                                      
                                      
                                      
                                      
                                      (15,129
                                      )Unearned
      Revenue
                                      
                                      
                                      60,000
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      60,000Decrease
      Other Payable
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (1,500
                                      )Increase
      Account Payable
                                      
                                      
                                      1,104,046
                                      
                                      
                                      
                                      2,508,080
                                      
                                      
                                      
                                      755,903
                                      
                                      
                                      
                                      1,930,224
                                      
                                      
                                      
                                      2,934,123Decrease
      Creditcard Payable
                                      
                                      
                                      (656
                                      )
                                      
                                      
                                      263
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      894
                                      
                                      
                                      
                                      -Net
      cash provided by operating activities
                                      
                                      $
                                      (520,698
                                      )
                                      
                                      $
                                      146,170
                                      
                                      
                                      $
                                      (153,772
                                      )
                                      
                                      $
                                      348,649
                                      
                                      
                                      $
                                      (1,125,822
                                      )Investing
      Activities:Purchase
      of Furniture and Equipment
                                      
                                      
                                      (12,946
                                      )
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (12,946
                                      )
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (12,946
                                      )Net
      cash provided by investing activities
                                      
                                      $
                                      (12,946
                                      )
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      (12,946
                                      )
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      (12,946
                                      )Financing
      Activities:Proceeds
      from issurance of common stock
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      90,698Repay
      loans to shareholders
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      (25,066
                                      )Proceeds
      from loan from shareholders
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      1,191,472Net
      cash provided by financing activities
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      -
                                      
                                      
                                      $
                                      1,257,104Effect
      of  Exchange Rate on Cash
                                      
                                      $
                                      (39,532
                                      )
                                      
                                      $
                                      (13,962
                                      )
                                      
                                      $
                                      (23,703
                                      )
                                      
                                      $
                                      485
                                      
                                      
                                      $
                                      9,447Net
      increase (decrease) in cash and cash equivalents
                                      
                                      $
                                      (573,176
                                      )
                                      
                                      $
                                      132,208
                                      
                                      
                                      $
                                      (190,421
                                      )
                                      
                                      $
                                      349,134
                                      
                                      
                                      $
                                      127,783Cash
      and cash equivalents at beginning of the period
                                      
                                      $
                                      700,959
                                      
                                      
                                      $
                                      605,932
                                      
                                      
                                      $
                                      318,204
                                      
                                      
                                      $
                                      389,006
                                      
                                      
                                      $
                                      -Cash
      and cash equivalents at end of the period
                                      
                                      $
                                      127,783
                                      
                                      
                                      $
                                      738,140
                                      
                                      
                                      $
                                      127,783
                                      
                                      
                                      $
                                      738,140
                                      
                                      
                                      $
                                      127,783
   8
  FLURIDA
GROUP, INC. AND SUBSIDIARIES
 
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 
 NOTE
A- BUSINESS DESCRIPTION
 
 Flurida
Group, Inc. (the “Company”), incorporated under the laws of Nevada on December
19, 2006, with registered address at 502 East John Street, Carson City, NV
89706. Flurida Group, Inc. operates its business in USA as Flurida Group USA,
Inc., the Company’s wholly owned branch located in the State of Illinois and has
principle office at 800 West Fifth Avenue, Suite 210, Naperville, IL
60563.
 
 Besides
USA operation, Flurida Group, Inc. also established one subsidiary in
Europe:
 Flurida
Group European S.R.L (“Flurida European”): Flurida Group European S.R.L. was
established on December 28, 2007 and is 100% owned by Flurida Group,
Inc.  Flurida European is in the business of trading services,
distribution, and marketing of the appliance parts in Europe.  The Flurida
European is located at Via locatelli 2, 21010 Vizzola, Ticino,
VA-Italy.
 
 The
company closed its Flurida Qingdao China office in July, 2009.
 
 The
Company’s main business includes sourcing, distribution and marketing of
appliance parts in Asia, Europe, North and South America.
 
 These
parts are manufactured in China by Zhong Nan Fu Rui Mechanical Electronics
Manufacturing Co., Ltd. (“Zhong Nan Fu Rui”).  It was established in 2005
specializing in home appliance components and subassemblies manufacturing, and
located in Qingdao City, Shandong Province, China.  On September 18, 2007,
Flurida Group, Inc. signed a long-term distribution agreement with Zhong Nan Fu
Rui Mechanical Electronics Manufacturing Co., Ltd.  Zhong Nan Fu Rui is a
Chinese manufacturing company owned 100% by Mr. Jianfeng Ding, the founder of
the Company.
 
 NOTE
B – SIGNIFICANT ACCOUNTING POLICIES
 
 Basis of
accounting
 
 The
financial statements reflect the assets, revenues and expenditures of the
Company on the accrued basis of accounting.
  9
  FLURIDA
GROUP, INC. AND SUBSIDIARIES
 
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
B – SIGNIFICANT ACCOUNTING POLICIES
 
 Principles of
Consolidation
 
 The
consolidated financial statements of the Company include the accounts of Flurida
Group USA and Flurida Group European S.R.L.  All significant intercompany
balances and transactions have been eliminated in consolidation.
 
 Use of
Estimates
 
 The
preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect certain amounts reported in the
financial statements and disclosures.  Accordingly, actual results could
differ from those estimates.
 
 Cash and Cash
Equivalents
 
 The
Company considers all highly-liquid investments with an original maturity of
three months or less when purchased to be cash equivalents.
 
 Foreign Currency
Translation
 
 The
Company has determined the United States dollars to be its functional currency
for Flurida Group USA and European Euro to be its functional currency in
European business.  Assets and liabilities were translated to U.S. dollars
at the period-end exchange rate.  Statement of operations amounts were
translated to U.S. dollars using the first date of each month during the
year.  Gains and losses resulting from translating foreign currency
financial statements are accumulated in other comprehensive income (loss), a
separate component of shareholders’ equity.
 
 Property,
Plant, and Equipment Depreciation
 
 Property,
plant, and equipment are stated at cost.  Depreciation is being provided
principally by straight line methods over the estimated useful lives of the
assets. As of June 30, 2010, the company has furniture and equipments at a cost
of $ 12,946, and $168 of depreciation expense was recorded.
  10
  FLURIDA
GROUP, INC. AND SUBSIDIARIES
 
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
B – SIGNIFICANT ACCOUNTING POLICIES
 
 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.
 
 Accrued Interest
Receivable
 
 In July
1st,
2009, the company loan $278,090 to its main supplier Zhong Nan Fu Rui Mechanical
electronics Co., Ltd at interest rate of 5.31%, term July 1, 2009 to June 30,
2010. As of June 30, 2010, total of $14,772 accrued interest receivable was
incurred.
 
 Unearned
Revenue
 
 One of
the customers prepaid the Company $ 60,000 for a design of refrigerator part,
which is the service income that the Company haven’t earned as of June 30,
2010.
 
 Account
Payable
 
 The
Company incurred accounts payable including professional fees, purchases, and
other service fee payables. As of June 30, 2010, the company has account payable
of 2,934,123.
  11
  FLURIDA
GROUP, INC. AND SUBSIDIARIES
 
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Revenues
 
 Net
revenues include sales of appliance parts in Asia, Europe, and North America.
Flurida Group, Inc recognizes revenue for these products when it is realized or
realizable and earned.  Revenue is considered realized and earned when
persuasive evidence of an arrangement exists; delivery has occurred or services
have been rendered; the Company’s fee to its customer is fixed or determinable;
and collection of the resulting receivable is reasonably assured.
  Revenues
are recognizedfrom 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.
 
 Flurida
Group, Inc had total revenue of $ 3,251,138 in second quarter ended at June 30,
2010.
 
 From the
period of April to June 2010, the Company sold total quantity of 42,140
icemakers and 608,616 motors to an US company, Electrolux Mexico, located
at Charlotte, NC for $ 2,206,033 as consignment sales.  The
motors were manufactured and supplied by Zhong Nan Fu Rui; all the motors were
shipped out at FOB shipping point Qingdao, China.  And the icemakers were
manufactured and supplied by ChuZhou FuDa Mechanical & Electronics Co., Ltd;
all the icemakers were shipped out at FOB shipping point Nanjing,
China.
 
 The
Company sold total quantity of 60,480 motors to another US company, Master
Precision Global (MPG), a sub-assembler to Electrolux, for $ 238,291. The motors
were manufactured and supplied by Zhong Nan Fu Rui. and shipped out at FOB
shipping point at Qingdao, China.
 
 The
Company sold total quantity of 94,240 motors to another US company, Stanco Metal
Products, Inc, a sub-assembler to Electrolux, for $ 240,124. The motors were
manufactured and supplied by Zhong Nan Fu Rui. and shipped out at FOB shipping
point at Qingdao, China.
  12
  FLURIDA
GROUP, INC. AND SUBSIDIARIES
 
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Revenues
(Continued)
 
 Also, the
company sold some related refrigerator appliance parts to Electrolux North
Carolina for $7,576. The parts were manufactured and supplied by Zhong Nan Fu
Rui, and were shipped out at FOB shipping point at Qingdao, China.
 
 In the
second quarter of 2010, the company sold total quantity of 11,200 pieces of
Motor, 47,890 pieces of Dac Box, and 29,952 pieces of Magnet to Electrolux
Hungry for $ 252,636; the magnets were manufactured and supplied by Shanghai
Fulu International Trading Co., Ltd.; all the parts were shipped out at FOB
shipping point at Shanghai, China.  The dac Boxes were manufactured and
supplied by Qingdao Fubida Electronics Co., Ltd and the motors were manufactured
and supplied by Zhong Nan Fu Rui, and all of those parts were shipped out at FOB
shipping point at Qingdao, China.
 
 The
company sold total quantity of 7,300 pieces of Motors, 3,500 Lamps, 20,188 Dac
Boxes, 6,500 pieces of refrigerator relating parts, and 37,080 Magnet to
Electrolux Italy for $191,939. The 37,080 magnets were manufactured and supplied
by Shanghai Fulu International Trading Co., Ltd.; all the parts were shipped out
at FOB shipping point at Shanghai, China.  The motors were manufactured and
supplied by Zhong Nan Fu Rui and the Dac Boxes and other related refrigerator
appliance parts were  manufactured and supplied by Qingdao Fubida
Electronics Co., Ltd., and were shipped out at FOB shipping point at Qingdao,
China.
 
 The
company sold 500 pieces of icemakers to Electrolux Australia for $ 14,430. The
icemakers were manufactured and supplied by ChuZhou FuDa Mechanical &
Electronics Co., Ltd, and were shipped out at FOB shipping point at Nanjing,
China.
 
 Also, the
company sold total quantity of 384 pieces of Dac Box to Electrolux Sweden for $
1,552. The dac Boxes were manufactured and supplied by Qingdao Fubida
Electronics Co., Ltd , and shipped out at FOB shipping point at Qingdao,
China.
 
 For the
period of April to June, 2010, the company sold some related refrigerator
appliance parts worldwide for $ 15,014.
  13
  FLURIDA
GROUP, INC. AND SUBSIDIARIES
 
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Revenues
(Continued)
 
 The
company incurred a tooling income of $ 83,543 from Electrolux US, Italy, and
Hungry in second quarter 2010.
 
 In
summary, for the three months ended June 30, 2010, the Company incurred the
total revenue of $ 3,251,138 and cost of goods sold $ 2,933,763
respectively.  The cost of goods sold is also discussed in Note C, Related
Party Transactions.
 
 Payroll
Expense
 
 Beginning
at 2008, Flurida Qingdao’s Representative office hired 7 full time employees to
take care of daily management and administrative activities for the
Company.  Flurida Group USA began to have payroll for officers at January
2009.
 
 The
consolidated total payroll expense for the period ended June 30, 2010 was $
102,268.  The payroll expenses details are listed as follows:
 
 Three Months Ended
                  
                  
                  Three Months Ended
                  
                  
                  Three Months EndedJune 30, 2010
                  
                  
                  June 30, 2009
                  
                  
                  June 30, 2008Payroll
      Expense - ERHosing
      public accumulate fund -ER
                  
                  $
                  -
                  
                  
                  $
                  -
                  
                  
                  $
                  378.55Social 
      insurance-ER
                  
                  
                  -
                  
                  
                  
                  -
                  
                  
                  
                  1,254.38US
      Medicare Tax - ER
                  
                  
                  1,377.50
                  
                  
                  
                  459.16
                  
                  
                  
                  -US
      Social Security Tax -ER
                  
                  
                  5,890.00
                  
                  
                  
                  1,963.34
                  
                  
                  
                  -Payroll
      Expense - ER - Other
                  
                  
                  -
                  
                  
                  
                  860.16
                  
                  
                  
                  -Total
      Payroll Expense - ER
                  
                  
                  7,267.50
                  
                  
                  
                  3,282.66
                  
                  
                  
                  1,632.93Payroll
      Expenses - EEFederal
      Tax Withholding
                  
                  
                  14,499.99
                  
                  
                  
                  5,833.34
                  
                  
                  
                  -Housing
      public accumulate fund -EE
                  
                  
                  -
                  
                  
                  
                  0.00
                  
                  
                  
                  378.55Net
      Wage Payment-EE
                  
                  
                  70,082.51
                  
                  
                  
                  25,105.84
                  
                  
                  
                  7,480.76Social
      Insurance-EE
                  
                  
                  -
                  
                  
                  
                  0.00
                  
                  
                  
                  425.86State
      Tax Withholding
                  
                  
                  3,150.00
                  
                  
                  
                  950.00
                  
                  
                  
                  752.90US
      Medicare Tax -EE
                  
                  
                  1,377.50
                  
                  
                  
                  459.16
                  
                  
                  
                  -US
      Social Security Tax - EE
                  
                  
                  5,890.00
                  
                  
                  
                  1,963.34
                  
                  
                  
                  -Total
      Payroll Expenses - EE
                  
                  
                  95,000.00
                  
                  
                  
                  34,311.68
                  
                  
                  
                  9,038.07Total
      Payroll Expense
                  
                  $
                  102,267.50
                  
                  
                  $
                  37,594.34
                  
                  
                  $
                  10,671.00
  14
  FLURIDA
GROUP, INC. AND SUBSIDIARIES
 
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Payroll Expense
(Continue)
 
 Start
from July 1, 2009, Flurida Qingdao Representative Office was closed, and there’s
no more payroll expenses incurred since then. And Flurida Group USA hired two
employees to taking care of the office and marketing activities.
 
 The
housing public accumulated fund and social insurance were paid by both employer
and employees in China; the employee portion of housing public accumulated fund
and social insurance was withheld by employer, and then submitted to local tax
authority in China.
 
 Started
from January 2010, Flurida Group had salaries for officers Jianfeng Ding, Yaru
Huang, and Ying Zhong for $200,000, $70,000, and $70,000 respectively. 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 monthly basis.
 
 Comprehensive
Income
 
 The
company’s comprehensive income is comprised of net income, unrealized gains and
losses on marketable securities classified foreign currency translation
adjustments, and unrealized gains and losses on derivative financial instruments
related to foreign currency hedging.
 
 Concentration of credit
risk
 
 The
Company maintains its cash in bank accounts which, at times, may exceed the
federally insured limits.  The Company has not experienced any losses in
such accounts and believes it is not exposed to any significant credit risk on
cash.
  15
  FLURIDA
GROUP, INC. AND SUBSIDIARIES
 
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Operating
Expense
 
 Below
table list the detail operating expense for the period April to June, 2010 and
2009.
 
 Three Months Ended
                    
                    
                    Three Months EndedJune 30, 2010
                    
                    
                    June 30, 2009ExpenseAdministration
      Expense
                    
                    $
                    907.70
                    
                    
                    $
                    -Bank
      Service Charges
                    
                    
                    353.99
                    
                    
                    
                    182.59Business
      operation tax
                    
                    
                    -
                    
                    
                    
                    1,323.03Business
      Registration
                    
                    
                    550.00
                    
                    
                    
                    -Business
      Administration Expense
                    
                    
                    -
                    
                    
                    
                    135.00Certification
                    
                    
                    19,312.00
                    
                    
                    
                    -Commission
                    
                    
                    15,770.40
                    
                    
                    
                    -Computer
      and Internet Expenses
                    
                    
                    290.11
                    
                    
                    
                    -Credit
      Card Finance Charge
                    
                    
                    49.95
                    
                    
                    
                    -Depreciation
      Expense
                    
                    
                    168.10
                    
                    
                    
                    -Dues
      and Subscriptions
                    
                    
                    -
                    
                    
                    
                    125.00Fuel
      Charge
                    
                    
                    27.92
                    
                    
                    
                    -Gift
      and Promotion
                    
                    
                    2,181.08
                    
                    
                    
                    -Insurance
      Expense
                    
                    
                    31.03
                    
                    
                    
                    3,171.81Meals
      and Entertainment
                    
                    
                    2,220.48
                    
                    
                    
                    934.12Office
      Supplies
                    
                    
                    3,119.93
                    
                    
                    
                    2,763.07Parking
      fee
                    
                    
                    84.40
                    
                    
                    
                    -Total
      Payroll Expense - ER
                    
                    
                    7,267.50
                    
                    
                    
                    2,422.50Total
      Payroll Expenses - EE
                    
                    
                    95,000.00
                    
                    
                    
                    34,311.68Postage
      & Shipping
                    
                    
                    1,196.25
                    
                    
                    
                    1,367.17Professional
      Fees
                    
                    
                    37,052.09
                    
                    
                    
                    14,127.00Rent
      Expense
                    
                    
                    5,130.00
                    
                    
                    
                    3,455.00Repairs
      and Maintenance
                    
                    
                    292.61
                    
                    
                    
                    -Service
      Cost
                    
                    
                    5,000.00
                    
                    
                    
                    -Transfer
      Agent Certificate Fee
                    
                    
                    640.00
                    
                    
                    
                    -Telephone
      Expense
                    
                    
                    3,129.93
                    
                    
                    
                    1,690.32Total
      Tax Expense
                    
                    
                    -
                    
                    
                    
                    860.16Total
      Travel Expense
                    
                    
                    27,627.67
                    
                    
                    
                    17,063.05Utilities
                    
                    
                    1,852.82
                    
                    
                    
                    246.68Total
      Expense
                    
                    $
                    229,255.96
                    
                    
                    $
                    84,178.18
  16
  FLURIDA
GROUP, INC. AND SUBSIDIARIES
 
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
B - SIGNIFICANT ACCOUNTING POLICIES (Continued)
 
 Inventory
 
 On June,
2008, Flurida Group, Inc signed a consigned inventory agreement with Electrolux
Home Products De Mexico, S.A. DEC.V. (Electrolux).  Under the term of the
agreement, the supplier, Flurida Group, Inc, agreed to produce, to maintain the
transit the customized products per Electrolux’s specification. Electrolux
maintain a storage location within Electrolux’s Juarez site for consigned
inventory. And Flurida Group, Inc is facilitated to use of Electrolux’s storage
location at such site to the sale of products to Electrolux; Electrolux will
provide labor resources for receipt, stock up, and pulls of consigned products.
Flurida Group, Inc. retains title and ownership of products while in transit to
Electrolux’s site and while stored in the consigned inventory location. Title and
ownership will pass to Electrolux when they withdraw products from the consigned
inventory location. Upon withdrawal, Electrolux will pay for it under the
payment term stated in the purchasing order correspond with the withdraw
products. Products
residing in the consigned inventory for 90 days with no activity due to non
communicated demand change will no longer qualify for consignment, and will be
considered as withdrawn product after 90 days. Accordingly, title passage and
invoicing shall occur on such product per the term.
 
 As of
June 30, 2010, there were icemakers and motors in Electrolux Juarez warehouse
for $ 449,805 as of consignment inventories.
 
 Also,
there were 125,712 motors in Electrolux Anderson warehouse for $ 327,415 as of
consignment inventories.
 
 Also,
there are 12,936 icemakers and 317,520 motors for $ 971,116 as the Company’s
inventories.
 
 As a
result, the company had total of $1,748,336 inventory as of June 30,
2010.
  17
  FLURIDA
GROUP, INC. AND SUBSIDIARIES
 
 NOTES
TO CONDENSED 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.
  18
  FLURIDA
GROUP, INC. AND SUBSIDIARIES
 
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
C – RELATED PARTY TRANSACTIONS
 
 Common Shares Issued to
Executive and Non-Executive Officers and Directors
 
 As of
June 30, 2010, total 30,129,960 shares were issued to officers and
directors.  Please see the table below for details:
 
 Name
                    
                    Total Shares
                    
                    
                    Total Amount
                    
                    
                    PercentageFenglan 
      Li
                    
                    
                    165,000
                    
                    
                    
                    15,750
                    
                    
                    
                    0.42
                    %Fuling
      Li
                    
                    
                    115,000
                    
                    
                    
                    10,750
                    
                    
                    
                    0.29
                    %Ying
      Zhong
                    
                    
                    2,000,000
                    
                    
                    
                    200,000
                    
                    
                    
                    5.13
                    %Gian
      Franco Barbieri
                    
                    
                    102,000
                    
                    
                    
                    9,700
                    
                    
                    
                    0.26
                    %Xiaoyong
      Fu
                    
                    
                    750,000
                    
                    
                    
                    75,000
                    
                    
                    
                    1.92
                    %Jianfeng
      Ding & Yaru Huang
                    
                    
                    26,997,760
                    
                    
                    
                    323,998
                    
                    
                    
                    69.24
                    %Total
                    
                    
                    30,129,760
                    
                    
                    $
                    635,198
                    
                    
                    
                    77.26
                    %
 
 * Based
on total issued shares as of June 30, 2010: 38,990,827.
 
 Cost of Goods
Sold
 
 The
Company’s purchase is primarily from supplier, Zhong Nan Fu Rui Mechanical
Electronics Manufacturing Co., Ltd., owned 100% by the founder of the Company,
Jianfeng Ding.  Due to Jianfeng Ding, and Yaru Huang, husband and wife,
combined hold 74.37% issued common shares for Flurida Group, Inc., the two
entities, Flurida Group, Inc., and Zhong Nan Fu Rui Mechanical Electronics
Manufacturing Co., Ltd., are under conmmon control according to EITF
02-5.
  19
  FLURIDA
GROUP, INC. AND SUBSIDIARIES
 
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
C – RELATED PARTY TRANSACTIONS (Continued)
 
 Cost of Goods Sold
(Continued)
 
 The
products the Company will sell are manufactured in China by Zhong Nan Fu Rui
Mechanical Electronics Manufacturing Co., Ltd. (“Zhong Nan Fu Rui”).  It
was established in 2005 specializing in home appliance components and
subassemblies manufacturing,
and located in Qingdao City, Shandong Province, China. On September 18,
2007, amended June 25, 2008 and further amended on August 4, 2008,
Flurida Group, Inc. signed a five year distribution agreement with Zhong
Nan Fu Rui Mechanical Electronics Manufacturing Co., Ltd.  Zhong Nan Fu Rui
is a Chinese manufacturing company owned 100% by Mr. Jianfeng Ding, our
president. Under the terms of the agreement Zhong Nan Fu Rui authorizes Flurida
to be its exclusive sales agent for the ice making product lines, including
icemaker and ice water dispensing systems all over the world. The ice making
product lines shall include the products that Zhong Nan Fu Rui developed before
the agreement signed and the products that will be developed solely by Zhong Nan
Fu Rui during the term of the agreement. Zhong Nan Fu Rui is the exclusive
supplier of the products we sell.  Although the distribution agreement
requires that the purchase price we will pay for these products will be
comparable to what the Flurida would have paid a non-related party in
market price, Mr. Ding may face a conflict in calculating the price the products
are sold to Flurida and the determining amount of products the Flurida
purchase.  However, because Mr. Ding has a fiduciary duty to Flurida
and the shareholders, he has indicated that he will assure strict adherence to
this provision of the agreement and will not require Flurida to purchase a
quantity of products in excess of that which Flurida can reasonably afford or
reasonably expect to sell in within two to three months of our purchase of the
products.
 
 The
management of Flurida Group, Inc. believes that the purchase price for the parts
from Zhong Nan Fu Rui will be market price.  Flurida Group, Inc. and Zhong
Nan Fu Rui are two totally separated entities, i.e., Flurida Group, Inc. is a
USA corporation and will fully comply with USA regulations and USA general
accepted accounting principles; Zhong Nan Fu Rui is a Chinese company and it
will comply with Chinese legal systems.
 
 Flurida
Group, Inc. and Zhong Nan Fu Rui will operate independently.  Zhong Nan Fu
Rui, as a Chinese local manufacturer, will record their manufacturing costs and
inventories based on the Chinese accounting regulations rulings.  But, when
Flurida Group, Inc. purchases the parts from Zhong Nan Fu Rui, Flurida Group
will record the actual costs paid to Zhong Nan Fu Rui as the costs for inventory
of Flurida Group, Inc.
  20
  FLURIDA
GROUP, INC. AND SUBSIDIARIES
 
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
C – RELATED PARTY TRANSACTIONS (Continued)
 
 Cost of Goods Sold
(Continued)
 
 There is
no any relationship for Zhong Nan Fu Rui’s manufacturing historic costs with
Flurida Group’s inventory value.  Specifically, Flurida’s inventory value
is equal to the purchase price or actual cost of the parts purchased from Zhong
Nan Fu Rui, and the purchase price of the parts will be fair market price. 
Flurida Group, Inc. will adopt the first-in and first-out inventory system
according to generally accepted accounting principles in USA.The management of Zhong Nan
Fu Rui disclosed to Flurida Group, Inc. that, Zhong Nan Fu Rui  adopted the
cost plus pricing policies with market adjustment, negotiable with
customers.  Zhong Nan Fu Rui adopted the cost plus system for all the
products for all customers including the product, icemakers exclusively
distributed by Flurida Group, Inc.  Specifically, the selling price is
determined by total actual manufacturing cost of direct manufacturing materials
(parts), direct manufacturing labor, and allocated manufacturing overhead cost,
plus 5-10% of total manufacturing cost.  Zhong Nan Fu Rui’s minimum gross
profit margin is 5%.
 
 Flurida
Group also purchased the products from suppliers, Qingdao Fubida Electronics
Co., Ltd, Shanghai Fulu International Trading Co., Ltd, and Chuzhou Fuda
Mechanical and Electronics Co., Ltd on purchase orders basis.
 
 Qingdao
Fubida Electronics Co., Ltd, owned 100% indirectly by Jianfeng Ding and Yaru
Huang, husband and wife. Qingdao Fubida Electronics Co., Ltd is a manufacturing
company, and it was established in 2003 specializing in home appliance control
components and subassemblies manufacturing, and located in Qingdao City,
Shandong Province, China. The plant space is around 70,000 sq ft. 14units
injection molding machine up to 600 metric tons.
 
 Chuzhou
Fuda  Mechanical & Electronics Co., Ltd. owned 100% indirectly by
Jianfeng Ding and Yaru Huang, husband and wife 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
100,000sq. ft. with 18 molding machine up to 800 metric ton and 6 assemblies
lines for appliance components and assemblies.
 
 Shanghai
Fulu International Trading Co., Ltd. a trading company established in 2007,
located at Shanghai, China, 100% owned indirectly by Jianfeng Ding and Yaru
Huang.
  21
  FLURIDA
GROUP, INC. AND SUBSIDIARIES
 
 NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 
 NOTE
C – RELATED PARTY TRANSACTIONS (Continued)
 
 Cost of Goods Sold
(Continued)
 
 In the
three months period end June 30, 2010, Flurida Group, Inc. purchased icemakers
and motors from Zhong Nan Fu Rui at total cost of $ 2,232,132 for FOB shipping
point at Qingdao, China.  The total parts price from Zhong Nan Fu Rui
consists of 80% of direct manufacturing materials and labor, 10% of allocated
manufacturing overhead, and 10% of profit margin.
 
 The
Company purchased icemakers from Chuzhou Fuda Mechanical and Electronics Co.,
Ltd. at total cost of $ 275,127 for FOB shipping point at Nanjing,
China.
 
 Flurida
Group, Inc. also purchased motors, refrigerator relating parts, and dac boxes
from Qingdao Fubida Electronics Co., Ltd. at total cost of $ 338,616 for FOB
shipping point at Qingdao, China.
 
 In
addition, Flurida Group, Inc. purchased magnets from Shanghai Fulu International
Trading Co., Ltd. a trading company established in 2007, located at Shanghai,
China, 100% owned indirectly by Jianfeng Ding and Yaru Huang, at total cost of $
50,728 for FOB shipping point at Shanghai, China.
 
 To
manufacture the related refrigerator appliance parts, Zhong Nan Fu Rui needs key
parts made in USA, which were purchased through Flurida Group, Inc. in USA, and
the company also needed to pay some freight expenses. All of the costs were $
37,160.
 
 Therefore,
for the three months period ended June 30, 2010, the total cost of goods sold
was $2,933,763.
 
 Loan to
Supplier
 
 At July
1st,2009, Flurida Group, Inc. loan $ 278,091 to the company’s primary
supplier, Zhong Nan Fu Rui. The outstanding balance bears interest at 5.31%,
pursuant to a written agreement, for the term from July 1st 2009 to
June 30th 2010.
This receivable was due on demand.  At July 1st 2010,
the loan agreement is renewed for another year by both parties at an interest
rate of 5.31%.
  22
  FLURIDA
GROUP, INC. AND SUBSIDIARIES
 
 NOTES
TO CONDENSED 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 June 30, 2010. 
..
 
 Therefore,
as of June 30, 2010 total shares issued and outstanding are
38,990,827.
 
 NOTE
E – GOING CONCERN
 
 The
Company’s short operating history and financial resources raise substantial
doubt about its ability to continue as a going concern.  The financial
statements do not include adjustments that might result from the outcome of this
uncertainty and if the Company is unable to generate significant revenue or
secure financing, then the Company may be required to cease or curtail its
operations.  From the period April to June 2010, the Company generated
sales revenue of $ 3,251,138, and cumulative net income of $121,747 from
December 19, 2006 (date of inception) through June 30, 2010.  The Company’s
single most concentrated customer is Electrolux located in various
countries.  If Electrolux discontinue the purchase which may be very
unlikely in near future, the Company may face the ability to continue as a going
concern.  However, due to the close relationship between the Company and
its suppliers, Zhong Nan Fu Rui and Qingdao Fubida Electronics Co., which are
100% owned by the founder, Jianfeng Ding, Zhong Nan Fu Rui and Qingdao Fubida
Electronics Co.’s current customers can be served by the Company for the same
quality of products and services.  Besides, as of June 30, 2010, the cash
and cash equivalent balance was $127,783 , 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.
  23




Item
2.   Management’s Discussion and Analysis or Plan of
Operation.




This
10−Q contains forward-looking statements. Our actual results could differ
materially from those set forth as a result of general economic conditions and
changes in the assumptions used in making such forward-looking statements. The
following discussion and analysis of our financial condition and results of
operations should be read together with the audited consolidated financial
statements and accompanying notes and the other financial information appearing
else where in this report. The analysis set forth below is provided pursuant to
applicable Securities and Exchange Commission regulations and is not intended to
serve as a basis for projections of future events. Refer also to "Cautionary
Note Regarding Forward Looking Statements" and “Risk Factors”
below.





Overview





Our
business is the sale of appliance parts in Asia, Europe, North and South America
and Australia.  The main products that we sell to these markets are
icemakers, motors, appliance assemblies.





These
parts are manufactured in China by Zhong Nan Fu Rui Mechanical Electronics
Manufacturing Co., Ltd. (“Zhong Nan Fu Rui”)





Zhong Nan
Fu Rui was established in 2005 specializing in home appliance components and
subassemblies manufacturing, and located in Qingdao City, Shandong Province,
China.  On September 18, 2007, amended June 25, 2008 and further
amended on August 4, 2008, Flurida Group, Inc. signed a long-term distribution
agreement with Zhong Nan Fu Rui Mechanical Electronics Manufacturing Co.,
Ltd.  Zhong Nan Fu Rui is a Chinese manufacturing company owned 100%
by Mr. Jianfeng Ding, our president.





Flurida
Group also purchased the products from suppliers, Qingdao Fubida Electronics
Co., Ltd, Chuzhou Fuda Mechanical & Electronics Co., Ltd. and Shanghai Fulu
International Trading Co., Ltd on purchase orders basis.





Qingdao
Fubida Electronics Co., Ltd, owned 100% indirectly by Jianfeng Ding and Yaru
Huang, husband and wife. Qingdao Fubida Electronics Co., Ltd is a manufacturing
company, and it was established in 2003 specializing in home appliance control
components and subassemblies manufacturing, and located in Qingdao City,
Shandong Province, China. The plant space is around 70,000 sq ft. 14units
injection molding machine up to 600 metric tons.





Chuzhou
Fuda  Mechanical & Electronics Co., Ltd. owned 100% indirectly by
Jianfeng Ding and Yaru Huang, husband and wife 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 100,000sq. ft. with 18 molding machine up to 800 metric ton and 6
assemblies lines for appliance components and assemblies.





Shanghai
Fulu International Trading Co., Ltd. a trading company established in 2007,
located at Shanghai, China, 100% owned indirectly by Jianfeng Ding and Yaru
Huang.





We sell
the following types of appliance parts:





 ̈
            Automatic Refrigerator Build-in
      Icemaker:The automatic refrigerator build-in icemaker is designed
      for household refrigeration products, such as refrigerator, under-counter
      refrigerator, freezer to make the ice cubes
  automatically.


24





 ̈
            Refrigerator Through-Door Ice
      Water System:Refrigeration Through-Door Ice Water System is the
      system that stores the ice cubes harvested from the icemaker, delivered
      and dispensed the ice, crushed ice or water to the refrigerator door
      through the electronic control system at the front of the refrigerator
      door. The through-door ice water system normally includes the following
      assemblies: ice bucket assembly, motor rail assembly, module assembly,
      facade assembly, housing assembly. The ice bucket assembly and the motor
      rail assembly can be located in the freezer, in the refrigerator door and
      or sealed chamber in the refrigerator. The module assembly, facade
      assembly and housing assembly vary according to the specific design from
      each client.





 ̈
            Shade Pole Motor and Motor
      Assembly for Refrigerator or Freezers:The shade pole
      motor and motor assembly is a key part for refrigerators or
      freezers.  Flurida Group Inc’s motor part is designed and
      specified for the refrigerators or freezers made by Electrolux, an US
      company located at Springfield, TN. Flurida also supplies the motors and
      motor assemblies to Electrolux Europe facilities in Italy,
      Hungary.





Results of
Operations





For the three months ended
June 30, 2010 vs. June 30, 2009.





Revenue





Flurida
Group, Inc had total revenue of $ 3,251,138 in three months ended at June 30,
2010, compare with the three months revenue of $ 3,040,753 of 2009.





From the
period of April to June 2010, the Company sold total quantity of 42,140
icemakers and 608,616 motors to an US company, Electrolux Mexico, located at
Springfield, TN for $ 2,206,033 as consignment sales.  The motors were
manufactured and supplied by Zhong Nan Fu Rui; all the motors were shipped out
at FOB shipping point Qingdao, China.  And the icemakers were
manufactured and supplied by ChuZhou FuDa Mechanical & Electronics Co., Ltd;
all the icemakers were shipped out at FOB shipping point Nanjing,
China.





The
Company sold total quantity of 60,480 motors to another US company, Master
Precision Global (MPG), a sub-assembler to Electrolux, for $ 238,291. The motors
were manufactured and supplied by Zhong Nan Fu Rui. and shipped out at FOB
shipping point at Qingdao, China.





The
Company sold total quantity of 94,240 motors to another US company, Stanco Metal
Products, Inc, a sub-assembler to Electrolux, for $ 240,124. The motors were
manufactured and supplied by Zhong Nan Fu Rui. and shipped out at FOB shipping
point at Qingdao, China. Also, the company sold some related refrigerator
appliance parts to Electrolux North Carolina for $7,576. The parts were
manufactured and supplied by Zhong Nan Fu Rui, and were shipped out at FOB
shipping point at Qingdao, China.





In the
second quarter of 2010, the company sold total quantity of 11,200 pieces of
Motor, 47,890 pieces of Dac Box, and 29,952 pieces of Magnet to Electrolux
Hungry for $ 252,636; the magnets were manufactured and supplied by Shanghai
Fulu International Trading Co., Ltd.; all the parts were shipped out at FOB
shipping point at Shanghai, China.  The dac Boxes were manufactured
and supplied by Qingdao Fubida Electronics Co., Ltd and the motors were
manufactured and supplied by Zhong Nan Fu Rui, and all of those parts were
shipped out at FOB shipping point at Qingdao, China.


25


The
company sold total quantity of 7,300 pieces of Motors, 3,500 Lamps, 20,188 Dac
Boxes, 6,500 pieces of refrigerator relating parts, and 37,080 Magnet to
Electrolux Italy for $191,939. The 37,080 magnets were manufactured and supplied
by Shanghai Fulu International Trading Co., Ltd.; all the parts were shipped out
at FOB shipping point at Shanghai, China.  The motors were
manufactured and supplied by Zhong Nan Fu Rui and the Dac Boxes and other
related refrigerator appliance parts were  manufactured and supplied
by Qingdao Fubida Electronics Co., Ltd., and were shipped out at FOB shipping
point at Qingdao, China.





The
company sold 500 pieces of icemakers to Electrolux Australia for $ 14,430. The
icemakers were manufactured and supplied by ChuZhou FuDa Mechanical &
Electronics Co., Ltd, and were shipped out at FOB shipping point at Nanjing,
China.





Also, the
company sold total quantity of 384 pieces of Dac Box to Electrolux Sweden for $
1,552. The dac Boxes were manufactured and supplied by Qingdao Fubida
Electronics Co., Ltd , and shipped out at FOB shipping point at Qingdao,
China.





For the
period of April to June, 2010, the company sold some related refrigerator
appliance parts worldwide for $ 15,014.  The company incurred a
tooling income of $ 83,543 from Electrolux US, Italy, and Hungry in second
quarter 2010.





In
summary, for the three months ended June 30, 2010, the Company incurred the
total revenue of  $3,251,138 and cost of goods sold $ 2,933,763
respectively.





Cost of
Revenue





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





The
Company’s purchase is primarily from supplier, Zhong Nan Fu Rui Mechanical
Electronics Manufacturing Co., Ltd., owned 100% by the founder of the Company,
Jianfeng Ding.  Due to Jianfeng Ding, and Yaru Huang, husband and
wife, combined hold 74.37% issued common shares for Flurida Group, Inc., the two
entities, Flurida Group, Inc., and Zhong Nan Fu Rui Mechanical Electronics
Manufacturing Co., Ltd., are under conmmon control according to EITF
02-5.





The
products the Company will sell are manufactured in China by Zhong Nan Fu Rui
Mechanical Electronics Manufacturing Co., Ltd. (“Zhong Nan Fu
Rui”).  It was established in 2005 specializing in home appliance
components and subassemblies manufacturing, and located in Qingdao City,
Shandong Province, China.  On September 18, 2007, amended June 25,
2008 and further amended on August 4, 2008, Flurida Group, Inc. signed a five
year distribution agreement with Zhong Nan Fu Rui Mechanical Electronics
Manufacturing Co., Ltd.  Zhong Nan Fu Rui is a Chinese manufacturing
company owned 100% by Mr. Jianfeng Ding, our president.  Under the
terms of the agreement Zhong Nan Fu Rui authorizes Flurida to be its exclusive
sales agent for the ice making product lines, including icemaker and ice water
dispensing systems all over the world. The ice making product lines shall
include the products that Zhong Nan Fu Rui developed before the agreement signed
and the products that will be developed solely by Zhong Nan Fu Rui during the
term of the agreement. Zhong Nan Fu Rui is the exclusive supplier of the
products we sell.  Although the distribution agreement requires that
the purchase price we will pay for these products will be comparable to what the
Flurida would have paid a non-related party in market price, Mr. Ding may face a
conflict in calculating the price the products are sold to Flurida and the
determining amount of products the Flurida purchase.  However, because
Mr. Ding has a fiduciary duty to Flurida and the shareholders, he has indicated
that he will assure strict adherence to this provision of the agreement and will
not require Flurida to purchase a quantity of products in excess of that which
Flurida can reasonably afford or reasonably expect to sell in within two to
three months of our purchase of the products.


26


The
management of Flurida Group, Inc. believes that the purchase price for the parts
from Zhong Nan Fu Rui will be market price.  Flurida Group, Inc. and
Zhong Nan Fu Rui are two totally separated entities, i.e., Flurida Group, Inc.
is a USA corporation and will fully comply with USA regulations and USA general
accepted accounting principles; Zhong Nan Fu Rui is a Chinese company and it
will comply with Chinese legal systems.





Flurida
Group, Inc. and Zhong Nan Fu Rui will operate independently.  Zhong
Nan Fu Rui, as a Chinese local manufacturer, will record their manufacturing
costs and inventories based on the Chinese accounting regulations
rulings.  But, when Flurida Group, Inc. purchases the parts from Zhong
Nan Fu Rui, Flurida Group will record the actual costs paid to Zhong Nan Fu Rui
as the costs for inventory of Flurida Group, Inc.  There is no any
relationship for Zhong Nan Fu Rui’s manufacturing historic costs with Flurida
Group’s inventory value.  Specifically, Flurida’s inventory value is
equal to the purchase price or actual cost of the parts purchased from Zhong Nan
Fu Rui, and the purchase price of the parts will be fair market
price.  Flurida Group, Inc. will adopt the first-in and first-out
inventory system according to generally accepted accounting principles in
USA.





The
management of Zhong Nan Fu Rui disclosed to Flurida Group, Inc. that, Zhong Nan
Fu Rui  adopted the cost plus pricing policies with market adjustment,
negotiable with customers.  Zhong Nan Fu Rui adopted the cost plus
system for all the products for all customers including the product, icemakers
exclusively distributed by Flurida Group, Inc.  Specifically, the
selling price is determined by total actual manufacturing cost of direct
manufacturing materials (parts), direct manufacturing labor, and allocated
manufacturing overhead cost, plus 5-10% of total manufacturing
cost.  Zhong Nan Fu Rui’s minimum gross profit margin is
5%.





Flurida
Group also purchased the products from suppliers, Qingdao Fubida Electronics
Co., Ltd, Shanghai Fulu International Trading Co., Ltd, and Chuzhou Fuda
Mechanical and Electronics Co., Ltd on purchase orders basis.





Qingdao
Fubida Electronics Co., Ltd, owned 100% indirectly by Jianfeng Ding and Yaru
Huang, husband and wife. Qingdao Fubida Electronics Co., Ltd is a manufacturing
company, and it was established in 2003 specializing in home appliance control
components and subassemblies manufacturing, and located in Qingdao City,
Shandong Province, China. The plant space is around 70,000 sq ft. 14units
injection molding machine up to 600 metric tons.





Chuzhou
Fuda  Mechanical & Electronics Co., Ltd. owned 100% indirectly by
Jianfeng Ding and Yaru Huang, husband and wife 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
100,000sq. ft. with 18 molding machine up to 800 metric ton and 6 assemblies
lines for appliance components and assemblies.





Shanghai
Fulu International Trading Co., Ltd. a trading company established in 2007,
located at Shanghai, China, 100% owned indirectly by Jianfeng Ding and Yaru
Huang.





In the
three months period end June 30, 2010, Flurida Group, Inc. purchased icemakers
and motors from Zhong Nan Fu Rui at total cost of $ 2,232,132 for FOB shipping
point at Qingdao, China.  The total parts price from Zhong Nan Fu Rui
consists of 80% of direct manufacturing materials and labor, 10% of allocated
manufacturing overhead, and 10% of profit margin.


27


The
Company purchased icemakers from Chuzhou Fuda Mechanical and Electronics Co.,
Ltd. at total cost of $ 275,127 for FOB shipping point at Nanjing,
China.





Flurida
Group, Inc. also purchased motors, refrigerator relating parts, and dac boxes
from Qingdao Fubida Electronics Co., Ltd. at total cost of $ 338,616 for FOB
shipping point at Qingdao, China.





In
addition, Flurida Group, Inc. purchased magnets from Shanghai Fulu International
Trading Co., Ltd. a trading company established in 2007, located at Shanghai,
China, 100% owned indirectly by Jianfeng Ding and Yaru Huang, at total cost of $
50,728 for FOB shipping point at Shanghai, China.





To
manufacture the related refrigerator appliance parts, Zhong Nan Fu Rui needs key
parts made in USA, which were purchased through Flurida Group, Inc. in USA, and
the company also needed to pay some freight expenses. All of the costs were $
37,160.





Therefore,
for the three months period ended June 30, 2010, the total cost of goods sold
was $2,933,763.





Expense





Our
operating expenses consist of selling, general and administrative
expenses.





For the
three months period ended June 30, 2010 and 2009, the company had a total of
$ 229,256 and $ 84,178 operating expenses respectively. The primary
reasons for this increase were increases in payroll expenses from $37,594 in the
three months ended June 30, 2009 vs. $102,268 in the three months ended
June 30, 2010.  And the increase in travel expenses from $17,063 in
the three months ended June 30, 2009 vs. $37,052 in the three months ended
June 30, 2010.  And the increase in professional expenses from $14,127
in the three months ended June 30, 2009 vs. $27,628 in the three months
ended June 30, 2010.  Also, there’s an additional of $ 35,082
Certification and Commissions Expense of our products had made the
operating expenses raise.





We expect
selling, general, and administrative expenses to increase in future periods as
we initiate a number of marketing and promotional activities.





For the six months ended
June 30, 2009 vs. June 30, 2008.





Revenue





We had $
4,545,077 revenue for the six months ended June 30, 2009.





As of
June 30, 2010, the Company incurred the total revenue of $ 5,437,803 which is
included $3,251,138
from 2nd quarter
and $ 2,186,665 from 1st quarter
2010.





In
addition to the information concerning revenues for the three month period ended
June 30, 2010, with respect to revenues of $2,186,665 from 1st quarter
2010:





For the
three months ended March 31, 2010, we had revenue of $2,186,665 from
parts, motors and icemaker sales. All of our sales in the first three months
ended March 31, 2010 were to Electrolux and its affiliates or sub-assemblers as
well as to certain key parts made in the U.S. sold to Zhong Nan Fu
Rui.


28


Cost of
Revenue





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





Our Cost
of Goods Sold for the six months ended June 30, 2009 was
$4,142,081.





As of
June 30, 2010, the Company incurred a total cost of good sold of $ 4,872,493
which is included $ 2,933,763 from 2nd quarter
and $1,938,730 from 1st quarter
2010.





In
addition to the cost of goods sold during the second quarter of 2010 described
above, we had $1,938,730 in cost of goods sold from 1st quarter
2010 as follows:





In the
period end March 31, 2010, Flurida Group, Inc. purchased icemakers and motors
from Zhong Nan Fu Rui at total cost of $1,280,031 for FOB shipping point at
Qingdao, China.





Flurida
Group, Inc. also purchased motors, refrigerator relating parts, and dac boxes
from Qingdao Fubida Electronics Co., Ltd. at total cost of $ 557,140 for FOB
shipping point at Qingdao, China.





In
addition, Flurida Group, Inc. purchased magnets from Shanghai Fulu International
Trading Co., Ltd. a trading company established in 2007, located at Shanghai,
China, 100% owned indirectly by Jianfeng Ding and Yaru Huang, at total cost of $
45,506 for FOB shipping point at Shanghai, China.





To
manufacture the related refrigerator appliance parts, Zhong Nan Fu Rui needs key
parts made in USA, which were purchased through Flurida Group, Inc. in
USA.  The costs of purchasing the parts were $55,053.





Expense





Our
expenses consist of selling, general and administrative expenses.





We had
$221,916 in expenses in the six months ended June 30, 2009 vs. $
427,313 for the six months ended June 30, 2010, increase of $ 205,397 for
the total operating expenses.  The primary reasons for this increase
were specify by modifying the following: increases in payroll expenses from $
90,905.22 in the six months ended June 30, 2009 vs. $ 211,004 in the six
months ended June 30, 2009, and increases in professional and Certification fees
from $44,327 in the six months ended June 30, 2009 vs. $ 93,822 in the six
months ended June 30, 2009.





We expect
selling, general, and administrative expenses to increase in future periods as
we initiate a number of marketing and promotional activities.





Income
Taxes





We are
subject to income taxes in the U.S., while the subsidiary in Italy is subject to
the income tax laws of Italy.  The representative sales office in
China is not subject to Chinese income tax.





Net Income





As a
result of the foregoing, we incurred a net income of $ 184,026 for the six month
period ended June 30, 2009 and net income of $145,380 for the six month period
ended June 30, 2010.


29


Commitments
and Contingencies





The
Company has signed a long-term distribution agreement with Zhong Nan Fu Rui
Mechanical Electronics Manufacturing Co., Ltd.  Zhong Nan Fu Rui is a
Chinese manufacturing company owned 100% by Mr. Jianfeng Ding, also the founder
of Flurida Group, Inc.  Also, on June 2008, the company signed a
consigned inventory agreement with an US company, Electrolux Home Products DE
Mexico, S.A.DEC.V (Electrolux).





Foreign
Currency Translation





The
Company has determined the United States dollars to be its functional currency
for Flurida Group USA; People’s Republic of China Chinese Yuan Renminbi to be
its functional currency in Flurida Qingdao office; and European Euro to be its
functional currency for our Italian subsidiary.  Assets and
liabilities were translated to U.S. dollars at the period-end exchange
rate.  The exchange rate of issuance of common stocks to shareholders
was used as one U.S. dollar to 6.8 Chinese Yuan (RMB).  Statement
of operations amounts were translated to U.S. dollars using the historic rate,
i.e., the rate at first date of each month during the year.  Gains and
losses resulting from translating foreign currency financial statements are
accumulated in other comprehensive income (loss), a separate component of
shareholders’ equity.





Liquidity
and Capital Resources





At June
      30
                  
                  
                  At June
      302010
                  
                  
                  2009Current
      Ratio
                  
                  
                  1.46
                  
                  
                  
                  1.41Cash
                  
                  $
                  127,783
                  
                  
                  $
                  738,140Working
      Capital
                  
                  $
                  1,379,020
                  
                  
                  $
                  1,273,884Total
      Assets
                  
                  $
                  4,385,921
                  
                  
                  $
                  4,410,364Total
      Liabilities
                  
                  $
                  2,994,123
                  
                  
                  $
                  3,136,480Total
      Equity
                  
                  $
                  1,391,798
                  
                  
                  $
                  1,273,884Total
      Debt/Equity
                  
                  
                  2.15
                  
                  
                  
                  2.46





*Current
Ratio = Current Assets /Current Liabilities





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





The
Company had cash and cash equivalents of $127,783 at June 30, 2010 and the
working capital of $1,379,020.





The total
debt of $2,994,123 for June 30, 2010 that is included the amount of $ 2,934,123
accounts payable and $ 60,000 unearned revenue.





Our
independent auditor has indicated that there is substantial doubt about our
ability to continue as a going concern due to the Company’s short operating
history and heavy concentration of customers.  The Company’s short
operating history and financial resources raise substantial doubt about its
ability to continue as a going concern.  The financial statements do
not include adjustments that might result from the outcome of this uncertainty
and if the Company is unable to generate significant revenue or secure
financing, then the Company may be required to cease or curtail its
operations.  The Company’s single most concentrated customer is
Electrolux located in various countries.  If Electrolux discontinue
the purchase which may be very unlikely in near future, the Company may face the
ability to continue as a going concern.  However, from the period
January to June 2010, the Company generated sales revenue of $5,437,803, and
cumulative net income of $121,747 from December 19, 2006 (date of inception)
through June 30, 2010, and besides, as of June 30, 2010, the cash and cash
equivalent balance was $127,783, 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.


30


Item
3.  Quantitative and Qualitative Disclosure about Market
Risk





Not
applicable.




Item
4.  Controls and Procedures.




Evaluation of Disclosure
Controls and Procedures





The
Company has established disclosure controls and procedures to ensure that
information required to be disclosed in this quarterly report on Form 10-Q was
properly recorded, processed, summarized and reported within the time periods
specified in the Commission's rules and forms.  The Company’s controls
and procedures are designed to ensure that information required to be disclosed
by the Company in the reports that it files or submits under the Act is
accumulated and communicated to the Company’s management, including its
principal executive and principal financial officers to allow timely decisions
regarding required disclosure.   A control system, no matter how
well conceived or operated, can provide only reasonable, not absolute, assurance
that the objectives of the control system are met.





We
carried out an evaluation of the effectiveness of the design and operation of
our disclosure controls and procedures (as defined in Exchange Act Rules
13a-15(e) and 15d-15(e)) at June 30, 2010 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 June 30, 2010, our disclosure
controls and procedures are effective.





Changes in Internal Control
over Financial Reporting





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




PART
II — OTHER INFORMATION




Item
      1.  Legal Proceedings.




None.


31





Item
      2.  Unregistered Sales of Equity Securities and Use of
      Proceeds.




(a)                 Unregistered Sales of Equity
Securities.





The
Registrant did not sell any unregistered securities during the three months
ended June 30, 2010.




(b)                 Use of
Proceeds.




The
Registrant did not sell any unregistered securities during the three months
ended June 30, 2010.





Item
      3.  Defaults Upon Senior
Securities




None.





Item
      4. (Removed and Reserved).




Item
      5.  Other Information.




Not
applicable.





Item
      6.  Exhibits.




(a) Exhibits.





Exhibit
              No.
            Document Description31.1
            CERTIFICATION
      of CEO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION
      302 OF THE SARBANES-OXLEY ACT OF 2002.31.2
            CERTIFICATION
      of CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION
      302 OF THE SARBANES-OXLEY ACT OF 2002.32.1
            CERTIFICATION
      of CEO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION
      906 OF THE SARBANES-OXLEYACT OF 200232.2
            CERTIFICATION
      of CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION
      906 OF THE SARBANES-OXLEYACT OF
2002








32


SIGNATURES





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





Flurida
Group, Inc., a Nevada corporation





Title
            
            Name
            
            Date
            
            SignaturePrincipal
      Executive Officer
            
            Jianfeng
      Ding
            
            August 10,
      2010
            
            /s/
      Jianfeng Ding




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




SIGNATURE
            
            NAME
            
            TITLE
            
            DATE/s/
      Jianfeng Ding
            
            Jianfeng
      Ding
            
            Principal
      Executive Officer and Director
            
            August 10,
      2010/s/ Yaru
      Hang
            
            Yaru
      Hang
            
            Principal
      Financial Officer and Principal Accounting Officer
            
            August 10,2010


33





EXHIBIT
INDEX





Exhibit
              No.
            Document Description31.1
            CERTIFICATION
      of CEO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION
      302 OF THE SARBANES-OXLEY ACT OF 2002.31.2
            CERTIFICATION
      of CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION
      302 OF THE SARBANES-OXLEY ACT OF 2002.32.1
            CERTIFICATION
      of CEO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION
      906 OF THE SARBANES-OXLEYACT OF 200232.2
            CERTIFICATION
      of CFO PURSUANT TO 18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO SECTION
      906 OF THE SARBANES-OXLEYACT OF
2002







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


34