UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q
(Mark One)
 
 þ☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the quarterly period ended March 31,June 30, 2015
 
OR
 
 ¨◻TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
Commission file number: 000-50140
 
EAGLE MOUNTAIN CORPORATION
(Exact name of Registrant as specified in its charter)
 
Delaware 16-1642709
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification Number)
 
Central Plaza,20333 Tomball PKY, Suite 4703, 18 Harbour Road, Wanchai, Hong Kong.204, Houston, Texas 77070
(Address of principal executive offices) (Zip code)
 
+852-2827 6288(281) 378-8028
(Registrant’s telephone number including area code)
 
 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
 
 
Yes [X]
 No [ ]
  
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).
 
 
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. (Check one):
 
Large accelerated filer ¨[ ]Accelerated filer 
¨ 
[ ] 
    
Non-accelerated filer¨[ ]Smaller reporting companyþ[X]
(Do not check if a smaller reporting company)   
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  
  
 Yes [ ] 
No [X]
 
The Registrant had 39,684,495271,055,926 shares of common stock outstanding as of May 20,September 13, 2015.

 
 
 
2
TABLE OF CONTENTS
 
     Page
PART IFINANCIAL INFORMATION  
      
  
Item 1.
Financial Statements (Unaudited)3
Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations 4
      
 
Item 2.
3.		Management’s DiscussionQuantitative and Analysis of Financial Condition and Results of OperationsQualitative Disclosures about Market Risk 58
      
  
Item 3.
Quantitative and Qualitative Disclosures about Market Risk13
Item 4.
Controls and Procedures 138
      
PART IIOTHER INFORMATION  
      
  Item 1.Legal Proceedings 149
      
  Item 1A.Risk Factors 149
      
  Item 2.Unregistered Sales of Equity Securities and Use of Proceeds 149
      
  Item 3.Defaults Upon Senior Securities 149
      
  Item 4.Mine Safety Disclosures 149
      
  Item 5.Other Information 149
      
  
Item 6.
Exhibits 1510
      
SIGNATURES 
   1611
 

 
2
 
3
 

PART I – FINANCIAL INFORMATION
 
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
 
Item 1.Financial Statements
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
 

 Pages
Condensed Consolidated Balance Sheets (Unaudited)
F-1
Condensed Conslidated Statements of Income (Unaudited)
F-2
Condensed Consolidated Statements of Cash Flows (Unaudited)
F-3
Notes to the Condensed Consolidated Financial Statements (Unaudited)
F-5 to F-14F-13
 
 

 
3
 
4
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(Unaudited)
 
  
As of
June 30, 2015
(Unaudited)
  
As of
December 31, 2014
(Audited)
 
       
ASSETS      
Current assets        
Cash and cash equivalents $196,523  $- 
Interest receivable  5,307   - 
Prepaid expense  7,000   - 
Other current assets ��7,313   - 
Total current assets
  216,143   - 
         
Note receivable  258,450   - 
Deposit on property (Note 6)  260,000   - 
Intangible assets (Note 6)  2,031,500   - 
Assets from discontinued operations (Note 5)  560,128   128 
Total other assets  3,110,078     
         
TOTAL ASSETS $3,326,221  $128 
         
LIABILITIES  AND STOCKHOLDERS’ EQUITY (DEFICIT)        
Current liabilities        
Accounts payable and accrued liabilities $905,931  $- 
Advances  220,131   - 
Convertible notes, net  70,862   - 
Loan payable  269,400   - 
Total current liabilities  1,466,324   -  
         
Liabilities from discontinued operations  1,159,758   448,055 
         
Total liabilities  2,626,082   - 
         
Stockholders’ Equity (Deficit)        
Series B Convertible Preferred Stock
Par value: $0.001, 8,000,000 shares authorized, 8,000,000 and nil shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively
  8,000   - 
Series C Convertible Preferred Stock
Par value: $0.001, 2,100,000 shares authorized, 2,050,000 and nil shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively
  2,050   - 
Series D Convertible Preferred Stock
Par value: $0.001, 640,000 shares authorized, 638,509 and nil shares issued and outstanding as of June 30, 2015 and December 31, 2014, respectively
  639   - 
Common stock:
Par value: $0.001, 500,000,000 shares authorized, 2,205,010 shares issued and outstanding as of June 30, 2015 and December 31, 2014
  2,205   2,205 
Stock payable  98,940,000   - 
Additional paid in capital  616,479,675   4,371,203 
Exchange reserve  (1,776)  (1,776)
Minority interest in earnings of subsidiary  119,358   - 
Accumulated deficit  (714,850,012)  (4,819,559)
Total stockholders’ equity  700,139   (447,927)
         
Total liabilities and stockholders’ equity $3,326,221  $128 
 
 Notes 
As of
March 31, 2015
(Unaudited)
  
As of
December 31, 2014
(Audited)
 
        
ASSETS       
Current assets         
Cash and cash equivalents  $-  $- 
Accounts receivable, net of allowance for doubtful accounts of $0 for 2015 and $0 for 2014   560,000   - 
Inventories, net3  -   - 
Other current assets   128   128 
          
Total current assets  $560,128  $128 
          
          
TOTAL ASSETS  $560,128  $128 
          
LIABILITIES         
Current liabilities         
Accounts payable  $480,000  $- 
Accruals   566,165   335,522 
Due to shareholders for converted pledged collateral   112,533   112,385 
          
Total current liabilities  $1,158,698  $448,055  
         
         
TOTAL LIABILITIES $1,158,698   448,055 
         
NET ASSETS (LIABILITIES) $(598,570)  (447,927))
         
Commitments and contingencies $-  $- 
         
STOCKHOLDERS’ EQUITY        
Preferred stock, 20,000,000 shares authorized; 0  shares issued and outstanding as of March 31, 2015 and December 31, 2014 $-  $- 
Common stock, $0.001 par value; 50,000,000 shares authorized; 39,684,495 and 39,684,495 shares issued and outstanding as of March 31, 2015 and December 31, 2014  39,685   39,685 
Additional paid in capital  4,333,723   4,333,723 
Exchange reserve  (1,776)   (1,776)) 
Retained earnings (deficits)  (4,970,202)   (4,819,559))
   -   - 
TOTAL STOCKHOLDERS’ EQUITY  (598,570)   (447,927))
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 

 
F-1
 
F-1

EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Income
(Unaudited)
 
   Three Months Ended  Six Months Ended 
  June 30,  June 30,  June 30,  June 30, 
  2015  2014  2015  2014 
               
Revenue
 $-  $-  $   $- 
                 
Operating Expenses                
Exploration expenses  20,039   -   20,039   - 
Professional fees  224,500   -   224,500   - 
General and administrative expenses  165,165   -   165,165   - 
Total operating expenses  409,704   -   409,704   - 
                 
Income (loss) from continuing operations  (409,704)  -   (409,704)  - 
                 
Other Income (expenses)                
Interest expenses
  (73,086)  -   (73,086)  - 
Interest income  369   -   369   - 
Impairment of goodwill  
(604,163,185
)  -   (604,163,185)  - 
(Loss) on debt settlement  (105,233,144)  -   (105,233,144)  - 
Other Income (expenses)  (709,469,046)  -   (709,469,046)  - 
                 
Net Income (loss) from continuing operations
  (709,878,750)  -   (709,878,750)  - 
Net Income (loss) from discontinued operations  (1,060)  (282,104)  (151,703)  (574,679)
Net Income (loss) $(709,879,810) $(282,104) $
(710,030,453
) $(574,679)
                 
Attributable to:                
Non-controlling interest $(7,041) $-  $(7,041) $- 
Shareholders of the Company $(709,879,810) $(282,104) $(710,030,453) $(574,679)
                 
Net Loss Per Common Share – basic and diluted $(0.00) $(0.01) $(0.00) $(0.01)
                 
Weighted average number of shares – basic and diluted  2,205,010   2,205,010   2,205,010   2,205,010 
                 

 
 Notes 
Three months ended
March 31, 2015
(Unaudited)
  
Three months ended
March 31, 2014
(Unaudited)
 
        
Net sales  $560,000  $561,870 
Costs of sales   480,000   587,308 
          
Gross profit (loss)  $80,000  $(25,438) 
          
Operating expenses         
Selling and distribution costs   49,280   87,375 
General and administrative expenses   181,363   211,448 
          
Income (loss) from operations  $(150,643) $(324,261)
          
Other expenses (income)         
Management and service income   -   (31,488)
Interest income   -   (3)
Exchange differences   -   3,360 
Miscellaneous   -   (5,106)
          
Income (loss) before income taxes  $(150,643)  $(291,024) 
          
Net income (loss)  $(150,643)  $(291,024) 
          
Attributable to:         
Shareholders of the Company   (150,643)   (291,024) 
          
   $(150,643)  $(291,024) 
          
Earnings (loss) per share – basic and diluted  $(0.004)  $(0.01) 
          
Weighted average number of shares – basic and diluted5  39,684,495   39,684,495 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 


 
F-2
 
F-2
 
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited)
 
  Six Months Ended
  June 30,
  2015  2014 
Cash flows from operating activities:      
Net income (loss) before non-controlling interest $(710,030,453) $(574,679)
Add: loss from discontinued operations  151,703   574,679 
Adjustments to reconcile net income (loss) to cash used in operation        
       Impairment of Goodwill  604,163,185   - 
       Amortization of debt discount  70,862   - 
       Loss on debt settlement  105,233,144   - 
   Changes in current assets and liabilities:        
       Interest receivable  (369)  - 
       Prepaid expenses  (7,000)  - 
       Accounts payable and accrued expenses  (155,613)  - 
       Net cash provided (used) from continuing activities
  (574,541)  - 
       Net cash provided (used) from discontinued activities
  -   1,615,830 
       Net cash provided (used) from operating activities
  (574,541)  1,615,830 
         
Cash flows from investing activities:        
      Cash and cash equivalents acquired from acquisitions of consolidated companies  132,064   - 
      Advances of funds to subsidiary before acquisition  (151,000)  - 
      Loan receivable  (175,000)  - 
      Net cash provided (used) from continuing activities
  (193,936)  - 
      Net cash provided (used) from discontinued activities
  -   10,806,654 
      Net cash provided (used) from investing activities  (193,936)  10,806,654 
         
Cash flows from financing activities:        
      Proceeds from convertible notes  965,000   - 
      Net cash provided (used) from continuing activities  965,000   - 
      Net cash provided (used) from discontinued activities  -   (12,653,603)
      Net cash provided (used) from financing activities  965,000   (12,653,603)
         
      Net cash flows  196,523   (231,119)
         
Cash and equivalents, beginning of period  -   231,119 
Cash and equivalents, end of period $196,523  $- 
         
Supplemental cash flow disclosures:        
      Cash paid for interest $-  $- 
      Cash paid for income taxes $-  $- 
         
Supplemental non-cash investing activities:        
Non- cash net assets acquired, Assumption Agreement $685,126  $- 

 
 Notes 
As of
March 31, 2015
(Unaudited)
  
As of
March 31, 2014
(Unaudited)
 
        
Cash flows provided by (used for) operating activities :         
Net income (loss)  $(150,643)  $(291,024) 
          
Adjustments to reconcile net income to net cash provided by (used for) operating activities:         
          
Changes in assets and liabilities:         
(Increase) decrease in assets         
Accounts receivable   (560,000)   1,358,873 
Inventories   -   1,081,511 
Other current assets   -   91,618 
Current asset held for disposal   -   12,390,969 
Other assets   -   138,234 
          
          
          
          
          
Increase (decrease) in liabilities         
          
          
Accounts payable   480,000   (623,069)
Accrued expenses   230,643   (257,453)
          
Income tax payable   -   171,722 
Other current liabilities   -   (12,444,000) 
          
Total adjustments  $150,643  $1,908,405 
          
Net cash provided by (used for) operating activities  $-  $1,617,381 
          
Cash flows provided by (used for) investing activities:         
Advanced from Aristo / Mr. Yang  $-  $148 
Advanced to Aristo / Mr. Yang   -   931,652 
Decrease (increase) of restricted cash   -   - 
Decrease in Minority Interest   -   2,592,254 
Decrease of Fixed assets   -   8,212,849 
          
Net cash provided by (used for)  investing activities  $-  $11,736,903 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
 

 
F-3
 
 
F-3
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(Unaudited) (Continued)
 Notes 
As of
March 31, 2015
(Unaudited)
  
As of
March 31, 2014
(Unaudited)
 
        
Cash flows provided by (used for) financing activities:         
Net borrowings on lines of credit and loans  $-  $(10,229,862)
Principal payments to bank   -   (3,222,113)
Principal payments under capital lease obligation   -   (133,428)
          
Net cash provided by (used for) financing activities  $-  $(13,585,403)
          
Net increase (decrease) in cash and cash equivalents  $-  $(231,119)
          
Cash and cash equivalents–beginning of year   -   231,119 
          
Cash and cash equivalents–end of year  $-  $- 
          
Supplementary disclosure of cash flow information:         
Interest paid  $-  $- 
          
Income tax paid (reversal)  $-  $(177,291) 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
F-4
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
 
  Note 1.Organization and Principal Activities
 
Eagle Mountain Corporation (“Eagle”) (formerly named as USmart Mobile Device Inc. (“USmart”)) and its subsidiaries are referred to herein collectively and on a consolidated basis as the “Company” or “we”, “us” or “our” or similar terminology.
 
 Eagle Mountain Corporation (“Eagle”) (formerly named as USmart Mobile Device Inc. (“USmart”)) and its subsidiaries are referred to herein collectively and on a consolidated basis as the “Company” or “we”, “us” or “our” or similar terminology.
The Company was incorporated under the laws of the State of Delaware on September 17, 2002 and previously known as ACL Semiconductors Inc. The Company acquired Atlantic Components Limited, a Hong Kong incorporated company (“Atlantic”) through a reverse-acquisition that was effective September 30, 2003. On September 28, 2012, the Company acquired Jussey Investments Limited, a company incorporated in British Virgin Islands (“Jussey”). The subsidiaries were held for disposal since March 31, 2014 and officially disposed on September 30, 2014, the Company disposed all of the equity interest held in ACL International Holdings Limited (“ACL Holdings”).
After the disposal, the Company was incorporated under the laws of the State of Delaware on September 17, 2002 and previously known as ACL Semiconductors Inc. The Company acquired Atlantic Components Limited, a Hong Kong incorporated company (“Atlantic”) through a reverse-acquisition that was effective September 30, 2003. On September 28, 2012, the Company acquired Jussey Investments Limited, a company incorporated in British Virgin Islands (“Jussey”). The subsidiaries were held for disposal since March 31, 2014 and officially disposed on September 30, 2014, the Company disposed all of the equity interest held in ACL International Holdings Limited (“ACL Holdings”).
After the disposal, the Company is still engaged in the sales and distribution of smartphones, electronic products and components in Hong Kong Special Administrative Region (“Hong Kong”) and the People’s Republic of China (“China” or the “PRC”).
On April 24, 2015, the Company amended its Certificate of Incorporation to change its corporate name to Eagle Mountain Corporation.  Subsequently, on June 5, 2015  the Company and Eagle Mountain Ltd., a Belize corporation (the “Assignor”), entered into an Assignment and Assumption Agreement (the “Assumption Agreement”), pursuant to which the Assignor assigned to the Company certain debts and assets, including  (1) a controlling interest in Shale Oil International Inc. (OTC:PINK-SHLE), and its 100% owned subsidiary, Texas Shale Oil Inc., which collectively own a strategic oil and gas model (intellectual property) covering  several thousand square miles of prospective oil and gas exploration and development acres in Louisiana, Texas and Mexico, as well as various related geophysical, geological, engineering and geochemical data sets;  (2) an opportunity to participate in and finance a trans-oil pipeline project, and (3) an agreement for a strategic cooperation regarding an integrated energy project and an opportunity to purchase and refurbish a refinery. Mr. Ehud Amir, the Chairman of the Board of the Company’s Board of Directors, and the Company’s Chief Operating Officer, is the CEO of Assignor.  Mr. Amir is also a co-founder of Texas Shale Oil Inc., a wholly owned subsidiary of the Company’s 85% controlled subsidiary, Shale Oil International Inc. In addition, Mr. Ronald Cormick, the Company’s Chief Executive Officer, is the President and Director of Texas Shale Oil Inc. and President and CEO of Shale Oil International Inc.  Mr. Larry Eastland, a member of the Company’s Board of Directors, is also director and Chairman of Shale Oil International Inc.
As a result of entering into the Assignment and Assumption Agreement, the Company changed its business focus and discontinued its operation in the sales and distribution of smartphones, electronic products and components. The Company now operates in the natural resources, EPC (Engineering, Procurement, and Construction) and oil & gas sector.

On July 17, 2015 the Company filed a Certificate of Amendment with the Secretary of State of the State of Delaware to effect the increase in authorized shares of common stock and a reverse stock split. Upon filing of the Certificate of Amendment, the Company’s authorized common stock was increased to 500,000,000 shares and every eighteen shares of the Company’s issued and outstanding common stock was automatically converted into one issued and outstanding share of common stock, without any change in par value per share. The reverse stock split was  applied to all shares of the Company’s common stock outstanding immediately prior to July 17, 2015, as well as the number of shares of common stock available for issuance under the Company’s equity incentive plans. In addition, the reverse stock split will effect a reduction in the number of shares of common stock issuable upon the conversion of shares of preferred stock or upon the exercise of stock options or warrants outstanding immediately prior to the effectiveness of the reverse stock split. No fractional shares were  be issued as a result of the reverse stock split. Stockholders who would otherwise be entitled to receive a fractional share had their factional shares rounded up to the nearest whole number.

The aforementioned Assumption Agreement resulted in a change of control in the Company when on August 24, 2015 the holders of 638,509 shares of Class D and 2,050,000 shares of Class C preferred stock, converted those shares into 268,850,900 shares of our common stock.

F-4
 
On April 24, 2015, the Company amended its Certificate of Incorporation to change its corporate name to Eagle Mountain Corporation.
Business Activity
USmart was incorporated under the laws of the State of Delaware on September 17, 2002. The Company has been primarily engaged in the business of distribution of memory products mainly under “Samsung” brand name which principally comprised Dynamic Random Access Memory (“DRAM”), Graphic Random Access Memory (“Graphic RAM”), and Flash memory components for the Hong Kong Special Administrative Region (“Hong Kong”) and People’s Republic of China (the “PRC” or “China”) markets formerly through its indirectly wholly owned subsidiary Atlantic Components Limited (“Atlantic”), a Hong Kong incorporated company, and ATMD (Hong Kong) Limited (“ATMD”) after April 1, 2012. The Company, through its wholly owned subsidiary ACL International Holdings Limited (“ACL Holdings”), owns 30% equity interest in ATMD, the joint venture with Tomen Devices Corporation (“Tomen”). ATMD offers a broad range of industry-leading Samsung semiconductor products, and additional components from SAMCO (such as wifi and camera modules) and SMD (smartphone panels). Atlantic integrated around 90% of its business relating to procurement of semiconductors and electronic parts from Samsung to ATMD. Subsequent to the start of the operations of ATMD, the Company’s sales, the cost of sales and operating expenses are expected to evolve in accordance with the transition of the Company’s business as described above. Through the acquisition of Jussey Investments Limited (“Jussey”) on September 28, 2012, the Company has diversified its product portfolio and customer network, obtained design and manufacturing capabilities, and tapped into the blooming telecommunication industry with access to the 3G baseband licenses. On September 30, 2014, the Company disposed all of the equity interest held in ACL International Holdings Limited (“ACL Holdings”) to an independent third party Targa Electronics Company Limited (“Targa”). On completion of the disposal, USmart no longer holds any equity interest in ACL Holdings, and the Company will maintain sales and distribution operation of smartphones, electronic products and components in a moderate size and will also seek for acquisition of other business opportunity.
F-5
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
  Note 2.Summary of Significant Accounting Policies
 
Principal of Consolidation
 
(a)Method of Accounting
These consolidated financial statements include the accounts of Eagle Mountain Corp. and its 85.39% controlled subsidiary, Texas Shale Oil Inc.. All intercompany balances and transactions have been eliminated in consolidation.

Estimates
 
In preparing the consolidated financial statements, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the statements of financial condition, and revenues and expenses for the years then ended.  Actual results may differ significantly from those estimates. Significant estimates made by management include, but are not limited to, the assumptions used to calculate stock-based compensation, derivative liabilities, debt discounts and common stock issued for assets, services or in settlement of obligations.
 
The Company maintains its general ledger and journals with the accrual method accounting for financial reporting purposes. The consolidated financial statements and notes are representations of management. Accounting policies adopted by the Company conform to generally accepted accounting principles in the United States of America and have been consistently applied in the presentation of consolidated financial statements.Cash and Cash Equivalents
 
For purposes of reporting within the statements of cash flows, the Company considers all cash on hand, cash accounts not subject to withdrawal restrictions or penalties, and all highly liquid debt instruments purchased with a maturity of three months or less to be cash and cash equivalents.
 
Accounting for subsidiaries

A subsidiary is an entity controlled by the Company. Control is achieved where the Company has the power to govern the financial and operating policies of an entity so as to obtain benefits from its activities. The results of subsidiary acquired of during the year are included in the income statement from the effective date of acquisition. Where necessary, adjustments are made to the financial statements of subsidiary to bring its accounting policies into line with those used by the Company. All intra-company transactions, balances, income and expenses are eliminated on consolidation. Minority interest in the net assets of consolidated subsidiary are identified separately from the Company’s equity therein. Minority interests consist of the amount of those interests at the date of original business combination and the minority’s share of changes in equity since the date of the combination. Losses applicable to the minority in excess of the minority’s share of changes in equity are allocated against the interests of the Company except to the extent that the minority has a binding obligation and is able to make an additional investment to cover the losses.

Business combinations

All business combinations are accounted for under the purchase method. The cost of an acquisition is measured at the fair value of the assets given and liabilities incurred or assumed at the date of exchange plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities assumed in a business combination (including contingent liabilities) are measured initially at their fair values at the acquisition date, irrespective of the extent of any minority interest. The excess of the cost of acquisition over the fair value of the Company’s share of the identifiable net assets acquired is recorded as goodwill. At June 30, 2015, we had no recorded goodwill. The interest of minority shareholders in the acquisition is initially measured at the minority’s proportion of the net fair value of the assets, liabilities and contingent liabilities recognized.


 
(b)Principles of Consolidation
F-5
The consolidated financial statements are presented in US Dollars and include the accounts of the Company and its subsidiary. All significant inter-company balances and transactions will eliminate, if applicable, in consolidation.
 
 
Acquisition
The Company uses the acquisition method of accounting for business combinations which requires that the assets acquired and liabilities assumed be recorded at the date of the acquisition at their respective fair values. Assets acquired and liabilities assumed in a business combination that arise from contingencies are recognized at fair value if fair value can reasonably be estimated. If the fair value of an asset acquired or liability assumed that arises from a contingency cannot be determined at the date of acquisition, the asset or liability is recognized if probable and reasonably estimable; if these criteria are not met, no asset or liability is recognized. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Any excess of the purchase price (consideration transferred) over the estimated fair values of net assets acquired is recorded as goodwill. Transaction costs and costs to restructure the acquired company are expensed as incurred. The operating results of acquired business are reflected in the acquirer’s consolidated financial statements and results of operations after the date of the acquisition.
(c)Jointly-controlled entity
A jointly-controlled entity is a corporate joint venture that is subject to joint control, resulting in none of the participating parties having unilateral control over the economic activity of the jointly-controlled entity.
The Group’s investment in a jointly-controlled entity is stated in equity method for the consolidated statement of financial position the Group’s shares of the equity of a jointly-controlled entity and the consolidated income statement and consolidated reserves, respectively.
(d)Use of estimates
The preparation of consolidated financial statements that conform with generally accepted accounting principles in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Management makes these estimates using the best information available at the time, however, actual results could differ materially from those estimates.
F-6
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
  Note 2.Summary of Significant Accounting Policies (Continued)(continued)
 
Oil and gas properties

We use the successful efforts method of accounting for oil and gas properties. Under that method:

 (e)a.EconomicGeological and political risksgeophysical costs and the costs of carrying and retaining undeveloped properties are charged to expense when incurred since they do not result in the acquisition of assets.

The Company’s operations are conducted in Hong Kong and China. A large number of customers are located in Southern China. Accordingly, the Company’s business, financial condition and results of operations may be influenced by the political, economic and legal environment in Hong Kong and China, and by the general state of the economy in Hong Kong and China.
The Company’s operations and customers in Hong Kong and Southern China are subject to special considerations and significant risks not typically associated with companies in North America and Western Europe. These include risks associated with, among others, the political, economic and legal environments, and foreign currency exchange. The Company’s results may be adversely affected by changes in the political and social conditions in Hong Kong and China, and by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion, remittances abroad, and rates and methods of taxation, among other things.
 (f)b.Property, plantCosts incurred to drill exploratory wells and equipmentexploratory-type stratigraphic test wells that do not find proved reserves are charged to expense when it is determined that the wells have not found proved reserves.

Property, plant and equipment are carried at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method.
Estimated useful lives of the plant and equipment are as follows:
Automobiles3 1/3 years
Computers5 years
Leasehold improvement5 years
Office equipment5 years
Machinery10 years
The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the statement of income.

 (g)c.Account receivableCosts incurred to acquire properties and drill development-type stratigraphic test wells, successful exploratory wells, and successful exploratory-type stratigraphic wells are capitalized.

 d.Capitalized costs of wells and related equipment are amortized, depleted, or depreciated using the unit-of-production method.

Accounts receivable is carried at the net invoiced value chargede.Costs of unproved properties are assessed periodically to customer. The Company recordsdetermine if an allowance for doubtful accounts to cover estimated credit losses. Management reviews and adjusts this allowance periodically based on historical experience and its evaluation of the collectability of outstanding accounts receivable. The Company evaluates the credit risk of its customers utilizing historical data and estimates of future performance.impairment loss should be recognized.

Impairment of Long-Lived Assets
 
F-7Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable through the estimated undiscounted cash flows expected to result from the use and eventual disposition of the assets. Whenever any such impairment exists, an impairment loss will be recognized for the amount by which the carrying value exceeds the fair value. During the six month period ended June 30, 2015, there was no impairment of long-lived assets.
Intangible assets
Identifiable intangible assets are recognized when the Company controls the assets, it is probable that future economic benefits attributed to the asset will flow to the Company and the cost of the asset can be reliably measured.  The economic or useful life of an intangible asset is based on an estimate made by management and is subject to change under certain market conditions.
Fair Value of Financial Instruments
The Company’s financial instruments consist of cash, receivables, payables, and due to related party. The carrying amount of cash, receivables and payables approximates fair value because of the short-term nature of these items. The carrying amount of the notes payable approximates fair value as the individual borrowings bear interest at market interest rates.
Income Taxes
The Company accounts for income taxes in accordance with Accounting Standards Codification (“ASC”) Topic 740, Income Taxes, which requires that the Company recognize deferred tax liabilities and assets based on the differences between the financial statement carrying amounts and the tax bases of assets and liabilities, using enacted tax rates in effect in the years the differences are expected to reverse. Deferred income tax benefit (expense) results from the change in net deferred tax assets or deferred tax liabilities. A valuation allowance is recorded when it is more likely than not that some or all deferred tax assets will not be realized.

Loss per Common Share
Basic loss per share includes no dilution and is computed by dividing loss available to common stockholders by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of shares of common stock, common stock equivalents and potentially dilutive securities outstanding during the period.

F-6
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
  Note 2.Summary of Significant Accounting Policies (Continued)(continued)
Loss per Common Share (cont’d)
The Company had the following potential common stock equivalents at June 30, 2015:

Series B Convertible Preferred Stock40,000,000
Series C Convertible Preferred Stock205,000,000
Series D Convertible Preferred Stock63,850,900
Convertible notes12,650,000
Stock payable, common shares50,000,000
(h)Accounting for impairment of long-lived assets
The Company periodically evaluates the carrying value of long-lived assets to be held and used, including intangible assets subject to amortization, when events and circumstances warrant such a review, pursuant to the guidelines established in ASC No. 360 (formerly Statement of Financial Accounting Standards No. 144). The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair market values are reduced for the cost to dispose.
During the reporting periods, there was no impairment loss.
(i)Cash and cash equivalents
The Company considers all highly liquid investments purchased with original maturities of three months or less to be cash equivalents. The Company maintains bank accounts in Hong Kong. The Company currently has no bank accounts in the United States of America.
(j)Inventories
Inventories are stated at the lower of cost or market and are comprised of purchased computer technology resale products. Cost is determined using the first-in, first-out method.
(k)Lease assets
Leases that substantially transfer all the benefits and risks of ownership of assets to the company are accounted for as capital leases. At the inception of a capital lease, the asset is recorded together with its long term obligation (excluding interest element) to reflect the purchase and the financing.
Leases which do not transfer substantially all the risks and rewards of ownership to the company are classified as operating leases. Payments made under operating leases are charged to income statement in equal installments over the accounting periods covered by the lease term. Lease incentives received are recognized in income statement as an integral part of the aggregate net lease payments made. Contingent rentals are charged to income statement in the accounting period which they are incurred.
 
Since the Company reported a net loss at December 31, 2014 and June 30, 2015, respectively, the effect of considering any common stock equivalents, if outstanding, would have been anti-dilutive.  A separate computation of diluted earnings (loss) per share is not presented.
Reclassification 

Certain reclassifications have been made to the prior period’s financial statements to conform to the current period’s presentation.

Recent Accounting Pronouncements
The Company has implemented all new accounting pronouncements that are in effect and that may impact its financial statements and does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

Note 3 – Going Concern
The Company has incurred net losses since inception and had a working capital deficit of $1,251,241 at June 30, 2015.  These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. The Company expects cash flows from operating activities to improve, primarily as a result of an increase in revenue, although there can be no assurance thereof. The accompanying consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern. If we fail to generate positive cash flow or obtain additional financing, when required, we may have to modify, delay, or abandon some or all of our business and expansion plans.

F-7
F-8
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)

Note 2.Summary of Significant Accounting Policies (Continued)
Note 4 – Acquisition, Change of Business

(l)Income taxes
We are governed by the Internal Revenue Code of the United States, the Hong Kong Inland Revenue Department and the PRC’s Income Tax Laws. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets, including tax loss and credit carry forwards, and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income of the period that includes the enactment date. Deferred income tax expense represents the change during the period in the deferred tax assets and deferred tax liabilities. The components of the deferred tax assets and liabilities are individually classified as current and non-current based on their characteristics. Realization of the deferred tax asset is dependent on generating sufficient taxable income in future years. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.
The Company did not have any interest or penalty recognized in the income statements for the period ended March 31, 2015 and March 31, 2014 or the balance sheet, as of March 31, 2015 and December 31, 2014. The Company did not have uncertainty tax positions or events leading to uncertainty tax position within the next 12 months. The Company’s 2010, 2011, 2012, 2013 and 2014 U.S. federal income tax returns are subject to U.S. Internal Revenue Service examination and the Company’s 2006/7, 2007/8, 2008/9, 2009/2010, 2010/11, 2011/12, 2012/13, and 2013/14 Hong Kong Company Income Tax filing are subject to Hong Kong Inland Revenue Department examination. The Company’s 2008, 2009, 2010, 2011, 2012, 2013 and 2014 PRC income tax returns are subject to PRC State Administration of Taxation examination.
(m)Foreign currency translation
The accompanying consolidated financial statements are presented in United States dollars (USD). The functional currencies of the Company’s operating business based in Hong Kong and PRC are the Hong Kong Dollar (HKD) and Renminbi (RMB) respectively. The consolidated financial statements are translated into United States dollars from HKD with a ratio of USD1.00=HKD7.80, a fixed exchange rate maintained between Hong Kong and United States derived from the Hong Kong Monetary Authority pegging HKD and USD monetary policy. For our subsidiaries whose functional currency are the RMB, statement of income, balance sheets and cash flows are translated with a ratio of RMB1.00=HKD1.29 an average exchange rate during the period.
Exchange gains or losses arising from foreign currency transactions are included in the determination of net income for the respective periods. All of our revenue transactions are transacted in the functional currencies. We have not entered into any material transactions that are either originated, or to be settled, in currencies other than the HKD, RMB and USD. Accordingly, transaction gains or losses have not had, and are not expected to have a material effect on our results of operations.
The RMB is not freely convertible into any other currencies. In addition, all foreign exchange transactions in the PRC must be conducted through authorized institutions. Accordingly, management cannot provide any assurance that the RMB underlying the consolidated financial statement amounts could have been, or could be, converted into HKD or USD at the exchange rates used to translate the functional currency into the reporting currency.
 
F-9On June 5, 2015, Eagle Mountain Corporation (the “Company”) executed an assignment and assumption agreement (the “Assumption Agreement”) with Eagle Mountain Ltd., a Belize corporation (the “Assignor”). Pursuant to the Assumption Agreement, the Company acquired certain assets including; letters of intent, agreements and other assets and assumed debts in the aggregate amount of $1,327,017 from the Assignor, which amount was subsequently released in exchange for 538,509 shares of a newly designated class of Series D Convertible Preferred Stock (Note 8).  As consideration for the Assumption Agreement, the Company issued the Assignor and/or its assignees 8,000,000 shares of a newly designated Series B Convertible Preferred Stock, 2,050,000 shares of a newly designated Series C Convertible Preferred Stock, 100,000 shares of a newly designed Series D Convertible Preferred Stock and 50,000,000 shares of common stock (which remains payable).

The list of assets include:

1. A Consultancy Agreement, dated April 18, 2015, pursuant to which the Assignor will provide consulting services with respect to the strategic partners, prospective user, as well as potential financiers and investors for a trans-oil pipeline project.

2. A Memorandum of Understanding pursuant to which the parties agree to have a strategic cooperation regarding an integrated energy project.

3. A Letter of Intent to purchase and refurbish a refinery, dated February 26, 2015, by and between the Assignor and a petroleum company.

4. 85.39% Controlling ownership of Shale Oil International Inc. (OTC:PINK-SHLE), and its 100% owned subsidiary, Texas Shale Oil Inc., which collectively own a strategic oil and gas model (intellectual property) covering  several thousand square miles of prospective oil and gas exploration and development acres in Louisiana, Texas and Mexico, as well as various related geophysical, geological, engineering and geochemical data sets;

The Company does not have valuation data for above list items 1 to item 3, and as a result, we have assigned no fair market value to these assets. 

The transaction has been valued at $603,534,000, based on fair market value of the acquirer’s stock, which is issuable upon conversion of several classes of Preferred Stock as set out above and the issuance of a total of 50,000,000 shares of common stock which remains payable at the date hereof.  The value of 85.39% of the net underlying assets of Assignor was approximately $697,832.

The allocation of the purchase price totaling $697,832, is as follows.  For purposes of the allocation, Management has considered book value and fair value to be the same and has treated all assets and liabilities at cost:

At May 31, 2015 Book value Fair value adjustments Fair value 
   $ $  $ 
Net assets acquired         
Cash
  132,064   -  132,064 
Interest receivable  4,938   -  4,938 
Other receivable  7,313   -  7,313 
Note receivable  83,450   -  83,450 
Deposit on property  260,000   -  260,000 
Intangible assets  2,031,500   -  2,031,500 
Accounts payable and accrued liabilities  (1,061,544)  -  (1,061,544)
Advances  (220,131)  -  (220,131)
Loan payable  (269,400)  -  (269,400)
Advances from Eagle Mountain Corp  (151,000)  -  (151,000)
   817,190   -  817,190 
Minority interest       (119,358)
Total consideration       697,832 

F-8
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)

Note 4 – Acquisition (continued)

Note 2.Summary of Significant Accounting Policies (Continued)

(n)Revenue recognition
The Company derives revenues from resale of computer memory products, such as flash storage devices and memory chips. The Company recognizes revenue in accordance with the ASC 605 “Revenue Recognition”. Under ASC 605, revenue is recognized when there is persuasive evidence of an arrangement, delivery has occurred or services are rendered, the sales price is determinable, and collectability is reasonably assured. Revenue typically is recognized at time of shipment. Sales are recorded net of discounts, rebates, and returns, which historically were not material.
(o)Advertising
The Group expensed all advertising costs as incurred. Advertising expenses included in general and administrative expenses were $0 and $0 for the period ended March 31, 2015 and 2014, respectively.
(p)Segment reporting
The Company’s sales are generated from Hong Kong and the rest of China and substantially all of its assets are located in Hong Kong.
(q)Fair value of financial instruments
The carrying amount of the Company’s cash and cash equivalents, accounts receivable, lines of credit, convertible debt, accounts payable, accrued expenses, and long-term debt approximates their estimated fair values due to the short-term maturities of those financial instruments.
(r)Comprehensive income
Comprehensive income is defined to include all changes in equity except those resulting from investments by owners and distributions to owners. Among other disclosures, all items that are required to be recognized under current accounting standards as components of comprehensive income are required to be reported in a financial statement that is presented with the same prominence as other consolidated financial statements. The Company has no items that represent other comprehensive income and, therefore, has not included a schedule of comprehensive income in the consolidated financial statements.
(s)Basic and diluted earnings (loss) per share
In accordance with ASC No. 260 (formerly SFAS No. 128), “Earnings Per Share,” the basic earnings (loss) per common share is computed by dividing net earnings (loss) available to common stockholders by the weighted average number of common shares outstanding. Diluted earnings (loss) per common share is computed similarly to basic earnings (loss) per common share, except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive.
(t)Reclassification
Certain amounts in the prior period have been reclassified to conform to the current consolidated financial statement presentation.
F-10
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Note 2.Summary of Significant Accounting Policies (Continued)

(u)Recently implemented standards
The FASB has issued Accounting Standards Update (ASU) No. 2014-07, Applying Variable Interest Entities Guidance to Common Control Leasing Arrangements. The guidance addresses the consolidation of lessors in certain common control leasing arrangements and is based on a consensus reached by the Private Company Council (PCC). Under current U.S. GAAP, a company is required to consolidate an entity in which it has a controlling financial interest. The assessment of controlling financial interest is performed under either: (a) a voting interest model; or (b) a variable interest entity model. In a variable interest entity model, the company has a controlling financial interest when it has: (a) the power to direct the activities that most significantly affect the economic performance of the entity; and (b) the obligation to absorb losses or the right to receive benefits of the entity that could be potentially significant to the entity. To determine which model applies, a company preparing financial statements must first determine whether it has a variable interest in the entity being evaluated for consolidation and whether that entity is a variable interest entity.
In February 2013, FASB has issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This ASU improves the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in this ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP.
-The private company lessee and the lessor are under common control;
-The private company lessee has a leasing arrangement with the lessor;
-Substantially all of the activity between the private company lessee and the lessor is related to the leasing activities (including supporting leasing activities) between those two companies, and
-If the private company lessee explicitly guarantees or provides collateral for any obligation of the lessor related to the asset leased by the private company, then the principal amount of the obligation at inception does not exceed the value of the asset leased by the private company from the lessor. If elected, the accounting alternative should be applied to all leasing arrangements meeting the above conditions. The alternative should be applied retrospectively to all periods presented, and is effective for annual periods beginning after December 15, 2014, and interim periods within annual periods beginning after December 15, 2015.
Early application is permitted for all financial statements that have not yet been made available for issuance.
The FASB has issued Accounting Standards Update (ASU) No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in the ASU change the criteria for reporting discontinued operations while enhancing disclosures in this area. It also addresses sources of confusion and inconsistent application related to financial reporting of discontinued operations guidance in U.S. GAAP.
Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization’s operations and financial results. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations.
The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. This disclosure will provide users with information about the ongoing trends in a reporting organization’s results from continuing operations. The amendments in this ASU enhance convergence between U.S. GAAP and International Financial Reporting Standards (IFRS). Part of the new definition of discontinued operation is based on elements of the definition of discontinued operations in IFRS 5, Non-Current Assets Held for Sale and Discontinued Operations. The amendments in the ASU are effective in the first quarter of 2015 for public organizations with calendar year ends. For most nonpublic organizations, it is effective for annual financial statements with fiscal years beginning on or after December 15, 2014. Early adoption is permitted.
F-11
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Note 3.Inventories
Inventories consisted of the following at March 31, 2015 and December 31, 2014:
March 31, 2015Satisfied:  December 31, 2014  $
Add:
          Issuance of various classes of  preferred convertible shares of Eagle Mountain Corp.
603,534,000
         Assumed convertible notes1,327,017
Total:604,861,017 
     
Finished goods$-Goodwill  $-
Less allowance for excess and obsolete inventory--604,163,185 
     
Inventory, net$-$-
Upon review, the Company has fully impaired the Goodwill on the transaction date.
Note 4.Property, Plant and Equipment, net

Note 5 – Discontinued Operations
Property, plant
On June 5, 2015, Eagle Mountain Corporation (the “Company”) executed an assignment and equipment, net consistedassumption agreement (the “Assumption Agreement”) with Eagle Mountain Ltd., a Belize corporation (the “Assignor”). Pursuant to the Assumption Agreement, the Company acquired certain agreements and assets and assumed debts in the aggregate amount of $1,327,017 from the following at March 31,Assignor. In consideration, the Company issued the Assignor and/or its assignees 8,000,000 shares of a newly designated Series B Convertible Preferred Stock, 2,050,000 shares of a newly designated Series C Convertible Preferred Stock, 100,000 shares of a newly designed Series D Convertible Preferred Stock and 50,000,000 shares of common stock (which remains payable).
Upon the closing, the Company changed its business from the sales and distribution of smartphones, electronic products and components to  operations in the natural resources, EPC (Engineering, Procurement, and Construction) and oil & gas sector.. The major classes of assets and liabilities from discontinued operations as of June 30, 2015 and December 31, 2014:
March 31, 2015December 31, 2014
At cost
Land and buildings$-$-
Automobiles--
Office equipment--
Leasehold improvements--
Furniture and fixtures--
Machinery--
$-$-
Less: accumulated depreciation--
$-$-
Depreciation2014 included in the consolidated balance sheets, are as gathered from the records transferred to the Company, unaudited, and amortization expense totaled $Nil and $Nil for the three months ended March 31, 2015 and 2014, respectively.subject to further verification, are reported below as follows:
Automobiles include the following amounts under capital leases:
March 31, 2015December 31, 2014
Cost$-$-
Less accumulated depreciation--
Total$-$-
 
  
As of
June 30, 2015
(Unaudited)
  
As of
December 31, 2014
(Audited)
 
       
ASSETS      
Current assets        
Accounts receivable $560,000  $- 
Other current assets  128   128 
Total current assets  560,128   128 
         
TOTAL ASSETS $560,128  $128 
         
LIABILITIES  AND STOCKHOLDERS’ EQUITY (DEFICIT)        
Current liabilities        
Accounts payable and accrued liabilities $1,047,225  $335,522 
Due to shareholders  112,533   112,533 
Total current liabilities  1,159,758   448,055  
         
Total liabilities  1,159,758   448,055  
         


 
F-12
F-9
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)
Note 5 – Discontinued Operations (cont'd)
(Unaudited)
The results of the discontinued operations are as follows:
   Three Months Ended  Six Months Ended 
  June 30,  June 30,  June 30,  June 30, 
  2015  2014  2015  2014 
               
Net sales $-  $451,371  $560,000  $1,013,241 
Costs of sales  -   526,225   480,000   1,113,533 
Gross profit (loss)    -   (74,854)  80,000   (100,292)
                 
                 
Operating Expenses                
Selling and distribution costs  -   30,990   49,280   118,365 
General and administrative expenses  1,060   196,108   182,423   409,106 
Operation expenses  1,060   227,098   231,703   527.471 
                 
Other income (expenses)    -   19,848     -   53,084 
                 
Income (loss) from discontinued operations  (1,060)  (282,104)  (151,703)  (574,679)
Note 6 – Other Assets

(a)  Note 4.Stock OptionsSale and Purchase Agreement with Pryme Oil and Gas LLC

On May 23, 2014 the Company’s 85% controlled subsidiary, Shale Oil International Inc. entered into a Sale and Purchase agreement with Pryme Oil and Gas LLC, a Texas corporation, (the “Seller”) where under the Company’s subsidiary, as “Purchaser”, will acquire 100% of the Seller’s working interests and net revenue interests in the oil and gas leases and areas of mutual interest held by Seller in the AVOYELLES & ST. LANDRY PARISHES, LOUISIANA, known as the Tuner Bayou Acreage (the “Acreage”).  In addition the Purchaser shall acquire the Seller’s working interest in the personal property, equipment and fixtures on the Acreage, as well as any available seismic, geologic, geophysical, geochemical, engineering, financial, prior drilling and production histories, legal and cultural information, reports, studies and data accumulated by Seller in the acquisition and development of the Acreage.  In consideration for the acquisition, the Purchaser shall assume certain debts of the Seller, not to exceed $1,400,000, shall pay the Seller’s proportionate share of the installation of an artificial lift system on the Rosewood Plantation 21-H well (the “Workover”) within 30 days of the execution of the agreement, not to exceed $260,000, and shall agree to drill at least one Chalk well within 4 months of the completion of the aforementioned Workover.  As at June 30, 2015 and August 31, 2014 the Company’s subsidiary has remitted deposits of $260,000 towards the required Workover fees.

Under the terms of the agreement, should the transaction fail to close for any reason, the $260,000 advance by the Company’s subsidiary may be converted into an unrestricted block of stock in Prime Energy Limited in equivalent value to the cash proceeds advanced, determined using a VWAP share price.  As at the date of this report the transaction has not yet closed due to a change in economic conditions and certain legal matters which are being addressed by Pryme, however the Company and Pryme continue to work towards completion of the agreement as contemplated above.

On March 31, 2006, the Board of Directors adopted the 2006 Equity Incentive Stock Plan (the “Plan”) and the majority stockholder approved the Plan by written consent. The purpose of the Plan is to provide additional incentive to employees, directors and consultants and to promote the success of the Company’s business. The Plan permits the Company to grant both incentive stock options (“Incentive Stock Options” or “ISOs”) within the meaning of Section 422 of the Internal Revenue Code (the “Code”), and other options which do not qualify as Incentive Stock Options (the “Non- Qualified Options”) and stock awards.
Unless earlier terminated by the Board of Directors, the Plan (but not outstanding options) terminates on March 31, 2016, after which no further awards may be granted under the Plan. The Plan is administered by the full Board of Directors or, at the Board of Director’s discretion, by a committee of the Board of Directors consisting of at least two persons who are “disinterested persons” defined under Rule 16b-2(c)(ii) under the Securities Exchange Act of 1934, as amended (the “Committee”).
Recipients of options under the Plan (“Optionees”) are selected by the Board of Directors or the Committee. The Board of Directors or Committee determines the terms of each option grant, including (1) the purchase price of shares subject to options, (2) the dates on which options become exercisable and (3) the expiration date of each option (which may not exceed ten years from the date of grant). The minimum per share purchase price of options granted under the Plan for Incentive Stock Options and Non-Qualified Options is the fair market value (as defined in the Plan) on the date the option is granted.
Optionees will have no voting, dividend or other rights as stockholders with respect to shares of Common Stock covered by options prior to becoming the holders of record of such shares. The purchase price upon the exercise of options may be paid in cash, by certified bank or cashier’s check, by tendering stock held by the Optionee, as well as by cashless exercise either through the surrender of other shares subject to the option or through a broker. The total number of shares of Common Stock available under the Plan, and the number of shares and per share exercise price under outstanding options will be appropriately adjusted in the event of any stock dividend, reorganization, merger or recapitalization or similar corporate event.
The Board of Directors may at any time terminate the Plan or from time to time make such modifications or amendments to the Plan as it may deem advisable and the Board of Directors or Committee may adjust, reduce, cancel and re-grant an unexercised option if the fair market value declines below the exercise price except as may be required by any national stock exchange or national market association on which the Common Stock is then listed. In no event may the Board of Directors, without the approval of stockholders, amend the Plan if required by any federal, state, local or foreign laws or regulations or any stock exchange or quotation system on which the Common Stock is listed or quoted and the applicable laws of any other country or jurisdiction where options or stock purchase rights are granted under the Plan.
Subject to limitations set forth in the Plan, the terms of option agreements will be determined by the Board of Directors or Committee, and need not be uniform among Optionees.
As of March 31, 2015, the Company has not granted any options according to the condition set forth in the 2006 Equity Incentive Stock Plan and therefore, there were no options outstanding under this Plan.
(b)  		Intangible Assets
 
Intangible assets totaling $2,031,500 reflected on the Company’s balance sheet represent certain acquired geologic, geophysical, geochemical and engineering data, land acquisition costs and certain associated technical expenses recorded at cost and held by the Company’s 85% controlled subsidiary, Shale Oil International Inc., and its wholly owned subsidiary, Texas Shale Oil Inc.

Note 7 – Loan Receivable

F-13During the six month period ended June 30, 2015, the Company provided $175,000 in operating capital to a third party in the form of a two year note, bearing interest at 2% plus the USD Libor rate.  The loan is unsecured.
On June 1, 2014, the Company’s subsidiary provided $83,450 to a third party in the form of a two year note, bearing 6% interest per annum as a loan for working capital. The loan is unsecured.

F-10
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)


Note 8 – Convertible Notes

On June 5, 2015, the Company entered into debt exchange agreements (the “Exchange Agreements”) with holders of convertible debentures which the Company assumed from the Assignor. Pursuant to the Exchange Agreements, the holders released the Company in full from the Company’s obligations to them for an aggregate of $1,327,017 in convertible debentures, and the Company cancelled, extinguished and discharged such obligations, in exchange for the issuance to the holders of an aggregate of 538,509 shares of Series D Convertible Preferred Stock. The aggregate of 538,509 shares of Series D Convertible Preferred Stock was valued at $106,560,161 based on fair market value of the Company’s market price on the date of the transaction, and assuming all Series D Convertible Shares of Preferred Stock were converted to shares of the Company’s common stock.  We recorded $105,233,144 as a loss on debt settlement.

During the six month period ended June 30, 2015, the Company entered into various 6% convertible notes with investors, having different terms of maturity between three months to two years and with conversion prices varying from $0.05 to $0.10.  We received a total of $965,000 in respect of these convertible notes.

As at the date of issue, these convertible notes were considered to have a beneficial conversion feature (“BCF”) because the conversion price was less than the quoted market price at the time of issuance. The beneficial conversion feature resulting from the discounted conversion price compared to market price was valued on the date of issue to be $965,000, or the face value of the notes.  This value was recorded as a discount on debt and offset to additional paid in capital. Amortization of the discount for the six month period ended June 30, 2015 was $70,862.

  June 30, 2015  Issue Date 
Total convertible promissory note – face value  965,000   965,000 
Less: beneficial conversion feature  (894,138)  (965,000)
   70,862   - 
Interest expenses:
   For the three month period   For the nine month period 
   
June 30,
2015
   
June 30,
2014
   
June 30,
2015
   
June 30,
2014
 
                 
Amortization of debt discount $70,862  $-  $70,862  $- 
Interest at contractual rate  2,224   -   2,224   - 
Totals $73,086  $1,247  $73,086  $10,551 

Note 9 – Common Stock

On June 5, 2015 as part of the Assumption Agreement (Note 4) the Company agreed to issue 8,000,000 shares of a newly designated Series B Convertible Preferred Stock, 2,050,000 shares of a newly designated Series C Convertible Preferred Stock, 100,000 shares of a newly designed Series D Convertible Preferred Stock and 50,000,000 shares of common stock.  Further the Company agreed to settle a total of $1,327,017 in assumed debt for 538,509 shares of Series D Convertible Preferred Stock.

F-11


(Unaudited)EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
Note 5.Weighted Average Number of Shares
(Unaudited)

The Company has a 2006 Incentive Equity Stock Plan, under which the Company may grant options to its employees for up to 5 million shares of common stock. There was no dilutive effect to the weighted average number of shares for the period ended March 31, 2015 and March 31, 2014 since there were no outstanding options at March 31, 2015 and March 31, 2014 (please refer to Note 6 for more information on the 2006 Equity Incentive Stock Plan).
Note 9 – Common Stock (cont’d)

Note 6.Subsequent Events
On June 8, 2015, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (“Series B Preferred Stock”) authorizing the issuance of up to 8,000,000 shares of Series B Preferred Stock. Each share of Series B Preferred Stock has a stated value of $0.001 and is automatically convertible into 90 shares of the Company’s common stock upon the Company’s filing of an amendment to its Certificate of Incorporation to increase its authorized number of shares of common stock. The conversion ratio is subject to adjustment in the event of stock splits, stock dividends, combination of shares and similar recapitalization transactions. The holders of Series B Preferred Stock are entitled to vote on all matters submitted to the Company’s stockholders and shall be entitled to the number of votes equal to the number of shares of common stock into which the shares of Series B Preferred Stock are convertible. On July 17, 2015, the Company effected a one for eighteen reverse split of its common stock and as a result each share of Series B Preferred Stock was adjusted so that it was convertible into 5 shares of the Company’s Common Stock.

In preparing these financial statements, the Company evaluated the events and transactions that occurred from April 1, 2015 through May 20, 2015, the date these financial statements were issued. The Company has decided to acquire more business, with the possibility of other business nature, into the Company. Despite mentioned the Company determined that there were no material subsequent events.
The Company also filed a Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock (“Series C Preferred Stock”) authorizing the issuance of up to 2,100,000 shares of Series C Preferred Stock. Each share of Series C Preferred Stock has a stated value of $0.001 and is automatically convertible into 1,800 shares of the Company’s common stock upon the Company’s filing of an amendment to its Certificate of Incorporation to increase its authorized number of shares of common stock. The conversion ratio is subject to adjustment in the event of stock splits, stock dividends, combination of shares and similar recapitalization transactions. The holders of Series C Preferred Stock are entitled to vote on all matters submitted to the Company’s stockholders and shall be entitled to the number of votes equal to the number of shares of common stock into which the shares of Series C Preferred Stock are convertible. On July 17, 2015, the Company effected a one for eighteen reverse split of its common stock and as a result each share of Series C Preferred Stock was adjusted so that it was convertible into 100 shares of the Company’s Common Stock.

Note 7.Uncertainty of ability to continue as a going concern
The Company also filed a Certificate of Designation of Preferences, Rights and Limitations of Series D Convertible Preferred Stock (“Series D Preferred Stock”) authorizing the issuance of up to 640,000 shares of Series D Preferred Stock. Each share of Series D Preferred Stock has a stated value of $0.001 and is automatically convertible into 1,800 shares of the Company’s common stock upon the Company’s filing of an amendment to its Certificate of Incorporation to increase its authorized number of shares of common stock, provided, however, such conversion shall not occur prior to September 1, 2015. The conversion ratio is subject to adjustment in the event of stock splits, stock dividends, combination of shares and similar recapitalization transactions. The holders of Series D Preferred Stock are entitled to vote on all matters submitted to the Company’s stockholders and shall be entitled to the number of votes equal to the number of shares of common stock into which the shares of Series D Preferred Stock are convertible. On July 17, 2015, the Company effected a one for eighteen reverse split of its common stock and as a result each share of Series D Preferred Stock was adjusted so that it was convertible into 100 shares of the Company’s Common Stock.

The Company had 2,205,010 shares of common stock outstanding at June 30, 2015 and December 31, 2014.

Note 10 – Other Events

On April 18, 2015, Ben Wong and Eddy Wong tendered their resignation as Chief Executive Officer and Chief Financial Officer, respectively, effective immediately. Concurrently, the Board of Directors appointed Ronald Cormick as Chief Executive Officer of the Company and Haley Manchester as Chief Financial Officer of the Company to fill the vacancies left by Messrs. Wong’s resignation, with immediate effect.  The Board also appointed Ronald Cormick, Ehud Amir, and Larry Eastland as directors of the Company and appointed Ehud Amir as Chief Operating Officer of the Company with immediate effect.

On May 26, 2015, Ben Wong and Alan (Chung-Lun) Yang resigned from the Board of Directors.
F-12
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
(Unaudited)


Note 11 – Subsequent Events

On July 17, 2015 (the “Effective Time”), the Company filed the Certificate of Amendment with the Secretary of State of the State of Delaware to effect the increase in authorized shares of common stock and a reverse stock split. Upon filing of the Certificate of Amendment, the Company’s authorized common stock was increased to 500,000,000 shares and every eighteen shares of the Company’s issued and outstanding common stock was automatically converted into one issued and outstanding share of common stock, without any change in par value per share. The reverse stock split was be applied to all shares of the Company’s common stock outstanding immediately prior to the Effective Time, as well as the number of shares of common stock available for issuance under the Company’s equity incentive plans. In addition, the reverse stock split will effect a reduction in the number of shares of common stock issuable upon the conversion of shares of preferred stock or upon the exercise of stock options or warrants outstanding immediately prior to the effectiveness of the reverse stock split. No fractional shares were be issued as a result of the reverse stock split. Stockholders who would otherwise be entitled to receive a fractional share had their fractional shares rounded up to the nearest whole number.
On August 24, 2015 the holders of 638,509 shares of Class D and 2,050,000 shares of Class C convertible preferred stock, converted those shares into 268,850,900 shares of our common stock, effecting a change in control.

On September 1, 2015 a total of $350,000 in convertible notes became due and payable.

F-13
The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The continuation of the Company as a going concern is dependent upon the ability of the Company to obtain necessary equity financing to continue operations and the attainment of profitable operations. The management will seek to raise funds from shareholders.
For the quarter ended March 31, 2015, the Company has generated revenue of $560,000 and has incurred an accumulated deficit $4,970,202. These financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities that might be necessary should the Company be unable to continue as a going concern. These factors noted above raise substantial doubts regarding the Company's ability to continue as a going concern.
F-14
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity and capital resources for the periods described.
The information contained in this Form 10-Q is intended to update the information contained in our annual report on Form 10-K for the year ended December 31, 2014, (the “Form 10-K”), filed with the Securities and Exchange Commission (“SEC”), and presumes that readers have access to, and will have read, the “Management’s Discussion and Analysis of Financial Condition and Results of Operation,” our consolidated financial statements and the notes thereto, and other information contained in the Form 10-K. The following discussion and analysis also should be read together with our condensed consolidated financial statements and the notes to the condensed consolidated financial statements and the notes thereto included elsewhere in this Form 10-Q.
Forward-Looking Statements
Information included in this Form 10-Q may contain forward-looking statements. Except for the historical information contained in this discussion of the business and the discussion and analysis of financial condition and results of operations, the matters discussed herein are forward looking statements. These forward looking statements include but are not limited to the Company’s plans for sales growth and expectations of gross margin, expenses, new product introduction, and the Company’s liquidity and capital needs. This information may involve known and unknown risks, uncertainties and other factors which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by any forward-looking statements. Forward-looking statements, which involve assumptions and describe our future plans, strategies and expectations, are generally identifiable by use of the words “may,” “will,” “should,” “expect,” “anticipate,” “estimate,” “believe,” “intend” or “project” or the negative of these words or other variations on these words or comparable terminology. In addition to the risks and uncertainties described in “Risk Factors” contained in the Form 10-K, these risks and uncertainties may include consumer trends, business cycles, scientific developments, changes in governmental policy and regulation, currency fluctuations, economic trends in the U.S. and inflation. Forward-looking statements are based on assumptions that may be incorrect, and there can be no assurance that any projections or other expectations included in any forward-looking statements will come to pass. Our actual results could differ materially from those expressed or implied by the forward-looking statements as a result of various factors. Except as required by applicable laws, we undertake no obligation to update publicly any forward-looking statements for any reason, even if new information becomes available or other events occur in the future.

5
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
Corporate Overview and Background
Eagle was primarily engaged in the business of distribution of memory products mainly under “Samsung” brand name which principally comprised DRAM, Graphic RAM and Flash for the Hong Kong and PRC markets (“Samsung Business”). After April 1, 2012, the Samsung Business was transferred to ATMD, a joint venture with Tomen. We indirectly own 30% equity interest in ATMD. On September 27, 2013, we sold the entire 30% equity interest of ATMD. Through the acquisition of Jussey on September 28, 2012, we have diversified our product portfolio and customer network, obtained design and manufacturing capabilities, and tapped into the blooming telecommunication industry with access to the 3G baseband licenses acquired by Jussey’s subsidiaries. On September 30, 2014, the Company disposed all of the equity interest held in ACL International Holdings Limited (“ACL Holdings”).
After the disposal, the Company iswas still engaged in the sales and distribution of smartphones, electronic products and components in Hong Kong Special Administrative Region (“Hong Kong”) and the People’s Republic of China (“China” or the “PRC”).

In the past three quarters, after the disposal of the subsidiary,On April 24, 2015, the Company continueamended its Certificate of Incorporation to doing business including negotiation, sourcing better supplier, restructuring of the administrative team and marketing with the customers in orderchange its corporate name to improve the financial position of the Company. After the continuous effort in the past periods,Eagle Mountain Corporation.  Subsequently, on June 5, 2015  the Company regainedand Eagle Mountain Ltd., a significant amount of sales revenue in this quarter. Moreover,Belize corporation (the “Assignor”), entered into an Assignment and Assumption Agreement (the “Assumption Agreement”), pursuant to which the Assignor assigned to the Company is continuous to looking for more business opportunitycertain debts and assets, including  (1)a controlling interest Shale Oil International Inc. (OTC:PINK-SHLE), and its 100% owned subsidiary, Texas Shale Oil Inc., which collectively own a strategic oil and gas model (intellectual property) covering  several thousand square miles of prospective oil and gas exploration and development acres in Louisiana, Texas and Mexico, as well as considering about acquisitionvarious related geophysical, geological, engineering and geochemical data sets;  (2) an opportunity to participate in and finance a trans-oil pipeline project, and (3) an agreement for business other than our main scheme.
Financial Highlights
The Company has decideda strategic cooperation regarding an integrated energy project and an opportunity to sell allpurchase and refurbish a refinery.  Mr. Ehud Amir, the investment in its fully subsidiary ACL International LimitedChairman of the Board of the Company’s Board of Directors, and the transaction will be completed withinCompany’s Chief Operating Officer, is the CEO of Assignor.  Mr. Amir is also a year. Accordingly, the company has put aside all the assets and liabilitiesco-founder of ACL under the current asset held for disposal to reflect the decision.
·Net sales for the three months ended March 31, 2015 (“first quarter of 2015”) decreased $1,870, or 0.3% to $560,000 compared to the same period in 2014 (“first quarter of 2014”).


·
The Company’s gross profit for the first quarter of 2015 increased by $105,438 or 414.4% toTexas Shale Oil Inc., a gross profit of $80,000 compared to a gross loss in the first quarter of 2014
.
  Net loss for the first quarter of 2015 decreased $140,381 to a loss $150,643 compared to the net loss of $291,024 for the first quarter of 2014.
  ·  Operating expenses for the first quarter of 2015 decreased by $68,180, or 22.8% to $230,643 compared to the first quarter of 2014.
6
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES

Results of Operations
  Three Months Ended 
  March 31, 2015  March 31, 2014 
  (Unaudited)  (Unaudited) 
       
Net sales $560,000  $561,870 
Cost of sales  480,000   587,308 
         
Gross profit  80,000   (25,438))
         
Operating expenses        
Sales and marketing expenses  49,280   87,375 
General and administrative expenses  181,363   211,448 
         
Profit (loss) from operations  (150,643)   (324,261))
         
Other (income) expenses  -   (33,237))
         
(Loss) Income before income taxes provision  (150,643)   (291,024) 
         
Income taxes provision  -   - 
         
Net income (loss) $(150,643)  $(291,024) 
         
Earnings (loss) per share – basic and diluted $
(0.004)
  $
(0.01)
 
Unaudited Comparisons for Three Months Ended March 31, 2015 to the Three Months Ended March 31, 2014
Net sales
Net sales consist of product sales, net of returns and allowances and any recoveries from sales of previously written down inventories. Net sales are recognized upon the transfer of legal titlewholly owned subsidiary of the products toCompany’s 85% controlled subsidiary, Shale Oil International Inc. In addition, Mr. Ronald Cormick, the customers. The quantityCompany’s Chief Executive Officer, is the President and Director of products the Company sells fluctuates with changes in demand from its customers. The Company’s net sales decreased by 0.3% to $560,000 for the first quarterTexas Shale Oil Inc. and President and CEO of 2015 from $561,870 for the first quarter of 2014. After the disposalShale Oil International Inc.  Mr. Larry Eastland, a member of the subsidiary, the Company achieved to restarted the sales in this quarter whichCompany’s Board of Directors, is the resulted of lots of negotiation and marketing activities within the last three quarters.
Cost of sales
Cost of sales is comprised of costs of goods purchased from our supplier, costs of manufacturing, assembly and testing of our products, and associated costs related to manufacturing support and quality assurance personnel, as well as provision for excess and obsolete inventories. The Company’s cost of sales, as a percentage of net sales, amounted to approximately 85.7% for the first quarter of 2015 and approximately 104.5% for the first quarter of 2014. Cost of sales decreased by $107,308 or 18.3%, to $480,000 for the first quarter of 2015 from $587,308 for the first quarter of 2014. This decrease was mainly due to better control of cost after the disposal of the subsidiary ACL Holding and doing business directly with supplier.
Gross Profit
Gross profit is net sales less cost of sales and is affected by a number of factors, including competitive pricing, product mix, foundry pricing, cost of test and assembly services, manufacturing yields and provision for excess and obsolete inventories. The Company’s gross profit for the first quarter of 2015 was recorded as a gross profit of $80,000, representing an increase of $105,438 or 414.4% over a gross loss of $25,438 in the same period of 2014. This result is a consequence of the sales achieved in the first quarter in 2015 with improved cost control and better profit margin.
7
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
Sales and Marketing Expenses
Sales and marketing expenses consists primarily of associated costs for sales and marketing, commissions, promotional activities, freight shipments, and marine insurance. Sales and marketing expenses decreased by $38,095 or 43.6%, to $49,280 for the first quarter of 2015 from $87,375 for the first quarter of 2014. Such decrease was directly attributable to the more effective control over the marketing activities after disposal of the subsidiary.
General and Administrative Expenses
General and administrative expenses consists primarily of compensation (including stock-based compensation) and associated costs for administrative personnel, professional fees including audit and other business registration fee, andalso director and officer insurance. General and administrative expenses decreased by $30,085 or 14.2%, to $181,363 for the first quarterChairman of 2015 from $211,448 for the first quarter of 2014. The decrease was directly attributable to more effective control over the administrative activities after disposal of the subsidiary..Shale Oil International Inc.
Income (Loss) from Operations
Loss from operations was $150,643 for the first quarter of 2015 compared to loss of $324,261 for the first quarter of 2014. This decrease in loss from operations was mainly due to the decision for disposal of operating subsidiaries in the coming quarter.
Other Expenses (Income)
Other expenses (income) consists primarily of rental income, management and service income, interest income, interest expenses, and profit on disposals of assets. The Company has recorded other income of $Nil for the first quarter of 2015, a decrease of 100% from other income of $33,237 for the first quarter of 2014. This decrease in other income was mainly due to disposal of subsidiary which resulted to no more rental income and management activities to subsidiary.

Net Income (Loss)
As a result of the foregoing,aforementioned transactions the Company recordednow operates in the natural resources, EPC (Engineering, Procurement, and Construction) and oil & gas sector, and discontinued its operation in the sales and distribution of smartphones, electronic products and components.
On July 17, 2015 the Company filed a net loss $150,643 forCertificate of Amendment with the first quarterSecretary of State of the State of Delaware to effect the increase in authorized shares of common stock and a reverse stock split. Upon filing of the Certificate of Amendment, the Company’s authorized common stock was increased to 500,000,000 shares and every eighteen shares of the Company’s issued and outstanding common stock was automatically converted into one issued and outstanding share of common stock, without any change in par value per share. The reverse stock split was  applied to all shares of the Company’s common stock outstanding immediately prior to July 17, 2015, a decrease of $140,381 or 48.2%, from a net loss $291,024 for the first quarter of 2013. The result was mainly due the disposals of subsidiary which provided a better effective control over cost and expenses.
Critical Accounting Policies
The U.S. Securities and Exchange Commission (“SEC”) recently issued Financial Reporting Release No. 60, “Cautionary Advice Regarding Disclosure About Critical Accounting Policies” (“FRR 60”), suggesting companies provide additional disclosure and commentary on their most critical accounting policies. In FRR 60, the SEC defined the most critical accounting policiesas well as the ones that are most importantnumber of shares of common stock available for issuance under the Company’s equity incentive plans. In addition, the reverse stock split will effect a reduction in the number of shares of common stock issuable upon the conversion of shares of preferred stock or upon the exercise of stock options or warrants outstanding immediately prior to the portrayaleffectiveness of a company’s financial condition and operating results, and require management to make its most difficult and subjective judgments, oftenthe reverse stock split. No fractional shares were be issued as a result of the needreverse stock split. Stockholders who would otherwise be entitled to make estimatesreceive a fractional share had their factional shares rounded up to the nearest whole number.
The Assumption Agreement resulted in a change of matters that are inherently uncertain. Basedcontrol in the Company when on this definition,August 24, 2015 the holders of 638,509 shares of Class D and 2,050,000 shares of Class C preferred stock, converted those shares into 268,850,900 shares of our most critical accounting policies include: inventory valuation, which affects cost of sales and gross margin; policies for revenue recognition, allowance for doubtful accounts, and stock-based compensation. The methods, estimates and judgments we use in applying these most critical accounting policies have a significant impact on the results we report in our consolidated financial statements.common stock.

 
8
 
4
Results of Operations

On June 5, 2015 the Company and Eagle Mountain Ltd., a Belize corporation (the “Assignor”), entered into an Assignment and Assumption Agreement (the “Assumption Agreement”) as more particularly described in the financial statements included herein. As a result of the Assumption Agreement, the Company now operates in the natural resources, EPC (Engineering, Procurement, and Construction) and oil & gas sector, and discontinued its operation in the sales and distribution of smartphones, electronic products and components.

The financial statements contained herein reflect the consolidated financial reports of the Company and its 85% controlled subsidiary, Shale Oil International Inc.  In addition, discontinued operations from the Company’s prior business operation is reflected as of the transaction date, June 5, 2015.

   Three Months Ended  Six Months Ended 
  June 30,  June 30,  June 30,  June 30, 
  2015  2014  2015  2014 
               
Revenue $-  $-  $   $- 
                 
Operating Expenses                
Exploration expenses  20,039   -   20,039   - 
Professional fees  224,500   -   224,500   - 
General and administrative expenses  165,165   -   165,165   - 
Total operatingexpenses  409,704   -   409,704   - 
Income (loss) from continuing operations  (409,704)  -   (409,704)    
                 
Other Income (expenses)                
Interest expenses  (73,086)  -   (73,086)  - 
Interest income  369   -   369   - 
Impairment of goodwill  (604,163,185)  -   (604,163,185)  - 
(Loss) on debt settlement  (105,233,144)  -   (105,233,144)  - 
Other Income (expenses)  (709,469,046)  -   (709,469,046)  - 
       -         
Net Income (loss) from continuing operations  (709,878,750)  -   (709,878,750)  - 
Net Income (loss) from discontinued operations  (1,060)  (282,104)  (151,703)  (574,679)
Net Income (loss) $(709,879,810) $(282,104) $(710,030,453) $(574,679)
                 
Attributable to:                
Non-controlling interest $(7,041) $-  $(7,041) $- 
Shareholders of the Company $(709,879,810) $(282,104) $(710,030,453) $(574,679)
                 
5
Unaudited Comparisons for Three and Six Months Ended June 30, 2015 to the Three and Six Months Ended June 30, 2014

Exploration Expenses

During the three and six months ended June 30, 2015 the Company incurred $20,039 in exploration expenses (2014- $Nil) with respect to our newly acquired business operations in the oil and gas sector.

Professional Fees

During the three and six months ended June 30, 2015 the Company incurred $224,500 in professional fees paid for legal, accounting, audit and other professional expense compared to $Nil in the prior comparative period.

The Company expected to continue to incur substantive additional professional fees as we move to evaluate recently acquired resource based assets and undertake financings to meet our operational overhead and planned exploration expenses.

General and Administrative expenses

During the three and six months ended June 30, 2015 the Company incurred general and administrative expenses of $165,165 as compared to $Nil in the prior comparative period.  General and administrative expenses include travel and entertainment expense, office expense, rent and other overhead, transfer agent and filing fees and fees paid to consultants.

Other Expenses

During the three and six month periods ended June 30, 2015 the Company reported impairment of goodwill with respect to an Assumption Agreement more particularly described in the financial statements contained herein of $604,163,185 as a result impairment testing conducted by management at the acquisition date.  In addition the Company recorded a loss on the settlement of certain acquired debts of $105,233,144 as a result of the issuance of shares of convertible class D preferred stock.

In addition we recorded interest expense of $73,086 in respect of certain convertible notes payable, including amortization of the debt discount and interest income of $369 with no similar expenses in the prior comparative three and six month periods.

Expenses from discontinued operations totaled $1,060 in the three months ended June 30 2015 ($282,104 – 2014) and $151,703 in the six months ended June 30, 2015 ($574,679-2014)

CAPITAL RESOURCES AND LIQUIDITY
At June 30, 2015, we had total current assets of $216,143 including $196,523 cash on hand, interest receivable of $5,307, prepaid expenses of $7,000 and other current assets of $7,313, as compared to $Nil total current assets in the comparative period ended December 31, 2014.  Current liabilities from continuing operations totaling $1,466,324 at June 30, 2015 include $905,931 from accounts payable and accrued liabilities, $220,131 in advances from third parties, $70,862 in convertible notes payable, net and $269,400 in loans payable, compared to $Nil current liabilities from continuing operations at December 31, 2014.  Presently we rely on advances from third parties and convertible loans from qualified investors to fund our general operating expenses. 

The Company expects it will need to raise additional capital to fund its proposed operations for the next twelve months, however, the total amount of capital required is presently unknown.  The Company is continuing to evaluate the cash requirements of its recently acquired operations. We intent to fund operations by a combination loans and equity placements.

There can be no assurance that continued funding will be available on satisfactory terms.

6
Net Cash Provided by (Used for) Operating Activities

In the six months ended June 30, 2015, net cash used by continuing operating activities was $574,541 as compared to $nil in the prior comparative period.  Net cash provided by discontinued operations totaled $1,615,830 in the six months ended June 30, 2014 as compared to NIL in the current period.

Net Cash Provided by (Used for) Investing Activities

During the six months ended June 30, 2015, the Company used $193,936 cash in investing activities compared to Nil in the prior comparative period.  The Company acquired cash of $132,064 as a result of consolidation of its subsidiary accounts and expended a total of 326,000 in loans and advances to its subsidiary and certain third parties.  The Company reported net cash provided from investing activities from discontinued operations of $10,806,654 in the six months ended June 30, 2014 as compared to Nil in the current six month period.
Net Cash Provided by (Used for) Financing Activities

During the six months ended June 30, 2015 the Company received $965,000 in proceeds from convertible notes payable ($Nil-2014) and reported $net cash used in financing activities from discontinued operations  $12,653,603 in the six months ended June 30, 2014 (Nil- 2015).

GOING CONCERN
The Company has incurred net losses since inception and had a working capital deficit of $1,251,241 at June 30, 2015.  These conditions raise substantial doubt as to the Company’s ability to continue as a going concern. The Company expects cash flows from operating activities to improve, primarily as a result of an increase in revenue, although there can be no assurance thereof. The accompanying consolidated financial statements do not include any adjustments that might be necessary should we be unable to continue as a going concern. If we fail to generate positive cash flow or obtain additional financing, when required, we may have to modify, delay, or abandon some or all of our business and expansion plans.

There can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or that funds will be available from external sources such as debt or equity financings or other potential sources. The lack of additional capital resulting from the inability to generate cash flow from operations or to raise capital from external sources would force the Company to substantially curtail or cease operations and would, therefore, have a material adverse effect on its business. Furthermore, there can be no assurance that any such required funds, if available, will be available on attractive terms or that they will not have a significant dilutive effect on the Company's existing stockholders.
The accompanying financial statements do not include any adjustments related to the recoverability or classification of asset-carrying amounts or the amounts and classification of liabilities that may result should the Company be unable to continue as a going concern.
CRITICAL ACCOUNTING POLICIES
Our financial statements and related public financial information are based on the application of accounting principles generally accepted in the United States (“GAAP”). GAAP requires the use of estimates; assumptions, judgments and subjective interpretations of accounting principles that have an impact on the assets, liabilities, and revenue and expense amounts reported. These estimates can also affect supplemental information contained in our external disclosures including information regarding contingencies, risk and financial condition. We believe our use of estimates and underlying accounting assumptions adhere to GAAP and are consistently and conservatively applied. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ materially from these estimates under different assumptions or conditions. We continue to monitor significant estimates made during the preparation of our financial statements.
Our significant accounting policies are summarized in Note 2 of our financial statements for the period ended June 30, 2015.  While all these significant accounting policies impact our financial condition and results of operations, we view certain of these policies as critical. Policies determined to be critical are those policies that have the most significant impact on our financial statements and require management to use a greater degree of judgment and estimates. Actual results may differ from those estimates. Our management believes that given current facts and circumstances, it is unlikely that applying any other reasonable judgments or estimate methodologies would cause a material effect on our consolidated results of operations, financial position or liquidity for the periods presented in this report.

7
RECENT ACCOUNTING PRONOUNCEMENTS
In April 2015, the FASB issued ASU 2015-03, Simplifying the Presentation of Debt Issuance Costs.  The new standard will require debt issuance costs to be presented on the balance sheet as a direct reduction of the carrying value of the associated debt liability, consistent with the presentation of debt discounts.  Currently, debt issuance costs are presented as a deferred asset.  The recognition and measurement requirements will not change as a result of this guidance.  The standard is effective for the annual reporting periods beginning after December 15, 2015 and will be applied on a retrospective basis.   This amendment will not have a material impact on our financial statements. 
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIESOFF BALANCE SHEET ARRANGEMENTS
We do not have any off-balance sheet arrangements, financings, or other relationships with unconsolidated entities or other persons, also known as “special purpose entities” (SPEs).
Revenue Recognition
The Company derives revenues from resale of computer memory products. The Company recognizes revenue in accordance with the ASC 605 “Revenue Recognition”. Under ASC 605, revenue is recognized when there is persuasive evidence of an arrangement, delivery has occurred or services are rendered, the sales price is determinable, and collectability is reasonably assured. Revenue typically is recognized at time of shipment. Sales are recorded net of discounts, rebates, and returns, which historically were not material.
Impairment of Long-Lived Assets
We account for impairment of property, plant and equipment in accordance with FASB ASC 360. The carrying value of a long-lived asset is considered impaired when the anticipated undiscounted cash flow from such asset is separately identifiable and is less than its carrying value. In that event, a loss is recognized based on the amount by which the carrying value exceeds the fair market value of the long-lived asset. Fair market value is determined primarily using the anticipated cash flows discounted at a rate commensurate with the risk involved. Losses on long-lived assets to be disposed of are determined in a similar manner, except that fair market values are reduced for the cost to dispose. During the reporting years, there was no impairment loss incurred. Competitive pricing pressure and changes in interest rates, could materially and adversely affect our estimates of future net cash flows to be generated by our long-lived assets.
Inventory Valuation
Our policy is to value inventories at the lower of cost or market on a part-by-part basis. In addition, we write down unproven, excess and obsolete inventories to net realizable value. This policy requires us to make a number of estimates and assumptions including market and economic conditions, product lifecycles and forecast demand for our product to value our inventory. To the extent actual results differ from these estimates and assumptions, the balances of reported inventory and cost of products sold will change accordingly.
Allowance for Doubtful Accounts.
We maintain an allowance for doubtful accounts for estimated losses resulting from the inability of our customers to make required payments. Our allowance for doubtful accounts is based on our assessment of the collectability of specific customer accounts, the aging of accounts receivable, our history of bad debts, and the general condition of the industry. If a major customer’s credit worthiness deteriorates, or our customers’ actual defaults exceed our historical experience, our estimates could change and impact our reported results.
Liquidity and Capital Resources
Our principal sources of liquidity are cash from operations, bank lines of credit and credit terms from suppliers. Our principal uses of cash have been for operations and working capital. We anticipate these uses will continue to be our principal uses of cash in the future.
As of December 31, 2014, the Company had no lines of credit and loan facilities available for drawdown as short-term loans repayable within 90 days due to the disposal of ACL Holdings on September 30, 2014.

Our ability to draw down under our various credit and loan facilities is, in each case, subject to the prior consent of the relevant lending institution to make advances at the time of the requested advance and each facility (other than with respect to certain long term mortgage loans) is payable within 90 days of drawdown. Accordingly, on a case by case basis, we may elect to terminate or not renew several of our credit facilities if significant reduction in our available short term borrowings that we do not deem it is commercially reasonable.

As of March 31, 2015, the Company has total net current liabilities of $598,570. This raises substantial doubt about the Company’s ability to continue as a going concern. We will continue to seek additional sources of available financing on acceptable terms; however, there can be no assurance that we will be able to obtain the necessary additional capital on a timely basis or on acceptable terms, if at all. In addition, if the results are negatively impacted and delayed as a result of political and economic factors beyond management’s control, our capital requirements may increase.

The following factors, among others, could have negative impacts on our results of operations and financial position: the termination or change in terms of the banking facilities; pricing pressures in the industry; a continued downturn in the economy in general or in the memory products sector; an unexpected decrease in demand for certain memory products; our ability to attract new customers; an increase in competition in the related markets; and the ability of some of the Company’s customers to obtain financing.
Although we believe the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We are under no duty to update any of the forward-looking statements after the date of this report to conform them to actual results or to make changes in our expectations.
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Net Cash Provided by (Used for) Operating Activities
In the three months ended March 31, 2015, net cash provided by operating activities was $Nil while for the three months ended March 31, 2014, net cash provided by operating activities was $1,617,381, a decrease in net cash provided by operating activities of $1,617,381. This decrease was primarily due to the disposal of ACL Holdings which resulted in decrease in operating activities, however, the Company is still maintaining operation and doing business within the period.
Net Cash Provided by (Used for) Investing Activities
For the three months ended March 31, 2015, net cash provided by investing activities was $Nil while for the three months ended March 31, 2014 was $11,736,903, a decrease of the amount of $11,736,903. This decrease was primarily due to changes in fixed assets assigned to current assets hold for disposal resulted by the decision for disposal of operating subsidiaries as of March 31, 2014 and then actually disposed in September 30, 2014.
Net Cash Provided by (Used for) Financing Activities
In the three months ended March 31, 2015, net cash used for financing activities was $Nil while for the three months ended March 31, 2014, net cash used by was $13,585,403, an increase of the amount of $13,585,403. This increase was due to the decision for disposal of operating subsidiaries which resulted in the repayment of bank lines of credit and loans payable usage of March 31, 2014.
New Accounting Pronouncements
In January 2013, FASB has issued Accounting Standards Update (ASU) No. 2013-01, Balance Sheet (Topic 210): Clarifying the Scope of Disclosures about Offsetting Assets and Liabilities. This ASU clarifies that ordinary trade receivables and receivables are not in the scope of ASU No. 2011-11, Balance Sheet (Topic 210): Disclosures about Offsetting Assets and Liabilities. Specifically, ASU 2011-11 applies only to derivatives, repurchase agreements and reverse purchase agreements, and securities borrowing and securities lending transactions that are either offset in accordance with specific criteria contained in the FASB Accounting Standards Codification™ (Codification) or subject to a master netting arrangement or similar agreement. The FASB undertook this clarification project in response to concerns expressed by U.S. stakeholders about the standard’s broad definition of financial instruments. After the standard was finalized, companies realized that many contracts have standard commercial provisions that would equate to a master netting arrangement, significantly increasing the cost of compliance at minimal value to financial statement users. An entity is required to apply the amendments in ASU 2013-01 for fiscal years beginning on or after January 1, 2013, and interim periods within those annual periods. An entity should provide the required disclosures retrospectively for all comparative periods presented. The effective date is the same as the effective date of ASU 2011-11.
In February 2013, FASB has issued Accounting Standards Update (ASU) No. 2013-02, Comprehensive Income (Topic 220): Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This ASU improves the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses that are initially excluded from net income for an accounting period. Those gains and losses are later reclassified out of accumulated other comprehensive income into net income. The amendments in this ASU do not change the current requirements for reporting net income or other comprehensive income in financial statements. All of the information that this ASU requires already is required to be disclosed elsewhere in the financial statements under U.S. GAAP.

The FASB has issued Accounting Standards Update (ASU) No. 2014-07, Applying Variable Interest Entities Guidance to Common Control Leasing Arrangements. The guidance addresses the consolidation of lessors in certain common control leasing arrangements and is based on a consensus reached by the Private Company Council (PCC). Under current U.S. GAAP, a company is required to consolidate an entity in which it has a controlling financial interest. The assessment of controlling financial interest is performed under either: (a) a voting interest model; or (b) a variable interest entity model. In a variable interest entity model, the company has a controlling financial interest when it has: (a) the power to direct the activities that most significantly affect the economic performance of the entity; and (b) the obligation to absorb losses or the right to receive benefits of the entity that could be potentially significant to the entity. To determine which model applies, a company preparing financial statements must first determine whether it has a variable interest in the entity being evaluated for consolidation and whether that entity is a variable interest entity.
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The new guidance allows a private company to elect (when certain conditions exist) not to apply the variable interest entity guidance to a lessor under common control. Instead, the private company would make certain disclosures about the lessor and the leasing arrangement. Under the amendments in this ASU, a private company lessee could elect an alternative not to apply variable interest entity guidance to a lessor when:
-The private company lessee and the lessor are under common control;
-The private company lessee has a leasing arrangement with the lessor;
-Substantially all of the activity between the private company lessee and the lessor is related to the leasing activities (including supporting leasing activities) between those two companies, and
-If the private company lessee explicitly guarantees or provides collateral for any obligation of the lessor related to the asset leased by the private company, then the principal amount of the obligation at inception does not exceed the value of the asset leased by the private company from the lessor. If elected, the accounting alternative should be applied to all leasing arrangements meeting the above conditions. The alternative should be applied retrospectively to all periods presented, and is effective for annual periods beginning after December 15, 2014, and interim periods within annual periods beginning after December 15, 2015. Early application is permitted for all financial statements that have not yet been made available for issuance.
The FASB has issued Accounting Standards Update (ASU) No. 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity. The amendments in the ASU change the criteria for reporting discontinued operations while enhancing disclosures in this area. It also addresses sources of confusion and inconsistent application related to financial reporting of discontinued operations guidance in U.S. GAAP.
Under the new guidance, only disposals representing a strategic shift in operations should be presented as discontinued operations. Those strategic shifts should have a major effect on the organization’s operations and financial results. Examples include a disposal of a major geographic area, a major line of business, or a major equity method investment. In addition, the new guidance requires expanded disclosures about discontinued operations that will provide financial statement users with more information about the assets, liabilities, income, and expenses of discontinued operations.
The new guidance also requires disclosure of the pre-tax income attributable to a disposal of a significant part of an organization that does not qualify for discontinued operations reporting. This disclosure will provide users with information about the ongoing trends in a reporting organization’s results from continuing operations. The amendments in this ASU enhance convergence between U.S. GAAP and International Financial Reporting Standards (IFRS). Part of the new definition of discontinued operation is based on elements of the definition of discontinued operations in IFRS 5, Non-Current Assets Held for Sale and Discontinued Operations. The amendments in the ASU are effective in the first quarter of 2015 for public organizations with calendar year ends. For most nonpublic organizations, it is effective for annual financial statements with fiscal years beginning on or after December 15, 2014. Early adoption is permitted.

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EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
The new amendments will require an organization to:
Present (either on the face of the statement where net income is presented or in the notes) the effects on the line items of net income of significant amounts reclassified out of accumulated other comprehensive income - but only if the item reclassified is required under U.S. GAAP to be reclassified to net income in its entirety in the same reporting period.
Cross-reference to other disclosures currently required under U.S. GAAP for other reclassification items (that are not required under U.S. GAAP) to be reclassified directly to net income in their entirety in the same reporting period. This would be the case when a portion of the amount reclassified out of accumulated other comprehensive income is initially transferred to a balance sheet account (e.g., inventory for pension-related amounts) instead of directly to income or expense.
The amendments apply to all public and private companies that report items of other comprehensive income. Public companies are required to comply with these amendments for all reporting periods (interim and annual). A private company is required to meet the reporting requirements of the amended paragraphs about the roll forward of accumulated other comprehensive income for both interim and annual reporting periods. However, private companies are only required to provide the information about the effect of reclassifications on line items of net income for annual reporting periods, not for interim reporting periods. The amendments are effective for reporting periods beginning after December 15, 2012, for public companies and are effective for reporting periods beginning after December 15, 2013, for private companies. Early adoption is permitted.
In February 2013, FASB issued Accounting Standards Update (ASU) No. 2013-03, Financial Instruments (Topic 825). This ASU clarifies the scope and applicability of a disclosure exemption that resulted from the issuance of Accounting Standards Update No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRSs. The amendment clarifies that the requirement to disclose "the level of the fair value hierarchy within which the fair value measurements are categorized in their entirety (Level 1, 2, or 3)" does not apply to nonpublic entities for items that are not measured at fair value in the statement of financial position, but for which fair value is disclosed. This ASU is the final version of Proposed Accounting Standards Update 2013-200—Financial Instruments (Topic 825) which has been deleted. The amendments are effective upon issuance.
In February 2013, FASB has issued Accounting Standards Update (ASU) No. 2013-04, Liabilities (Topic 405): Obligations Resulting from Joint and Several Liability Arrangements for Which the Total Amount of the Obligation Is Fixed at the Reporting Date. This ASU provides guidance for the recognition, measurement, and disclosure of obligations resulting from joint and several liability arrangements for which the total amount of the obligation within the scope of this ASU is fixed at the reporting date, except for obligations addressed within existing guidance in U.S. GAAP. The guidance requires an entity to measure those obligations as the sum of the amount the reporting entity agreed to pay on the basis of its arrangement among its co-obligors and any additional amount the reporting entity expects to pay on behalf of its co-obligors. The guidance in this ASU also requires an entity to disclose the nature and amount of the obligation as well as other information about those obligations. The amendments in this ASU are effective for fiscal years, and interim periods within those years, beginning after December 15, 2013. For nonpublic entities, the amendments are effective for fiscal years ending after December 15, 2014, and interim periods and annual periods thereafter. The amendments in this ASU should be applied retrospectively to all prior periods presented for those obligations resulting from joint and several liability arrangements within the ASU’s scope that exist at the beginning of an entity’s fiscal year of adoption. An entity may elect to use hindsight for the comparative periods (if it changed its accounting as a result of adopting the amendments in this ASU) and should disclose that fact. Early adoption is permitted.
In March 2013, FASB has issued Accounting Standards Update (ASU) No. 2013-05, Foreign Currency Matters (Topic 830). This ASU resolve the diversity in practice about whether Subtopic 810-10, Consolidation—Overall, or Subtopic 830-30, Foreign Currency Matters—Translation of Financial Statements, applies to the release of the cumulative translation adjustment into net income when a parent either sells a part or all of its investment in a foreign entity or no longer holds a controlling financial interest in a subsidiary or group of assets that is a nonprofit activity or a business (other than a sale of in substance real estate or conveyance of oil and gas mineral rights)within a foreign entity. In addition, the amendments in this Update resolve the diversity in practice for the treatment of business combinations achieved in stages (sometimes also referred to as step acquisitions) involving a foreign entity. This ASU is the final version of Proposed Accounting Standards Update EITF11Ar—Foreign Currency Matters (Topic 830), which has been deleted. The amendments in this Update are effective prospectively for fiscal years (and interim reporting periods within those years) beginning after December 15, 2013. For nonpublic entities the amendments in this Update are effective prospectively for the first annual period beginning after December 15, 2014, and interim and annual periods thereafter. The amendments should be applied prospectively to derecognition events occurring after the effective date. Prior periods should not be adjusted. Early adoption is permitted. If an entity elects to early adopt the amendments, it should apply them as of the beginning of the entity’s fiscal year of adoption.
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EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
Item 3.
Quantitative and Qualitative Disclosures about Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Item 4.
Controls and Procedures
(a)Disclosure Controls and Procedures
We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in reports that we file or submit under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission (SEC) rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), as appropriate, to allow timely decisions regarding required disclosure.
Limitations on the Effectiveness of Disclosure Controls. In designing and evaluating the Company's disclosure controls and procedures, management recognized that disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Additionally, in designing disclosure controls and procedures, Company management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible disclosure controls and procedures. The design of any disclosure controls and procedures also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.
Evaluation of Disclosure Controls and Procedures. The Company's CEO and CFO have evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures as defined in Exchange Act Rules 13a-15(e) and 15d-15(e) as of May 20, 2015, and based on this evaluation, the Company's principal executive and financial officers have concluded that the Company's disclosure controls and procedures were not effective to ensure that material information is recorded, processed, summarized and reported by management of the Company on a timely basis in order to comply with the Company's disclosure obligations under the Exchange Act and the rules and regulations promulgated thereunder. The Company's principal executive and financial officer’s conclusion regarding the Company's disclosure controls and procedures is based on management's conclusion that the Company's internal control over financial reporting are ineffective, as described in our Annual Report on Form 10K as filed with the SEC on April 16, 2015, which included a complete discussion relating to the foregoing evaluation of Disclosures on Controls and Procedures.
(b)Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31,June 30, 2015 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

 
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8
PART II. OTHER INFORMATION
 
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
Item 1.Legal Proceedings
None
Item 1A.Risk Factors
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
None      During the six month period ended June 30, 2015, the Company entered into various 6% convertible notes with investors, having different terms of maturity between three months to two years and with conversion prices varying from $0.05 to $0.10.  We received a total of $965,000 in respect of these convertible notes which are convertible into a total of 12,650,000 shares of common stock.

       On August 24, 2015 the holders of 638,509 shares of Class D and 2,050,000 shares of Class C preferred stock, converted those shares into 268,850,900 shares of our common stock.

Item 3.Defaults Upon Senior Securities
None
Item 4.Mine Safety Disclosures
        Not applicable.
Item 5.Other Information
None
 
14None

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Item6.
Item6.		Exhibits
 Exhibits: Description:
* 31.13.1Certificate of Amendment, dated April 24, 2015(1)
3.2Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock(2)
3.3Certificate of Designation of Preferences, Rights and Limitations of Series C Convertible Preferred Stock(2)
3.4Certificate of Designation of Preferences, Rights and Limitations of Series D Convertible Preferred Stock(2)
10.1Assignment and Assumption Agreement(2)
10.2Form of Exchange Agreement(2)
10.3*Convertbile Note Purchase Agreement and Form of 6% Convertible Promissory Note
10.4*Loan agreement between Shale Oil International Inc (formerly Willow Creek Enterprises Inc.) and Orosz Brother Cars Ltd.
10.5*Sale and Purchase Agreement between Shale Oil International Inc (formerly Willow Creek Enterprises Inc.) and Pryme Oil and Gas LLC
31.1*Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
* 31.231.2*Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
* 32.132.1*Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
* 32.232.2*Certification by Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**Filed herewith.XBRL Instance Document
*101.SCH**FurnishedXBRL Taxonomy Extension Schema Document
101.CAL**XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB**XBRL Taxonomy Extension Labels Linkbase Document
101.PRE**XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF**XBRL Taxonomy Extension Definition Linkbase Document
*
**
Filed herewith. Pursuant
(1) Filed as an exhibit to Rule 406T of Regulation S-T, the Interactive Data FilesCompany’s Current Report on Exhibit 101 hereto are deemed notForm 8-K which was filed or part of any registration statement or prospectus for purposes of Sections 11 or 12 of the Securities Act of 1933, are deemed not filed for purposes of Section 18 ofwith the Securities and Exchange Act of 1934,Commission on April 29, 2015 and otherwise are not subjectis incorporated herein by reference.
(2)2 Filed as exhibit to liability under those sections.the Company’s Current Report on Form 8-K which was filed with the Securities and Exchange Commission on June 8, 2015 and is incorporated herein by reference.
To be filed by amendment.

 
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15SIGNATURES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 EAGLE MOUNTAIN CORPORATION
   
Date: May 20,September 14, 2015By:/s/ Ronald Cormick
  Ronald Cormick
  Chief Executive Officer
   
Date: May 20,September 14, 2015By:  /s/ Haley Manchester
  Haley Manchester
  Chief Financial Officer



 

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