UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM


Form 10-K

(Mark One)


þ(Mark One)
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  
For the fiscal year ended December 31, 2014      2015

or

o 
[   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
  
For the transition period from__________to__________

Commission file number: 000-50140

USmart Mobile Device Inc.

(Exact name of Registrant as specified in its charter)


000-50140
Commission File Number
EAGLE MOUNTAIN CORPORATION
(Exact name of registrant as specified in its charter)
Delaware16-1642709N/A
(State or other jurisdiction of incorporation or organizationorganization)(I.R.S. Employer Identification Number)No.)

Room 1703, 17/F., Tower 1, Enterprise Square, 9 Sheung Yuet Road, Kowloon Bay, Kowloon, Hong Kong.
20333 Tomball PKY, Suite 204, Houston, Texas77070
(Address of principal executive offices)(Zip Code)
(281) 974-3041
(Registrant’s  telephone number, including area code)

Registrant’s telephone number including area code :011-852-3666-9939

Securities registered pursuant to Section 12(b) of the Act:


Securities registered pursuant to Section 12(b) of the Exchange Act:
Title of each className of each exchange on which registered
NONEn/aN/An/a


Securities registered pursuant to Section 12(g) of the Exchange Act:
Common Stock, $0.001 par value
(Title of  class)class


Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.oYesþNo


Yes[   ]No[X]

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.oYesþNo


Yes[   ]No[X]

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.þYesoNo


Yes[  ]No[X]


Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files.)þYesoNo

files).


Yes[ ]No[ X]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.o


Yes[   ]No[X]

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”,filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.


Large accelerated filero[   ]Accelerated filero[   ]
Non-accelerated filero (Do[   ]Smaller reporting company[X]
(Do not check if a smaller reporting company)Smaller reporting company þ


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


Yes[  ]No[ X]

The aggregate market value of voting and non-voting common stock held by non-affiliates of the registrant was $855,708 based on the closing price of $1.63 as reported as of June 30, 2015 (the last business day of the registrant’s most recently completed second quarter), assuming solely for the purpose of this calculation that all directors, officers and greater than 10% stockholders of the registrant are affiliates. The determination of affiliate status for this purpose is not necessarily conclusive for any other purpose.
APPLICABLE ONLY TO REGISTRANTS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PAST 5 YEARS:

Indicate by check mark whether the issuer has filed all documents and reports required to be filed by Section 12, 13, or 15(d) of the voting common equity heldSecurities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by non-affiliatesa court.

Yes[   ]No[   ]
APPLICABLE ONLY TO CORPORATE REGISTRANTS

Indicate the number of the registrant asshares outstanding of June 30, 2014 was approximately $127,907 based upon the closing price of $0.01each of the registrant’s classes of common stock, on the OTC Bulletin Board. (For purposes of determining this amount, only directors, executive officers, and 10% or greater stockholders have been deemed affiliates).

The number of shares of Registrant’s Common Stock outstanding as of April 15, 2015 was 39,684,495.

the latest practicable date.


375,620,926 common shares outstanding as of August 31, 2016


DOCUMENTS INCORPORATED BY REFERENCE

NONE


Table of Contents

Form 10-K Index

None


2

TABLE OF CONTENTS

  PAGEPage
 PART I
  4
Item 1Business  7
Item 1ARisk Factors  11
Item 1BUnresolved Staff Comments  11
Item 2Properties  11
Item 3Legal Proceedings  11
Item 4Mine Safety Disclosures
   
 FORWARD LOOKING STATEMENTPART II1
 
PART I
   
Item 1.5Business1
Item 1A.Risk Factors8
Item 1B.Unresolved Staff Comments16
Item 2.Properties17
Item 3.Legal Proceedings17
Item 4.Mine Safety Disclosures17
PART II
Item 5.Market for the Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities  1812
Item 6.6Selected Financial Data  1914
Item 7.7Management’s Discussion and Analysis of Financial Condition and Results of Operations  1914
Item 7A.7AQuantitative and Qualitative Disclosures About Market Risk  2617
Item 8.8Financial Statements and Supplementary Data  17
 26
Item 9.9Changes in and Disagreements with Accountants on Accounting and Financial Disclosure  2619
Item 9A.9AControls and Procedures  2619
Item 9B.9BOther Information  2920
   
PART III 
PART III
   
Item 10.10Directors, Executive Officers and Corporate Governance  3021
Item 11.11Executive Compensation  3222
Item 12.12Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters  3525
Item 13.13Certain Relationships and Related Transactions, and Director Independence  3626
Item 14.14Principal Accounting Fees and Services  3727
   
PART IV 
PART IV
   
Item 15.15Exhibits, and Financial Statement Schedules  28
 38
SignaturesSIGNATURES  39
Index to Consolidated Financial StatementsF-1

29

FORWARD LOOKING STATEMENTS

This Annual Report on Form 10-K and the documents incorporated herein contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this Annual Report, statements that are not statements of current or historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “plan”, “intend”, “may,” “will,” “expect,” “believe”, “could,” “anticipate,” “estimate,” or “continue” or similar expressions or other variations or comparable terminology are intended to identify such forward-looking statements. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. Except as required by applicable laws, the Company undertakes 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.

PART I

As used throughout this Annual Report, the terms “USMART”, “Company”, “we”, “us”, “our” or “Registrant” refer to USmart Mobile Device Inc. and its subsidiaries.

3

Item 1.Business

Overview

USmart Mobile Device Inc.

ITEM 1.  BUSINESS

Forward Looking Statements
This Annual Report on Form 10-K  (“Annual Report”) contains forward-looking statements.  These statements relate to future events or our future financial performance.  In some cases, you can identify forward-looking statements by terminology such as "may," "should," "expects," "plans," "anticipates," "believes," "estimates," "predicts," "potential," or "continue" or the negative of these terms or other comparable terminology.  These statements are only predictions and involve known and unknown risks, uncertainties and other factors, including the risks in the section entitled "Risk Factors" any of which may cause our or our industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements.
These forward-looking statements are largely based on our expectations, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors. Although we believe such estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management’s assumptions about future events may prove to be inaccurate. We caution all readers that the forward-looking statements contained in this report are not guarantees of future performance, and we cannot assure any reader that such statements will be realized or the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to the factors listed in the “Risk Factors” section and elsewhere in this report. All forward-looking statements speak only as of the date of this report. We disclaim any obligation to publicly update or revise any forward-looking statements as a result of new information, future events or otherwise, unless required by law. These cautionary statements qualify all forward-looking statements attributable to us, or persons acting on our behalf. The risks, contingencies and uncertainties relate to, among other matters, the following:
•prices of crude oil, natural gas liquids, and refined products;
•energy prices generally;
•the general level of crude oil, natural gas, and natural gas liquids production;
•the general level of demand for crude oil, and natural gas liquids;
•the availability of supply of crude oil, natural gas liquids, and refined products for acquisition and transportation;
•the ability to obtain adequate supplies of products if an interruption in supply or transportation occurs and the availability of capacity to transport products to market areas;
•actions taken by foreign oil and gas producing nations;
•the political and economic stability of foreign oil and gas producing nations;
•political and economic risks of operating in foreign nations;
•the availability and price of marketable fuels under our initial contracts;
•governmental regulation and taxation;
•inability to attract and retain key personnel;
•the ability to renew contracts with key customers and enter into additional contracts with new customers;
•the nonpayment or nonperformance by our counterparties;
•the availability and cost of capital and our ability to access certain capital sources;
•a deterioration of the credit and capital markets;
•the ability to successfully identify and consummate strategic acquisitions, and integrate acquired assets and businesses;
•changes in applicable laws and regulations, including tax, environmental, transportation and employment regulations, or new interpretations by regulatory agencies concerning such laws and regulations and the impact of such laws and regulations (now existing or in the future) on our business operations;
•our inability to obtain additional financing necessary to fund our operations and capital expenditures and to meet our other obligations;
•our financial position;
•our cash flows and liquidity;
•plans, objectives, expectations and intentions contained in this report that are not historical;
•and other factors contained in Item 1A – Risk Factors
The safe harbors of forward-looking statements provided by Section 21E of the Exchange Act are unavailable to issuers of penny stock. As we issued securities at a price below $5.00 per share, our shares are considered penny stock and such safe harbors set forth under the Private Securities Litigation Reform Act of 1995 are unavailable to us.

Our financial statements are stated in United States dollars and are prepared in accordance with United States generally accepted accounting principles.

In this annual report, unless otherwise specified, all dollar amounts are expressed in United States dollars and all references to "common stock" refer to the common shares in our capital stock.

As used in this Annual Report, the terms "we," "us," “Company,” "our" and "Eagle Mountain" mean Eagle Mountain Corporation, unless otherwise indicated.

4

Corporate Information

The address of our principal executive office is 20333 Tomball PKY, Suite 204, Houston, Texas 77070. Our telephone number is (281) 974-3041. Our website is http:// www.eaglemtc.com

Our common stock is quoted on the OTCMarkets under the symbol "EMTC".
The Company was incorporated under the laws of the State of Delaware on September 17, 2002.2002 and previously known as ACL Semiconductors Inc. 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 storage devices in the Hong Kong Special Administrative Region (“Hong Kong”) and People’s Republic of China (the “PRC” or “China”) markets formerly through its wholly owned subsidiaryacquired Atlantic Components Limited, (“Atlantic”), a Hong Kong incorporated company and(“Atlantic”) through 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”) onreverse-acquisition that was effective September 30, 2003. On September 28, 2012, the Company has diversified its product portfolioacquired Jussey Investments Limited, a company incorporated in British Virgin Islands (“Jussey”). The subsidiaries were held for disposal since March 31, 2014 and customer network, obtained design and manufacturing capabilities, and tapped into the blooming telecommunication industry with access to the 3G baseband licenses. Onofficially disposed 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.

1

Background

USmart 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”).

ACL International Holdings Limited

ACL Holdings, a holding company incorporated in Hong Kong, was wholly owned by the Company. ACL Holdings owns 100% equity interest of Atlantic, and 100% equity interest of Jussey.

Atlantic Components Limited

Atlantic, a company incorporated in Hong Kong, is indirectly wholly owned by the Company. Atlantic was established in May 1991 by Mr. Chung-Lun Yang (“Mr. Yang”), the Company’s Chairman, as a regional distributor of memory products of various manufacturers. In 1993, Samsung Electronics Hong Kong Co., Ltd. (“Samsung”) appointed Atlantic as its authorized distributor and marketer of Samsung’s memory products in Hong Kong and overseas markets. In 2001, Atlantic established a representative office in Shenzhen, China, and began concentrating its distribution and marketing efforts in Southern China.

The Company’s Samsung business was formerly conducted through Atlantic. After

 On April 1, 2012, Atlantic integrated its business relating to procurement of semiconductors and electronic parts directly from Samsung to the joint venture, ATMD, which was finally sold in November 2013. The transition of the business integration has been completed by December 31, 2012. During the transitional period, Atlantic extended its distributor agreement with Samsung to June 30, 2012. After the distributor agreement expired, Atlantic transformed its position from Samsung memory products distributor to a general memory products distributor, and continues its business by providing various brands of memory products to its customers.

2

Aristo Technologies Limited

On March 23, 2010,24, 2015, the Company concluded that Aristo Technologies Limited (“Aristo”)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 related company solely owned by Mr. Yang, was a variable interest entity under FASB ASC 810-10-25 and was therefore subject to consolidation with the Company beginning fiscal year 2007 under the guidance applicable to variable interest entities. Atlantic used to sell Samsung memory chips to Aristo and allows long grace periods for Aristo to repay the open accounts receivable. After the establishment of ATMD, the Company will sell different brands of memory products to Aristo. Being the Company’s biggest creditor, the Company does not require Aristo to pledge assets or enter into any agreements to bind Aristo to specific repayment terms. The Company does not experience any bad debt from Aristo. Hence, the Company does not provide any bad debt provision derived from Aristo. Although, the Company is not involved in Aristo’s daily operation, it believes that there will not be significant additional risk derived from the trading relationship and transactions with Aristo. Aristo is engaged in the marketing, selling and servicing of computer products and accessories including semiconductors, LCD products, mass storage devices, consumer electronics, computer peripherals and electronic components for different generations of computer related products. In addition to Samsung-branded products, Aristo carries various brands of products, such as Hynix, Micron, Qimonda, Lexar, Dane-Elec, Elixir, SanDisk and Winbond. Aristo also provides value-added services to its products and resells it to its customers. Aristo’s 2012 and 2011 sales were around $2 million and $14 million; it was a distributor that accommodated special requirements for specific customers.

Jussey Investments Limited

Jussey, a holding company incorporated in British Virgin Islands, which was wholly owned by the Company, owns 100% equity interest in eVision Telecom Limited (“eVision”Belize corporation (the “Assignor”), a Hong Kong incorporated company, and 80% equity interest in USmart Electronic Products Limited, a Hong Kong incorporated company, which owns 100% equity interest of Dongguan Kezheng Electronics Limited, a wholly foreign-owned enterprise (“WFOE”) organized under the laws of the PRC (USmart Electronic Products Limited and Dongguan Kezheng Electronics Limited are together referring as “UEP” hereafter). Hence, Jussey indirectly owns 80% of Kezheng.

USmart Electronic Products Limited & Dongguan Kezheng Electronics Limited

UEP was founded in 2006 and it conducts its business through either itself or Kezheng, which has a factory located in Dongguan, PRC. UEP provides Research and Development (“R&D”) and both ODM (Original Design Manufacturing) and OEM (Original Equipment Manufacturing) services for the three “C” products – Computers, Communications and Consumer electronics devices, such as tablets, portable media players, digital photo frames, and smartphones. UEP has its own R&D and production teams. With the support from eVision, the business of which is described below, UEP is capable of providing its customers with total solutions from design to manufacturing. UEP holds its own brands – USmart and VSmart, which can be used on a broad spectrum of products including memory storage devices, visual and audio products such as digital flat screen television, DAB (Digital Audio Broadcasting) radios, digital photo frames, and other home electronic products. In 2010, UEP began its business development in the telecommunication industry, and successfully obtained the W-CDMA (Wideband Code Division Multiple Access is one of the third-generation (“3G”) wireless standards) license from Intel Mobile Communications GmbH., which offers cellular platforms for global phone makers. W-CDMA baseband is adapted by China Unicom, one of the three major telecommunication carriers in the PRC.

eVision Telecom Limited

Founded in 2011, eVision is a Hong Kong based solution house that specializes in CDMA2000 (also known as Evolution-Data Optimized or “EV-DO”) platform. CDMA2000 is one of the 3G wireless standards. This standard was adapted by China Telecom, one of the three major telecommunication carriers in China. The principal function of eVision is to provide CDMA2000 solutions to UEP. In May 2011, eVision entered into an exclusive R&D servicingAssignment 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 (the “Servicing Agreement”) withfor a strategic cooperation regarding an independent third partyintegrated 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 85.39% 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 PRC (the “R&D House”), a solution house that works closely with South China University of Technology and has a R&D team consisting of members with advanced academic qualifications. On behalf of eVision, the R&D House holds a CDMA2000 software license granted by VIA Telecom Co. Ltd. According to the Servicing Agreement, the R&D House provides R&D services relating to CDMA2000 technology exclusively to eVision, and eVision holds the sole and exclusive right, title and interest to and in the aforementioned license and any R&D results/products obtained or developed by the R&D House during the term of the Servicing Agreement. eVision will also hold all the intellectual property rights that are obtained or developed by the R&D House in the course of such research.

Key Events

ACL Holdings and its subsidiaries disposed to Targa

As of September 30, 2014, USmart disposed all the equity interest of ACL Holdings and its subsidiaries 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 componentscomponents. 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 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 moderate sizechange of control in the Company under the terms of the certificates of designation for each of the Series B, C and will also seek for acquisitionD preferred stock, each series automatically converted into shares of other business opportunity.

Products

The primary products the Company’s common stock upon the amendment to the Company’s certificate of incorporation becoming effective as set out above.  As a result, 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 effective July 17, 2015.  These shares were issued on August 24, 2015. The holder of 8,000,000 shares of Class B preferred stock surrendered 40,000,000 shares of common stock upon conversion, which shares were exchanged for 8,000,000 shares of Series E preferred stock.

Other than as set out herein, we have not been involved in any bankruptcy, receivership or similar proceedings, nor have we been a party to any material reclassification, merger, consolidation or purchase or sale of a significant amount of assets not in the ordinary course of our business.

Eagle Mountain has an 85.39% controlled subsidiary, Shale Oil International Inc. (OTC: PINK-SHLE), and its 100% owned subsidiary, Texas Shale Oil Inc. which subsidiaries hold the majority of the Company’s  assets consisting of a strategic oil and gas model covering several square miles of prospective oil and gas development acres in Louisiana, Texas and Mexico, related geophysical, geological, engineering and geochemical data and options to participate in certain pipeline and integrated energy projects.  During February 2016 we incorporated American Mining and Metals Inc. ownership, management and origination of EMTC’s mining projects and joint venture distributeventures of mineral businesses in the US and sell forinternationally.  We have not yet commenced operations in American Mining and Metals Inc. We do not plan to monetize any of the assets acquire as part of the Assignment and Assumption agreement in the current fiscal year ended December 31, 2014 are described as follows:

Atlantic Components Limited

In the year 2014 Atlantic will provide various brand memory products2016 due to its customers.

The primary productscurrent commodity prices.


Current Business
Our business plan is to become an international originator for Atlantic consist of the followings:

DRAM

Dynamic Random Access Memory (DRAM) is a type of random-access memory that stores each bit of data in a separate capacitor within an integrated circuit. The capacitor can be either charged or discharged; these two states are taken to represent the two values of a bit, conventionally called 0large-scale Oil and 1. Since capacitors leak charge, the information eventually fades unless the capacitor charge is refreshed periodically. Since the application range for DRAM is very broad, it is classified into three main categories, namely Computing DRAM, Consumer DRAMGas, other Natural Resources, and Graphics DRAM.

Computing DRAM

Computing DRAM is widely used memory component in serversInfrastructure projects including EPC (Engineering, Procurement and personal computers (PC) such as desktopsConstruction) consortiums and notebooks.

Consumer DRAM

Consumer DRAM is the widely used memory components in consumer products such as Set-Top Boxes (STB), Digital TVs, High Definition TVs (HDTV), Digital Still Cameras (DSC), Video Cameras, Digital Single-Lens Reflex (DSLR) Cameras, Navigation devices (such as Global Positioning System (GPS), GLONASSstrategic partnerships. Our projects currently under negotiation include upstream, midstream, and Galileo),downstream oil and gas assets as well as mining and infrastructure development deals.  We intend to emphasize value over volume in our projects, meaning having a high-value portfolio for upstream/midstream/downstream oil & gas as well as natural resources projects, investing only where the automotive industry.

Graphics DRAM

Graphics DRAM isCompany’s management can apply our unique set of capabilities.  

Presently we hold a special purpose Double Data Rate (DDR) DRAM that is usedcontrolling interest in graphics-intensiveShale 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.
The majority of our operations during fiscal 2015 since a restructure in June 2015 were focused on negotiating initial contracts for operation and financing of a project where under we would source, purchase and transport oil, gas and other products which require high-speed 3-dimensional calculation performanceinto foreign markets.
In January 2016, we announced the signing of a formal Heads of Agreement to pursue mutually beneficial management and a large memory sizefinancing projects in the oil, gas and natural resources industries with Shandong Pusheng Petrochemical Co., Ltd. (“SPPCL”).
5
Under the terms of the agreement, for the initial naphtha trading project, Eagle Mountain will provide sourcing, purchasing and management of transportation logistics for the oil, gas, and refined products to be used as data storage buffer, such as for DVDdelivered and computer game displays.

Currently,sold into the ComputingChinese market.

SPPCL is an international oil and Consumer DRAM markets have been dominated by DDR3. The Synchronous Dynamic Random Access Memory (SDRAM), DDRgas trading and DDR2 are nearly fading outdevelopment company, globally engaged in a wide range of businesses in the market.oil industry, with extensive partnerships with many State-owned companies. The Graphics DRAM marketcompany has organized consortiums for multiple international projects in the oil, gas, petrochemical and mining industries.
Further in April of 2016 we announced a Joint-Venture Agreement between SPPCL and Eagle Mountain for oil, gas and petroleum products trading as well as an initial purchase order to purchase light naphtha through the established Joint Venture Company. The contract calls for Eagle Mountain to source and negotiate the purchase and delivery of approximately 300,000 metric tonnes of light naphtha per month for five years. At the time of the origination of the purchase order, light naphtha has been dominated by GDDR3 and GDDR5. The GDDR 2 is nearly fading out in the market.

NAND Flash

NAND Flash memory is a specialized typerange of memory component used$330 to store user data and program code; it retains this information even when the power is off. Although NAND Flash is predominantly used in mobile phones and tablets, it is also commonly used in multimedia digital storage applications for products such as MP3 players, DSC, Digital Voice Recorders, USB Disks, Flash memory cards, solid-state drives (SSD), etc. Flash cards such as the micro SD cards, SD cards, and CF cards are widely used for digital cameras, mobile phones, portable game consoles, MP3 players, etc.

LCD Panel

LCD panel is a major component in visual consumer electronics products such as LCD TVs, tablets, smartphones, notebooks, digital phone frames, portable game consoles, etc.

USmart Electronic Products Limited, Dongguan Kezheng Electronics Limited & eVision Telecom Limited

The primary products for USmart and eVision consist$380/tonne FOB U.S. Gulf Coast.

A subsidiary of the followings:

Research & Development

USmart primary focus its R&D on providing smartphone solution under the Intel’s 3G baseband license, whereas eVision focus on providing smartphone solution under the VIA’s 3G baseband license.

Manufacturing Services

OEM (Original Equipment Manufacturing) services where USmart manufactures products or components to its customers to sell under its customers’ brand name. USmart has provided OEM services for various electronic products such as computer and peripherals, flash storage devices, smartphones and home electronic products.

ODM (Original Design Manufacturing) services where USmart designs and manufactures a product which is specified and eventually branded by another firm for sale. USmart has provided ODM services for various electronic products such as computer and peripherals, flash storage devices, smartphones and home electronic products.

Industry Background

Memory products are integral to a wide variety of consumer and industrial applications, including: personal computer systems, workstations and servers, and handheld devices such as notebooks, netbooks, tablets, smartphones, e-Readers, etc. A market trend of increasingly high-throughput applications (including data processing applications, mobile applications, digital consumer electronics, graphics applications, etc) is creating demand for high performance memory products. At present, NAND Flash, DDR2 DRAM, DDR3 DRAM and GDDR5 DRAM are the dominant memory products used with high-throughput applications and Samsung is the world’s largest developer and manufacturer of these memory products.

Our Strategy

For the memory products business, the Company intends to, through operation of USmart and eVision, continue to provide its customers with a reliable source of memory products. For the R&D and manufacturing businesses, the Company intends to focus on research and development and manufacturing of smartphone and other mobile device products.

The Company intends to implement the strategies by:

·Leverage network to become a leading smartphone solution provider;

·Capitalize on rapid migration of manufacturers to China and companies seeking to expand their international market coverage;

·Further consolidate leadership position by carrying best-in-class products from highly reputable brands and providing superior customer service;

·Maintain optimal product mix with diversified lifecycles to maximize sales as new and groundbreaking technology is introduced; and

·Provide “Total Memory Solutions” for computer, consumer electronic appliances and communications devices manufacturers.

Competitive Strengths

The Company believes there are several key factors that will continue to differentiate us from its competitorsEagle Mountain based in Hong Kong to be formed will be joint-ventured 40/60 with a Hong-Kong subsidiary of Shandong Pusheng where the Irrevocable Documentary Letter of Credit (DLC) is established and PRC:

·There are currently five types of 3G wireless standards in the telecommunication industry. Three of them are adapted in China by the major mobile network carriers, China Unicom, China Telecom and China Mobile. The Company, through USmart and eVision, has access to two of the three 3G wireless standards, namely, WCDMA and CDMA2000 for its smartphones development.
·eVision has a strong R&D team specializing in the WCDA mobile network, while exclusively appointed an R&D House specializing in CDMA2000 mobile network that works closely with South China University of Technology. This R&D House has a R&D team consisting of members with advanced academic qualifications.

·The Company has a very close business relationship with ATMD and Tomen, the majority shareholder of ATMD. The Company believes this has a competitive advantage over its competitors in Greater China region. As the world’s largest memory products manufacturer, Samsung’s memory products are competitively priced and have an established reputation for product quality and brand name recognition in the retail and PC/Server OEM & Consumer Electronic segments. ATMD, as one of the largest distributors of Samsung’s memory products for Hong Kong and Southern Chinaready to proceed with the first purchase during the early fall of 2016. Eagle Mountain is responsible for arranging the purchase and delivery of the naphtha. Shandong Pusheng is responsible for sale of the naphtha into the Southeast Asian markets, is expected to be in a highly competitive position compared to other U.S., European, Japanese and Taiwanese memory products manufacturers and distributors.

Competition

The memory products industry in Hong Kong and Southern China markets is very competitive. cooperation with China’s state enterprises.

The Company will initially focus on this joint venture opportunity prior to development of its existing oil and gas and infrastructure development opportunities.
Markets and Customers

The revenues which we hope to generate by our initial operations are highly dependent upon the prices of, and supply and demand for, oil, gas, naphtha and other hydrocarbons, as well as our ability to source these resources. The price we purchase at and/or receive for oil, gas and naphtha sales depends on numerous factors  beyond our control, including seasonality, the condition of the domestic and global economies, particularly in the manufacturing sectors, political conditions in other oil producing countries, the extent of domestic and global production and imports of oil, the proximity and capacity of pipelines and other transportation facilities, supply and demand for oil, the marketing of competitive fuels and the effects of federal, state and local regulation, as well as regulation in the countries in which we intend to commence operations. The oil and gas industry also competes with other memory products traders, consumer electronics manufacturers,industries in supplying the energy and smartphone researchfuel requirements of industrial, commercial and development solution houses, many of which have substantially greater financial, technical, marketing, distribution channels and other resources.

Memory products, such as NAND flash, compete on the basis of product availability, price and customer service. We believe that we compete effectively with respect to each of these competitive factors. Price competition is significant and is expected to continue. Since we have been in the industry for over 20 years, we have maintained good connections with other distributors and memory products manufacturers on sourcing the requested products for our customers. In order to distinct from the other competitors, we have maintained high quality customer service and employed a team of field application engineers to ensure the products we sourced are authentic and reduce the risk of malfunctioning on our customer’s products. The Company’s principal competitors also include the other non-exclusive distributors of Samsung memory products in the Hong Kong and Southern China markets.

The smartphones industry in the China market is also highly competitive and has been characterized by price competition, manufacturing capacity constraints and product availability constraints at various times. There are currently five types of 3G wireless standards in the telecommunication industry. Three of them are adopted in China by the major mobile network carriers, China Unicom, China Telecom and China Mobile. Currently, the Company has access to two of the three 3G wireless standards, namely, WCDMA and CDMA2000 from Intel and VIA respectively for its smartphones development. Intel and VIA may at its sole discretion increase the number of licensees in China, which would result in an increased competition for the Company. The Company’s principal competitors are other smartphone solution providers such as Cellon, Coolpal, and SIMCOM.

Seasonality

The memory products industry and smartphones industry are increasingly characterized by seasonality and wide fluctuations in supply and demand. Since a significant portion of our revenue is from consumer markets, our business may be subject to seasonally lower revenues in certain quarters of our fiscal year. The industry has also been impacted by significant shifts in consumer demand due to economic downturns or other factors, which may result in diminished product demand and production over-capacity. In recent periods, weakness in the general economic condition has had a more significant impact on our results than seasonality, and has made it difficult to assess the impact of seasonal factors on our business.

Suppliers

In the year 2014, Tomen was our supplier for Samsung memory products provided to Atlantic, and we also had various other PRC and HK suppliers for the general memory products and the other electronic parts for the manufacturing of smartphones.

Customers

As of April 15, 2015, the Company has no customers in Hong Kong and Southern China. In order to control the Company’s credit risks, the Company does not offer any credit terms to its customers. other than a small number of clients who have long-established business relationships with the Company.

Government Regulation

individual consumers.

As of December 31, 2014,2015 we have not yet made any purchases or sales of hydrocarbons.

Competition

The oil and gas industry and the Company’s businessnatural resource industry are highly competitive, and we may compete for personnel, prospective properties, producing properties and services with a substantial number of other companies that have greater resources. In our planned joint venture operations, werewe will compete with larger and more experienced corporations in the sourcing of oil, gas and refined products, and the logistics related to transportation and delivery. Many of these companies explore for, produce and market oil and gas and other natural resources directly, carry on refining operations and market the end products on a worldwide basis. We also face competition from alternative fuel sources, including coal, heating oil, imported LNG, nuclear and other nonrenewable fuel sources, and renewable fuel sources such as wind, solar, geothermal, hydropower and biomass. Competitive conditions may also be substantially affected by various forms of energy legislation and/or regulation considered from time-to-time by the United States government and other international regulations. It is not possible to predict whether such legislation or regulation may ultimately be adopted or its precise effects upon our future operations. Such laws and regulations may, however, substantially increase the costs of for acquiring, developing or producing oil, gas or other natural resources and may prevent or delay the commencement or continuation of our operations.

Regulation

The oil and gas industry in the Globally and in the United is subject to extensive regulation by various levels of government authorities in each respective jurisdiction. In each operating location, rules, regulations and procedures apply, including those issued at the state, provincial and national government level.  There are various agencies and commissions which regulate exploration, production and midstream activities as well as transportation and environmental concerns. These authorities have various permitting, licensing and bonding requirements which may be applicable to our current and future operations. Various remedies are available for enforcement of these rules, regulations and procedures in each jurisdiction, including fines, penalties, revocation of any jurisdictionpermits and licenses, and reporting requirements.  While our initial operations will rely on third party service providers that are established global operators in our industry, we cannot be assured we will not incur liability for fines, penalties or other than Hong Kong SARremedies that are available to these national, state and the PRC. The Company executes its sales contractslocal authorities. However, we believe that joint venture partners, suppliers and delivers itsservice providers are in material compliance with national, state and local rules, regulations and procedures, and that continued substantial compliance with existing requirements will not have a material adverse effect on our financial position, cash flows or results of operations.

Risk relating to China

Our initial joint-venture for oil, gas and petroleum products trading will be established in Hong KongChina and PRC for its Chinese customersour initial revenue will be primarily derived from these operations. Accordingly, our financial condition and there have been no restrictions imposed on the Company by the PRC authorities with respectresults of operations are subject to the Company’s pursuit of business growtha significant degree to economic, political and opportunitieslegal developments in China.

Political and economic policies in China could affect our business in unpredictable ways. We have not yet assessed the possible impact of a wide number of risks to our initial operations as a result of operating in China and we cannot predict whether changes to China's political, economic and social conditions, laws, regulations and policies will have any adverse effect on our current or future business or operational results.

Employees

As of December 31, 2014,2015, we had one employee.  Additionally, our officers and directors provide services under independent consulting contracts.
Available Information
We file annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K, proxy statements and other documents with the Company had a total of 5 full time employees in Hong KongSEC under the Exchange Act. The public may read and PRC, including 2 employees in sales and marketing, 2 employees in administration and accounts, 1employee in engineering and quality control. Nonecopy any materials that we file with the SEC at the SEC’s Public Reference Room at 100 F Street, NE, Washington DC 20549. The public may obtain information on the operation of the Company employees are representedPublic Reference Room by labor unions.calling the SEC at 1-800-SEC-0330. Also, the SEC maintains an internet website that contains reports, proxy and information statements, and other information regarding issuers, including Approach, that file electronically with the SEC. The Company has never experiencedpublic can obtain any work stoppagedocument we file with the SEC at www.sec.gov. Information contained on or connected to our website is not incorporated by reference into this Form 10-K and believesshould not be considered part of this report or any other filing that our employee relations are favorable.

The Company’s primary hiring sources for its employees include referrals from existing employees, print and internet advertising and direct recruiting. All ofwe make with the Company’s employees are highly skilled and educated and subject to rigorous recruiting standards appropriate for a company involved in the distribution of brand name memory products. The Company attracts talent from numerous sources, including higher learning institutions, colleges and industry. Competition for these employees is intense. The Company believes its relationship with its employees to be good. However, the Company’s ability to achieve its financial and operational objectives depends in large part upon its continuing ability to attract, integrate, retain and motivate highly qualified personnel, and upon the continued service of its senior management and key personnel, especially Mr. Ben Wong.

SEC.
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Item 1A.Risk Factors

We are subject to a number of risks. Some of these risks are endemic to

ITEM 1A.    RISK FACTORS
You should carefully consider the high-technology and semiconductor industry and are the same or similar to those disclosed in our previous SEC filings. This section should be read in conjunction with the consolidated financial statements and the accompanying notes thereto, and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in this Annual Report. The risks and uncertaintiesrisk factors set outforth below are not the only risks and uncertainties we face. Our business could be harmed by any of these risks. The trading price of our common stock could decline due to any of these risks and investors may lose all or part of their investment. The information included in this Annual Report is provided as of the filing date with the SEC and future events or circumstances could differ significantly from the forward-looking statements included herein.

Risks Related to Our Business

Our independent auditor has issued a going concern opinion after auditing our financial statements; our ability to continue is dependent on our ability to raise additional capital and our operations could be curtailed if we are unable to obtain required additional funding when needed.

As of December 31, 2014, the Company has total current assets of $128 and current liabilities of $448,055. This raises substantial doubt about the Company’s ability to continue as a going concern. The Company is attempting to address its lack of liquidity by raising additional funds, either in the form of debt or equity or some combination thereof. Any additional equity financing may involve substantial dilution to our then existing shareholders. We currently have no agreements or arrangements with respect to any such financing and there can be no assurance that any needed funds will be available to us on acceptable terms or at all. Our failure to raise additional funds in the future will adversely affect our business operations, and may require us to suspend our operations. After auditing our financial statements, our independent auditor issued a going concern opinion and our ability to continue is dependent on our ability to raise additional capital. If we are unable to maintain our current level of working capital, we will likely to face more difficulty in business operation.

If the growth rate of either memory products or other components sold or the amount of memory or components used in each application decreases, sales of our products could decrease.

The Company is dependent on the computer and consumer electronics market as many of the products that we distribute are used in PCs, smartphones, or other consumer electronics. DRAMs are the most widely used semiconductor components in PCs. Flash products are mostly used in the consumer electronics products. Wifi and Camera modules are highly used in smartphones. LCD panels are used in many visual products, such as smartphones, tablets, and netbooks. If there is a continued reduction in the growth rate of the related consumer electronics markets, sales of our products built for those markets would decrease, and, as a result, our operations, cash flows and financial condition could be adversely affected.

The demand from the end-products that uses our solutions depends on many factors.

The demand from the end-products that use our solutions depend on many factors such as economic climate, change in technology, competiveness of competitors, etc. If such demand decreases as a result of negative impact from these factors, it will affect revenue, cash flows and financial conditions of the Company, and may adversely affect the Company’s share price.

The solutions provided by us rely on the licenses from Intel Mobile Communications GmbH. and VIA Telecom Co., Ltd, which we could lose.

The majority of solutions provided by USmart are under licenses from Intel Mobile Communications GmbH (“Intel”). Whareas, the majority of solutions provided by eVision are under licenses from VIA Telecom Co. (“VIA”) Ltd. If such licenses are revoked or expire without renewal, USmart and eVision will not be able to provide those solutions to its customers and may result in loss of revenue and profits which will have a negative impact to its financial results and positions.

Competitive level is uncontrollable.

Business in telecommunication industry highly relies on the baseband license acquired from Intel. The current CDMA license providers are Intel, VIA and T3G Technology Co., Ltd. in China. USmart cannot control how many licensees the license providers authorized. If the number of licensees increases, it may increases the competition and result in loss of revenue and profits which may have a negative impact to its financial results and positions.

Our research and development may be costly and/or untimely, and there are no assurances that our research and development will either be successful or completed within the anticipated timeframe, if at all.

Our recent acquired business relies on research and development activities. The research and development of new products play an important role for our company. Development of new products requires significant research and development. If we are unable to perform research and development successfully, our business and results of operations could be negatively impacted.

The research and development of new products is costly and time consuming, and there are no assurances that our research and development of new products will either be successful or completed within the anticipated time frame, if at all. There are also no assurances that if the product is developed, that it will lead to actual commercialization and sales.

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We are heavily dependent upon the electronics industry, and excess capacity or decreased demand for products produced by this industry could result in increased price competition as well as a decreasethe other information contained in this report before investing in our gross margins and unit volume sales.

Our business is heavily dependent on the electronics industry. The majority of our revenue is generated from the networking, high-end computing and computer peripherals segmentscommon stock. Any of the electronics industry, which are characterized by intense competition, relatively short product life-cyclesfollowing risks could materially and significant fluctuations in product demand. Furthermore, these segments are subject to economic cycles, which have occurred in the past and are likely to occur in the future. A recession or any other event leading to excess capacity or a downturn in these segments of the electronics industry could result in intensified price competition, a decrease in our gross margins and unit volume sales and materially affect our business, prospects, financial condition and results of operations.

The memory product industry is highly competitive.

The Company faces intense competition from a number of companies, some of which are large corporations or conglomerates, that may have greater resources to withstand downturns in the semiconductor memory market, invest in technology and capitalize on growth opportunities. To the extent Samsung memory products become less competitive, our ability to effectively compete against distributors of other memory products will diminish.

We face competition from other telecommunication and computer manufacturers.

We face competition from other telecom and computer manufacturers in China, particularly in the telecommunication sector. There are three major telecommunication companies in China and they can also provide R&D, manufacturing and marketing services to smartphone and other accessories that we feature. This competition may affect our ability to attract and retain customers and buyers and may reduce the prices we are able to charge. An inability to compete effectively could adversely affect our business, financial condition and results of operations.

We In such a case, you may lose all or part of your investment. The risks described below are operatingnot the only ones we face. Additional risks and uncertainties not currently known to us or those we currently view to be immaterial may also materially adversely affect our business, financial condition and results of operations. Our risk factors relative to our initial area of operations are focused on our current plan of operations and may not include other material risks we will experience when and if we expand our operations.

Our business depends on the availability of supply of crude oil, natural gas liquids, and refined products for purchase in aninternational markets which is dependent on the ability and willingness of other parties to explore for and produce crude oil and natural gas. Spending on crude oil and natural gas exploration and production may be adversely affected by industry with very short life cycle.

The mobile devices industryand financial market conditions that are beyond our control including, without limitation, (1) prices for crude oil, condensate, and natural gas liquids, (2) crude oil and natural gas producers having success in their operations, (3) continued commercially viable areas in which to explore and produce crude oil and natural gas, (4) the newly acquiredavailability of liquids-rich natural gas needed to produce natural gas liquids, and (5) the availability of transportation and storage capacity.


Our business isdepends on global spending by the oil and natural gas industry, and this spending and our future business may be adversely affected by industry and financial market conditions and existing or new regulations, such as those related to environmental matters, that are beyond our control.

We depend on the ability and willingness of other entities to make operating hasand capital expenditures to explore for, develop, and produce crude oil and natural gas globally, and to extract natural gas liquids from natural gas as well as the availability of necessary pipeline transportation and storage capacity to bring products to market. Customers’ expectations of lower market prices for crude oil and natural gas, as well as the availability of capital for operating and capital expenditures, may cause them to curtail spending, thereby reducing business opportunities and demand for our services and equipment. Actual market conditions and producers’ expectations of market conditions for crude oil, condensate and natural gas liquids may also cause producers to curtail spending, thereby reducing business opportunities and demand for our services.

Industry conditions are influenced by numerous factors over which we have no control, such as the availability of commercially viable geographic areas in which to explore and produce crude oil and natural gas, the availability of liquids-rich natural gas needed to produce natural gas liquids, the supply of and demand for crude oil and natural gas, environmental restrictions on the exploration and production of crude oil and natural gas, such as existing and proposed regulation of hydraulic fracturing, domestic and worldwide economic conditions, political instability in crude oil and natural gas producing countries and merger and divestiture activity among our current or potential customers. The volatility of the oil and natural gas industry and the resulting impact on exploration and production activity could adversely impact the level of drilling activity. This reduction may cause a very short product life cycle. Inability to respond to an enddecline in business opportunities or the demand for our services, or adversely affect the price of a product life cycle may resultour services. Reduced discovery rates of new crude oil and natural gas reserves in the loss of revenue and profits whichour market areas also may have a negative long-term impact to its financial results and positions.

We are operatingon our business, even in an industry with high demand in product features upgradeenvironment of stronger crude oil and fast generation change.

The telecommunication industry in which our recently acquired business is operating has high demand in product features upgrade and fast generation change. Inability to respondnatural gas prices, to the features upgradeextent existing production is not replaced.


The crude oil and generation changenatural gas production industry tends to run in cycles and may, at any time, cycle into a downturn; if that occurs, the rate at which it returns to former levels, if ever, will be uncertain. Prior adverse changes in the global economic environment and capital markets and declines in prices for crude oil and natural gas have caused many customers to reduce capital budgets for future periods and have caused decreased demand for crude oil and natural gas. Limitations on the availability of capital, or higher costs of capital, for financing expenditures have caused and may continue to cause customers to make additional reductions to capital budgets in the future even if commodity prices increase from current levels. These cuts in spending may curtail drilling programs and other discretionary spending, which could result in a reduction in business opportunities and demand for our services, the loss of revenuerates we can charge and profits which may have a negative impact to its financial results and positions.

If our current product strategy and operating system strategy are not successful, our telecommunication business could be negatively impacted.

Our current strategy is to concentrate our mobile solution on smartphones and to use third-party and/or open-source operating systems and associated application ecosystems, predominantly the Google Android operating system (a royalty-free open-source platform). As a result, we are dependent on third-parties’ continued development of operating systems, software application ecosystem infrastructures and such third-parties’ approvalutilization. In addition, certain of our implementationscustomers could become unable to pay their suppliers, including us. Any of their operating systemthese conditions or events could materially and associated applications. If we had to changeadversely affect our strategy, our financialconsolidated results could be negatively impacted because a resulting shift away from using Android and the associated applications ecosystem could be costly and difficult. A strategy shift could increase the burden of development to the Company and potentially create a gap in our portfolio for a period of time, which could competitively disadvantage the Company.

We are at risk if Android-based smartphones do not remain competitiveoperations.

Competition in the marketplace. Even if Android-based smartphones remainoil and gas industry is intense, and most of our competitors have resources that are greater than ours.
We operate in a highly competitive the Android operating system is an open-source platformenvironment for sourcing, marketing and many other companies sell competing Android-based smartphones solutions. If the Android-based smartphones solutionstransporting oil, gas, liquids and refined products.  Most of our competitors are major state owned and large independent oil and gas or commodity marketing companies that have financial, technical and personnel resources substantially greater than ours. Those companies may be able to more successful than ours,easily source supply and delivery of commodities and have opportunities our lack of financial results could be negatively impacted. It is also critical to the success of the Android operating system that third-party developers continueor personnel resources restrict. Our ability to develop and offer applications for this operating system that are competitive with applications developed for other operating systems. From an overall risk perspective,operate our current projects, and acquire additional contracts and projects in the industry is currently engaged in an extremely competitive phase with respectfuture will depend on our ability to operating system platforms, applicationshire and software generally. If Android does not continue to gain operator and/or developer adoption, or any updated versions or new releases of Google’s Android operating system or applications are not made available to usretain qualified personnel and consummate transactions and in a timely fashion,highly competitive environment. Also, there is substantial competition for capital available for investment in the Company could be competitively disadvantagedoil and our financial results could be negatively impacted.

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gas industry. We may not be able to adequately protect our brand namecompete successfully in the future in attracting and intellectual property rights that we developed.

Our brand namesretaining qualified personnel, securing contracts,  marketing oil, gas and intellectual property rights are important to our businessrefined products and we rely on them to conduct our business operations. Unauthorized use of our brand namesraising additional capital.


Declining oil and intellectual property rights by third parties may materiallynatural gas prices could adversely affect our business and reputation. We rely on trademark and copyright laws to protect our intellectual property rights. Despite our precautions, it may be possible for third parties to obtain and use our brand names or intellectual property rights without authorization.

We cannot be assured that third parties will not infringe or misappropriate our brand names or intellectual property rights. We may, at times, have to incur significant legal costs and spend time in defending our trademarks and copyrights. Any defense efforts, whether successful or not, would divert both time and resources from the operation and growth of our business.

Current economic and political conditions may harm our business.

Global economic conditions and the effects of military or terrorist actions may cause significant disruptions to worldwide commerce. If these disruptions result in delays or cancellations of customer orders, a decrease in corporate spending on information technology or our inability to effectively market, manufacture or ship our products,impact our results of operations cash flows


Oil, gas and financial conditionliquids prices experienced a sharp decline during the second half of calendar year 2014. During calendar year 2015, prices remained low and trended down during the second half of the year and into the first quarter of calendar year 2016.  The sharp decline in crude oil, gas and liquids prices has reduced the incentive for producers to expand production. If prices remain low, resultant declines in production could adversely impact volumes available for sourcing, purchase and delivery under our initial contracts with our joint venture partner.

Our profitability could be adversely affected. There is a risk that the eventsnegatively impacted by price and logistical issues out of our control as we source supply for our customer(s)

Souring, purchase, resale and transportation of crude oil, liquids, and refined products are “margin-based” businesses in Japan could negatively affected semiconductor markets, and may continue to have severe and unpredictable effectswhich our realized margins will depend on the differential of sales prices over our total supply costs. Our profitability will therefore be sensitive to changes in product prices caused by changes in supply, transportation, storage capacity or other market conditions.

We will attempt to obtain a certain margin of profitability for our sourced purchases. However, market, weather or other conditions beyond our control may disrupt our expected supply of product, and we may be required to obtain supply at increased prices that cannot be passed through to our customers. In general, product supply contracts permit suppliers to charge posted prices at the time of delivery or the current prices established at major storage points, creating the potential for sudden and drastic price of certain raw materials in the future. In addition,fluctuations. Sudden and extended wholesale price increases could reduce our ability to raise capital for working capital purposesmargins and ongoing operations is dependent upon ready access to capital markets. During times of adverse global economic and political conditions, accessibility to capital markets could, decrease. If we are unable to access the capital marketsif continued over an extended period of time, reduce demand by our end customers.

We will seek to mitigate this risk by entering into supply contracts but this may not mitigate our associated commodity price risk.

Our business would be adversely affected if our method of transport is interrupted.

In our initial naphtha transaction, we are completing a CIF contract in which delivery of product is the responsibility of the seller. However, we anticipate FOB contracts in which we use third-party transport services for product sourced under our supply agreements and we may use third-party facilities to store our products. Any significant interruption in the service by any third party transport company and/or to storage facilities would adversely affect our ability to obtain products from our suppliers or deliver products to our customers.

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If we are unable to purchase product from our principal suppliers, our results of operations would be adversely affected.

If we are unable to purchase product from significant suppliers, our failure to obtain alternate sources of supply at competitive prices and on a timely basis would adversely affect our ability to satisfy customer demand, reduce our revenues and adversely affect our consolidated results of operations.

The fees charged to customers under our agreements with them for the supply, transportation and marketing of crude oil, condensate, natural gas liquids and other refined products may not escalate sufficiently to cover increases in costs and this would affect our profitability.

Our costs may increase at a rate greater than the rate that the fees that we charge to customers increase pursuant to our contracts with them. Additionally, some customers’ obligations under their agreements with us may be permanently or temporarily reduced upon the occurrence of certain events, some of which are beyond our control, including force majeure events wherein the supply of crude oil, condensate, and/or natural gas liquids are curtailed or cut off. Force majeure events include (but are not limited to) revolutions, wars, acts of enemies, embargoes, import or export restrictions, strikes, lockouts, fires, storms, floods, acts of God, explosions, mechanical or physical failures of our equipment or facilities of our customers. If the escalation of fees is insufficient to cover increased costs or if any customer suspends or terminates its contracts with us, our profitability could be materially and adversely affected.

Our industry is subject to federal, state, provincial and local laws and regulations with respect to environmental, safety and other regulatory matters and the cost of compliance with, violation of or liabilities under, such laws and regulations could adversely affect our profitability.

Our planned operations involving the sourcing, purchase and supply of crude oil, condensate, natural gas liquids, and refined products, are subject to stringent federal, state, provincial and local laws and regulations relating to the protection of natural resources and the environment, health and safety, waste management, and transportation and disposal of such products and materials. Our suppliers carry similar risks of leakage and sudden or accidental spills of crude oil, natural gas liquids, and hydrocarbons. Liability under, or violation of, environmental laws and regulations could result in, among other things, the impairment or cancellation of operations, injunctions, fines and penalties, reputational damage, expenditures for remediation and liability for natural resource damages, property damage and personal injuries, all of which may impact our results of operations.

We expect to contract with third parties for various modes of transportation to carry distillates and crude oil including trucks, railcars and barges, each of which is subject to regulation in each jurisdiction of operation. In addition, under certain environmental laws, we could be subject to strict and/or joint and several liability for the investigation, removal or remediation of released materials depending on the terms of our supply contracts and transportation methods. As a result, these laws could cause us to become liable for the conduct of others, regardless of whether we were responsible for those actions, or if such actions were in compliance with all applicable laws at the time of those actions. While we intend to take actions to mitigate the risks of contracts with third parties, we may be unablesubject to fund operations,risks we are not able to successfully mitigate.

Implementation of risk management procedures will not eliminate all commodity risk, basis risk, or risk of adverse market conditions which can adversely affect our financial position and results of operations.

We intend to establish a market risk policy where under we will lock in a margin for the commodities we purchase by selling such commodities for physical delivery to our customers on a specific contract by contract basis.  We do not intend to purchase and hold inventory for future sale. By entering into contracts with a specific inventory purchase and established contract to sell inventory basis, we seek to maintain a position that is substantially balanced between purchases on the one hand, and confirmed inventory sale on the other hand. These policies and practices cannot, however, eliminate all risks. For example, any event that disrupts our anticipated physical supply of commodities could expose us to risk of loss resulting from the need to cover obligations required under contracts for forward sale. Additionally, we can provide no assurance that our processes and procedures will detect and/or prevent all violations of our risk management policies and procedures, particularly if deception or other intentional misconduct is involved.

Basis risk describes the inherent market price risk created when a commodity of certain grade or location is purchased, sold or exchanged as compared to a purchase, sale or exchange of a like commodity at a different time or place. Transportation costs and timing differentials are components of basis risk. In a backwardated market (when prices for future deliveries are lower than current prices), basis risk is created with respect to timing. In these instances, physical inventory generally loses value as price of such physical inventory declines over time. Basis risk cannot be entirely eliminated, and basis exposure, particularly in backwardated or other adverse market conditions, can adversely affect our consolidated financial position and results of operations.

The counterparties to our commodity derivative and physical purchase and sale contracts may not be able to perform their obligations to us, which could materially affect our cash flows and results of operations.

We encounter risk of counterparty nonperformance in our businesses. Disruptions in the supply of product and in the crude oil and natural gas commodities sector overall for an extended or near term period of time could result in counterparty defaults on our derivative and physical purchase and sale contracts. This could impair our ability to obtain supply to fulfill our sales delivery commitments or obtain supply at reasonable prices, which could result in decreased gross margins and profitability.

Reduced demand for refined products could have an adverse effect our results of operations.

Any sustained decrease in demand for refined products in the markets we serve could reduce our cash flow. Factors that could lead to a decrease in market demand include:

a recession or other adverse economic condition that results in lower spending by consumers on gasoline, diesel, and travel;

higher fuel taxes or other governmental or regulatory actions that increase, directly or indirectly, the cost of gasoline;

an increase in automotive engine fuel economy, whether as a result of a shift by consumers to more fuel-efficient vehicles or technological advances by manufacturers;

an increase in the market price of crude oil that leads to higher refined product prices, which may reduce demand for refined products and drive demand for alternative products; and

the increased use of alternative fuel sources, such as battery-powered engines.

A loss of a key customer could materially or adversely affect our results of operations.

We have only recently entered into our first procurement and supply contract and we expect to continue to depend on key customers to support our revenues for the foreseeable future. The loss of any key customer, failure to renew contracts upon expiration, or a sustained decrease in demand by key customers could result in a substantial loss of revenues and could have a material and adverse effect on our consolidated results of operations.

8
Certain of our operations cash flowsare conducted through joint ventures which have unique risks.

Certain of our operations will be conducted through joint ventures. With respect to our joint ventures, we share ownership and financial condition.

We believemanagement responsibilities with partners that we will require additional equity financingmay not share our goals and objectives. Differences in views among the partners may result in delayed decisions or failures to reduceagree on major matters, such as large expenditures or contractual commitments, the construction or acquisition of assets or borrowing money, among others. Delay or failure to agree may prevent action with respect to such matters, even though such action may serve our long-term debtsbest interest or that of the joint venture. Accordingly, delayed decisions and implementdisagreements could adversely affect the business and operations of the joint ventures and, in turn, our business plan.

We anticipate that we will require additional equity financing in orderand operations. From time to reducetime, our long-term debts and implement our business plan of increasing sales in the Southern China markets. There can be no assurance that we will be able to obtain the necessary additional capital on a timely basis or on terms acceptable to us. If we obtain such financing, the holders of our Common Stock may experience substantial dilution.

To finance our new business, debt or equity financingjoint ventures may be requiredinvolved in disputes or legal proceedings which may negatively affect our investments. Accordingly, any such occurrences could adversely affect our consolidated results of operations, financial position and may adversely impact our share price.

In order to expand the business of USmart and eVision as well as the Company, the Company may need to raise fund in form of equity and/or debt to incur substantial additional indebtedness to finance such expansion. If we or our subsidiaries incur additional debt, the risks that we face as a result of an increased indebtedness could have important consequences to you. For example, it could:

limit our ability to satisfy our obligations under our borrowings;cash flows.
increase our vulnerability to adverse general economic and industry conditions;
require us to dedicate a substantial portion of our cash flow fromOur marketing operations to servicing and repaying our indebtedness, thereby reducingdepend on the availability of our cash flow to fund working capital, capital expenditurestransportation and other general corporate purposes;storage capacity.
limit our flexibility in planning for or reacting to changes in our businesses and the industry in which we operate;
place us at a competitive disadvantage compared to our competitors that have less debt;
limit, along with the restrictive covenants of our indebtedness, among other things, our ability to borrow additional funds or make guarantees; and
increase the cost of additional financing.

Our ability to generate sufficient cash to satisfy our outstanding and future debt obligations will depend upon our future operating performance, whichproduct supply will be affectedtransported and stored on facilities owned and operated by prevailing economic conditions and financial, business and other factors, manythird parties. Any interruption of which are beyond our control. We anticipate that our operating cash flow will be sufficient to meet our anticipated operating expenses and to service our debt obligations as they become due. However, we may not always be able to generate sufficient cash flow for these purposes. If we are unable to service our indebtedness, we will be forced to adopt an alternative strategy that may include actions such as reducingtransport or delaying capital expenditures, selling assets, restructuringstorage companies or refinancing our indebtedness or seeking equity capital. These strategies may not be instituted on satisfactory terms, if at all. As a result, the share price may be adversely affected due to increase in gearing or shareholder base.

11

Risks Relating to the Recent Acquisition

The acquisition may not resultadverse change in the increaseterms and conditions of revenue and profits of the Company.

While the management expects that the acquisition of Jussey will enable the Company to tap into and expand its operations in mobile devices and telecommunication business segments through USmart and eVision, USmart and eVision may not be able to contribute an increase in revenue and profit to the results of the Company as other factors such as changes in future economic climate, intensity of competition from competitors, ability to adapt due to change in technology, number of orders to be received may not be correctly anticipated, which will have a significant impact on the results of USmart and eVision that could generate.

Successful operation of the acquired business is not assured.

Despite that USmart and eVision have orders / projects on hand and pipeline of orders are anticipated, the Company may not be able to expand the business of USmart or eVision beyond these orders / projects and may suffer losses after these orders have been fulfilled as USmart and eVision have operated at a loss making in the past, which may have a significant negative impact to the Company financial position.

Successful integration of the USmart and eVision businesses with our other businesses is not assured.

While management expects that they will be able to integrate the business of USmart and eVision into the Company’s existing trading business within the expected timeframe which would enables the Company to operate more effectively and efficiently and to create synergy hence lower costs of operations, such integration may fail or fail to achieve the desired level of synergy and may increase the overall administrative expenses at a ratio higher than the proportionate revenue and profit contribution from USmart and eVision, and may have significant negative impact to the Company.

USmart and eVision may not be able to distribute dividends to the Company.

USmart and eVision are Hong Kong incorporated company and may distribute retained profits to its shareholders. Since USmart and eVision have been operating at a loss in the past and does not have retained profits available for distribution to the Company, it may not be able to generate enough profits to recover losses from prior years and therefore may not be able to distribute dividends to the Company for further distributions to its shareholders.

A lack of expertise over USmart and eVision financial reporting in U.S. GAAP could result in an inability to accurately report our financial results, which may lead to loss of investor confidence in our financial statements and may adversely affect the Company’s share price.

While the management will pursue to ensure that the financial results of USmart and eVision will be reported accurately under U.S. GAAP, the financial results of USmart and eVision may be inaccurately reported under U.S. GAAP due to lack of U.S. GAAP expertise from USmart and eVision and may adversely affect the Company’s share price, loss of investor confidence and regulatory penalty.

Our ability to execute on our business strategy and growth will depend in part on the success of the telecommunication industry.

The acquisition is part of the Company’s business strategy to grow and expand through access to the telecommunication industry. As a result, the success of USmart and eVision businesses will have a material impact on the overall success of the Company.

12

Risks Associated With Doing Business in China

There are substantial risks associated with doing business in China, some of which are addressed in the following risk factors.

Economic, political and social conditions, as well as government policies in Chinaservice could have a material adverse effect on our business, results of operationsability, and financial condition.

Partthe ability of our business is conductedcustomers, to transport products and have a corresponding material adverse effect on our revenues.


The risk of terrorism and political unrest in various energy producing regions may adversely affect the economy and partthe price and availability of our revenues is derived from, the PRC.

The economyproducts.


An act of terror in any of the PRC differs from the economies of most developed countries in many respects, including, but not limited to structure, governmental involvement, level of development, growth rate, capital re-investment, allocation of resources, control of foreign currency and rate of inflation. The economymajor energy producing regions of the PRC has been transitioning from a planned economy to a market-oriented economy. Althoughworld could potentially result in recent years the PRC government has implemented measures emphasizing the utilization of market forces for economic reform, a substantial portion of productive assetsdisruptions in the PRC is still owned by the PRC government. In addition, the PRC government continues to play a significant role in regulating industries by imposing industrial policies. It also exercises significant control over the PRC’s economic growth through allocating resources, controlling paymentsupply of foreign currency-denominated obligations, setting monetary policycrude oil and providing preferential treatment to particular industries or companies.

Policies and other measures taken by the PRC government to regulate the economynatural gas which could have a significant negativematerial impact on the availability and price of propane. Terrorist attacks in the areas of our operations could negatively impact our ability to transport propane to our locations. These risks could potentially negatively impact our consolidated results of operations.


We depend on the leadership and involvement of key personnel for the success of our businesses.

We have certain key individuals in our senior management who we believe are critical to the success of our business. The loss of leadership and involvement of those key management personnel could potentially have a material adverse impact on our business.
Future economic conditions in the PRC, with a resulting negative impact on our business. For example, our business, results of operationsU.S. and financial condition may beinternational markets could materially and adversely affected by:

new lawsaffect our business, financial condition and regulationsresults of operations.
The U.S. and other world economies continue to experience the interpretationsafter-effects of those lawsa global recession and regulations;
credit market crisis. More volatility may occur before a sustainable growth rate is achieved either domestically or globally. Even if such growth rate is achieved, such a rate may be lower than the introduction of measures to control inflation or stimulate growth;
changesU.S. and international economies have experienced in the rate or method of taxation; or
the imposition of additional restrictions on currency conversions and remittances abroad.

Macroeconomic measures taken by the PRC government to managepast. Global economic growth could have adversedrives demand for energy from all sources, including fossil fuels. A lower, future economic consequences.

In response to concerns about the PRC’s high growth rate will result in industrialdecreased demand for our oil production bankand lower commodity prices, and consequently reduce our revenues, cash flows from operations and our profitability.

Our business requires significant capital expenditures and we may not be able to obtain needed capital or financing on satisfactory terms or at all.
Our planned operational activities require substantial capital expenditures. We intend to fund our capital expenditures through a combination of financing contracts, borrowings under credit fixed investmentfacilities, if possible,  and money supply, the PRC government has periodically taken measures to slow economic growthpublic equity financings. Future cash flows are subject to a more manageable level. Amongnumber of variables, including our success in establishing cash flow from operations. We do not expect our cash flow from operations to be sufficient to cover our current expected capital expenditure budget and we may have limited ability to obtain the measures thatadditional capital necessary to sustain our operations at current levels. We may not be able to obtain debt or equity financing on favorable terms or at all. The failure to obtain financing could cause us to scale back our operations, which in turn could lead to the PRC government has taken are restrictions on bank loans in certain sectors. These measures have contributed to a modest slowdown in economic growth in the PRC and a reduction in demand for consumer goods and real property. These measures and any additional measures, including an increase in interest rates, could contribute to a further slowdown in the PRC economy, which could result in a decline in demand for industrial materials and lower revenues for us.

In particular, the State Council has recently announced further macroeconomic measures to control perceived overinvestment in the real property market. The detailed regulations issued by central government agencies to implement these measures include, without limitation, restrictions on foreign investment and strict enforcement of tax collection. We can give you no assurance that these measures and regulations will not adversely affect our business.

The PRC legal system has inherent uncertainties that could negatively impact our business.

Our business is operated through, and our revenues are generated by, our operating subsidiaries in the PRC. Substantially allfailure of our assets are locatedbusiness plan.

Our growth depends on the success of our initial agreement with joint venture partner Shandong Pusheng Petrochemical Co., Ltd. (“SPPCL”) for the sourcing, purchasing and management of transportation logistics for oil, gas, and refined products to be delivered and sold into the Chinese market which has no operational history and is subject to change.
We have only recently entered into a formal agreement in our planned area of operations. The success of our growth will depend on our ability to successfully conclude this agreement, establish a joint venture, secure financing and commence sales of sourced commodities.  While we believe we have the PRC. The PRC legal systempersonnel and experience to conclude these transactions and commence sales, there is based on written statutes. Prior court decisions mayno guarantee we will be cited for reference but have limited precedential value. Since 1979, the PRC government has promulgated laws and regulations dealing with economic matters such as foreign investment, corporate organization and governance, commerce, taxation and trade. However, because these laws and regulations are relatively new, and because of the limited volume of published cases and their nonbinding nature, interpretation and enforcement of these laws and regulations involve uncertainties. In addition, as the legal system in China develops, changes in such laws and regulations, their interpretation or their enforcement mayable to perform under this agreement, which would have a negativematerial adverse effect on our business, financial condition and results of operations.

13

It may be difficult to affect service of process upon us or our directors or to enforce any judgments obtained from non-PRC courts.

Our operations are conducted and a substantial part of our assets are located within China. Our key management reside in Hong Kong and China, where substantially all of their assets are located. Investors may experience difficulties in effecting service of process upon us, our directors or our senior management as it may not be possible to affect such service of process outside China. In addition, our PRC counsel has advised us that China does not have treaties with the United States and many other countries providing for reciprocal recognition and enforcement of court judgments. Therefore, recognition and enforcement in China of judgments of a court in the United States or certain other jurisdictions may be difficult or impossible.

Restrictions on foreign currency exchange may limit our ability to obtain and remit foreign currency or to utilize our revenues effectively.

We receive substantially part of our revenues in Renminbi through our ownership and operation of USmart. As a result, any restriction on currency exchange may limit our ability to use revenues generated in Renminbi to service and repay our indebtedness. Our ability to satisfy our debt obligations depends upon the ability of our subsidiaries incorporated in the PRC to obtain and remit sufficient foreign currency. Our subsidiaries incorporated in the PRC must present certain documents to the designated foreign exchange bank before they can obtain and remit foreign currency out of the PRC (including, in the case of dividends, evidence that the relevant PRC taxes have been paid and, in the case of shareholder loans, evidence of the registration of the loan with the State Administration for Foreign Exchange). There can be no assurance that our subsidiaries incorporated in the PRC will not encounter difficulty in the future when undertaking these activities. If our subsidiaries in the PRC are unable to remit dividends to us, we could be unable to make payment of interest on and principal of our indebtedness.

Currency fluctuations and restrictions on currency exchange may adversely affect our business, including limiting our ability to convert Chinese Renminbi into foreign currencies and, if Chinese Renminbi were to decline in value, reducing our revenue in US Dollar terms.

Our reporting currency is the US Dollar and our operations in China use their local currency as their functional currencies.  Part of our revenue and expenses in China are in the Chinese currency, the Renminbi.  We are subject to the effects of exchange rate fluctuations with respect to any of these currencies.  For example, the value of the Renminbi depends to a large extent on Chinese government policies and China’s domestic and international economic and political developments, as well as supply and demand in the local market.  Since 1994, the official exchange rate for the conversion of the Renminbi to the US Dollar had generally been stable and the Renminbi had appreciated slightly against the US Dollar.  In July 2005, the Chinese government changed its policy of pegging the value of the Renminbi to the US Dollar.  Under this policy, which was halted in 2008 due to the worldwide financial crisis, the Renminbi was permitted to fluctuate within a narrow and managed band against a basket of certain foreign currencies.  In June 2010, the Chinese government announced its intention to again allow the Renminbi to fluctuate within the 2005 parameters.  It is possible that the Chinese government could adopt an even more flexible currency policy, which could result in more significant fluctuation of Renminbi against the US Dollar, or it could adopt a more restrictive policy.  We can offer no assurance that the Renminbi will be stable against the US Dollar or any other foreign currency. 

Our financial statements are translated into US Dollars at the average exchange rates in each applicable period.  To the extent the US Dollar strengthens against foreign currencies, the translation of these foreign currencies denominated transactions results in reduced revenue, operating expenses and net income for our international operations.  Similarly, to the extent the US Dollar weakens against foreign currencies, the translation of these foreign currency denominated transactions results in increased revenue, operating expenses and net income for our international operations.  We are also exposed to foreign exchange rate fluctuations as we convert the financial statements of our foreign consolidated subsidiaries into US Dollars in consolidation.  If there is a change in foreign currency exchange rates, the conversion of the foreign consolidated subsidiaries’ financial statements into US Dollars will lead to a translation gain or loss which is recorded as a component of other comprehensive income.  In addition, we have certain assets and liabilities that are denominated in currencies other than the relevant entity’s functional currency.  Changes in the functional currency value of these assets and liabilities create fluctuations that will lead to a transaction gain or loss.  We have not entered into agreements or purchased instruments to hedge our exchange rate risks, although we may do so in the future.  The availability and effectiveness of any hedging transaction may be limited and we may not be able to hedgecompensate for, or fully mitigate, these risks.

RISKS RELATING TO AN INVESTMENT IN OUR SECURITIES
If we fail to maintain effective internal controls over financial reporting, the price of our exchange rate risks.

The cyclical naturecommon stock may be adversely affected.

We are required to establish and maintain appropriate internal controls over financial reporting. Failure to establish those controls, or any failure of those controls once established, could adversely impact our public disclosures regarding our business, financial condition or results of operations. Any failure of these controls could also prevent us from maintaining accurate accounting records and discovering accounting errors and financial frauds. Rules adopted by the SEC pursuant to Section 404 of the telecommunication and computer industry could adversely affectSarbanes-Oxley Act of 2002 require annual assessment of our results of operation.

Our results of operations are and will continueinternal control over financial reporting. The standards that must be met for management to be affected byassess the cyclical nature of the telecommunication and computer industry in the PRC. Our products pricing, inventory and accounts receivable are affected by, among other factors, supply and demand of comparable products, interest rates, inflation, the rate of economic growth, tax laws and political and economic developments in the PRC. We cannot assure you that the products can be sold. In addition, additional supply of new products are scheduled for completion over the next few months and years in the PRC. This additional supply could also adversely affect trade products sales as well as the inventory and credit policies.

14

Risks Related to Our Common Stock

Failure to maintain effective internal control over financial reporting as effective are complex, and require significant documentation, testing and possible remediation to meet the detailed standards. We may encounter problems or delays in accordance with Section 404 of the Sarbanes Oxley Act of 2002 may result in actions filed against us by regulatory agencies or in a reduction in the pricecompleting activities necessary to make an assessment of our common stock.

We are required to maintain effectiveinternal control over financial reporting. If we cannot assess our internal control over financial reporting under the Sarbanes Oxley Actas effective, investor confidence and share value may be negatively impacted.

In addition, management’s assessment of 2002internal controls over financial reporting may identify weaknesses and related regulations.conditions that need to be addressed in our internal controls over financial reporting or other matters that may raise concerns for investors. Any material weaknessactual or perceived weaknesses and conditions that need to be addressed in our internal control over financial reporting, that needs to be addressed,disclosure of management’s assessment of our internal controls over financial reporting, or disclosure of a material weakness inour public accounting firm’s attestation to or report on management’s assessment of our internal controlcontrols over financial reporting may reducehave an adverse impact on the price of our common shares because investors may lose confidencestock.

9
Compliance with changing regulation of corporate governance and public disclosure will result in ouradditional expenses.
Changing laws, regulations and standards relating to corporate governance and public disclosure, including the Sarbanes-Oxley Act of 2002 and related SEC regulations, have created uncertainty for public companies and significantly increased the costs and risks associated with accessing the public markets and public reporting. For example, on January 30, 2009, the SEC adopted rules requiring companies to provide their financial reporting.statements in interactive data format using the eXtensible Business Reporting Language, or XBRL. We currently have to comply with these rules. Our failuremanagement team will need to maintain effective internal control overinvest significant management time and financial reporting could alsoresources to comply with both existing and evolving standards for public companies, which will lead to actions being filed against us by regulatory agencies. We identified material weaknesses in internal control over financial reporting as more fully discussed in Controlsincreased general and Procedures at Item 9Aadministrative expenses and a diversion of management time and attention from revenue generating activities to compliance activities.
Because of the early stage of development and the nature of our Annual Report as of December 31, 2014. Currently, we have plans for certain remediation actions, but they will take time to implementbusiness, our securities are considered highly speculative.
Our securities must be considered highly speculative, generally because of their cost. There can be no assurance when remediation will be completed, if at all. Therefore, future reports may have statements indicating that our controls and procedures are not effective. We cannot assure you that even if we remediate our internal control over financial reporting relating to the identified material weaknesses that it will establish the effectivenessnature of our internal control over financial reporting or that we will not be subject to material weaknesses in the future.

Our major stockholder controls our business and could delay, deterthe early stage of its development. We have not generated any revenues nor have we realized a profit from our -operations to date and we may not generate any revenues or prevent a changerealize any profits in the short term.   Any profitability in the future from our business will be heavily dependent upon our ability to perform under joint venture contracts recently secured.  Since we have not generated any revenues, we will have to raise additional monies through the sale of controlour equity securities or debt in order to continue our business operations.

We may, in the future, issue additional common shares that would reduce investors’ percent of ownership and may dilute our share value.
The future issuance of common shares may result in substantial dilution in the percentage of our common shares held by our then existing stockholders. We may value any common shares issued in the future on an arbitrary basis. The issuance of common shares for future services or acquisitions or other business combination.

One shareholder, Mr. Yang, Chairmancorporate actions may have the effect of diluting the value of the Board of Directors, holds approximately 67.1% ofcommon shares held by our outstanding Common Stock. By virtue of his stock ownership, Mr. Yang will control all matters submitted to our boardinvestors, and our stockholders, including the election of directors, and will be able to exercise control over our business, policies and affairs. Since he has substantial voting power, he could cause us to take actions that we would not otherwise consider, or could delay, deter or prevent a change of control or other business combination that might otherwise be beneficial to our stockholders.

Our stock price has been volatile and may fluctuate in the future.

There has been significant volatility in thehave an adverse effect on any trading market prices of publicly traded shares in computer related companies, including ours. From September 30, 2003, the effective date of the reverse-acquisition of Atlantic, to December 31, 2014, the closing price of our Common Stock fluctuated from a per share high of $3.00 to a low of $0.01 per share. The share price of our Common Stock may not remain at or exceed current levels. The market price for our Commoncommon shares.

The Market for Penny Stock has suffered in recent years from patterns of fraud and for the stock of electronic companies generally, has been highly volatile. The market price of our Common Stock may be affected by: (1) incidental level of demand and supply of the stock; (2) daily trading volume of the stock; (3) number of public stockholders in our stock; (4) fundamental results announced by Usmart; and (5) any other unpredictable and uncontrollable factors.

If additional authorized shares of our Common Stock available for issuance or shares eligible for future sale were introduced into the market, it could hurt our stock price.

We are authorized to issue 50,000,000 shares of Common Stock. As of April 15, 2015, there were 39,684,495 shares of our Common Stock issued and outstanding.

Currently, outstanding shares of Common Stock are eligible for resale. We are unable to estimate the amount, timing or nature of future sales of outstanding Common Stock. Sales of substantial amounts of the Common Stock in the public market by these holders or perceptions that such sales may take place may lower the Common Stock’s market price.

If penny stock regulations impose restrictions on the marketability of our Common Stock, the ability of our stockholders to sell shares of our stock could be impaired.

The SEC has adopted regulations that generally define a “penny stock” to be an equity security that has a market price of less than $5.00 per share or an exercise price of less than $5.00 per share subject to certain exceptions. Exceptions include equity securities issued by an issuer that has (i) net tangible assets of at least $2,000,000, if such issuer has been in continuous operation for more than three years, or (ii) net tangible assets of at least $5,000,000, if such issuer has been in continuous operation for less than three years, or (iii) average revenue of at least $6,000,000 for the preceding three years. Unless an exception is available, the regulations require that prior to any transaction involving a penny stock, a risk of disclosure schedule must be delivered to the buyer explaining the penny stock market and its risks. Our Common Stock is currently trading at under $5.00 per share. Although we currently fall under one of the exceptions, if at a later time we fail to meet one of the exceptions, our Common Stock will be considered a penny stock. As such the market liquidity for the Common Stock will be limited to the ability of broker-dealers to sell it in compliance with the above-mentioned disclosure requirements.

Youabuse

Stockholders should be aware that, according to the SEC Release No. 34-29093, the market for penny stocks has suffered in recent years from patterns of fraud and abuse. Such patterns include:

Control (i) control of the market for the security by one or a few broker-dealers;
“Boiler room” practices involving high-pressure sales tactics;
Manipulationbroker-dealers that are often related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales;
The release ofsales and false and misleading information;
Excessivepress releases; (iii) boiler room practices involving high-pressure sales tactics and unrealistic price projections by inexperienced salespersons; (iv) excessive and undisclosed bid-ask differentialsdifferential and markups by selling broker-dealers; and,
Dumping (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired level, along with the resulting inevitable collapse of those prices and with consequential investor losses.
Broker-dealers may be discouraged from effecting transactions in our shares because they are considered penny stocks and are subject to the penny stock rules thereby potentially limiting the liquidity of our shares.
Rules 15g-1 through 15g-9 promulgated under the Securities Exchange Act of 1934, as amended, impose sales practice and disclosure requirements on NASD broker-dealers who make a market in "penny stocks". A penny stock generally includes any non-NASDAQ equity security that has a market price of less than $5.00 per share.  Our shares are quoted on the OTC Pink Marketplace.  NASD broker-dealers who act as market makers for our shares generally facilitate purchases and sales of our shares.  The additional sales practice and disclosure requirements imposed upon broker-dealers may discourage broker-dealers from effecting transactions in our shares, which hurtscould severely limit the market liquidity of the shares and impede the sale of our shares in the secondary market.
Under the penny stock regulations, a broker-dealer selling penny stock to anyone other than an established customer or "accredited investor" (generally, an individual with net worth in excess of $1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or her spouse) must make a special suitability determination for the purchaser and must receive the purchaser's written consent to the transaction prior to sale, unless the broker-dealer or the transaction is otherwise exempt.
In addition, the penny stock regulations require the broker-dealer to deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the SEC relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt.  A broker-dealer is also required to disclose commissions payable to the broker-dealer and the registered representative and current quotations for the securities.  Finally, a broker-dealer is required to send monthly statements disclosing recent price information with respect to the penny stock held in a customer's account and information with respect to the limited market in penny stocks.
Our common stock may experience extreme rises or declines in price, and you may not be able to sell your shares at or above the price paid.
Our common stock may be highly volatile and could be subject to extreme fluctuations in response to various factors, many of which are beyond our control, including (but not necessarily limited to): (i) the trading volume of our shares; (ii) the number of securities analysts, market-makers and brokers following our common stock; (iii) changes in, or failure to achieve, financial estimates by securities analysts; (iv) actual or anticipated variations in quarterly operating results; (v) conditions or trends in our business industries; (vi) announcements by us of significant contracts, acquisitions, strategic partnerships, joint ventures or capital commitments; (vii) additions or departures of key personnel; (viii) sales of our common stock; and (ix) general stock market price and volume fluctuations of publicly-trading and particularly, microcap companies.
Investors may have difficulty reselling shares of our common stock, either at or above the price they paid for our stock, or even at fair market value. The stock markets often experience significant price and volume changes that are not related to the operating performance of individual companies, and because our common stock is thinly traded it is particularly susceptible to such changes. These broad market changes may cause the market price of our common stock to decline regardless of how well we perform as a company. In addition, there is a history of securities class action litigation following periods of volatility in the market price of a company’s securities. Although there is no such shareholder litigation currently pending or threatened against the Company, such a suit against us could result in the incursion of substantial legal fees, potential liabilities and the diversion of management’s attention and resources from our business. Moreover, and as noted below, our shares are currently traded on the OTCQB and, further, are subject to the penny stock regulations. Price fluctuations in such shares are particularly volatile and subject to manipulation by market-makers, short-sellers and option traders.
We have not and do not intend to pay any cash dividends on our common shares and, consequently, our stockholders will not be able to receive a return on their shares unless they sell them.
We intend to retain any future earnings to finance the development and expansion of our business. We have not, and do not, anticipate paying any cash dividends on our common shares in the foreseeable future. Unless we pay dividends, our stockholders will not be able to receive a return on their shares unless they sell them.
A decline in the price of our common stock could affect our ability to raise further working capital, it may adversely impact our ability to continue operations and we may go out of business.
A prolonged decline in the price of our common stock could result in a reduction in the liquidity of our common stock and causesa reduction in our ability to raise capital. Because we may attempt to acquire a significant portion of the funds we need in order to conduct our planned operations through the sale of equity securities, or convertible debt instruments, a decline in the price of our common stock could be detrimental to our liquidity and our operations because the decline may cause investors to not choose to invest in our stock. If we are unable to raise the funds we require for all our planned operations, we may be forced to reallocate funds from other planned uses and may suffer from loss.

a significant negative effect on our business plan and operations, including our ability to develop new products and continue our current operations. As a result, our business may suffer, and not be successful and we may go out of business. We are aware ofalso might not be able to meet our financial obligations if we cannot raise enough funds through the abuses that have occurred in the penny stock market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate in the market, we will strive within the confines of practical limitations to prevent such abuses with respect to our Common Stock.

Section 203 of the Delaware General Corporation Law may deter a third party from acquiring us.

Section 203 of the Delaware General Corporation Law prohibits a merger with a 15% shareholder within three years of the date such shareholder acquired 15%, unless the merger meets one of several exceptions. The exceptions include, for example, approval by two-thirds of the shareholders (not counting the 15% shareholder), or approval by the Board prior to the 15% shareholder acquiring its 15% ownership. This provision makes it difficult for a potential acquirer to force a merger with or takeover of the Company, and could thus limit the price that certain investors might be willing to pay in the future for sharessale of our Common Stock.

common stock and we may be forced to go out of business.
10
Item 1B.Unresolved Staff Comments

We are a smaller reporting company as defined by Rule 12b-2

ITEM 1B.    UNRESOLVED STAFF COMMENTS
As of the Exchange Act and are not required to providedate of this filing, we have no unresolved comments from the information required under this item.

staff of the SEC.  

Item 2.Properties

After the disposal of ACL Holdings on September 30, 2014, the Company does not own any properties directly or indirectly

ITEM 2.   PROPERTIES

Our Executive Offices:

Our principal office is located at 20333 Tomball PKY, Suite 204, Houston, Texas 77070. Our telephone number is (281) 974-3041. Our website is http:// www.eaglemtc.com.

Item 3.Legal Proceedings

ITEM 3.  LEGAL PROCEEDINGS

We are not a party to any currentknow of no material, active or pending legal proceedings that, if decided adversely to us, would have a material adverse effect uponagainst our business, results of operations, or financial condition, and we are not awareCompany, nor of any threatened or contemplated proceeding by anylegal proceedings that a governmental authority is contemplating against us. To our knowledge, we are not a party to any material legal proceedings as of the date of this report.


Item 4.Mine Safety Disclosure

ITEM 4.  MINE SAFETY DISCLOSURES
Not Applicable

Applicable.


11

PART II


Item 5.Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

  High  Low 
Fiscal Year ended December 31, 2014:        
Quarter ended December 31, 2014 $0.02  $0.01 
Quarter ended September 30, 2014 $0.01  $0.01 
Quarter ended June 30, 2014 $0.02  $0.01 
Quarter ended March 31, 2014 $0.03  $0.01 
         
Fiscal Year ended December 31, 2013:        
Quarter ended December 31, 2013 $0.15  $0.01 
Quarter ended September 30, 2013 $0.07  $0.03 
Quarter ended June 30, 2013 $0.80  $0.07 
Quarter ended March 31, 2013 $0.13  $0.07 

Stock price

ITEM 5.  MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Market Price of and Dividends on the Registrant’s Common Equity and Related Stockholder Matters
Market Information
The Company's common stock is currently quoted on the OTC Markets under the trading symbol “EMTC”.  Following is information has been derivedon high and low closing bid prices to report for the fiscal year ended December 31, 2015 and December 31, 2014.

QuarterHigh ($)Low ($)
Quarter ended 12/31/20151.420.7701
07/31/2015 thru 09/30/2015 (after a 1 for 18 reverse split)1.400.28
07/01/2015 thru 07/31/20150.0950.0551
Quarter ended 06/30/20150.110.01
Quarter ended 03/31/20150.020.0051
Quarter ended 12/31/20140.020.01
Quarter ended 09/30/20140.010.01
Quarter ended 06/30/20140.020.01
Quarter ended 03/31/20140.030.01

The above information was taken from Yahoo Finance. Suchinformation as posted on OTC Markets.  The quotations provided may reflect inter-dealer bids,prices, without retail mark-up, mark-down or commissions,commission and may not reflectrepresent actual transactions.


Holders

As of April 15, 2015, the last reported sale price of our Common Stock, as reported by Yahoo Finance, was $0.013 per share.

As of April 15,December 31, 2015 there were approximately 450303 record holders of the Company’s common stock (which number does not include the number of stockholders whose shares are held by a brokerage house or clearing agency, but does include such brokerage houses or clearing agencies as one record of our Common Stock.

Dividend Policy

Since our recapitalization with Atlantic, effective September 30, 2003, weholder).


Dividends
We have never declared or paid cash dividends on our Common Stock.common stock.  We currently anticipate that we willintend to retain all available funds for use inearnings, if any, to support the operation and expansiondevelopment of our business and therefore do not anticipate paying any cash dividends infor the foreseeable future.

Payment of future dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including current financial condition, operating results and current and anticipated cash needs.


Equity Compensation Plan Information

2006 STOCK OPTION PLAN

Plans


The company has not adopted any equity compensation plans and does not anticipate adopting any equity compensation plans in the near future.  Notwithstanding the foregoing, because the company has limited cash resources at this time, it may issue shares or options to or enter into obligations that are convertible into shares of common stock with its employees and consultants as payment for services or as discretionary bonuses.

Transfer Agent

The transfer agent for the common stock is Action Stock Transfer, Inc. The transfer agent’s address is 2469 E. Fort Union Blvd, Suite 214, Salt Lake City UT 84121, and its telephone number is (801) 274-1088.

Recent Sales of Unregistered Securities; Use of Proceeds from Registered Securities

Recent Sales of Unregistered Securities:

Subsequent to the fiscal year ended December 31, 2015 the Company issued the following  securities:
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Issuances pursuant to Regulation S

On January 4, 2016 the Company issued 8,000,000 shares of common stock to a third party in respect of a share purchase agreement where under the purchaser had the option to acquire shares at a price of $0.01 per share.  The Company received cash proceeds of $80,000 prior to the fiscal year end in respect of this share purchase agreement.  No underwriters were utilized in connection with this sale of securities.

On January 6, 2016 the Company issued a total of 25,000 shares to an individual as part of a share transfer between two shareholders where under certain shares were returned to the company for cancellation and reissue.  The new shares were issued prior to receipt of the canceled shares, which return and cancelation occurred January 23, 2016.

On January 21, 2016, the Company issued a total of 13,000,000 shares at $0.05 in respect to certain convertible notes entered into during fiscal 2015 which came due and payable September 1, 2015 to two individual investors.

On January 23, 2016 the Company issued 700,000 shares to an individual as part of a share transfer between two shareholders where under certain shares were returned to the company for cancellation and reissue.  The new shares were concurrent to receipt of the canceled shares, which return and cancelation occurred January 23, 2016.

On January 23, 2016 the Company issued 2,000,000 shares to an individual as part of a share transfer between two shareholders where under certain shares were returned to the company for cancellation and reissue.  The new shares were concurrent to receipt of the canceled shares, which return and cancelation occurred January 23, 2016.

On January 23, 2016 a shareholder of the Company returned a total of 8,895,000 common shares for reissue.  Upon receipt the shares were canceled and returned to treasury pending instruction for reissue from the shareholder.

On March 31, 2006,9, 2016 the BoardCompany issued 1,000,000 shares to a private individual in respect of Directors adopteda private placement at $0.10 per share for total cash proceeds of $100,000.

On March 10, 2016 the 2006 Equity Incentive Stock Plan (the “Plan”) and the majority stockholder approved the Plan by written consent. The purposeCompany issued a total of 10,000,000 shares of common stock in respect of the Plan isacquisition of an engineering, construction and procurement project in the country of Cyprus.  A further 4,900,000 shares were issued to provide additional incentivea consultant in respect of this transaction on April 5, 2016.

On April 5 and April 7, 2016 respectively, the Company issued a total of 5,500,000 shares to employees, directorsan individual and consultantsa corporate entity as part of a share transfer between shareholders where under certain shares were returned to the company for cancellation on January 23, 2016, and subsequent reissue.

On May 5, 2016 the Company issued a total of 1,500,000 shares to promotefive individuals as part of a share transfer between shareholders where under certain shares were returned to the successcompany for cancellation on January 23, 2016, and subsequent reissue.  A total of 40,000 shares remained available for reissue as at the date of this report in respect to the share surrender and reissue request.

Each of the Company’s business. The Plan permitsforegoing issuances of securities was exempt from registration due to 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 terminatedexemption found in Regulation S promulgated 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)Securities and Exchange Commission under the Securities Exchange Act of 1934, as amended (the “Committee”).

Recipients1933. These sales were offshore transactions since all of optionsthe offerees were not in the United States and the purchasers were outside the United States at the time of the purchase. Moreover, there were no directed selling efforts of any kind made in the United States neither by us nor by any affiliate or any person acting on our behalf in connection with any of these offerings. All offering materials and documents used in connection with the offers and sales of the securities included statements to the effect that the securities have not been registered under the Plan (“Optionees”) are selected by the BoardSecurities Act 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 exercisable1933 and (3) the expiration date of each option (which may not exceed ten years frombe offered or sold in the date of grant). The minimum per share purchase price of options grantedUnited States or to U.S. persons unless the securities are registered under the PlanAct or an exemption therefrom is available and that hedging transactions involving those securities may not be conducted unless in compliance with the Act. Each purchaser under Regulation S certified that it is not a U.S. person and is not acquiring the securities for Incentive Stock Optionsthe account or benefit of any U.S. person and Non-Qualified Options isagreed to resell such securities only in accordance with the fair market value (as definedprovisions of Regulation S, pursuant to registration under the Act or pursuant to an available exemption from registration. The shares sold are restricted securities and the certificates representing these shares have been affixed with a standard restrictive legend, which states that the securities cannot be sold without registration under the Securities Act of 1933 or an exemption there from and we are required to refuse to register any transfer that does not comply with such requirements.


Issuances pursuant to Regulation D

On January 6, 2016 the Company issued a total of 25,000 shares to an individual as part of a share transfer between two shareholders where under certain shares were returned to the company for cancellation and reissue.  The new shares were issued prior to receipt of the canceled shares, which return and cancelation occurred January 23, 2016.

On January 23, 2016, the Company issued a total of 2,500,000 shares of common stock to a private individual in the Plan) on the date the option is granted.

Optionees will have no voting, dividend or other rights as stockholders with respect to an agreement for services.


The foregoing issuances of securities were exempt from registration pursuant to Section 4(2) of the Securities Act for transactions by an issuer not involving a public offering and Regulation D promulgated thereunder. Neither we nor any person acting on our behalf offered or sold these securities by any form of general solicitation or general advertising. The shares sold are restricted securities and the certificates representing these shares have been affixed with a standard restrictive legend, which states that the securities cannot be sold without registration under the Securities Act of Common Stock covered by options prior to becoming the holders of record of such shares.1933 or an exemption therefrom. 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 subjectpurchaser represented to the option or through a broker. The total number of shares of Common Stock available underCompany that they were purchasing the Plan,securities for their own account and not for 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 lawsaccount of any other country or jurisdiction where options or stock purchase rights are grantedpersons. The purchasers were provided with written disclosure that the securities have not been registered under the Plan.

Subject to limitations set forth inSecurities Act of 1933 and therefore cannot be sold without registration under the Plan,Securities Act of 1933 or an exemption therefrom.


Issuer Purchases of Equity Securities

There were no repurchases of common stock for the terms of option agreements will be determined by the Board of Directors or Committee, and need not be uniform among Optionees.

As ofyear ended December 31, 2014, there were no options outstanding under the Plan.

2015.

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Item 6.Selected Financial Data

We are

ITEM 6.  SELECTED FINANCIAL DATA

The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and areis not required to provide the information required under this item.

information.

Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward Looking Statements

This Management’s Discussioncurrent report contains forward-looking statements relating to future events or our future financial performance.  In some cases, you can identify forward-looking statements by terminology such as "may", "should", "intends", "expects", "plans", "anticipates", "believes", "estimates", "predicts", "potential", or "continue" or the negative of these terms or other comparable terminology.  These statements are only predictions and Analysis of Financial Conditioninvolve known and Results of Operations and other portions of this report contain forward-looking information that involveunknown risks, and uncertainties. The Company’s actual results could differ materially from those anticipated by the forward-looking information. Factors that may cause such differences include, but are not limited to, availability and cost of financial resources, product demand, market acceptanceuncertainties and other factors discussedwhich may cause our or our industry's actual results, levels of activity or performance to be materially different from any future results, levels of activity or performance expressed or implied by these forward-looking statements.

Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity or performance.  You should not place undue reliance on these statements, which speak only as of the date that they were made.  These cautionary statements should be considered with any written or oral forward-looking statements that we may issue in the future.  Except as required by applicable law, including the securities laws of the United States, we do not intend to update any of the forward-looking statements to conform these statements to actual results, later events or circumstances or to reflect the occurrence of unanticipated events.

In this report underunless otherwise specified, all dollar amounts are expressed in United States dollars and all references to “common shares” refer to the heading “Risk Factors.” This Management’s Discussioncommon shares of our capital stock.

The management’s discussion and Analysisanalysis of Financial Conditionour financial condition and results of operations are based upon our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP").

Results of Operations should be read
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 conjunction with the Company’s financial statements andincluded herein. As a result of the related notes included elsewhere in this report.

Overview

Corporate Background

USmart was primarily engagedAssumption Agreement, the Company now operates in the business of distribution of memory products mainly under “Samsung” brand name which principally comprised DRAM, Graphic RAMnatural resources, EPC (Engineering, Procurement, and Flash for the Hong KongConstruction) 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 portfoliooil & gas sector, 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 is still engageddiscontinued its operation 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”).

19
components.

Executive Summary

In 2014, our major sales came from selling memory products, and manufacturing and selling smartphone products.

·Net sales for the year ended December 31, 2014 decreased 98.6% to $1.01 million compared to the same period in 2013.
oGross profit margin for the year ended December 31, 2014 decreased 10.21% to -9.90% compared to the same period in 2013.

·Gross profit for the year ended December 31, 2014 decreased 144.5% to a gross loss of 0.1 million compared to the same period in 2013.
oGross profit margin for the year ended December 31, 2014 decreased 10.21% to -9.90% compared to the same period in 2013.

·Net profit for the year ended December 31, 2014 increased 1,190.2% to $12.06 million compared to the same period in 2013.
oGeneral and administrative expenses for the year ended December 31, 2014 decreased 90.0% to $0.45 million compared to the same period in 2013.
oIncome from the disposal of subsidiary shareholdings amounted for $12.73 million for the year 2014.
o
·On September 30, 2014, the Company disposed all of the equity interest held in ACL International Holdings Limited (“ACL Holdings”).

20

Results of Operations

The following table setstables set forth the comparison of the audited consolidated statements of operations data for the year ended December 31, 20142015 and 20132014 and should be read in conjunction with our financial statements and the related notes appearing elsewhere in this document.

  Year Ended December 31, 
  2014  2013  Difference  Percentage
Increase		 
Net sales $1,013,241  $72,175,289  $-71,162,048   -98.6%
Cost of sales  (1,113,533)  (71,949,939))  70,836,406   98.5%
Gross profit  (100,292)  225,350   -325,642   -144.5%
                 
Operating expenses                
Sales and marketing  118,365   154,014   -35,649   -23.1%
General and administrative  447,850   4,906,299   -4,458,449   -90.9%
Total operating expenses  566,215   5,060,313   -4,494,098   -88.8%
                 
Income (loss) from operations  (666,507)  (4,834,963)  4,168,456   86.2%
Other expenses (income)  (12,726,285)  8,934,360   21,660,645   242.4%
Income (loss) before income taxes provision  12,059,778   (13,769,323)  25,829,101   187.6%
Income taxes provision  -   (21,887)  21,887   100.0 
Net (loss) income $12,059,778  $(13,791,210) $25,850,988   187.4%


The following table sets forth key componentsresults of the continuing operations are as a percentagefollows:
  Year Ended December 31,  
  2015  2014  Difference 
Revenue $-  $-  $- 
             
Operating expenses            
Depreciation  20,070   -   20,070 
Exploration expenses  334,182   -   334,182 
    Professional fees  466,069   -   466,069 
    General and administrative expenses  4,631,046   -   4,631,046 
Total operating expenses  (5,451,367)  -   (5,451,367)
             
Other expenses (income)            
   Interest expenses  (1,195,235)  -   (1,195,235)
   Interest income  5,317   -   5,317 
   Impairment of goodwill  (604,163,185)  -   (604,163,185)
   Loss on debt settlement  (105,233,144)  -   (105,233,144)
   Gain on debt forgiveness  255,690   -   255,690 
Other Income (expenses)  (710,330,557)  -   (710,330,557)
             
Net Income (loss) from continuing operations  (715,781,924)  -   (715,781,924)

14
The results of net revenue for the year ended December 31, 2014 and 2013

  Year Ended December 31, 
  2014  2013 
Net sales  100.0%  100.00%
Cost of sales  (109.90)%  (99.69)%
Gross profit  (9.90)%  0.31%
         
Operating expenses        
Sales and marketing  (11.68)%  (0.21)%
General and administrative  (44.20)%  (6.80)%
Total operating expenses  (55.88)%  (7.01)%
         
Income (loss) from operations  (65.78)%  (6.70)%
Other income (expenses)  1,256.00%  (12.38)%
Income (loss) before income taxes provision  1,190.22%  (19.08)%
Income taxes provision  -%  (0.03)%
Net (loss) income  1,190.22%  (19.11)%

discontinued operations are as follows:


  Year Ended December 31, 
  2015  2014  Difference 
Net sales $-  $1,013,241  $(1,013,241)
Costs of sales  -   1,113,533   (1,113,533)
Gross profit (loss)  -   (100,292)  100,292 
             
             
Operating Expenses            
Selling and distribution costs  -   118,365   (118,365)
General and administrative expenses  -   409,106   (409,106)
Total operating expenses  -   527,471   (527,471)
             
Income (loss) from operation  -   (627,763)  627,763 
             
Other income (expenses)  (73,909)  12,726,285   (12,800,194)
             
Income (loss) from discontinued operations  (73,909)  12,098,522   (12,172,431)

Comparison of the Years Ended December 31, 20142015 and 2013

Net Sales

Net sales consist of product sales, net of returns and allowances and2014

The Company did not generate any recoveries from sales of previously written down inventories. Net sales are recognized upon the transfer of legal title of the products to the customers. The quantity of products the Company sells fluctuates with changesrevenue in demand from its customers. Net sales for the fiscal year 2014 were $1,013,241, down $71,162,048 or 98.6% from $72,175,289 in the 2013 fiscal year. This reduction was due to the Company disposed all of the equity interest held in ACL Holdings on September 30,years ended December 31, 2015 and 2014.

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 109.9% for

Exploration Expenses

During the year ended December 31, 20142015 the Company incurred $334,182 in exploration expenses (2014- $Nil) with respect to our newly acquired business operations in the oil and approximately 99.7% forgas sector.

Professional Fees

During the year ended December 31, 2013. Cost of sales decreased by $70,836,406 or 98.5%, from $71,949,9392015 the Company incurred $466,069 respectively in professional fees paid for legal, accounting, audit and other professional expense compared to $Nil in the prior comparative period.

The Company expects to continue to incur substantive additional professional fees as we move to evaluate recently acquired resource based assets, negotiate agreements with third parties to monetize these assets and undertake financings to meet our operational overhead and planned exploration expenses.

General and Administrative expenses

During the year ended December 31, 20132015 the Company incurred general and administrative expenses of $4,631,046 as compared to $1,113,533 for$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 year ended December 31, 2014. The decrease was mainly due to2015 the Company disposed allreported 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 equity interest held in ACL Holdings on September 30, 2014.

Gross Profit

Gross profit is net sales less costissuance of sales and is affected by a numbershares 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 loss for the fiscal year 2014 was $100,292, a decrease of $325,642 or 144.5%, from $225,350 in the fiscal year 2013. Gross profit margin for fiscal year 2014 decreased to -9.90% from 0.31% in fiscal year 2013. These results were due to the reason mentioned above.

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 $35,649, or 23.1%, from $154,014 for the year ended December 31, 2013 to $118,365 for the year ended December 31, 2014. These results were due to the same reason mentioned above.

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, and director and officer insurance. General and administrative expenses decreased by $4,458,449 or 90.0% from $4,906,299 for the year ended December 31, 2013 to $447,850 for the year ended December 31, 2014. The decrease was mainly due to the Company disposed all of the equity interest held in ACL Holdings on September 30, 2014.

Income (Loss) from Operations

Loss from operations was $666,507 for the year ended December 31, 2014 compared to loss of $4,834,963 for the year ended December 31, 2013, a decrease of $4.2 million. The decrease was mainly due to the Company disposed all of the equity interest held in ACL Holdings on September 30, 2014.

Other Expenses (Income)

Other expenses (income) consists primarily of rental income, management and service income, interest income, interest expenses, and profits/(loss) on disposals of assets and investments. Other income increased by $21,660,645 or 242.4% from a net other expense of $8,934,360 for the year ended December 31, 2013 to a net other income of $12,726,285 for the year ended December 31, 2014. The decrease was mainly due to the income derived from the Company disposed all of the equity interest held in ACL Holdings on September 30, 2014.

Interest Expense

Interest expense, including finance charges, relates primarily to borrowings from our bank and a third party. Interest expense decreased $1,041,095 or 100%, fromconvertible class D preferred stock.


In addition, we recorded interest expense of $1,041,095$1,195,235 in respect of certain convertible notes payable, including amortization of the debt discount.  We also recorded interest income of $5,317 in regard to certain loans and advances receivable, with no similar expenses in the prior comparative three and nine month periods.

Discontinued operation

Net sales and costs of sales from discontinued operations totaled $nil in the year ended December 31, 2013,2015, compared to $Nilnet sales of $1,013,241 and costs of sales of $1,113,533 in the year ended December 31,2 014. Expenses from discontinued operations totaled $nil in the year ended December 31, 2014. These changes were mainly due to the Company disposed all of the equity interest, including the loans liabilities, held in ACL Holdings on September 30, 2014.

Income Taxes Provision

The Company is subject to income tax in the U.S., Hong Kong and PRC. Income tax provision for the year ended December 31, 2014 was $Nil, a decrease of $21,887 or100.0% from $21,887 for the year ended December 31, 2013. This decrease was an adjustment on the prior year estimated Hong Kong corporate income taxes payable by Atlantic. The effective income tax rate is 0% for 2014 as compared to 0.03% for 2013. The Company did not have any interest or penalty not to recognize in the income statements for the year ended December 31, 2014 and December 31, 2013 or the balance sheet, as of December 31, 2014 and December 31, 2013.

Net (loss) Income

As a result of the foregoing, the Company recorded a consolidated net2015 (net income of $12,059,778 for the fiscal year$12,726,285 – 2014 up $25,850,988 or 187.4%, from a net loss of $13,791,210 in the fiscal year 2013. This was resulted by the disposal of the equity interest held in ACL Holdings on September 30, 2014.

Critical Accounting Policies

The U.S. Securities and Exchange Commission (“SEC”) recently issued Financial Reporting Release No. 60, “CautionaryAdvice 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 policies as the ones that are most important to the portrayal of a company’s financial condition and operating results, and require management to make its most difficult and subjective judgments, often as a result of a gain on the needdisposal of certain assets).

15
Critical Accounting Policies

The preparation of our financial statements requires management to make estimates and assumptions that affect the reported amounts of matters that are inherently uncertain. Based on this definition, our most critical accounting policies include: inventory valuation, which affects costassets and liabilities and the disclosure of salescontingent assets and gross margin; policies for revenue recognition, allowance for doubtful accounts,liabilities at the date of the financial statements and stock-based compensation. The methods,the reported amounts of revenues and expenses during the reporting period. On an on-going basis, management evaluates its estimates and judgments we use in applying these most critical accounting policies have a significant impact on our results we report in our consolidated financial statements.

Revenue Recognition

The Company derives revenues from resale of computer memory products, sale of self-manufacture products, and sale of research and development 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 serviceswhich 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 historical experience and on various other factors that are believed to be reasonable under the amount by whichcircumstances. The results of their evaluation form the basis for making judgments about the carrying value exceeds the fair market valuevalues 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 actualliabilities. Actual results may differ from these estimates under different assumptions and assumptions, the balances of reported inventory and cost of products sold will change accordingly. Since Aristo supplies different generations of computer related products, older generation products will move slowly owingcircumstances. Our significant accounting policies are more fully discussed in Note 2 to lower market demand. According to the management experience and estimation on the actual market situation, old generation products carrying on hand for ten years will have no re-sell value. Therefore, these inventories on hand over ten years will be written off by Aristo immediately.

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.

Audited Financial Statements contained herein.

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. Detailed disclosures regarding our outstanding credit facilities are set forth in Notes 7 and 8 of the Notes to Consolidated Financial Statements, including the amounts of the facilities, outstanding balances, interest rates, maturity periods (for long term loans) and pledge of assets.

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

At December 31, 2014, the Company has2015, we had total current assets of $128$41,078 including $16,825 cash on hand, interest receivable of $10,255, and other current assets of $13,998, as compared to $Nil total current assets in the comparative period ended December 31, 2014.  Current liabilities from continuing operations totaling $3,052,456 at December 31, 2015 include $1,277,786 from accounts payable and accrued liabilities, $585,510 in advances from third parties, $675,000 in convertible notes payable, net, $34,160 in loans payable, deferred revenue of $350,000, $50,000 in liability for unissued shares and $80,000 in deposit for stock option, compared to $Nil current liabilities from continuing operations at December 31, 2014.  Presently we rely on advances from third parties, sale of $448,055. This raises substantial doubt about the Company’s abilitycommon stock and convertible loans from qualified investors 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,fund our capital requirements may increase.

general operating expenses. 

The short-term borrowings from banks and other financial institutions to finance the cash flow required to finance the purchase of products from our suppliers must be made a day in advance of the release of goods from suppliers’ warehouse before receiving payments from customers upon physical delivery of such goods in Hong Kong which, in most instances, take approximately two days from the date of such delivery.

The following factors, among others, could have a negative impact on the Company’s 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; the Company’s 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.

Net Cash Provided by Operating Activities

In the year ended December 31, 2014,2015, net cash providedused by operatingcontinuing activities amounted to $1,615,830$1,119,526 while net cash used for operatingcontinuing activities in the year ended December 31, 2013,2014, amounted to $9,090,317, an increase of $10,706,147. This increase was primarily due to the disposal of ACL Holdings on September 30, 2014.

Net Cash Provided by Investing Activities

$nil,


In the year ended December 31, 2014,2015, net cash providedused by investingdiscontinued activities amounted to $11,738,454$nil while net cash provided by investingfor discontinued activities in the year ended December 31, 2013,2014, amounted to $9,745,137, an increase of $1,993,317. This increase was primarily due to the disposal of ACL Holdings on September 30, 2014.

$1,615,830.


Net Cash Used for FinancingProvided by Investing Activities

In the year ended December 31, 2014,2015, net cash used for financingby continuing activities amounted to $13,585,403$243,649 while net cash used for financingby continuing activities in the year ended December 31, 2013,2014, amounted to $1,063,163, a decrease of $12,522,240. This decrease was due to$nil.

In the disposal of ACL Holdings on September 30, 2014.

Contractual Obligations

The following table presents our contractual obligations as ofyear ended December 31, 2013 over2015, net cash provided by discontinued activities amounted to $nil while net cash provided for discontinued activities in the next five years and thereafter:

Payments by Period
  Amount  Less
Than
1 Year		  1-3
Years		  4-5
Years		  After 5
Years		 
Operating Leases $1,078,893  $376,760  $352,066  $350,067  $— 
Capital Leases  133,428   75,917   57,511   —   — 
Line of credit and notes payable – short-term  3,178,580   3,178,580   —   —   — 
Bank Loans  4,760,281   3,475,231   505,656   118,775   660,619 
Loan from a third party  7,051,282   641,026   6,410,256   —   — 
Total Contractual Obligations $16,202,464  $7,747,514  $7,325,489  $468,842  $660,619 

year ended December 31, 2014, amounted to $11,738,454.

Net Cash Used for Financing Activities
In the year ended December 31, 2015, net cash provided by continuing activities amounted to $1,380,000 while net cash used by continuing activities in the year ended December 31, 2014, amounted to $nil.

In the year ended December 31, 2015, net cash provided by discontinued activities amounted to $nil while net cash used for discontinued activities in the year ended December 31, 2014, amounted to $13,585,403.
16
Contractual Obligations

None.

Off-Balance Sheet Arrangements

As of December 31, 20142015 and 2013,2014, we had no relationships with unconsolidated entities or financial partnerships, such as entities often referred to as structured finance or special purpose entities, which would have been established for the purpose of facilitating off balance sheet arrangements, or other contractually narrow or limited purposes. We are, therefore, not materially exposed to any financing, liquidity, market or credit risk that could arise if we had engaged in such relationships.

Related Party Transactions

We conduct business

Transactions with several affiliated companies. AllRonald Cormick, CEO, Officer and Director of the related party transactions taking place duringCompany

During the reporting periods were conducted infiscal year ended December 31, 2015, the normal courseCompany paid $10,000 Mr. Ronald Cormick as consulting fees.

During the period ended December 31, 2015, Mr. Ronald Cormick advanced $320,121 to the Company’s subsidiary TSO. As of business. The pricesDecember 31, 2015, $409,834 remained on the balance sheets as advances.

Transactions with Ehud Amir, COO, Officer and Director of products soldthe Company

During the period ended December 31, 2015, Mr. Ehud Amir advanced $6,475 to or purchasedthe Company’s subsidiary TSO. as of December 31, 2015, $6,475 was on the balance sheets as advances.

Transactions with Haley Manchester, CFO, Officer of the Company

During the fiscal year ended December 31, 2015, the Company paid $10,000 to Mr. Haley Manchester as consulting fees.

Transactions with Larry Eastland, Director of the Company

During the fiscal year ended December 31, 2015, the Company accrued $150,000 consulting fees from these related entities are inMr. Larry Eastland. As of December 31, 2015, $150,000 was on the same price rangesbalance sheets as those offered to other non-related customers or purchased from other vendors.

Amounts due from Aristo / Mr. Yang represented Aristo transactions with various related parties of Mr. Yang.

Effect of Inflation

We believe that our results of operations are not dependent upon moderate changes in inflation rates as we expect to be able to pass along component price increases to our customers.

Inflation generally affects us by increasing costs of raw materials, labor,accounts payable and equipment. We do not believe that inflation had any material effect on our results of operations in the periods presented in our audited consolidated financial statements.

New Accounting Pronouncements

See Note 2 to consolidated financial statements included in Item 8, Financial Statements, of this Annual Report on Form 10-K

accrued liabilities.

Item 7A.Quantitative and Qualitative Disclosures about Market Risk

We are

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and areis not required to provide the information required under this item.

information.

Item 8.Financial Statements and Supplementary Data

Attached

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

All financial information required by this Item is attached hereto and filed as part of this Annual Report on Form 10-K are our Consolidated Financial Statements,below beginning on page F-1.

Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

On March 21, 2014 (the “Engagement Date”), the Company’s board of directors approved the engagement of Albert Wong & Co. LLP (“New Auditor”), an independent U.S. CPA firm which is associated with the Company's existing independent accountants, Albert Wong & Co. (“Previous Auditor”), who tendered its resignation on March 21, 2014 (the “Resignation Date”), as the Company’s new independent accountant.

The report of the Previous Auditor on the Company's consolidated financial statements for the fiscal years ended December 31, 2010 and 2011 did not contain an adverse opinion or a disclaimer of opinion and was not qualified or modified as to uncertainty, audit scope, or accounting principles, except to note that the Company had numerous significant related parties’ transactions. During the years ended December 31, 2010 and 2011 and through the Resignation Date, there have been no disagreements between the Company and the Previous Auditor on any matter of accounting principles or practices, financial statement disclosure or auditing scope or procedure, which disagreements if not resolved to the Previous Auditor’s satisfaction would have caused them to make reference to the subject matter of the disagreement in connection with their reports. During the years ended December 31, 2010 and 2011 and through the Resignation Date, there were no "reportable events" as that term is described in Item 304(a)(1)(v) of Regulation S-K.

During the years ended December 31, 2012 and 2011, and any subsequent interim period prior to the Engagement Date, neither the Company nor anyone acting on the Company's behalf consulted the New Auditor with respect to (i) the application of accounting principles to a specified transaction, either completed or proposed, or the type of audit opinion that might be rendered on the Company's consolidated financial statements, or any other matters (ii) any matter that was either the subject of a disagreement (as defined in paragraph (a)(1)(iv) of Item 304 of Regulation S-K and the related instructions thereto) or reportable events (as described in Item 304(a)(1)(v) of Regulation S-K).

Item 9A.Controls and Procedures

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 December 31, 2014, 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 below.

Management’s Report on Internal Control over Financial Reporting

The Company's CEO and CFO are responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control system was designed to provide reasonable assurance to the company's management and board of directors regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

In making its assessment of internal control over financial reporting management used the criteria issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control-Integrated Framework. Because of the material weakness described in the following paragraphs, management believes that, as of December 31, 2014, the company's internal control over financial reporting was not effective based on those criteria.

Management’s evaluation was retrospective and conducted as of December 31, 2014, the last day of the fiscal year covered by this Form 10-K. Based upon management’s evaluation, our CEO and CFO have concluded that our internal controls over financial reporting were not effective as of December 31, 2014 because we have not completed the remediation (discussed elsewhere in this document) for the fiscal year ended December 31, 2014 due to the following material weaknesses:

Company-level controls.We did not maintain effective company-level controls as defined in the Internal Control—Integrated Framework published by COSO. These deficiencies related to each of the five components of internal control as defined by COSO (control environment, risk assessment, control activities, information and communication, and monitoring). These deficiencies resulted in more than a remote likelihood that a material misstatement of our annual or interim financial statements would not be prevented or detected. Specifically,

·Our control environment did not sufficiently promote effective internal control over financial reporting throughout our organizational structure, and this material weakness was a contributing factor to the other material weaknesses described in this Item 9A;

·Our board of directors had not established adequate financial reporting monitoring activities to mitigate the risk of management override, specifically:
–no formally documented financial analysis was presented to our board of directors, specifically fluctuation, variance, trend analysis or business performance reviews;
–an effective whistleblower program had not been established;
–there was insufficient oversight of external audit specifically related to fees, scope of activities, executive sessions, and monitoring of results;
–there was insufficient oversight of accounting principle implementation;
–there was insufficient review of related party transactions; and
–there was insufficient review of recording of stock transactions.

·We did not maintained sufficient competent evidence to support the effective operation of our internal controls over financial reporting, specifically related to our board of directors’ oversight of quarterly and annual SEC filings; and management’s review of SEC filings, journal entries, account analyses and reconciliations, and critical spreadsheet controls;

·We had inadequate risk assessment controls, including inadequate mechanisms for anticipating and identifying financial reporting risks; and for reacting to changes in the operating environment that could have a material effect on financial reporting;

·There was inadequate communication from management to employees regarding the general importance of controls and employees duties and control responsibilities;
·We had inadequate monitoring controls, including inadequate staffing and procedures to ensure periodic evaluations of internal controls, to ensure that appropriate personnel regularly obtain evidence that controls were functioning effectively and that identified control deficiencies were remediated in a timely manner;

·We had an inadequate number of trained finance and accounting personnel with appropriate expertise in U.S. generally accepted accounting principles. Accordingly, in certain circumstances, an effective secondary review of technical accounting matters was not performed;

·We had inadequate controls over our management information systems related to program changes, segregation of duties, and access controls;

·We had inadequate access and change controls over end-user computing spreadsheets. Specifically, our controls over the completeness, accuracy, validity and restricted access and review of certain spreadsheets used in the period-end financial statement preparation and reporting process were not designed appropriately or did not operate as designed; and

·We were unable to assess the effectiveness of our internal control over financial reporting in a timely matter.

Financial statement preparation and review procedures.We had inadequate policies, procedures and personnel to ensure that accurate, reliable interim and annual consolidated financial statements were prepared and reviewed on a timely basis. Specifically, we had insufficient: a) levels of supporting documentation; b) review and supervision within the accounting and finance departments; c) preparation and review of footnote disclosures accompanying our financial statements; and d) technical accounting resources. These deficiencies resulted in errors in the financial statements and more than a remote likelihood that a material misstatement of our annual or interim financial statements would not be prevented or detected. In addition, as discussed in Note 2 of Notes to the Consolidated Financial Statements of this Form 10-K, we recently determined that Aristo Technologies Limited (“Aristo”), a related party, has been a variable interest entity under FASB ASC 810-10-25. Consequently, we are consolidating the financial statements of Aristo with those of the Company for the period effective and are restating our previously filed annual and interim financial statements in amended Form 10-Ks for years ended 2007 and 2008 to reflect the disclosure in accordance with ASC 810-10-25.

Inadequate reviews of account reconciliations, analyses and journal entries.We had inadequate review procedures over account reconciliations, account and transaction analyses, and journal entries. Specifically, deficiencies were noted in the following areas: a) management review of supporting documentation, calculations and assumptions used to prepare the financial statements, including spreadsheets and account analyses; and b) management review of journal entries recorded during the financial statement preparation process. These deficiencies resulted in a more than a remote likelihood that a material misstatement of our annual or interim financial statements would not be prevented or detected.

Inadequate controls over purchases and disbursements.We had inadequate controls over the segregation of duties and authorization of purchases, and the disbursement of funds. These weaknesses increase the likelihood that misappropriation of assets and/or unauthorized purchases and disbursements could occur and not be detected in a timely manner. These deficiencies resulted in errors in the financial statements and in more than a remote likelihood that a material misstatement of our annual or interim financial statements would not be prevented or detected. Specifically,

·We had inadequate procedures and controls to ensure proper segregation of duties within our purchasing and disbursements processes and accounting systems;

·We had inadequate procedures and controls to ensure proper authorization of purchase orders; and

·We had inadequate approvals for payment of invoices and wire transfers.

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

As of December 31, 2014, we had not completed the remediation of any of these material weaknesses.

We are addressing the outstanding material weaknesses described above, as well as our control environment. We also expect to undertake the following remediation efforts:

·We plan on formalizing quarterly financial statement variance analysis of actual versus budget with relevant explanations of variances for distribution to our board of directors.
·We are in the process of developing, documenting, and communicating a formal whistleblower program to employees. We expect to post the policy on the Company web site in the governance section and in the common areas in the office. We plan on providing a toll free number for reporting complaints and will hire a specific third party whistleblower company to monitor the hotline and provide monthly reports of activity to our board of directors.

·Management intends to continue to provide SEC and US GAAP training for employees and retain external consultants with appropriate SEC and US GAAP expertise to assist in financial statement review, account analysis review, review and filing of SEC reports, policy and procedure compilation assistance, and other related advisory services.

·We intend on developing an internal control over financial reporting evidence policy and procedures which contemplates, among other items, a listing of all identified key internal controls over financial reporting, assignment of responsibility to process owners within the Company, communication of such listing to all applicable personnel, and specific policies and procedures around the nature and retention of evidence of the operation of controls.

·We have restricted access to all financial modules. In order to mitigate the risks of management or other override, only authorized persons have edit access to each. We will remove or add authorized personnel as appropriate to mitigate the risks of management or other override; and

·We have re-assigned roles and responsibilities, and intend to continue improving segregation of duties.

These specific actions are part of an overall program that we are currently developing in an effort to remediate the material weaknesses described above.

Attached as exhibits to this report are certifications of our CEO and CFO, which are required in accordance with Rule 13a-14 of Securities Exchange Act of 1934, as amended. The discussion above in this Item 9A includes information concerning the controls and controls evaluation referred to in the certifications and those certifications should be read in conjunction with this Item 9A for a more complete understanding of the topics presented.

We are committed to improving our internal control processes and will continue to diligently review our internal control over financial reporting and our disclosure controls and procedures. The failure to implement adequate controls may result in deficient and inaccurate reports under the Exchange Act.

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 quartered ended December 31, 2014 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.Other Information

None.

29

PART III

Item 10.Directors, Executive Officers and Corporate Governance

Directors and Executive Officers

The following table sets forth the name, age, and position of our directors and our executive officers as of December 31, 2014. Each director holds office (subject to our By-Laws) until the next annual meeting of shareholders and until such director’s successor has been elected and qualified. All of our executive officers are serving until the next annual meeting of directors and until their successors have been duly elected and qualified. Each executive officer holds his office until he resigns, is removed by the board of directors, or his successor is elected and qualified, subject to applicable employment agreements.  

NAMEAGEPOSITION
Chung-Lun Yang52Chairman of the Board of Directors
Ben Wong50Director and Chief Executive Officer
Eddy Wong47Chief Financial Officer (3)
Ming Yan Leung45Chief Technology Officer

(1)Wing Sun Leung resigned as Independent Director on November 7, 2014.
(2)Ho Man Yeung resigned as Independent Director on November 8, 2014.
(3)Philip Tsz Fung Lo resigned as Chief Financial Officer on December 30, 2014
(4)Eddy Wong was engaged as Chief Financial Officer on December 30, 2014

Chung-Lun Yang, Chairman of the Board. Mr. Yang became a Director on September 30, 2003. Mr. Yang is the founder of Atlantic and has been a director of Atlantic since 1991. Mr. Yang graduated from The Hong Kong Polytechnic University in 1982 with a degree in electronic engineering. From October 1982 until April 1985, he was the sales engineer of Karin Electronics Supplies Ltd. From June 1986 until September 1991, he was Director of Sales (Samsung Components Distribution) of Evertech Holdings Limited, a Hong Kong based company. Mr. Yang has over 15 years of extensive experience in the electronics distribution business.  The breadth of Mr. Yang’s sales and operational experience led the Board of Directors to believe this individual is qualified to serve as a director of the Company.  Mr. Yang is also a member of The Institution of Electrical Engineers, United Kingdom. Mr. Yang resigned as the Company’s Chief Executive Officer on February 1, 2013.

Ben Wong, Director and Chief Executive Officer. Mr. Wong was elected as the Director at the Company’s 2012 annual shareholders meeting on November 16, 2012, and appointed as the Chief Executive Officer of the Company on February 1, 2013. Mr. Wong has been the Chief Executive Officer and Director of USmart Electronic Products Limited since 2006. Mr. Wong graduated from the Chinese Culture University of Taiwan in 1986 with a Bachelor’s Degree of Science in Mechanical Engineering. From 1989 to 1990, he worked for Philips H.K. Ltd. as the Industrial Engineer. He gained manufacturing concept from design to mass production processing, and flow of products development from working in Philips. He is also experienced in object-oriented design/analysis, application development, requirements planning & testing, project development, IT management, prototyping, conceptual design and interface implementation.

Ming Yan Leung, Chief Technology Officer. Mr. Leung was appointed as our Chief Technology Officer on June 11, 2010. Prior to joining the Company, Mr. Leung was Chief Architect Officer of RV Technology Ltd., where he oversaw various mobile solutions and services for enterprises and end users. In 1997, Mr. Leung ran the banking solution team at the Tech-Trans Group where he led the implementation of SWIFT-related solution for various banking institutes and a mobile workforce system for an electricity supply company. Mr. Leung holds a Masters in Engineering Management from the University of Technology, Sydney, and a Postgraduate degree in Investment Decision Making from Wuhan University of Technology. Mr. Leung was chosen to be a member of the board based on his experience in managing development and implementation of electronic devices and solutions for more than 10 years.

There are no family relationships between any of our directors and executive officers. There have been no events under any bankruptcy act, no criminal proceedings and no judgments, orders or decrees material to the evaluation of the ability and integrity of any director or executive officer of the Company during the past five years.

Board Meetings

During the fiscal year ended December 31, 2014, our Board of Directors held 4 meetings. No director who served during the fiscal year ended December 31, 2014 attended fewer than 80% of the meetings of the Board of Directors during that year.

Committees of the Board

On January 20, 2011, the Board of Directors establishes an Audit Committee, Nominating Committee and Compensation Committee of the Board of Directors:

Board Leadership Structure and Risk Oversight Role

Our Board of Directors currently contains 2 Executive Directors. The Company is in search of appropriate candidate to fill in the vacant position of Independent Directors. We believe that such a leadership structure is suitable for the Company at its present stage of development.

As a matter of regular practice, and as part of its oversight function, our Board of Directors periodically reviews on the significant risks in respect to our business.  With our current governance structure based on our Board of Directors and senior executives, there is not a significant division of oversight and operational responsibilities in managing the material risks facing the Company.

Code of Business Conduct and Ethics

We have adopted a written code of business conduct and ethics, known as our Code of Business Conduct and Ethics which applies to all of our directors, officers, and employees, including our principal executive officer and our principal financial and accounting officer.

17

EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
(F/K/A copy of the Code of Business Conduct and Ethics is attached as Exhibit 14 to the Annual Report on Form 10-K for the period ended December 31, 2003. To receive a copy of our Code of Business Conduct and Ethics, at no cost, requests should be directed to the Secretary, USmart Mobile Device Inc., Room 1703, 17/F., Tower 1, Enterprise Square, 9 Sheung Yuet Road, Kowloon Bay, Kowloon, Hong Kong. We intend to disclose any amendment to, or waiver of, a provision of the Code of Business Conduct and Ethics in a report filed under the Securities Exchange Act of 1934, as amended, within four business days of the amendment or waiver.

Stockholder Communications

Stockholders and other interested parties may contact the Board of Directors or the non-management directors as a group at the following address: Board of Directors or Outside Directors, USmart Mobile Device Inc., Room 1703, 17/F., Tower 1, Enterprise Square, 9 Sheung Yuet Road, Kowloon Bay, Kowloon, Hong Kong. All communications received at the above address will be relayed to the Board of Directors or the non-management directors, respectively. Communications regarding accounting, internal accounting controls or auditing matters may also be reported to the Board of Directors using the above address.

Typically, we do not forward to our directors communications from our stockholders or other communications which are of a personal nature or not related to the duties and responsibilities of the Board, including:

·Junk mail and mass mailings

·New product suggestions

·Resumes and other forms of job inquiries

·Opinion surveys and polls

·Business solicitations or advertisements

Compliance with Section 16(A) of The Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors and executive officers and persons who own more than ten percent of a registered class of our equity securities (collectively, “Reporting Person”) to file with the SEC initial reports of ownership and reports of changes in ownership of our Common Stock and other equity securities of the Company. Reporting Persons are required by the SEC regulation to furnish the Company with copies of all Section 16(a) forms that they file. To our knowledge, based solely on a review of the copies of such reports furnished to us, we believe that during fiscal year ended



REPORT AND CONSOLIDATED FINANCIAL STATEMENTS

December 31, 2014 all Reporting Persons complied with all applicable filing requirements.

Item 11.Executive Compensation

COMPENSATION DISCUSSION2015 AND ANALYSIS

Summary

Our approach to executive compensation is influenced by our belief2014

(Stated in rewarding people for consistently strong execution and performance. We believe that the ability to attract and retain qualified executive officers and other key employees is essential to our long term success.

Our plan to obtain and retain highly skilled employees is to provide market competitive salaries and also incentive awards. Our approach is to link individual employee objectives with overall company strategies and results, and to reward executive officers and significant employees for their individual contributions to those strategies and results. We use compensation and performance data from comparable companies in the electronics distribution industry to establish market competitive compensation and performance standards for our employees. Furthermore, we believe that equity awards serve to align the interests of our executives with those of our stockholders. As such, we intend for equity to become a key component of our compensation program.

Named Executive Officers

The named executive officers for the fiscal year ended December 31, 2014 are: Ben Wong, our Chief Executive Officer; Eddy Wong, our Chief Financial Officer; and Ming Yan Leung, our Chief Technology Officer. These individuals are referred to collectively in this Annual Report on Form 10-K as the “Named Executive Officers.”

OUR EXECUTIVE COMPENSATION PROGRAM

Overview

The primary elements of our executive compensation program are base salary, incentive cash and stock bonus opportunities and equity incentives typically in the form of stock option grants. Although we provide other types of compensation, these three elements are the principal means by which we provide the Named Executive Officers with compensation opportunities.

The emphasis on the annual bonus opportunity and equity compensation components of the executive compensation program reflect our belief that a large portion of an executive’s compensation should be performance-based. This compensation is performance-based because payment is tied to the achievement of corporate performance goals. To the extent that performance goals are not achieved, executives will receive a lesser amount of total compensation. We have entered into employment agreements with four of our Named Executive Officers. Such employment agreements set forth base salaries, bonuses and stock option grants. Such stock option grants are predicated on our achievement of corporate performance goals as set forth in such agreements.

ELEMENTS OF OUR EXECUTIVE COMPENSATION PROGRAM

Base Salary

We pay a base salary to certain of the Named Executive Officers. In general, base salaries for the Named Executive Officers are determined by evaluating the responsibilities of the executive’s position, the executive’s experience and the competitiveness of the marketplace. Base salary adjustments are considered and take into account changes in the executive’s responsibilities, the executive’s performance and changes in the competitiveness of the marketplace. We believe that the base salaries of the Named Executive Officers are appropriate within the context of the compensation elements provided to the executives and because they are at a level which remains competitive in the marketplace.

Bonuses

The Board of Directors may authorize us to give discretionary bonuses, payable in cash or shares of Common Stock, to the Named Executive Officers and other key employees. Such bonuses are designed to motivate the Named Executive Officers and other employees to achieve specified corporate, business unit and/or individual, strategic, operational and other performance objectives.

Stock Options

Stock options constitute performance-based compensation because they have value to the recipient only if the price of our Common Stock increases. We have not granted any stock options to any of our Named Executive Officers and the grant of stock options to Named Executive Officers is not a material factor in making compensation determinations with respect to our Named Executive Officers. However, we have in the past used stock options as incentives for our other employees. Stock options generally vest over time, with obtainment of a corporate goal, or a combination of the two. The grant of stock options is designed to motivate our employees to achieve our short term and long term corporate goals.

US Dollars)
32


Retirement and Deferred Compensation Benefits

We do not have any arrangements with the Named Executive Officers to provide them with retirement and/or deferred compensation benefits.

Perquisites

There were no perquisites provided to the Named Executive Officers.

Post-Termination/Change of Control Compensation

We do not have any arrangements with the Named Executive Officers to provide them with compensation following termination of employment.

Tax Implications of Executive Compensation

Our aggregate deductions for each Named Executive Officer compensation are potentially limited by Section 162(m) of the Internal Revenue Code to the extent the aggregate amount paid to an executive officer exceeds $1 million, unless it is paid under a predetermined objective performance plan meeting certain requirements, or satisfies one of various other exceptions specified in the Internal Revenue Code. At our 2012 Named Executive Officer compensation levels, we did not believe that Section 162(m) of the Internal Revenue Code would be applicable, and accordingly, we did not consider its impact in determining compensation levels for our Named Executive Officers in 2012.

Hedging Policy

We do not permit the Named Executive Officers to “hedge” ownership by engaging in short sales or trading in any options contracts involving our securities.

Option Exercises and Stock Vested

No options have been exercised by our Named Executive Officers during the fiscal year ended December 31, 2014.

Pension Benefits

Under the Mandatory Provident Fund (“MPF”) Scheme Ordinance in Hong Kong, the Company is required to set up or participate in an MPF scheme to which both the Company and employees must make continuous contributions throughout their employment based on 5% of the employees’ earnings, subject to maximum and minimum level of income. For those earning less than the minimum level of income, they are not required to contribute but may elect to do so. However, regardless of the employees’ election, their employers must contribute 5% of the employees’ income. Contributions in excess of the maximum level of income are voluntary. All contributions to the MPF scheme are fully and immediately vested with the employees’ accounts. The contributions must be invested and accumulated until the employees’ retirement.

Nonqualified Deferred Compensation

We do not have any defined contribution or other plan that provides for the deferral of compensation on a basis that is not tax-qualified.

Employment Agreements

We have entered into employment agreements with our Executive Officers, which set the base salary as set forth in our summary compensation table.

33

Executive Officer Compensation

The following table sets forth the annual and long-term compensation of our Named Executive Officers for services in all capacities to the Company whose total compensation exceeds $100,000 for the last two fiscal years ended December 31, 2014 and December 31, 2013.

Summary Compensation Table

Name and
Principal Position		YearSalaryBonusStock
Awards		Option
Awards		Non-Equity
Incentive Plan
Compensation		Change in
Pension Value
and
Non-qualified
Deferred
Compensation
Earnings		All Other
Compensation		Total
Chung-Lun Yang2014$--—————$-
Former Chief Executive Officer (1)2013$--—————$-

On February 1, 2013, the board of directors of the Company appointed Mr. Ben Wong as the Company’s Chief Executive Officer. Mr. Wong has an employment agreement with USmart and receives a monthly salary of HKD50,000 (approximately USD6,427).

On August 18, 2013, the board of directors of the Company appointed Mr. Philip Tsz Fung Lo as the Company’s Chief Financial Officer. Mr. Lo has an employment agreement with USmart and receives a monthly salary of HKD30,000 (approximately USD3,856). On December 30, 2014, Mr. Lo resigned as the Chief Financial Officer. On the same date, Mr. Eddy Wong was appointed as the Company’s Chief Financial Officer by the Company’s board of directors.

Outstanding equity awards at fiscal year-end

None.

Compensation of Directors

The following table sets forth the Director compensation for service on the Board of Directors of the Company for the fiscal year ended December 31, 2014.

Name Fees Earned
or Paid in
Cash		  Stock
Awards		  Option
Awards		  Non-Equity
Incentive Plan
Compensation		  Non-qualified
Deferred
Compensation
Earnings		  All Other
Compensation		  Total 
Chung-Lun Yang (1) $—   —   —   —   —   —  $— 
Ben Wong (2) $—   —   —   —   —   —  $— 
Ho Man Yeung (4) $12,820   —   —   —   —   —  $12,820 
Wing Sun Leung (3) $12,820   —   —   —   —   —  $12,820 

(1)Chung-Lun Yang resigned as the Company’s Chief Executive Officer on February 1, 2013. The board of directors of the Company appointed Ben Wong as the new Chief Executive Officer on February 1, 2013.
(2)Ben Wong was elected as the director at the Company’s 2012 annual shareholders meeting on November 16, 2012.
(3)Wing Sun Leung resigned as the Company’s Independent Director on November 7, 2014.
(4)Ho Man Yeung resigned as the Company’s Independent Director on November 8, 2014

We compensate our independent directors an amount of HKD10,000 (USD1,282) per month for serving on our board of directors, in addition to reimbursement for out of pocket expenses incurred in attending director meetings. We do not compensate our executive directors for serving on the board of directors.

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

The following table sets forth certain information regarding beneficial ownership of our Common Stock as of December 31, 2014: (i) by each person who is known by us to own beneficially more than 5% of the Common Stock, (ii) by each of our directors, (iii) by each of our executive officers and (iv) by all our directors and executive officers as a group. On such date, we had 39,684,495 shares of Common Stock outstanding.

As used in the table below, the term beneficial ownership with respect to a security consists of sole or shared voting power, including the power to vote or direct the vote, and/or sole or shared investment power, including the power to dispose or direct the disposition, with respect to the security through any contract, arrangement, understanding, relationship, or otherwise, including a right to acquire such power(s) during the 60 days immediately following December 31, 2014. Except as otherwise indicated, the stockholders listed in the table have sole voting and investment powers with respect to the shares indicated

Name and Address of Beneficial Owner Shares of Common Stock
Beneficially Owned		  Percentage of Class
Beneficially Owned(1)		 
Chung-Lun Yang (4)
No. 78, 5th Street, Hong Lok Yuen, Tai Po, New Territories, Hong Kong		  26,622,000   67.1%
Ben Wong (2)
11A, Tower 2, Bellagio, 33 Castle Peak Road, Sham Tseng, New Territories, Hong Kong		  1,800   0.0%
Philip Tsz Fung Lo (3)
30C, Block 2, Hanley Villa, 18 Yau Lai Road, Tsuen Wan, New Territories, Hong Kong		  -   0.0%
Ho Man Yeung (5)
Block 4, 7/F. Unit B, The Grand Panorama, 10 Robinson Road,
Central, Hong Kong		  0   0.0%
Wing Sun Leung (5)
5658 Owens Drive, #202, Pleasanton, CA 94588, USA		  0   0.0%
Farburn Holdings Limited (6)
1601 Beverly House, 93-107 Lockhart Road, Wanchai, Hong Kong.		  3,600,000   9.1%
Ho Fun Cheng (6)
1601 Beverly House, 93-107 Lockhart Road, Wanchai, Hong Kong.		  3,600,000   9.1%
All Directors and Officers as a Group  26,893,800   67.8%

(1)

Applicable percentage of ownership is based on 39,684,495 shares of Common Stock outstanding as of December 31, 2014, together with securities exercisable or convertible into shares of Common Stock within 60 days of December 31, 2014, for each stockholder. Beneficial ownership is determined in accordance with the rules of the United States Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of Common Stock subject to securities exercisable or convertible into shares of Common Stock that are currently exercisable or exercisable within 60 days of December 31, 2014, are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person. The Common Stock is the only outstanding class of equity securities of the Company.

(2)Executive Officer
(3)Former Executive Officer
(4)Director Except as otherwise set forth, information on the stock ownership of these persons was provided to us by such persons.
(5)Former Director
(6)The shares are owned directly by Farburn Holdings Limited (“Farburn”) and indirectly by Ho Fun Cheng (“Mr. Cheng”) through his equity ownership in Farburn. In addition, Mr. Cheng is the sole director of Farburn, and may be deemed as beneficial owner of these shares. Farburn acquired these shares from the Company pursuant to certain Amended and Restated Finder and Consulting Agreement dated October 15, 2012.
Item 13.Certain Relationships and Related Transactions, and Director Independence

All related person transactions are reviewed and, as appropriate, may be approved or ratified by the Board of Directors. Related person transactions are approved by the Board of Directors only if, based on all of the facts and circumstances, they are in, or not inconsistent with, our best interests and our stockholders, as the Board of Directors determines in good faith. The Board of Directors takes into account, among other factors it deems appropriate, whether the transaction is on terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related person’s interest in the transaction. The Board of Directors may also impose such conditions as it deems necessary and appropriate on us or the related person in connection with the transaction.

In the case of a transaction presented to the Board of Directors for ratification, the Board of Directors may ratify the transaction or determine whether rescission of the transaction is appropriate.

CERTAIN RELATED PERSON TRANSACTIONS

Related party receivables are payable on demand upon the same terms as receivables from unrelated parties.

Transactions with Aristo Technologies Limited / Mr. Yang

This represented Aristo transactions with various related parties of Mr. Yang. As of December 31, 2014 and 2013, we had an outstanding receivable from Aristo / Mr. Yang, the President and Chairman of our Board of Directors, totaling $Nil and $931,652, respectively. These advances bear no interest and are payable on demand.

Transactions with Solution Semiconductor (China) Limited

Mr. Yang is a director and the sole beneficial owner of the equity interests of Solution Semiconductor (China) Ltd. (“Solution”).

During the years ended December 31, 2014 and 2013, we received service charges of $Nil and $15,384 respectively from Solution. The service fee was charged for back office support for Solution. During the years ended December 31, 2014 and 2013, we sold products for $Nil and $3,530,784 respectively, to Solution. As of December 31, 2014 and 2013, there were no outstanding accounts receivables from Solution

Two facilities located in Hong Kong owned by Solution were used by the Company as collateral for loans from DBS Bank (Hong Kong) Limited (“DBS Bank”) and The Bank of East Asia, Limited (“BEA Bank”) respectively.

Transactions with Systematic Information Limited

Mr. Yang, the Company’s Chief Executive Officer, majority shareholder and a director, is a director and shareholder of Systematic Information Ltd. (“Systematic Information”) with a total of 100% interest.

During the years ended December 31, 2014 and 2013, we received service charges of $Nil and $3,077 respectively from Systematic Information. The service fee was charged for back office support for Systematic Information. During the years ended December 31, 2014 and 2013, we sold products for $Nil and $2,000,782 respectively, to Systematic Information. As of December 31, 2014 and 2013, there were no outstanding accounts receivables from Systematic Information.

A workshop located in Hong Kong owned by Systematic Information was used by the Company as collateral for loans from BEA Bank.

Transactions with City Royal Limited

Mr. Yang, the Company’s Chief Executive Officer, majority shareholder and a director, is a 50% shareholder of City Royal Limited (“City”). The remaining 50% of City is owned by the wife of Mr. Yang. A residential property located in Hong Kong owned by City was used by the Company as collateral for loans from DBS Bank.

Transactions with Aristo Components Limited

Mr. Ben Wong, the Company’s Chief Executive Officer, is a 90% shareholder of Aristo Components Ltd. (“Aristo Comp”). The remaining 10% of Aristo Comp is owned by a non-related party.

During the years ended December 31, 2014 and 2013, we received a management fee of $Nil and $12,308 respectively from Aristo Comp. The management fee was charged for back office support for Aristo Comp. During the years ended December 31, 2014 and 2013, we have no purchase from Aristo Comp. As of December 31, 2014 and December 31, 2013, there were no outstanding accounts payable to Aristo Comp.

Transactions with Atlantic Ocean (HK) Limited

Mr. Yang is a director and 60% shareholder of Atlantic Ocean (HK) Limited (“Ocean”). During the years ended December 31, 2014 and 2013, we sold products for $Nil and $13,924 respectively, to Ocean. As of December 31, 2014 and 2013, there were no outstanding accounts receivables from Ocean.

Item 14.Principal Accounting Fees and Services

The following table presents fees, including reimbursements for expenses, professional audit services and other services rendered by Albert Wong & Co. LLP CPA during the years ended December 31, 2014 and 2013. Albert Wong & Co. LLP CPA audited our annual financial statements for the year ended December 31, 2014 and 2013.

  Fiscal 2014  Fiscal 2013 
Audit Fees (1) $30,000  $107,000 
Audit Related Fees (2) $—  $— 
Tax Fees (3) $—  $— 
All Other Fees (4) $—  $— 
         
Total $30,000  $107,000 

(1)Audit Fees consist of fees billed for professional services rendered for the audit of the Company’s consolidated annual financial statements and review of the interim consolidated financial statements included in quarterly reports and services that are normally provided by Albert Wong & Co. CPA firms in connection with statutory and regulatory filings or engagements. Audit Fees billed by Albert Wong & Co. LLP CPA firm includes audited fees for auditing our 2014 annual financial statements. Audit Fees billed by Albert Wong & Co. CPA firm includes audited fees for auditing our 2013 annual financial statements and interim reviews for 2013.
(2)Audit-Related Fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under “Audit Fees.” There were no such fees in fiscal year 2014 or 2013.
(3)Tax Fees consist of fees billed for professional services rendered for tax compliance, tax advice and tax planning. There were no such fees in fiscal year 2014 or 2013.
(4)All Other Fees consist of fees for products and services other than the services reported above. There were no such fees in fiscal year 2014 or 2013.

37

PART IV

Item 15.Exhibits and Financial Statement Schedules

(a)Documents filed as part of this Report
(1)The financial statements listed in the Index to Consolidated Financial Statements are filed as part of this report
(2)The financial statements listed in the Index are filed as part of this report.

Schedule II – Valuation and Qualifying Accounts and Reserves. Schedule II on page S-1 is filed as part of this report.

(3)List of Exhibits

See Index to Exhibits in paragraph (b) below.

The Exhibits are filed with or incorporated by reference in this report.

(b)Exhibits required by Item 601 of Regulation S-K.

Exhibit No.Description
31.1Certification of Principal Executive Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
31.2Certification of Principal Financial Officer required by Rule 13a-14(a) or Rule 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*
32.1Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
32.2Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

* Filed herewith

(c)Financial statements required by Regulation S-X which are excluded from the annual report to shareholders by Rule 14a-3(b).

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

USMART MOBILE DEVICE INC.
By:/s/ Ben Wong
Ben Wong
Chief Executive Officer
Dated: April 15, 2015

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

SignatureTitleDate
/s/ Ben WongChief Executive Officer and DirectorApril 15, 2015
Ben Wong(Principal Executive Officer)
/s/ Eddy WongChief Financial OfficerApril 15, 2015
Eddy Wong(Principal Financial and Accounting Officer)
/s/ Chung-Lun YangChairman of the Board of DirectorsApril 15, 2015
Chung-Lun Yang

USmart Mobile Device Inc. and Subsidiaries

Consolidated Financial Statements

As of December 31, 2014 and December 31, 2013 and

For the Years Ended December 31, 2014 and 2013

With Report of Independent Registered Public Accounting Firm

Index to Consolidated Financial Statements

 Page
  
Report of Independent Registered Public Accounting FirmF-1
 
Consolidated Balance SheetsF-2
  
Consolidated Statements of OperationsF-3
Financial Statements:  
Consolidated Balance SheetsStatement of Changes in Stockholders’ DeficitF-4
 F-3
Consolidated Statements of Income and Comprehensive IncomeF-5
Consolidated Statements of Stockholders’ Equity and Accumulated Other Comprehensive IncomeF-6
Consolidated Statements of Cash FlowsF-5
 F-7
Notes to Consolidated Financial StatementsF-9
Schedule II – Valuation and Qualifying AccountsS-1
Schedule III – Quarterly InformationS-1F-6 to F-18

F-1


18

DCAW (CPA) Limited
CERTIFIED PUBLIC ACCOUNTANTS
7/F, Nan Dao Commercial Building
359-361 Queen’s Road Central, Hong Kong
Tel : 852-2851 7954
Fax: 852-2545 4086
 

Albert Wong & Co. LLP

CERTIFIED PUBLIC ACCOUNTANTS

139 Fulton Street, Suite 818B

New York, NY 10038-2532

Tel : 1-212-226-9088

Fax: 1-212-437-2193

To:
The board of directors and stockholders of
Eagle Mountain Corporation (F/K/A USmart Mobile Device Inc.) (“the Company”)

Report of Independent Registered Public Accounting Firm

We have audited the accompanying consolidated balance sheets of Eagle Mountain Corporation (F/K/A USmart Mobile Device Inc.) and subsidiaries as of December 31, 20142015 and 2013,2014, and the related consolidated statements of income, stockholders' equity and cash flows for the year then ended. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audit.

We conducted our audits in accordance with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. The Company is not required to have, nor were we engaged to perform an audit of the Company’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of USmart Mobile Device Inc.Eagle Mountain Corporation as of December 31, 20142015 and 2013,2014, and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America.

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. These factors as discussed in Note 18 to the financial statements, raises substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 18.3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

New York, United States of AmericaHong KongAlbert Wong & Co. LLPDCAW (CPA) Limited
April 15, 2015September 9, 2016Certified Public Accountants

USMART MOBILE DEVICE INC.




F-1







EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES

FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER

(F/K/A USmart Mobile Device Inc.)

Consolidated Balance Sheets
  
As of
December 31, 2015
  
As of
December 31, 2014
 
       
ASSETS      
Current assets        
Cash and cash equivalents $16,825  $- 
Interest receivable  10,255   - 
Other current assets  13,998   - 
Total current assets
  41,078   - 
         
Note receivable  258,450   - 
Deposit on property (Note 6)  260,000   - 
Computers and electronics, net  28,109     - 
Intangible assets (Note 6)  2,031,500   - 
Assets from discontinued operations (Note 5)  -   128 
Total other assets  2,578,059    128 
         
TOTAL ASSETS $2,619,137  $128 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)        
Current liabilities        
Accounts payable and accrued liabilities $1,277,786  $- 
Advances  585,510   - 
Deferred revenue  350,000   - 
Convertible notes, net  675,000   - 
Loan payable  34,160   - 
Deposit for stock option  80,000     
Liability for unissued shares  50,000     - 
Total current liabilities  3,052,456   - 
        - 
Liabilities from discontinued operations  -   448,055 
         
Total liabilities  3,052,456   448,055 
         
Stockholders’ Equity (Deficit)        
Series B Convertible Preferred Stock
Par value: $0.001, 8,000,000 shares authorized, Nil shares issued and outstanding as of December 31, 2015 and December 31, 2014
  -   - 
Series C Convertible Preferred Stock
Par value: $0.001, 2,100,000 shares authorized, nil shares issued and outstanding as of December 31, 2015 and December 31, 2014
  -   - 
Series D Convertible Preferred Stock
Par value: $0.001, 640,000 shares authorized, nil shares issued and outstanding as of December 31, 2015 and December 31, 2014
  -   - 
Series E Convertible Preferred Stock
Par value: $0.001, 8,000,000 shares authorized, 8,000,000 and nil shares issued and outstanding as of December 31, 2015 and December 31, 2014, respectively
  8,000   - 
Common stock:
Par value: $0.001, 500,000,000 shares authorized, 335,365,926  shares issued and outstanding as of December 31, 2015 and December 31, 2014
  335,366   2,205
 
*
Additional paid in capital  719,779,584   4,371,203 *
Exchange reserve  (3,776)  (1,776)
Non-controlling interest in earnings of subsidiary  28,674   - 
Accumulated deficit  (720,581,167)  (4,819,559)
Total stockholders’ equity  (433,319)  (447,927)
         
Total liabilities and stockholders’ equity $2,619,137  $128 
* The number of common stocks outstanding and additional paid in capital as at Dec 31, 2014 AND 2013

(Stated in US Dollars)

CONSOLIDATED BALANCE SHEETS

  Notes 2014  2013 
         
ASSETS          
Current assets:          
Cash and cash equivalents   $-  $231,119 
Restricted cash    -   - 
Accounts receivable, net of allowance for doubtful accounts of  $0 for 2014 and $555,993 for 2013    -   1,358,873 
Inventories, net 3  -   1,081,511 
Other current assets    128   91,618 
           
Total current assets   $128  $2,763,121 
           
Long-term assets:          
Property, plant and equipment, net 4  -   8,212,849 
Other deposits    -   138,234 
Amounts due from Aristo / Mr. Yang 6  -   931,652 
           
TOTAL ASSETS   $128  $12,045,856 
           
LIABILITIES          
Current liabilities:          
Accounts payable   $-  $623,069 
Accruals    335,522   554,231 
Lines of credit and loan facilities 7  -   3,178,580 
Bank loans 8  -   3,222,113 
Current portion of loan from a third party    -   641,026 
Current portion of capital lease 5  -   75,917 
Income tax payable    -   (177,291)
Due to shareholders for converted pledged collateral    112,533   112,385 
Other current liabilities    -   12,444,000 
           
Total current liabilities   $448,055  $20,674,030 

USMART MOBILE DEVICE INC.are retrospectively restated according to a result of a reverse stock split during period ended Jun 30, 2015.



The accompanying notes are an integral part of these unaudited consolidated financial statements.



F-2

EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES

FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER

(F/K/A USmart Mobile Device Inc.)

Consolidated Statements of Operations
   
Year Ended
December 31,
 
  2015  2014 
         
Revenue
 $-  $- 
         
Operating Expenses        
Depreciation  20,070   - 
Exploration expenses  334,182   - 
Professional fees  466,069   - 
General and administrative expenses  4,631,046   - 
Total operating expenses  5,451,367   - 
         
Income (loss) from continuing operations  (5,451,367)  - 
         
Other Income (expenses)        
Interest expenses
  (1,195,235)  - 
Interest income  5,317   - 
Impairment of goodwill  (604,163,185)  - 
Loss on debt settlement  (105,233,144)  - 
Gain on debt forgiveness  255,690     - 
Other Income (expenses)  (710,330,557)  - 
         
Net Income (loss) from continuing operations
  (715,781,924)  - 
Net Income (loss) from discontinued operations  (73,909)  12,059,778 
Net Income (loss) $
(715,855,833)
  $12,59,778 
         
Attributable to:        
Non-controlling interest $94,225  $- 
Shareholders of the Company $(715,761,608) $12,059,778 
         
Net (Loss) Per Common Share – basic and diluted $(6.43) $5.47 
         
Weighted average number of shares – basic and diluted  111,357,728   2,205,010 *
         

* The number of common stocks outstanding and additional paid in capital as at Dec 31, 2014 are retrospectively restated according to a result of a reverse stock split during period ended Jun 30, 2015.
The accompanying notes are an integral part of these unaudited consolidated financial statements.


F-3

EAGLE MOUNTAIN CORPORATION AND 2013

SUBSIDIARIES

(StatedF/K/A USmart Mobile Device Inc.)
Consolidated Statements of Stockholders’ Deficit
  Series B Preferred Stock  Series C Preferred Stock  Series D Preferred Stock  Series E Preferred Stock   Common Stock    Additional   Reserve  Accumulated   Non-Controlling   Total 
   Number   Amount   Number   Amount   Number  Amount     Number   Amount  Number   Amount     Paid in Capital      Loss    Interest     
                                                     
Balance, December 31, 2013  -  -   -   -   -   -   -   -    2,205,026   2,205   4,371,203   (1,810)  (16,879,337)  -   (12,507,739)
Issue of capital exchange reserve  -  -   -   -   -   -   -   -    -   -   -   34   -   -    34 
Net income (loss)  -  -   -   -   -   -   -   -    -   -   -   -   12,059,778   -    12,059,778 
Balance, December 31, 2014  -   -   -   -   -   -   -   -   2,205,026   2,205   4,371,203   (1,776)  (4,819,559)  -    (447,927)
Shares issued for business combination  8,000,000   8,000   2,050,000   2,050   100,000   100   -   -   50,000,000   50,000   603,473,850   -    -    -    603,534,000 
Shares issued for debt settlement  -    -    -    -    538,509   539   -   -   -    -    106,559,622   -    -    -    106,560,161 
Preferred shares converted  (8,000,000)  (8,000)  (2,050,000)  (2,050)  (638,509)  (639)  8,000,000   8,000   268,850,900   268,851   (266,162)  -    -    -    - 
Shares issued for services  -    -    -    -    -    -    -    -    2,560,000   2,560   3,584,840   -    -    -    3,587,400 
Shares issued for private placement  -    -    -    -    -    -    -    -    1,000,000   1,000   99,000   -    -    -    100,000 
Shares issued for convertible notes  -    -    -    -    -    -    -    -    8,750,000   8,750   466,250   -    -    -    475,000 
Financing costs  -    -    -    -    -    -    -    -    -    -    (30,000)  -    -    -    (30,000)
Issue of capital exchange reserve  -    -    -    -    -    -    -    -    2,000,000   2,000   -    (2,000)  -    -    - 
Beneficial conversion feature associated with convertible notes  -    -    -    -    -    -    -    -    -    -    1,150,000   -    -    -    1,150,000 
Debt contributed to additional paid in capital  -    -    -    -    -    -    -    -    -    -    370,981   -    -    -    370,981 
Minority interest on business combination  -    -    -    -    -    -    -    -    -    -    -    -    -    122,899   122,899 
Net income (loss)  -    -    -    -    -    -    -    -    -    -    -    -    (715,761,608)  (94,225)  (715,855,833)
Balance, December 31, 2015  -    -    -   -   -   -   8,000,000   8,000   335,365,926   335,366   719,779,584   (3,776)  (720,581,167),  28,674   (433,319)
* The number of common stocks outstanding and additional paid in US Dollars)

  Notes 2014  2013 
         
Long-term liabilities:          
Loan from a third party, less current portion   $-  $6,410,256 
Capital lease, less current portion 5  -   57,511 
Deferred tax liabilities    -   5,569 
           
Total long-term liabilities    -   6,473,336 
           
TOTAL LIABILITIES   $448,055  $27,147,366 
         - 
NET ASSETS (LIABILITIES)   $(447,927) $(15,101,510)
           
Commitments and contingencies   $-  $- 
           
STOCKHOLDERS’ EQUITY          

Preferred stock, 20,000,000 shares authorized; 0 shares issued and outstanding as of December 31, 2014 and 2013

   $-  $- 

Common stock, $0.001 par value; 50,000,000 shares authorized;39,684,495 and 39,684,495 shares issued and outstanding as of December 31, 2014 and 2013

    39,685   39,685 
Additional paid in capital    4,333,723   4,333,723 
Exchange reserve    (1,776)  (1,810)
Retained earnings (deficits)   $(4,819,559) $(16,879,337)
           
    $(447,927) $(12,507,739)
Non-controlling interest    -   (2,593,771)
           
TOTAL STOCKHOLDERS’ EQUITY   $(447,927) $(15,101,510)

capital as at Dec 31, 2014 are retrospective restated according to a result of a reverse stock split during period ended Jun 30, 2015.




See accompanying notes to the consolidated financial statements

USMART MOBILE DEVICE INC.


F-4

EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES

FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(Stated in US Dollars)

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

  Notes 2014  2013 
         
Net sales   $1,013,241  $72,175,289 
Costs of sales    (1,113,533)  (71,949,939)
           
Gross profit (loss)   $(100,292) $225,350 
           
Operating expenses          
Sales and marketing expenses    118,365   154,014 
General and administrative expenses    447,850   4,906,299 
           
Income (loss) from operations   $(666,507) $(4,834,963)
           
Other expenses (income)          
Rental income    -   (167,134)
Interest expenses    -   1,041,095 
Management and service income    (44,362)  (331,816)
Interest income    (7)  (2,000)
(Profit) on disposals of fixed assets    -   (1,930,234)
Loss (Profit) on disposals of assets    (12,673,201)  68,333 
Exchange differences    (4,533)  (28,729)
Reverse for provision of doubtful account    -   - 
Miscellaneous    (4,182)  (173,079)
Impairment of goodwill    -   11,341,123 
Share result of a jointly-controlled entity   -   (883,199)
           
Income (loss) before income taxes   $12,059,778  $(13,769,323)
           
Income tax (reversal) provision 11  -   21,887 
           
Net income (loss)   $12,059,778  $(13,791,210)
           
Attributable to :          
Non-controlling interest    -   (451,124)
Shareholders of the Company    12,059,778   (13,340,086)
           
     12,059,778   (13,791,210)
           
Earnings (loss) per share – basic and diluted   $0.30  $(0.34)
           
Weighted average number of shares – basic and diluted 13  39,684,495   39,562,522 

SeeF/K/A USmart Mobile Device Inc.)

Consolidated Statements of Cash Flows
  Year Ended
  December 31,
  2015  2014 
Cash flows from operating activities:      
Net income (loss) before non-controlling interest $(715,855,833)  $12,059,778 
Add: loss from discontinued operations  73,909   (12,059,778) 
Adjustments to reconcile net income (loss) to cash used in operation        
       Depreciation  20,071   - 
       Impairment of Goodwill  604,163,185   - 
       Amortization of debt discount  1,150,000   - 
       Loss on debt settlement  105,233,144   - 
        Shares issued for services rendered  3,587,400   - 
        Gain on write-off debt  (255,690)   - 
        Imputed interest  3,542   - 
   Changes in current assets and liabilities:        
       Interest receivable  (5,317)   - 
       Prepaid expenses  (6,685)   - 
       Accounts payable and accrued expenses  138,951   - 
       Deferred revenue  350,000   - 
       Advances from related parties  283,797     
       Net cash provided (used) from continuing activities
  (1,119,526)   - 
       Net cash provided (used) from discontinued activities
  -   1,615,830 
       Net cash provided (used) from operating activities
  (1,119,526)   1,615,830 
         
Cash flows from investing activities:        
      Cash and cash equivalents acquired from acquisitions of consolidated companies  130,531   - 
      Advances of funds to subsidiary before acquisition  (151,000)   - 
      Loan receivable  (175,000)   - 
      Computers and electronics  (48,180)   - 
      Net cash provided (used) from continuing activities
  (243,649)   - 
      Net cash provided (used) from discontinued activities
  -   11,738,454 
      Net cash provided (used) from investing activities  (243,649)   11,738,454 
         
Cash flows from financing activities:        
      Proceeds from subscription  150,000   - 
      Proceeds from exercise option  80,000   - 
      Proceeds from convertible notes  1,150,000   - 
      Net cash provided (used) from continuing activities  1,380,000   - 
      Net cash provided (used) from discontinued activities  -   (13,585,403) 
      Net cash provided (used) from financing activities  1,380,000   (13,585,403) 
         
      Net cash flows  16,825   (231,119) 
         
Cash and equivalents, beginning of period  -   231,119 
Cash and equivalents, end of period $16,825  $- 
         
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:        
    Interest receivable $4,938  $- 
    Other receivable  7,313   - 
    Note receivable  83,450   - 
    Deposit on property  260,000   - 
    Intangible assets  2,031,500   - 
    Accounts payable and accrued liabilities  (1,061,544)  - 
    Advances  (220,131)  - 
    Loan payable  (269,400)  - 
    Advances from Eagle Mountain Corp  (151,000)  - 
Total: $685,126  $- 
Supplemental non-cash financing activities:        
Shares issued for services rendered  3,587,400     
         

 The accompanying notes are an integral part of these unaudited consolidated financial statements.


F-5

EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
(F/K/A USmart Mobile Device Inc.)
Notes to the consolidated financial statements

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(Stated in US Dollars)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY AND

ACCUMULATED OTHER COMPREHENSIVE INCOME

  Number of
shares		  Amount  Additional
paid-in
capital		  Reserve  Retained
earnings
(accumulated
losses)		  Total 
                   
Balance, January 1, 2013  39,474,495  $39,475  $4,321,333  $2,072   (3,539,251) $823,629 
Issue of capital  210,000   210   12,390   -   -   12,600 
Exchange reserve  -   -   -   (3,882)  -   (3,882)
Net income (loss)  -   -   -   -   (13,340,086)  (13,340,086)
                         
Balance, December 31, 2013  39,684,495  $39,685  $4,333,723  $(1,810)  (16,879,337) $(12,507,739)
       　           　   　 
                         
Balance, January 1, 2014  39,684,495  $39,685  $4,333,723  $(1,810)  (16,879,337) $(12,507,739)
Issue of capital  -   -   -   -   -   - 
Exchange reserve
  -   -   -   34   -   34 
Net income (loss)  -   -   -   -   12,059,778   12,059,778 
                         
Balance, December 31, 2014  39,684,495  $39,685  $4,333,723  $(1,776)  (4,819,559) $(447,927)

See accompanying notes to the consolidated financial statements

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(Stated in US Dollars)

CONSOLIDATED STATEMENTS OF CASH FLOWS

  Notes 2014  2013 
         
Cash flows provided by (used for) operating activities :          
Net (loss) income  $12,059,778  $(13,340,086)
           
Adjustments to reconcile net income (loss) to net cash provided by (used for) operating activities:          
Allowance for doubtful accounts    -   457,932 
Depreciation and amortization    -   756,596 
Change in inventory reserve    -   662,093 
Issuance of common stocks to consultant as:          
- professional fee for consultant services    -   12,600 
Gain on disposal of fixed assets    -   (1,930,234)
Loss on disposal of investments
    -   68,333 
Loss (gain) on investment in a jointly-controlled entity    -   (883,199)
Loss share by non-controlled party    -   (451,124)
Amortization of goodwill reserve    -   11,341,123 
Exchange reserve    -   (3,882)
           
Changes in assets and liabilities:          
(Increase) decrease in assets          
Accounts receivable – other    1,358,873   (589,104)
Inventories    1,081,511   2,872,546 
Other current assets    91,490   685,251 
Other assets    138,234   27,091 
           
Increase (decrease) in liabilities          
Accounts payable – other    (623,069)  265,063 
Account payable – related parties    -   (9,209,313)
Accrued expenses    (218,709)  178,718 
Income tax payable    171,722   - 
Deferred tax    -   (68,720)
Other current liabilities    (12,444,000)  57,999 
           
Total adjustments   $(10,443,948) $4,249,769 
           
Net cash provided by (used for) operating activities   $1,615,830  $(9,090,317)

See accompanying notes to the consolidated financial statements

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2014 AND 2013

(Stated in US Dollars)

  Notes 

2014

  2013 
         
Cash flows used for investing activities:          
Advanced from Aristo / Mr. Yang  $148  $3,961,166 
Advanced to Aristo / Mr. Yang    931,652   (1,234.459)
(Increase) decrease in restricted cash    -   838,413 
Cash proceeds from sales of fixed assets    -   2,587,949 
Cash proceeds from sales of investments    -   3,633,173 
Purchase of fixed assets    -   (41,105)
Decrease in minority interest    2,593,805   - 
Disposal of fixed assets    8,212,849   - 
           
Net cash provided by (used for) investing activities   $11,738,454  $9,745,137 
           
Cash flows provided by (used for) financing activities:          
Net repayments on lines of credit and notes payable   $(10,229,862) $(5,140,742)
Principal payments to bank    (3,222,113)  (6,018,222)
Borrowings from bank    -   3,141,026 
Borrowings from non-controlled party    -   7,051,282 
Principal payments under capital lease obligation    (133,428)  (96,507)
           
Net cash provided by (used for) financing activities   $(13,585,403) $(1,063,163)
           
Net increase (decrease) in cash and cash equivalents   $(231,119) $(408,343)
           
Cash and cash equivalents – beginning of year    231,119   639,462 
           
Cash and cash equivalents – end of year   $-  $231,119 
           
Supplementary disclosure of cash flow information:          
Interest paid   $-  $1,041,095 
Income tax paid (reversal)   $-  $- 

See accompanying notes to the consolidated financial statements

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1.Organization and principal activitY

Consolidated Financial Statements


Note 1       Organization and Basis of Presentation

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.

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 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”).

Business Activity

USmart was incorporated under

On April 24, 2015, the lawsCompany 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 85.39% 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 on September 17, 2002. The Company has been primarily engagedto effect the increase in the businessauthorized shares of distribution of memory products mainly under “Samsung” brand name which principally comprised Dynamic Random Access Memory (“DRAM”), Graphic Random Access Memory (“Graphic RAM”),common stock 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 startreverse stock split. Upon filing of the operationsCertificate of ATMD,Amendment, the Company’s sales, the cost of salesauthorized common stock was increased to 500,000,000 shares and operating expenses are expected to evolve in accordance with the transitionevery eighteen shares of the Company’s businessissued 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 described above. Throughwell as the acquisitionnumber of Jussey Investments Limited (“Jussey”) on September 28, 2012,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 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 has diversified its product portfoliounder the terms of the certificates of designation for each of the Series B, C and customer network, obtained design and manufacturing capabilities, and tappedD preferred stock, each series automatically converted into shares of the blooming telecommunication industry with accessCompany’s common stock upon the amendment to the 3G baseband licenses. On September 30, 2014,Company’s certificate of incorporation becoming effective as set out above.  As a result, the Company disposed allholders of the equity interest held in ACL International Holdings Limited (“ACL Holdings”) to an independent third party Targa Electronics Company Limited (“Targa”). On completion638,509 shares of the disposal, USmart no longer holds any equity interest in ACL Holdings,Class D and the Company will maintain sales and distribution operation2,050,000 shares of smartphones, electronic products and components in a moderate size and will also seekClass C preferred stock, converted those shares into 268,850,900 shares of our common stock effective July 17, 2015.  These shares were issued on August 24, 2015. The holder of 8,000,000 shares of Class B preferred stock surrendered 40,000,000 shares of common stock upon conversion, which shares were exchanged for acquisition8,000,000 shares of other business opportunity.

F-9
Series E preferred stock.

USMART MOBILE DEVICE INC.


F-6

EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2.Summary of significant accounting policies

(a)Method of Accounting

The Company maintains its general ledger and journals with

(F/K/A USmart Mobile Device Inc.)
Notes to the accrual method accounting for financial reporting purposes. TheConsolidated Financial Statements

Note 2       Summary of Significant Accounting Policies
Principal of Consolidation
These 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.

(b)Principles of consolidation

The consolidated financial statements are presented in US Dollars and include the accounts of the CompanyEagle Mountain Corp. and its subsidiary.85.39% controlled subsidiary, Shale Oil International Inc. (OTC: PINK-SHLE), and its 100% owned subsidiary, Texas Shale Oil Inc. All significant inter-companyintercompany balances and transactions arehave been eliminated in consolidation.

The Company owned its subsidiary soon after its inception and continued to own


Estimates
In preparing the equity’s interests through December 31, 2014. The following table depicts the identity of the subsidiary:

Name of Subsidiary Place of
Incorporation		 Attributable Equity
Interest %		  Registered Capital 
ACL International Holdings Limited Hong Kong  0  $0.13 
Atlantic Components Limited (1) Hong Kong  0  $384,615 
Aristo Technologies Limited (2) Hong Kong  0  $1,282 
Dongguan Kezheng Electronics Limited (3) PRC  0  $680,499 
eVision Telecom Limited (4) Hong Kong  0  $25,641 
Jussey Investments Limited (1) BVI  0  $1 
USmart Electronic Products Limited (4) Hong Kong  0  $1.28 

Note: (1) Wholly owned subsidiary of ACL International Holdings Limited

  (2) Deemed variable interest entity

  (3) Wholly owned subsidiary of USmart Electronic Products Limited

  (4) Wholly or partially owned by Jussey Investments Limited

Variable Interests Entities

According to ASC 810-10-25 which codified FASB Interpretation No. 46 (Revised December 2003), Consolidation of Variable Interest Entities — an interpretation of ARB No. 51 (FIN 46R), an entity that has one or more of the three characteristics set forth therein is considered a variable interest entity. One of such characteristics is that the equity investment at risk in the relevant entity is not sufficient to permit the entity to finance its activities without additional subordinated financial support provided by any parties, including the equity holders.

ASC 810-05-08A specifies the two characteristics of a controlling financial interest in a variable interest entity (“VIE”): (1) the power to direct the activities of a VIE that most significantly impact the VIE’s economic performance; and (2) the obligation to absorb losses of the VIE that could potentially be significant to the VIE or the right to receive benefits from the VIE that could potentially be significant to the VIE. The Company is the primary beneficiary of Aristo because the Company can direct the activities of Aristo through the common director and major shareholder. Also, the Company extended substantial accounts receivable to Aristo and created an obligation to absorb loss if Aristo failed. Moreover, ASC 810-25-42 & 43 provides guidance on related parties treatment of VIE and specifies the relationship of de-facto agent and principal. This guidance will help to determine whether the Company will consolidate Aristo.

All the above mentioned subsidiaries or deem subsidiary were no longer belonged to the Group and were not our subsidiaries and deem subsidiaries after September 30, 2014.

F-10

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2.Summary of significant accounting policies (Continued)

(b)Principles of consolidation (Continued)

Aristo Technologies Limited

The Company sells Samsung memory chips to Aristo and allows long grace periods for Aristo to repay the open accounts receivable. Being the biggest creditor, the Company does not require Aristo to pledge assets or enter into any agreements to bind Aristo to specific repayment terms. The Company does not experience any bad debt from Aristo. Hence, the Company does not provide any bad debt provision derived from Aristo. Although, the Company is not involved in Aristo’s daily operation, it believes that there will not be significant additional risk derived from the trading relationship and transactions with Aristo.

Aristo is engaged in the marketing, selling and servicing of computer products and accessories including semiconductors, LCD products, mass storage devices, consumer electronics, computer peripherals and electronic components for different generations of computer related products. Aristo carries various brands of products such as Samsung, Hynix, Micron, Elpida, Qimonda, Lexar, Dane-Elec, Elixir, SanDisk and Winbond.  Aristo 2013 sales were around 7 million; it was only a small distributor that accommodated special requirements for specific customers.

Aristo supplies different generations of computer related products. Old generation products will move slowly owing to lower market demand. According to the management experience and estimation on the actual market situation, old products carrying on hand for ten years will have no resell value. Therefore, inventories on hand over ten years will be written-off by Aristo immediately.

The Company sold to Aristo in order to fulfill Aristo’s periodic need for Samsung memory products based on prevailing market prices, which Aristo, in turn, sells to its customers.  The sales to Aristo for fiscal year 2014 were $Nil. For fiscal year 2013 were $3,337,735 with account receivable of $4,850,769 as of December 31, 2013. For fiscal year 2012 were $106,031 with account receivable of $5,323,933 as of December 31, 2012. For fiscal year 2011 were $7,086,379 with accounts receivable of $16,871,739 as of December 31, 2011. For fiscal year 2010 were $7,123,769 with accounts receivable of $14,073,937 as of December 31, 2010.

The Company purchases from Aristo, from time to time, LCD panels, Samsung memory chips, DRAM, Flash memory, central processing units, external hard disks, DVD readers and writers that the Company cannot obtain from Samsung directly due to supply limitations.

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 entitymanagement 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.

F-11

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2.Summary of significant accounting policies(Continued)

(d)Use of estimates

The preparation of consolidated financial statements that conform with generally accepted accounting principles in the United States of America requires managementrequired 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 disclosurerevenues 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 contingentobligations.

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 and liabilitiesof consolidated subsidiary are identified separately from the Company’s equity therein. Minority interests consist of the amount of those interests at the date of the consolidated financial statementsoriginal business combination and the reported amountsminority’s share of revenueschanges 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 expenses duringis able to make an additional investment to cover the reporting periods. Management makes these estimates usinglosses.

Business combinations

All business combinations are accounted for under the best information availablepurchase method. The cost of an acquisition is measured at the time, however, actual results could differ materially from those estimates.

(e)Economic and political risks

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 Company’s operations are conducted in Hong Kong and China. A large numberexcess of customers are located in Southern China. Accordingly,the cost of acquisition over the fair value of 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 stateshare of the economy in Hong Kong and China.

identifiable net assets acquired is recorded as goodwill. At December 31, 2015, we had no recorded goodwill. 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 changesinterest of minority shareholders 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)Property, plant and equipment

Plant and equipment are carriedacquisition is initially measured at cost less accumulated depreciation. Depreciation is provided over their estimated useful lives, using the straight-line method.

Estimated useful livesminority’s proportion of the plant and equipment are as follows:

Automobiles3 1/3 years
Computers5 years
Leasehold improvement5 years
Land and buildingsBy estimated useful life
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)Account receivable

Accounts receivable is carried at the net invoicedfair value charged to customer. The Company records 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 collectabilityassets, liabilities and contingent liabilities recognized.



F-7

EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
(F/K/A USmart Mobile Device Inc.)
Notes to the Consolidated Financial Statements
Note 2       Summary of outstanding accounts receivable. The Company evaluatesSignificant Accounting Policies (continued)
Oil and gas properties

We use the credit risksuccessful efforts method of its customers utilizing historical dataaccounting for oil and estimates of future performance.

gas properties. Under that method:
F-12

 a.Geological and geophysical 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.

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 2.Summary of significant accounting policies (Continued)b.Costs incurred to drill exploratory wells and exploratory-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.


(h)c.Accounting for the impairment of long-lived assetsCosts incurred to acquire properties and drill development-type stratigraphic test wells, successful exploratory wells, and successful exploratory-type stratigraphic wells are capitalized.

The Company periodically evaluates


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

e.Costs of unproved properties are assessed periodically to determine if an impairment loss should be recognized.

Impairment of Long-Lived Assets
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying valueamount of long-lived assets toan asset may not be held and used, including intangible assets subject to amortization, when events and circumstances warrant such a review, pursuant torecoverable through 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 anticipatedestimated undiscounted cash flowflows expected to result from the use and eventual disposition of the assets. Whenever any such asset is separately identifiable and is less than its carrying value. In that event, aimpairment exists, an impairment loss iswill be recognized based onfor 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.

value. During the reporting years,year ended December 31 2015, there was no impairment loss.

(i)Cash and cash equivalents

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 considers all highly liquid investments purchasedaccounts for income taxes in accordance with original maturities of three months or less to be cash equivalents. TheAccounting Standards Codification (“ASC”) Topic 740, Income Taxes, which requires that the Company maintains bank accounts in Hong Kong. The Company does not maintain any bank accounts inrecognize deferred tax liabilities and assets based on 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.

(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 and the tax bases 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 incomein effect in the years in which those temporarythe differences are expected to be recovered or settled. The effect onreverse. 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-8

EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
(F/K/A USmart Mobile Device Inc.)
Notes to the Consolidated Financial Statements
Note 2       Summary of Significant Accounting Policies (continued)
Loss per Common Share (cont’d)
The Company had the following potential common stock equivalents at December 31, 2015:

Series E Convertible Preferred Stock40,000,000
Convertible notes13,580,810
Since the Company reported a net loss at December 31, 2014 and December 31, 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.

Revenue Recognition

The Company's revenue recognition policies are in compliance with FASB ASC 605 Revenue Recognition (formerly SEC Staff Accounting Bulletin (SAB) 104). Revenue is recognized when services are rendered to customers when a formal arrangement exists, the price is fixed or determinable, the delivery is completed, no other significant obligations of the Company exist and collectability is reasonably assured. Payments received before all of the relevant criteria for revenue recognition are satisfied are recorded as unearned revenue.

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 $3,060,658 at December 31, 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-9

EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
(F/K/A USmart Mobile Device Inc.)
Notes to the Consolidated Financial Statements

Note 4       Acquisition, Change of Business
On 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 includes:

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  (112,007)-  (112,007)
Accrued expenses on exploration  (838,350)-  (838,350)
Accrued liabilities  (21,000)--  (21,000)
Accrued interest  (90,187)--  (90,187)
Advances  (220,131)--  (220,131)
Loan payable  (269,400)--  (269,400)
Advances from Eagle Mountain Corp  (151,000)--  (151,000)
Total  817,190 --  817,190 
Minority interest       (119,358)
Total consideration       697,832 


F-10

EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
(F/K/A USmart Mobile Device Inc.)
Notes to the Consolidated Financial Statements

Note 4      Acquisition (continued)

Satisfied:$
Add:  Issuance of various classes of preferred convertible shares of Eagle Mountain Corp. based on quoted market value of common stock issuable as at transaction date.603,534,000
          Assumed convertible notes1,327,017
Total:604,861,017
Goodwill604,163,185
Upon review, the Company has fully impaired the Goodwill on the transaction date.

Note 5      Discontinued Operations

On 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 agreements and assets and assumed debts in the aggregate amount of $1,327,017 from the 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.
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 December 31, 2015 and December 31, 2014 included in the consolidated balance sheets, are as gathered from the records transferred to the Company, unaudited, and subject to further verification, are reported below as follows:
  
As of
December 31,
2015
  
As of
December 31,
2014
 
       
ASSETS      
Current assets        
Accounts receivable $-  $- 
Other current assets  -   128 
Total current assets  -   128 
         
TOTAL ASSETS $-  $128 
         
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)        
Current liabilities        
Accounts payable and accrued liabilities $-  $335,522 
Due to shareholders  -   112,533 
Total current liabilities  -   448,055  
         
Total liabilities  -   448,055  
         

F-11

EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
(F/K/A USmart Mobile Device Inc.)
Notes to the Consolidated Financial Statements
Note 5       Discontinued Operations (cont'd)

The results of the discontinued operations are as follows:

   Year Ended 
  December 31, 
  2015  2014 
         
Net sales $-  $1,013,241 
Costs of sales  -   1,113,533 
Gross profit (loss)  -   (100,292)
         
         
Operating Expenses        
Selling and distribution costs  -   118,365 
General and administrative expenses  -   409,106 
Total operating expenses  -   527,471 
         
Income (loss) from operation  -   (627,763)
         
Other income (expenses)  (73,909)  12,726,285 
         
Income (loss) from discontinued operations  (73,909)  12,098,522 
Note 6       Other Assets

(a)  Sale and Purchase Agreement with Pryme Oil and Gas LLC

On May 23, 2014 the Company’s 85.39% 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 December 31, 2015 and 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 tax rates is recognized in incomeeconomic 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.



F-12

EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
(F/K/A USmart Mobile Device Inc.)
Notes to the Consolidated Financial Statements

Note 6      Other Assets (continued)

(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 85.39% controlled subsidiary, Shale Oil International Inc., and its wholly owned subsidiary, Texas Shale Oil Inc.

Note 7       Deferred Revenue

In September 2015, the Company received $350,000 from a client in respect to an invoice issued with respect to certain consulting services to be rendered including the acquisition of engineering, geological and geophysical data and the completion of pre-feasibility work on a potential mining project in Panama.  As at December 31, 2015 the Company had not yet completed the scope of work and has recorded the amount received as deferred revenue.

Note 8       Loans Receivable

During the year ended December 31, 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.

Note 9       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 53,850,900 shares of the Company’s common stock.  We recorded $105,233,144 as a loss on debt settlement.

During the year ended December 31, 2015, the Company entered into various 6% convertible notes with investors, having a maturity date as of September 1, 2015 and with conversion prices varying from $0.05 to $0.10 per share.  We received a total of $1,150,000 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 $1,150,000, 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 period ended December 31, 2015 was $1,150,000.

  December 31, 2015  Issue Date 
Total convertible promissory note – face value  1,150,000   1,150,000 
Less: beneficial conversion feature  -   (1,150,000)
   1,150,000   - 

F-13

EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
(F/K/A USmart Mobile Device Inc.)
Notes to the Consolidated Financial Statements

Note 9      Convertible Notes (continued)

The notes became due and payable on September 1, 2015 and are now considered demand notes which continue to accrue interest at a rate of 6% per annum.

Interest expenses:
  
For the Year ended
December 31,
 
  2015  2014 
       
Amortization of debt discount $1,150,000  $- 
Interest at contractual rate  29,512   - 
Totals $1,179,512  $- 

Note 10     Agreements for Services

On August 3, 2015, the Company entered into Services Agreement with an independent consultant. Under the services agreement, the consultant will provide general consultancy services in connection with the Company’s projected business in or related to China and Hong Kong. In consideration for the services provided, the Company will pay a total of 100,000 shares of the Company’s common stock, which was valued at fair market value on issuance at $1.275 per share or $127,500.

On August 3, 2015, the Company entered another Services Agreement with an independent consultant, Alan Chung-Lun Yang (“Mr. Yang”). Mr. Yang is a former director of the Company and resigned from the Board of Directors on May 26, 2015. Under the services agreement, Mr. Yang will provide general consultancy services in connection with the Company’s projected business in or related to China and Hong Kong. In consideration for the services provided, the Company will pay a total of 500,000 shares of the Company’s common stock, which was valued at fair market value on issuance at $1.275 per share or $637,000.

On November 25, 2015, the Company entered into Services Agreements with two independent consultants. Under the services agreement, the consultants will provide general consultancy services in connection with the Company’s projected business in or related to China and Hong Kong. In consideration for the services provided, the Company will pay a total of 1,960,00 shares of the Company’s common stock, which was valued at fair market value on issuance at $1.44 per share or $2,822,400.

Note 11    Related Parties Transactions

Transactions with Ronald Cormick, CEO, Officer and Director of the Company

During the fiscal year ended December 31, 2015, the Company paid $10,000 Mr. Ronald Cormick as consulting fees.

During the period ended December 31, 2015, Mr. Ronald Cormick advanced $320,121 to the Company’s subsidiary TSO. As of December 31, 2015, $409,834 remained on the balance sheets as advances.

Transactions with Ehud Amir, COO, Officer and Director of the Company

During the period ended December 31, 2015, Mr. Ehud Amir advanced $6,475 to the Company’s subsidiary TSO. as of December 31, 2015, $6,475 was on the balance sheets as advances.

Transactions with Haley Manchester, CFO, Officer of the Company

During the fiscal year ended December 31, 2015, the Company paid $10,000 to Mr. Haley Manchester as consulting fees.

Transactions with Larry Eastland, Director of the Company

During the fiscal year ended December 31, 2015, the Company accrued $150,000 consulting fees from Mr. Larry Eastland. As of December 31, 2015, $150,000 was on the balance sheets as accounts payable and accrued liabilities.

F-14

EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
(F/K/A USmart Mobile Device Inc.)
Notes to the Consolidated Financial Statements

Note 12    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.

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 includesit was convertible into 5 shares of the enactment date. DeferredCompany’s Common Stock.

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.

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.

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 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.



F-15

EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
(F/K/A USmart Mobile Device Inc.)
Notes to the Consolidated Financial Statements

Note 12    Common Stock (continued)

The aforementioned Assumption Agreement resulted in a change of control in the Company under the terms of the certificates of designation for each of the Series B, C and D preferred stock, each series automatically converted into shares of the Company’s common stock upon the amendment to the Company’s certificate of incorporation becoming effective as set out above.  As a result, 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 effective July 17, 2015.  These shares were issued on August 24, 2015. The holder of 8,000,000 shares of Class B preferred stock surrendered 40,000,000 shares of common stock upon conversion, which shares were exchanged for 8,000,000 shares of a newly designated Series E preferred stock.

On October 23, 2015, the Company filed the Certificate of Designation of Preferences, Rights and Limitations of Series E Convertible Preferred Stock (“Series E Preferred Stock”) authorizing the issuance of up to 8,000,000 shares of Series E Preferred Stock. Each share of Series E Preferred Stock has a stated value of $0.001 and is automatically convertible into five shares of the Company’s 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 E 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 E Preferred Stock are convertible.

On October 9, 2015, 500,000 shares of the Company’s common stock was issued to a former director of the Company and 100,000 shares of the Company’s common stock was issued to an independent consultant in respect to the service agreements. (For more details, see Note 9 – Services Agreements)

On October 30, 2015, 50,000,000 shares of the Company’s common stock was issued in respect to the acquisition of business. (For more details, see Note 4 – Acquisition, Change of Business)

On November 6, 2015, the Company issued a total of 2,000,000 shares of the Company’s common stock in in respect to a share swap between two individual, non-related investors. The 2,000,000 shares for return to treasury in respect to this transaction have not been returned to the Company for cancellation as at the fiscal year ended December 31, 2015 and as a result the Company has recorded the transaction as an exchange reserve under the equity in the balance sheets.  The shares were returned for cancelation subsequent to the fiscal year end.

In October and November 2015, total of 8,750,000 shares of common stock were issued in respect to the various convertible notes as described above in Note 8. (ref Note 8 – Convertible Notes).

On December 2, 2015, the Company issued a total of 1,000,000 shares of the Company’s common stock at a price of US$0.10 per share. 

On December 4, 2015, 1,960,000 shares of the Company’s common stock was issued in respect to certain service agreements. (For more details, see Note 9 – Services Agreements)

The Company had 335,365,926 and 2,205,010 shares of common stock outstanding at December 31, 2015 and December 31, 2014.

Note 13    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-16
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
(F/K/A USmart Mobile Device Inc.)
Notes to the Consolidated Financial Statements
Note 14    Income Taxes

The Company and its subsidiary are subject to the U.S. federal corporate income tax at a maximum rate of 34%. Income tax (reversal) expense represents the change during the period in the deferred tax assetsamounted to $Nil for 2015 and deferred tax liabilities. 2014 owing to no taxable income.
The componentsComponents 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.

F-13
follows:

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2.Summary of significant accounting policies
  December 31, 2015  December 31, 2014 
       
Net operating losses $5,451,367  $666,507 
         
Total deferred tax assets $5,451,367  $666,507 
Less: valuation allowance  (5,451,367)  (666,507)
         
  $-  $- 
    (Continued)

(l)Income taxes (Continued)

The Company did not have any interest orand penalty recognizednot to recognize- in the income statements for the periodyear ended December 31, 2015 and 2014 and December 31, 2013 or the balance sheet as of December 31, 20142015 and December 31, 2013.2014. The Company did not have uncertainty tax positions or events leading to uncertainty tax position within the next 12 months. The Company’s 2011, 2012, 2013, 2014 and 20142015 U.S. federal income tax returnsCorporation Income Tax Returns are subject to U.S. Internal Revenue Service examinationexamination.

    A valuation allowance existed as of December 31, 2015 and 2014, due to the uncertainty of net operating loss utilization based on the Company’s 2007/8, 2008/9, 2009/2010, 2010/11, 2011/12, 2012/13, 2013/14history of losses.
Note 15   Subsequent Events
Entry into a material agreement
In January we announced the signing of a formal Heads of Agreement to pursue mutually beneficial management and 2014/15 Hong Kong Company Income Tax filing are subject to Hong Kong Inland Revenue Department examination. The Company’s 2009, 2010, 2011, 2012, 2013financing projects in the oil, gas 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)natural resources industries with Shandong Pusheng Petrochemical Co., Ltd. (“SPPCL”). The functional currencies

Under the terms of the Company’s operating businessagreement, for the initial naphtha trading project,Eagle Mountain will provide sourcing, purchasing and management of transportation logistics for the oil, gas, and refined products to be delivered and sold into the Chinese market.
SPPCL is an international oil and gas trading and development company, globally engaged in a wide range of businesses in the oil industry, with extensive partnerships with many State-owned companies. The company has organized consortiums for multiple international projects in the oil, gas, petrochemical and mining industries.
Further in April of 2016 we announced a Joint-Venture Agreement between SPPCL and Eagle Mountain for oil, gas and petroleum products trading as well as an initial purchase order to purchase light naphtha through the established Joint Venture Company. The contract calls for Eagle Mountain to source and negotiate the purchase and delivery of approximately 300,000 metric tonnes of light naphtha per month for five years. At the time of the origination of the purchase order, light naphtha has been in the range of $330 to $380/tonne FOB U.S. Gulf Coast.
A subsidiary of Eagle Mountain based in Hong Kong to be formed will be joint-ventured 40/60 with a Hong-Kong subsidiary of Shandong Pusheng where the Irrevocable Documentary Letter of Credit (DLC) is established and PRC areready to proceed with the Hong Kong Dollar (HKD)first purchase during the early fall of 2016. Eagle Mountain is responsible for arranging the purchase and Renminbi (RMB) respectively.delivery of the naphtha. Shandong Pusheng is responsible for sale of the naphtha into the Southeast Asian markets, in cooperation with China’s state enterprises.
F-17
EAGLE MOUNTAIN CORPORATION AND SUBSIDIARIES
(F/K/A USmart Mobile Device Inc.)
Notes to the Consolidated Financial Statements
Note 15   Subsequent Events (continued)
Shares issued subsequent to fiscal year end

On January 4, 2016 the Company issued 8,000,000 shares of common stock to a third party in respect of a share purchase agreement where under the purchaser had the option to acquire shares at a price of $0.01 per share.  The consolidatedCompany received cash proceeds of $80,000 prior to the fiscal year end in respect of this share purchase agreement.  No underwriters were utilized in connection with this sale of securities.
On January 6, 2016 the Company issued a total of 50,000 shares to two individuals as part of a share transfer between two shareholders where under certain shares were returned to the company for cancellation and reissue.  The new shares were issued prior to receipt of the canceled shares, which return and cancelation occurred January 23, 2016.
On January 21, 2016, the Company issued a total of 13,000,000 shares at $0.05 in respect to certain convertible notes entered into during fiscal 2015 which came due and payable September 1, 2015 to two individual investors.
On January 23, 2016 the Company issued 700,000 shares to an individual as part of a share transfer between two shareholders where under certain shares were returned to the company for cancellation and reissue.  The new shares were concurrent to receipt of the canceled shares, which return and cancelation occurred January 23, 2016.
On January 23, 2016 the Company issued 2,000,000 shares to an individual as part of a share transfer between two shareholders where under certain shares were returned to the company for cancellation and reissue.  The new shares were concurrent to receipt of the canceled shares, which return and cancelation occurred January 23, 2016.
On January 23, 2016 a shareholder of the Company returned a total of 8,895,000 common shares for reissue.  Upon receipt the shares were canceled and returned to treasury pending instruction for reissue from the shareholder.
On January 23, 2016, the Company issued a total of 2,500,000 shares of common stock to a private individual in respect to an agreement for services.
On March 9, 2016 the Company issued 1,000,000 shares to a private individual in respect of a private placement at $0.10 per share for total cash proceeds of $100,000.
On March 10, 2016 the Company issued a total of 10,000,000 shares of common stock in respect of the acquisition of an engineering, construction and procurement project in the country of Cyprus.  A further 4,900,000 shares were issued to a consultant in respect of this transaction on April 5, 2016.
On April 5 and April 7, 2016 respectively, the Company issued a total of 5,500,000 shares to an individual and a corporate entity as part of a share transfer between shareholders where under certain shares were returned to the company for cancellation on January 23, 2016, and subsequent reissue.
On May 5, 2016 the Company issued a total of 1,500,000 shares to five individuals as part of a share transfer between shareholders where under certain shares were returned to the company for cancellation on January 23, 2016, and subsequent reissue.  A total of 40,000 shares remained available for reissue as at the date of this report in respect to the share surrender and reissue request.

F-18

ITEM 9.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

On May 1, 2016 Eagle Mountain received resignation letter from AWC LLP (“AWC”) (formerly known as Albert Wong & Co., LLP) as the Company’s independent registered public accounting firm. The resignation of AWC was accepted by the Company’s audit committee.
The principal accountant’s reports of AWC on the 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 Kongthe Company as of 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.

(n)Revenue recognition

The Company derives revenues from resale of computer memory products, providing both ODM (Original Design Manufacturing) and OEM (Original Equipment Manufacturing) services for various electronic products, such as computer and peripherals, flash storage devices and home electronic 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.

(o)Advertising

The Group expensed all advertising costs as incurred. Advertising expenses included in general and administrative expenses were $Nil and $1,121 for thefiscal years ended December 31, 2014 and 2013 respectively.

(p)Segment reporting

The Company’s sales are generated from Hong Kongdid not contain any adverse opinion or disclaimer of opinion 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 duewas not qualified or modified as to the short-term maturities of those financial instruments.

F-14

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 2.Summary of significant accounting policies(Continued)

(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 currentuncertainty, audit scope or 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,principles except that the denominator is increasedreport was qualified as to include the numberCompany’s ability to continue as a going concern.

During the Company’s two most recent fiscal years and the subsequent interim period through May 1, 2016, there were no disagreements with AWC on any matter of additional common shares thataccounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreement(s), if not resolved to the satisfaction of AWC, 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 reclassifiedcaused it to conformmake reference to the subject matter of the disagreement(s) in connection with its report. During the Company’s two most recent fiscal years and the subsequent interim period through May 1, 2016, there were no reportable events of the type described in Item 304(a)(1)(v) of Regulation S-K.

The Company provided AWC with a copy of the foregoing disclosure and requested AWC to furnish the Company with a letter addressed to the Securities and Exchange Commission stating whether it agrees with the statements made therein. A copy of such letter, dated May 1, 2016, furnished by AWC was filed as Exhibit 16.1 to a current consolidatedreport on Form 8-K filed with the Securities and Exchange Commission on May 2, 2016.

On April 30, 2016 DCAW (CPA) Limited was formed as a result of a merger between AWC and Dominic K.F. Chan & Co.
On May 1, 2016, the Company’s Board of Directors approved the engagement of DCAW (CPA) Limited (“DCAW”) as the Company’s new independent registered public accounting firm.
During the Company’s two most recent fiscal years and the subsequent interim period through May1, 2016, neither the Company nor anyone on its behalf consulted with DCAW regarding (i) the application of accounting principles to a specified transaction, either completed or proposed; the type of audit opinion that might be rendered on the Company's financial statement presentation.

(u)Recently issued Accounting Guidance

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 arrangementsstatements, and is based onneither a consensus reachedwritten report nor oral advice was provided that DCAW concluded was an important factor considered by the Private Company Council (PCC). Under current U.S. GAAP,in reaching 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 significantdecision as to the entity. To determine which model applies,accounting, auditing or financial reporting issue; or (ii) any matter that was either the subject of a company preparing financial statements must first determine whether it hasdisagreement (as defined in Item 304(a)(1)(iv) of Regulation S-K and its related instructions) or a variable interestreportable event (as described in Item 304(a)(1)(v) of Regulation S-K).


ITEM 9A. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

The Company maintains disclosure controls and procedures (as defined in Rule 13a-15(e) under 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): ReportingSecurities Exchange Act of Amounts Reclassified Out of Accumulated Other Comprehensive Income. This ASU improves the transparency of reporting these reclassifications. Other comprehensive income includes gains and losses1934, as amended) 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 thedesigned to ensure that information that this ASU requires already is required to be disclosed elsewhere in the Company’s Securities Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to the Company’s management, as appropriate, to allow timely decisions regarding required disclosure.


The Company’s management, with the participation of our principal executive and principal financial officer evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this report. Based upon that evaluation, our principal executive and principal financial officer concluded that, as of the end of the period covered by this report, the Company’s disclosure controls and procedures were not effective.

Management's Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Management has employed a framework consistent with Exchange Act Rule 13a-15(c), to evaluate internal control over financial reporting described below. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation and fair presentation of financial statements under U.S. GAAP.

-The private company lessee andfor external purposes in accordance with generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the lessor are under common control;

-The private company lessee has a leasing arrangementrisk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the lessor;

-Substantially allpolicies or procedures may deteriorate.

Management, including our principal executive officer Ronald Cormick, and Haley Manchester, our principal financial officer, conducted an evaluation of the activity between the private company lesseedesign 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 obligationoperation 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.

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 2.Summary of Significant Accounting Policies (Continued)

(u) Recently issued Accounting Guidance (Continued)

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 toour internal control over financial reporting as 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.

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3.INVENTORIES

Inventories consisted of the following:

  December 31, 2014  December 31, 2013 
       
Finished goods $-  $3,044,793 
Less allowance for excess and obsolete inventory  -   (1,963,282)
         
Inventory, net $-  $1,081,511 

The following is a summary of the change in the Company's inventory valuation allowance:

  December 31,2014  December 31, 2013 
       
Inventory valuation allowance, beginning of the year $-  $2,625,375 
Obsolete inventory sold  -   (662,093)
         
Inventory valuation allowance, end of year $-  $1,963,282 

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 4.PROPERTY, PLANT AND EQUIPMENT, NET

Property, plant and equipment, net comprise the following:

  December 31, 2014  December 31, 2013 
       
At cost        
Land and buildings $-  $8,574,682 
Automobiles  -   642,241 
Office equipment  -   268,863 
Leasehold improvements  -   543,550 
Furniture and fixtures  -   57,302 
Machinery  -   668,185 
         
  $-  $10,754,823 
Less: accumulated depreciation  -   (2,541,974)
         
  $-  $8,212,849 

Depreciation and amortization expense included in the general and administrative expenses for the yearsyear ended December 31, 20142015. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission 2013 Internal Control-Integrated Framework (“COSO”). As a result of this assessment, Mr. Huang Yu concluded that, as of and 2013 were $Nil and $756,596 respectively.

Automobiles includefor the following amounts under capital leases:

  December 31, 2014  December 31, 2013 
       
Cost $-  $399,473 
Less accumulated depreciation  -   (341,876)
         
Total $-  $57,597 

F-18

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 5.CAPITAL LEASE OBLIGATIONS

The Company has no more capital lease obligation afteryear ended December 31, 2014. Aggregate future obligations2015, our internal control over financial reporting was not effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles as of the year ended December 31, 2015.


The matters involving internal controls and procedures that the Company’s management considered to be material weaknesses under COSO and SEC rules were: (1) lack of a majority of independent directors on the capital leasesCompany’s board of directors, resulting in effectineffective oversight in the establishment and monitoring of required internal controls and procedures; (2) limited number of staff, not allowing for complete segregation of incompatible duties; and (3) insufficient written policies and procedures for accounting and financial reporting with respect to the requirements and application of GAAP and SEC disclosure requirements. The aforementioned material weaknesses were identified by the Company’s management in connection with the preparation of our financial statements as of December 31, 20142015.

19
Management believes that the appointment of one or more independent directors, will remedy the lack of a majority of outside directors on the Company’s Board. In addition, management believes that preparing and 2013 are as follows:

The Company has several non-cancellable capital leases relatingimplementing sufficient written policies and checklists will remedy the insufficient written policies and procedures for accounting and financial reporting with respect to automobiles:

  December 31, 2014  December 31, 2013 
       
Current portion $-  $75,917 
Non-current portion  -   57,511 
         
  $-  $133,428 

At December 31, 2014the requirements and 2013,application of IFRS and SEC disclosure requirements. Further, management believes that the valuehiring of automobiles under capital leases as follows:

  December 31, 2014  December 31, 2013 
       
Cost $-  $399,473 
Less: accumulated depreciation  -   (341,876)
         
  $-  $57,597 

At December 31, 2014additional personnel who have the technical expertise and 2013,knowledge will result in proper segregation of duties.

Any effort to increase the Company had obligations under capital leases repayable as follows:

  December 31, 2014  December 31, 2013 
       
Total minimum lease payments        
-Within one year $-  $81,906 
- After one year but within 5 years  -   60,351 
         
  $-  $142,257 
Interest expenses relating to future periods  -   (8,829)
         
Present value of the minimum lease payments $-  $133,428 

F-19

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6.RELATED PARTY TRANSACTIONS

Related party receivables are payable on demand uponsize of the same terms as receivables from unrelated parties.

Transactions with Aristo Technologies Limited / Mr. Yang

This represented Aristo transactions with various related parties of Mr. Yang. As of December 31, 2014 and 2013, we had an outstanding receivable from Aristo / Mr. Yang, the President and Chairman of our Board of Directors, totaling $Nilappoint independent directors or personnel is conditional upon the Company raising additional capital.


We will continue to monitor and $931,652, respectively. These advances bear no interestevaluate the effectiveness of our internal controls and procedures and our internal controls over financial reporting on an ongoing basis and are payable on demand.

Transactions with Solution Semiconductor (China) Limited

Mr. Yang is a directorcommitted to taking further action and the sole beneficial ownerimplementing additional enhancements or improvements, as necessary and as funds allow.


This annual report does not include an attestation report of the equity interestscompany's registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by the company's registered public accounting firm pursuant to temporary rules of Solution Semiconductor (China) Ltd. (“Solution”).

the Securities and Exchange Commission that permit the company to provide only management's report in this annual report.


During the years ended December 31, 2014 and 2013, we received service charges of $Nil and $15,384 respectively from Solution. The service fee was charged for back office support for Solution. During the years ended December 31, 2014 and 2013, we sold products for $Nil and $3,530,784 respectively, to Solution. As of December 31, 2014 and 2013,Company’s last fiscal quarter there were no outstanding accounts receivables from Solution

Two facilities locatedchanges in Hong Kong owned by Solution were used byinternal control over financial reporting that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.


ITEM 9B.  OTHER INFORMATION

On April 24, 2015, the Company as collateral for loans from DBS Bank (Hong Kong) Limitedamended its Certificate of Incorporation to change its corporate name to Eagle Mountain Corporation.   

On June 8, 2015, the Company filed a Certificate of Designation of Preferences, Rights and Limitations of Series B Convertible Preferred Stock (“DBS Bank”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 The Bankis automatically convertible into 90 shares of East Asia, Limited (“BEA Bank”) respectively.

Transactions with Systematic Information Limited

Mr. Yang, the Company’s Chief Executive Officer, majority shareholdercommon 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.


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.

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 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 director, isreverse 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 director and shareholderreduction in the number of Systematic Information Ltd. (“Systematic Information”) withshares 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 issued as a totalresult of 100% interest.

During the years ended December 31, 2014 and 2013, we received service charges of $Nil and $3,077 respectively from Systematic Information. The service fee was charged for back office support for Systematic Information. Duringreverse stock split. Stockholders who would otherwise be entitled to receive a fractional share had their factional shares rounded up to the years ended December 31, 2014 and 2013, we sold products for $Nil and $2,000,782 respectively, to Systematic Information. As of December 31, 2014 and 2013, there were no outstanding accounts receivables from Systematic Information.

A workshop located in Hong Kong owned by Systematic Information was used bynearest whole number.


On October 23, 2015, the Company as collateral for loans from BEA Bank.

Transactions with City Royal Limited

Mr. Yang,filed a Certificate of Designation of Preferences, Rights and Limitations of Series E Convertible Preferred Stock (“Series E Preferred Stock”) authorizing the issuance of up to 8,000,000 shares of Series E Preferred Stock. Each share of Series E Preferred Stock has a stated value of $0.001 and is automatically convertible into five shares of the Company’s Chief Executive Officer, majority shareholdercommon stock. The conversion ratio is subject to adjustment in the event of stock splits, stock dividends, combination of shares and a director, is a 50% shareholdersimilar recapitalization transactions. The holders of City Royal Limited (“City”). The remaining 50% of City is owned by the wife of Mr. Yang. A residential property located in Hong Kong owned by City was used by the Company as collateral for loans from DBS Bank.

Transactions with Aristo Components Limited

Mr. Ben Wong,Series E Preferred Stock are entitled to vote on all matters submitted to the Company’s Chief Executive Officer,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 E Preferred Stock are convertible.


Except as provided above, there is no information to be disclosed in a 90% shareholder of Aristo Components Ltd. (“Aristo Comp”). The remaining 10% of Aristo Comp is owned by a non-related party.

Duringreport on Form 8-K during the years ended December 31, 2014 and 2013, we received a management fee of $Nil and $12,308 respectively from Aristo Comp. The management fee was charged for back office support for Aristo Comp. During the years ended December 31, 2014 and 2013, we have no purchase from Aristo Comp. As of December 31, 2014 and December 31, 2013, there were no outstanding accounts payable to Aristo Comp.

Transactions with Atlantic Ocean (HK) Limited

Mr. Yang is a director and 60% shareholder of Atlantic Ocean (HK) Limited (“Ocean”). During the years ended December 31, 2014 and 2013, we sold products for $Nil and $13,924 respectively, to Ocean. As of December 31, 2014 and 2013, there were no outstanding accounts receivables from Ocean.

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 7.REVOLVING LINES OF CREDIT AND LOAN FACILITIES

The summary of banking facilities at December 31, 2013 is as follows:

  Granted facilities  Utilized facilities  Not Utilized
Facilities		 
          
Lines of credit and loan facilities            
  Import/Export Loan  4,102,564   3,178,580   923,984 
  $  $  $ 
             
Bank Loans  3,222,113(a)  3,222,113   - 
Revolving Short Term Loan  1,538,462(a)  1,538,168   294 
Overdraft  64,103(b)  61,758   2,345 
             
  $8,927,242  $8,000,619  $926,623 

(a) The bank loans are combined from the summary of Note (8), total bank loans amount to USD7,630,946 with a revolving short term loan of USD1,538,168. The revolving short term loan is placed under Other Current Liabilities on the balance sheet. It has a facility limit of USD1,538,462, bearing an interest rate of 0.5% below Hong Kong prime rate per annum.

(b) Including in cash and cash equivalents

As of December 31, 2014, the Company disposed all the equity interest of ACL Holdings on September 30, 2014 and all the relevant banking facilities were included in the disposal.

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8.BANK LOANS

Bank loans were comprisedfourth quarter of the year covered by this Form 10-K that has not been previously filed with the Securities and Exchange Commission.


20

PART III

Item 10. Directors and Executive Officers
The following table sets forth the name, age, and position of our directors and our executive officers as of December 31, 20142015. Each director holds office (subject to our By-Laws) until the next annual meeting of shareholders and 2013

  December 31, 2014  December 31, 2013 
         
Installment loan provided by BEA Bank having a maturity date in July 28, 2014 and carrying an interest rate of Hong Kong dollar Prime Rate at 5.25% as of December 31, 2013 and 2012 +0.25%, payable in monthly installments of $13,291 including interest through December 2013 without any balloon payment requirements $-  $89,744 
         
Installment loan provided by BEA Bank having a maturity date in April 18, 2015 and carrying an interest rate of Hong Kong dollar Prime Rate at 5.25% as of December 31, 2013 and 2012 +0.25%, payable in monthly installments of $46,065 including interest through December 2013 without any balloon payment requirements  -   683,761 
         
Installment loan provided by DBS Bank having a maturity date in April 25, 2015 and carrying an interest rate of Hong Kong Prime dollar Rate at 5.25% as of December 31, 2013 and 2012 +0.5%, payable in monthly installments of $55,939 including interest through December 2013 without any balloon payment requirements  -   859,612 
         
Installment loan having a maturity date in 23 September, 2028 and carrying an interest rate of 2% per annum over one month HIBOR (0.2143% at December 31, 2013) from Fubon Bank payable in monthly installments of $6,283 including interest through December 2013 without any balloon payment requirements  -   947,971 
         
Term loan having a maturity due in 23 January, 2014 and carrying an interest rate of 3.88429 per annum from Fubon Bank without any balloon payment requirements  -   641,025 
         
  $-  $3,222,113 

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 8.BANK LOANS (CONTINUED)

An analysis onuntil such director’s successor has been elected and qualified. All of our executive officers are serving until the repaymentnext annual meeting of bank loan as of December 31, 2014directors and December 31, 2013 are as follow:

  December 31, 2014  December 31, 2013 
       
Carrying amount that are repayable on demand or within twelve months from December 31, 2013 containing a repayable on demand clause:        
Within twelve months $-  $1,937,063 
         
Carrying amount that are not repayable within twelve months from September 30, 2013 containing a repayable on demand clause but shown in current liabilities:        
After 1 year, but within 2 years $-  $505,656 
After 2 years, but within 5 years  -   118,775 
After 5 years  -   660,619 
         
  $-  $1,285,050 
         
  $-  $3,222,113 

With respect to all of the debtuntil their successors have been duly elected and credit arrangements referred to in this Note 8 and Note 9, the Company pledged its assets to a bank group in Hong Kong comprised of DBS Bank, BEA Bank and Fubon Bank, as collateral for all current and future borrowings from the bank groupqualified. Each executive officer holds his office until he resigns, is removed by the Company. In additionboard of directors, or his successor is elected and qualified, subject to the above pledged collateral, the debt is also secured by:

applicable employment agreements.  
1.Collateral for loans from DBS Bank:
(a)a security interest on a residential property located in Hong Kong owned by City, a related party;
(b)a workshop located in Hong Kong owned by Solution, a related party; and
(c)an unlimited personal guarantee by Mr. Yang

2.Collateral for loans from BEA Bank:
(a)a workshop located in Hong Kong owned by Systematic Information, a related party;
(b)a workshop located in Hong Kong owned by Solution, a related party; and
(c)an unlimited personal guarantee by Mr. Yang

3.Collateral for loans from Fubon Bank
(a)a security interest on two residential properties located in Hong Kong owned by Aristo, a company wholly owned by Mr. Yang; and
(b)an unlimited personal guarantee by Mr. Yang

4.As of December 31, 2014, the Company disposed all the equity interest of ACL Holdings on September 30, 2014 and all the relevant banking facilities were included in the disposal.

NOTE 9.other current liabilities

The other current liabilities consisted the following as of December 31, 2014 and December 31, 2013:

  December 31, 2014  December 31, 2013 
       
Revolving short term loan $-  $1,538,168 
Trade deposit from customers  -   7,725,475 
Temporary receipts  -   2,242,999 
Others  -   937,358 
         
  $-  $12,444,000 

The trade deposit from customers consists of letter of credits received from our customers which were financed by the bank and deposit received from customers for future orders.

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10.LOAN FROM A THIRD PARTY

On September 26, 2013, Atlantic Components Limited entered into a Loan Agreement with Excel Precise International Limited, an unrelated third party, for a loan facility to the aggregate extent of HKD55 Million (USD7,051,282). The amount HKD55 Million has been drawn down on September 27, 2013. The rate of interest is 1.1% per month and payable on the 26th day of each calendar month. The Loan is collateral with mortgage over two Properties owned by Atlantic Components Limited and Personal Guaranteed by Wong, Fung Ming and Yang, Chung Lun.

The repayment time schedule contained in the Loan Agreement as at December 31, 2013 as follows:

Date of RepaymentNAME Amount
AGE 
The Last date of the 12-month period from September 27, 2013641,026
The Last date of the 24-month period from September 27, 20131,282,051
The Last date of the 36-month period from September 27, 20135,128,205POSITION
     
Ronald Cormick71Director and Chief Executive Officer (1)
Haley Manchester50Chief Financial Officer (2)
Ehud Amir38Chief Operating Officer and Director, Chairman of the Board of Directors
Larry Eastland72Corporate Secretary and Director
(1)Mr. Cormick was appointed CEO and Director on April 18, 2015

(2)Mr. Manchester was appointed CFO on April 18, 2015

(3)Mr. Amir was appointed COO and Director on April 18, 2015, and Chairman of the Board of Directors on May 26, 2015

(4)Mr. Eastland was appointed Director and Secretary on April 18, 2015
Ronald Cormick, CEO and Director
Mr. Cormick has more than 50 years of technical and managerial training and experience in the international and domestic oil and gas industry. Although focused primarily on the upstream (exploration and production) sector, experience includes operational and executive management of a public company with operations through marketing, sales and delivery via truck, train and pipeline. A parallel history of both scientific and managerial experience in research and development with applications in oil and gas and minerals, medicine, sports and consumer products. Selected by Dr. Frank Press, Chief Science Adviser to President Carter, served for two years as the extractive industries’ expert on a sequestered team of 25 specialists commissioned to brain-storm future break-through technologies (it lead to President Reagan’s “Strategic Defense Initiative” and the end of the “cold war”). Since 2013, Mr. Cormick, has served as the President of Texas Shale Oil Inc. where he is responsible for strategic planning and project management. Mr. Cormick is also the President and Chief Executive Officer of Shale Oil International Inc. (OTC Pink: SHLE) which acquired Texas Shale Oil Inc. in 2014. Prior to that, he was the Chief Executive Member of RCO Energy LLC (predecessor to Texas Shale Oil Inc.) since 2006. Mr. Cormick is also a research director for AIRIS Corp, a private Canadian medical device company since 2006. Mr. Cormick previously held numerous management and staff positions including Research Scientist and Manager in Exploration R&D in both oil & gas and mineral industries and was the President of an international oil company.

Haley Manchester, CFO
Mr. Manchester is globally-experienced in finance, accounting, geo-socio-economic strategy, business development, sales, marketing, and distribution management. He speaks several languages fluently, including Vietnamese, Japanese, and Khmer and has lectured internationally at the University-level in finance/economics-related coursework. He obtained a BA from Gettysburg College and holds an MA in Economics with a concentration on Finance from Trinity College. Dr. Eastland served as the CEO of Trai Thien USA Inc., one of the few Vietnamese companies to successfully go public in the U.S., where he managed the quadrupling of operations from 2009 until overseeing its recent merger with Onasis Mining Inc in 2014. He has over twenty years of private and multinational general management, distribution, and business development experience in Asia, including more than six years of downstream oil and gas operations experience with both Mobil and Caltex.

Ehud Amir, COO, Director and Chairman of the Board of Directors
Mr, Amir, is a financial and natural resources entrepreneur. Mr. Amir is a co-founder of Texas Shale Oil Inc., where he is responsible for the financial modeling and project acquisition structures, and identifying the best partners to develop the company's upstream oil and gas targets and assets. Prior to that, from 2010 to 2012, Mr. Amir was the managing director at Sterlington Resources Ltd. in charge of designing its financial structures and Joint Ventures for Dove Mining Ltd. and its clients, mainly for alluvial mines projects.

Larry Eastland, Director and Corporate Secretary
Dr. Eastland is a seasoned entrepreneur and leads an international business advisory group in Los Angeles, Hong Kong and Southeast Asia that has provided business services for more than 20 years on four continents. He has served four U.S. Presidents including Staff Assistant to the President; U.S. Delegate to the World Tourism Organization; Director of Operations for the 1983 Summit of Industrialized Nations; and, Deputy to the Undersecretary of State. Larry brings a unique and unrivaled level of access for EMTC to heads of state, oil/gas industry giants, and political influencers around the world. He is a decorated Marine Corps officer having served as a Firebase Commander in Vietnam.  Dr. Eastland received a B.A. in Political Science and International Relations from Brigham Young University in 1967. He received an M.A. and Ph.D. in quantitative behavioral research from the University of Southern California in 1973 and 1976, respectively.

There are no family relationships between any of our directors and executive officers. There have been no events under any bankruptcy act, no criminal proceedings and no judgments, orders or decrees material to the evaluation of the ability and integrity of any director or executive officer of the Company during the past five years.
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Committees of the Board
There are presently no committees of the Board. The Company's Board of Directors performs some of the same functions of an Audit Committee, such as; recommending a firm of independent certified public accountants to audit the financial statements; reviewing the auditors' independence, the financial statements and their audit report; and reviewing management's administration of the system of internal accounting controls. The Company does not currently have a written audit committee charter or similar document.

Board Leadership Structure and Risk Oversight Role
Our Board of Directors currently contains 3 members all of which are Executive Directors. The Company is in search of appropriate candidates to expand its board and serve in the position of Independent Director. While we have no independent directors at present, we believe that such a leadership structure is suitable for the Company at its present stage of development.
As a matter of regular practice, and as part of its oversight function, our Board of Directors periodically reviews on the significant risks in respect to our business.  With our current governance structure based on our Board of Directors and senior executives, there is not a significant division of oversight and operational responsibilities in managing the material risks facing the Company.
Code of Business Conduct and Ethics
We have adopted a written code of business conduct and ethics, known as our Code of Business Conduct and Ethics which applies to all of our directors, officers, and employees, including our principal executive officer and our principal financial and accounting officer. A copy of the Code of Business Conduct and Ethics is attached as Exhibit 14 to the Annual Report on Form 10-K for the period ended December 31, 2003. To receive a copy of our Code of Business Conduct and Ethics, at no cost, requests should be directed to the Secretary, Eagle Mountain Corporation at 20333 Tomball PKY, Suite 204, Houston, Texas 77070. We intend to disclose any amendment to, or waiver of, a provision of the Code of Business Conduct and Ethics in a report filed under the Securities Exchange Act of 1934, as amended, within four business days of the amendment or waiver.
Stockholder Communications
Stockholders and other interested parties may contact the Board of Directors or the non-management directors as a group at the following address: Board of Directors, Eagle Mountain Corporation at 20333 Tomball PKY, Suite 204, Houston, Texas 77070. All communications received at the above address will be relayed to the Board of Directors, respectively. Communications regarding accounting, internal accounting controls or auditing matters may also be reported to the Board of Directors using the above address.
Typically, we do not forward to our directors communications from our stockholders or other communications which are of a personal nature or not related to the duties and responsibilities of the Board, including:
·Junk mail and mass mailings
·New product suggestions
·Resumes and other forms of job inquiries
·Opinion surveys and polls
·Business solicitations or advertisements
Compliance with Section 16(A) of The Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires our directors, executive officers, and stockholders holding more than 10% of our outstanding common stock, to file with the Securities and Exchange Commission initial reports of ownership and reports of changes in beneficial ownership of our common stock. Executive officers, directors and greater-than-10% stockholders are required by SEC regulations to furnish us with copies of all Section 16(a) reports they file. Based solely on our review of forms 3, 4 and 5 and amendments thereto furnished to the Company during its most recent fiscal year, the following directors, officers and/or person beneficially owning greater than 10% of the Company’s equity securities failed to timely file reports required by Section 16(a) of the Exchange Act during the most recent fiscal year or prior fiscal years:
Ronald Cormick failed to timely file his Form 3 in connection with his appointment as CEO and Director and his Form 4 in connection with certain Series C preferred shares acquired under the terms of an Assumption Agreement entered into April 24, 2015, which shares were converted to common stock on July 17, 2015. Larry Eastland failed to file his Form 3 in connection with his appointment as Corporate Secretary and Director and his Form 4 in connection with certain Series C preferred shares acquired under the terms of an Assumption Agreement entered into April 24, 2015, which shares were converted to common stock on July 17, 2015. As at the date of this report neither of these reports have been filed.
The number of Forms 3, 4 and 5 and the number of transactions that were not filed timely are as follows: Larry Eastland (2 forms, 2 transactions) and Ronald Cormick (2 forms, 2 transactions).

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Item 11.
Executive Compensation
COMPENSATION DISCUSSION AND ANALYSIS
Summary
Our approach to executive compensation is influenced by our belief in rewarding people for consistently strong execution and performance. We believe that the ability to attract and retain qualified executive officers and other key employees is essential to our long term success.
Our plan to obtain and retain highly skilled employees is to provide market competitive salaries and also incentive awards. Our approach is to link individual employee objectives with overall company strategies and results, and to reward executive officers and significant employees for their individual contributions to those strategies and results. We use compensation and performance data from comparable companies in the electronics distribution industry to establish market competitive compensation and performance standards for our employees. Furthermore, we believe that equity awards serve to align the interests of our executives with those of our stockholders. As such, we intend for equity to become a key component of our compensation program.
Named Executive Officers
The named executive officers for the fiscal year ended December 31, 2015 are: Ronald Cormick, our Chief Executive Officer; Haley Mancheter, our Chief Financial Officer; and Ehud Amir, our Chief Operating Officer. These individuals are referred to collectively in this Annual Report on Form 10-K as the “Named Executive Officers.”
OUR EXECUTIVE COMPENSATION PROGRAM
Overview
The primary elements of our executive compensation program are base salary, incentive cash and stock bonus opportunities and equity incentives typically in the form of stock option grants. Although we provide other types of compensation, these three elements are the principal means by which we provide the Named Executive Officers with compensation opportunities.
The emphasis on the annual bonus opportunity and equity compensation components of the executive compensation program reflect our belief that a large portion of an executive’s compensation should be performance-based. This compensation is performance-based because payment is tied to the achievement of corporate performance goals. To the extent that performance goals are not achieved, executives will receive a lesser amount of total compensation. We have entered into employment agreements with four of our Named Executive Officers. Such employment agreements set forth base salaries, bonuses and stock option grants. Such stock option grants are predicated on our achievement of corporate performance goals as set forth in such agreements.
ELEMENTS OF OUR EXECUTIVE COMPENSATION PROGRAM
Base Salary
Presently we do not pay our Named Executive Officers a base salary, rather our officers receive consulting fees as invoiced for services rendered.  As we obtain satisfactory funding, we intend to provide base salaries for all named officers. In general, base salaries for the Named Executive Officers will be determined by evaluating the responsibilities of the executive’s position, the executive’s experience and the competitiveness of the marketplace. Base salary adjustments are considered and take into account changes in the executive’s responsibilities, the executive’s performance and changes in the competitiveness of the marketplace. We believe that base salaries of the Named Executive Officers are appropriate within the context of the compensation elements provided to the executives and because they are at a level which remains competitive in the marketplace.
Bonuses
The Board of Directors may authorize us to give discretionary bonuses, payable in cash or shares of Common Stock, to the Named Executive Officers and other key employees. Such bonuses are designed to motivate the Named Executive Officers and other employees to achieve specified corporate, business unit and/or individual, strategic, operational and other performance objectives.
Stock Options
Stock options constitute performance-based compensation because they have value to the recipient only if the price of our Common Stock increases. We have not granted any stock options to any of our Named Executive Officers and the grant of stock options to Named Executive Officers is not a material factor in making compensation determinations with respect to our Named Executive Officers. However, we have in the past used stock options as incentives for our other employees. Stock options generally vest over time, with obtainment of a corporate goal, or a combination of the two. The grant of stock options is designed to motivate our employees to achieve our short term and long term corporate goals.
Retirement and Deferred Compensation Benefits
We do not have any arrangements with the Named Executive Officers to provide them with retirement and/or deferred compensation benefits.
Perquisites
There were no perquisites provided to the Named Executive Officers.
23
Post-Termination/Change of Control Compensation
We do not have any arrangements with the Named Executive Officers to provide them with compensation following termination of employment.
Tax Implications of Executive Compensation
Our aggregate deductions for each Named Executive Officer compensation are potentially limited by Section 162(m) of the Internal Revenue Code to the extent the aggregate amount paid to an executive officer exceeds $1 million, unless it is paid under a predetermined objective performance plan meeting certain requirements, or satisfies one of various other exceptions specified in the Internal Revenue Code. At our 2012 Named Executive Officer compensation levels, we did not believe that Section 162(m) of the Internal Revenue Code would be applicable, and accordingly, we did not consider its impact in determining compensation levels for our Named Executive Officers in 2012.
Hedging Policy
We do not permit the Named Executive Officers to “hedge” ownership by engaging in short sales or trading in any options contracts involving our securities.
Option Exercises and Stock Vested
No options have been granted to any Named Executive Officers during the fiscal year ended December 31, 2015.
Pension Benefits
We presently have no pension benefit plan.
Nonqualified Deferred Compensation
We do not have any defined contribution or other plan that provides for the deferral of compensation on a basis that is not tax-qualified.
Employment Agreements
We do not have any written employment agreements with our Named Executive Officers.
Executive Officer Compensation
The following table sets forth the annual and long-term compensation of our Named Executive Officers for services in all capacities to the Company whose total compensation exceeds $100,000 for the last two fiscal years ended December 31, 2015 and December 31, 2014.
Summary Compensation Table
Name and
Principal Position
 Year  Salary  Bonus  
Stock
Awards
  
Option
Awards
  
Non-Equity
Incentive Plan
Compensation
  
Change in Pension Value
and Non-qualified
Deferred Compensation
Earnings
  
All Other
Compensation
  Total 
                            
Ronald Cormick, CEO (3)  2015   -   -   -   -   -   -   10,000   10,000 
Haley Manchester, CFO (4)  2015   -   -   -   -   -   -   10,000   10,000 
Ehud Amir, COO (5)  2015   -   -   -   -   -   -   -   - 
Larry Eastland, Secretary (6)  2015   -   -   -   -   -   -   150,000   150,000 
Ben Wong, Former CEO (1)  2014  $-   -   -   -   -   -   -   - 
Eddy Wong, Former CFO (2)  2014  $-   -   -   -   -   -   -   - 
(1)  Ben Wong was appointed CEO on February 1, 2013 and resigned his position on April 18, 2015;
(2)  Eddy Wong was appointed CFO on December 30, 2014 and resigned his position on April 18 2015;
(3)  Ronald Cormick was appointed CEO on April 18, 2015. Mr. Cormick was paid $10,000 in consulting fees during the fiscal year ended December 31, 2015;
(4)  Haley Manchester was appointed CFO on April 18, 2015. Mr. Manchester was paid $10,000 in consulting fees during the fiscal year ended December 31, 2015;
(5)  Ehud Amir was appointed COO on April 18, 2015.
(6)  Larry Eastland was appointed Corporate Secretary on April 18, 2015.  The Company and its subsidiary accrued fees totaling $150,000 in respect of services provided by Mr. Eastland all of which remained unpaid at December 31, 2015.
24
Outstanding equity awards at fiscal year-end
None.
Compensation of Directors
The following table sets forth the Director compensation for service on the Board of Directors of the Company for the fiscal year ended December 31, 2015.
Name
Fees Earned
or Paid in
Cash
  7,051,282
Stock
Awards
Option
Awards
Non-Equity
Incentive Plan
Compensation
Non-qualified
Deferred
Compensation Earnings
All Other
Compensation
Total 
Chung-Lun (Alan) Yang (1)$——————$—
Ben Wong (2)$——————$—
Eddy Wong (3)$——————$—
Ronald Cormick (4)$——————$—
Larry Eastland (5)$——————$—
Ehud Amir (6)$——————$—
(1)Chung-Lun Yang resigned as the Company’s Chairman of the Board and from the Board of Directors on May 26, 2015.

(2)Ben Wong resigned from the Board of Directors on May 26, 2015.

(3)Eddy Wong resigned from the Board of Directors on April 18, 2015.

(4)Ronald Cormick was appointed to the Company’s Board of Directors on April 18, 2015.
(5)Larry Eastland was appointed to the Company’s Board of Directors on April 18, 2015.
(6)Ehud Amir was appointed to the Company’s Board of Directors on April 18, 2015, and was appointed Chairman of the Board on May 26, 2015.
We do not compensate our executive directors for serving on the board of directors.
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The following table sets forth certain information regarding beneficial ownership of our Common Stock as of December 31, 2015: (i) by each person who is known by us to own beneficially more than 5% of the Common Stock, (ii) by each of our directors, (iii) by each of our executive officers and (iv) by all our directors and executive officers as a group. On such date, we had 335,365,926 shares of Common Stock outstanding.
25
As used in the table below, the term beneficial ownership with respect to a security consists of sole or shared voting power, including the power to vote or direct the vote, and/or sole or shared investment power, including the power to dispose or direct the disposition, with respect to the security through any contract, arrangement, understanding, relationship, or otherwise, including a right to acquire such power(s) during the 60 days immediately following December 31, 2015. Except as otherwise indicated, the stockholders listed in the table have sole voting and investment powers with respect to the shares indicated
  
 
Shares of Common Stock
Beneficially Owned
  
 
Percentage of Class
Beneficially Owned(1)
 
5% Stockholder        
Jin Wang
Rizhao City, China
   25,000,000   6.7%
Golden Nugget Resources Ltd.
Wanchai, Hong Kong (2)
  25,000,000    6.7%
Kesseff Investments LLC
Las Vegas, Nevada (3)
  20,000,000    5.3%
         
Directors and Officers        
Ronald Cormick(4)  90,000,000   24.0%
Ehud Amir (5)  130,000,000   34.6%
Larry Eastland (6)  25,000,000   6.7%
Haley Manchester  0   0%
All Directors and Officers as a Group  315,000,000   83.9%
(1)Applicable percentage of ownership is based on 375,365,926 shares of Common Stock outstanding as of the Record Date, together with securities exercisable or convertible into shares of Common Stock within 60 days of the Record Date, for each stockholder. Beneficial ownership is determined in accordance with the rules of the United States Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of Common Stock subject to securities exercisable or convertible into shares of Common Stock that are currently exercisable or exercisable within 60 days of the Record Date, are deemed to be beneficially owned by the person holding such securities for the purpose of computing the percentage of ownership of such person, but are not treated as outstanding for the purpose of computing the percentage ownership of any other person.
(2)The shares are owned directly by Golden Nugget Resources Ltd of which Lilian Wai holds voting dispositive power.
(3)The shares are owned directly by Kesseff Investments LLC, managing partner, David Kesseff.
(4)Represents 90,000,000 shares of Common Stock held by Heritage Resources Limited, over which Ronald Cormick holds voting and dispositive power.
(5)Includes (i) 40,000,000 shares of Common Stock issuable upon conversion of 8,000,000 shares of Series E Preferred Stock held by Amir Holdings Limited, over which Ehud Amir holds voting and dispositive power; and (ii) 90,000,000 shares of Common Stock held by Amir Holdings Limited over which Ehud Amir holds voting and dispositive power.
(6)Represents 25,000,000 shares of Common Stock held by EDLA Family Trust LLC over which Larry Eastland holds voting and dispositive power.

Item 13.
Certain Relationships and Related Transactions, and Director Independence
All related person transactions are reviewed and, as appropriate, may be approved or ratified by the Board of Directors. Related person transactions are approved by the Board of Directors only if, based on all of the facts and circumstances, they are in, or not inconsistent with, our best interests and our stockholders, as the Board of Directors determines in good faith. The Board of Directors takes into account, among other factors it deems appropriate, whether the transaction is on terms generally available to an unaffiliated third-party under the same or similar circumstances and the extent of the related person’s interest in the transaction. The Board of Directors may also impose such conditions as it deems necessary and appropriate on us or the related person in connection with the transaction.
In the case of a transaction presented to the Board of Directors for ratification, the Board of Directors may ratify the transaction or determine whether rescission of the transaction is appropriate.
CERTAIN RELATED PERSON TRANSACTIONS
Transactions with Ronald Cormick, CEO, Officer and Director of the Company

During the fiscal year ended December 31, 2015, the Company paid $10,000 Mr. Ronald Cormick as consulting fees.

During the period ended December 31, 2015, Mr. Ronald Cormick advanced $320,121 to the Company’s subsidiary TSO. As of December 31, 2015, $409,834 remained on the balance sheets as advances.

Transactions with Ehud Amir, COO, Officer and Director of the Company

26
During the period ended December 31, 2015, Mr. Ehud Amir advanced $6,475 to the Company’s subsidiary TSO. as of December 31, 2015, $6,475 was on the balance sheets as advances.

Transactions with Haley Manchester, CFO, Officer of the Company

During the fiscal year ended December 31, 2015, the Company paid $10,000 to Mr. Haley Manchester as consulting fees.

Transactions with Larry Eastland, Director of the Company

During the fiscal year ended December 31, 2015, the Company accrued $150,000 consulting fees from Mr. Larry Eastland. As of December 31, 2015, $150,000 was on the balance sheets as accounts payable and accrued liabilities.


Item 14.
Principal Accounting Fees and Services
The following table presents fees, including reimbursements for expenses, professional audit services and other services rendered by (1) DCAW (CPA) Limited, the Company’s current independent registered public accounting firm for the fiscal year ended December 31, 2015; and, (2) AWC LLP (formerly known as Albert Wong & Co., LLP), the Company’s former independent registered public accounting firm for the fiscal year ended December 31, 2014.   On April 30, 2016  DCAW (CPA) Limited was formed as a result of a merger between AWC (CPA) Limited and Dominic K.F. Chan & Co.

  Fiscal 2015  Fiscal 2014 
Audit Fees (1) $30,000  $30,000 
Audit Related Fees (2) $—  $— 
Tax Fees (3) $—  $— 
All Other Fees (4) $—  $— 
         
Total $30,000  $30,000 
(1)Audit Fees consist of fees billed for professional services rendered for the audit of the Company’s consolidated annual financial statements and review of the interim consolidated financial statements included in quarterly reports and services that are normally provided by DCAW (CPA) Limited and AWC LLP firms in connection with statutory and regulatory filings or engagements. Audit Fees billed by DCAW (CPA) Limited and AWC LLP firms includes audited fees for auditing our 2015 and 2014 annual financial statements respectively.

(2)Audit-Related Fees consist of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of the Company’s consolidated financial statements and are not reported under “Audit Fees.” There were no such fees in fiscal year 2015 or 2014.

(3)Tax Fees consist of fees billed for professional services rendered for tax compliance, tax advice and tax planning. There were no such fees in fiscal year 2015 or 2014.

(4)All Other Fees consist of fees for products and services other than the services reported above. There were no such fees in fiscal year 2015 or 2014.

27
PART IV

ITEM 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES

Financial Statements

The information required by this item is incorporated herein by reference to the financial statements and notes thereto listed in Item 8 of Part II and included in this Annual Report.

Schedules

All financial statement schedules are omitted because the required information is included in the financial statements and notes thereto listed in Item 8 of Part II and included in this Annual Report.

Exhibits

The following exhibits are filed as part of this Annual Report:
 Exhibits: Description:
3.1Certificate 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)
3.5Certificate of Designation of Preferences, Rights and Limitations of Series E Convertible Preferred Stock (4)
10.1Assignment and Assumption Agreement (2)
10.2Form of Exchange Agreement (2)
10.3Convertible Note Purchase Agreement and Form of 6% Convertible Promissory Note(3)
10.4Loan agreement between Shale Oil International Inc (formerly Willow Creek Enterprises Inc.) and Orosz Brother Cars Ltd. (3)
10.5Sale and Purchase Agreement between Shale Oil International Inc (formerly Willow Creek Enterprises Inc.) and Pryme Oil and Gas LLC (3)
10.6Exchange Agreement dated August 7, 2015 (4)
31.1*Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*Certification of Chief Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2*Certification by Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS**XBRL Instance Document
101.SCH**XBRL 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.
To be filed by Amendment.
(1) Filed as an exhibit to the Company’s Current Report on Form 8-K which was filed with the Securities and Exchange Commission on April 29, 2015 and is incorporated herein by reference.
(2) Filed as exhibit to 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.
(3) Filed as exhibits to the Company’s Quarterly Report on Form 10-Q which was filed with the Securities and Exchange Commission on September 14, 2015 and is incorporated by reference.
(4) Filed as exhibits to the Company’s Current Report on Form 8-K which was filed with the Securities and Exchange Commission on October 30, 2015 and is incorporated by reference herein


28



SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


EAGLE MOUNTAIN CORP
Date:September 9, 2016By:
/s/ Ronald Cormick
Name:Jean Mann
Title:Chief Executive Officer, President, and Director (Principal Executive Officer)
Date:September 9, 2016By:
/s/ Haley Manchester
Name:Haley Manchester
Title:Chief Financial Officer (Principal Financial and Accounting Officer)



Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

SignaturesTitleDate
/s/ Ronald CormickChief Executive Officer, President and DirectorSeptember 9, 2016
Ronald Cormick    
     
Current portion/s/Larry Eastland 641,026
Non-current portionSecretary and Director 6,410,256September 9, 2016
Larry Eastland    
   7,051,282
/s/Ehud AmirChief Operating Officer and DirectorSeptember 9, 2016
Ehud Amir
 

The Loan facility is to provide purpose temporary relief for the Company’s liquidity during the negotiation with new banker for a better term on a new banking facility.

As of December 31, 2014, the Company disposed all the equity interest of ACL Holdings on September 30, 2014 and all the loans from third parties were included in the disposal.

F-24

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11.Income taxes

Income tax (reversal) expense amounted to $Nil for 2014 and $21,887 for 2013. A reconciliation of the provision for income taxes with amounts determined by applying the statutory federal income tax rate of 34% to income before income taxes is as follows:

  December 31, 2014  December 31, 2013 
       
Computed tax at federal statutory rate $-  $- 
Tax rate differential on foreign earnings of Atlantic and Aristo,        
Hong Kong based companies  -   (83,680)
Federal tax penalty provision  -   80,000 
Tax (over) under provision for Atlantic  -   (68,720)
Tax paid by Kezheng  -   10,607 
Net operating loss carry forward  -   83,680 
         
  $-  $21,887 

The income tax provision consists of the following components:

  December 31, 2014  December 31, 2013 
       
Federal $-  $80,000 
Foreign  -   (58,113)
         
  $-  $21,887 

The Components of the deferred tax assets and liabilities are as follows:

  December 31, 2014  December 31, 2013 
       
Net operating losses $666,507  $4,681,570 
         
Total deferred tax assets $666,507  $4,687,570 
Less: valuation allowance  (666,507)  (4,687,570)
         
  $-  $- 

The Company did not have any interest and penalty not to recognize- in the income statements for the year ended December 31, 2014 and 2013 or balance sheet as of December 31, 2014 and 2013. The Company did not have uncertainty tax positions or events leading to uncertainty tax position within the next 12 months. The Company’s 2011, 2012, 2013, and 2014 U.S. Corporation Income Tax Return are subject to U.S. Internal Revenue Service examination and the Company’s 2007/8, 2008/9, 2009/2010, 2010/11, 2011/12 2012/13, 2013/14 and 2014/15 Hong Kong Corporations Profits Tax Return filing are subject to Hong Kong Inland Revenue Department examination. The Company’s 2009, 2010, 2011, 2012, 2013 and 2014 PRC income tax returns are subject to PRC State Administration of Taxation examination.

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 12.CASH FLOW INFORMATION

Cash paid during the years ended December 31, 2014 and 2013 is as follows:

  December 31, 2014  December 31, 2013 
       
Interest paid $-  $1,041,095 
        
Income taxes (reversal) paid $-  $- 

NOTE 13.WEIGHTED AVERAGE NUMBER OF SHARES

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 years ended December 31, 2014 and 2013 since there were no outstanding options at December 31, 2014 and 2013.

NOTE 14.RETIREMENT PLAN

Under the Mandatory Provident Fund (“MPF”) Scheme Ordinance in Hong Kong, the Company is required to set up or participate in an MPF scheme to which both the Company and employees must make continuous contributions throughout their employment based on 5% of the employees’ earnings, subject to maximum and minimum level of income. For those earning less than the minimum level of income, they are not required to contribute but may elect to do so. However, regardless of the employees’ election, their employers must contribute 5% of the employees’ income. Contributions in excess of the maximum level of income are voluntary. All contributions to the MPF scheme are fully and immediately vested with the employees’ accounts. The contributions must be invested and accumulated until the employees’ retirement. The Company contributed and expensed $Nil for 2014 and $32,872 for 2013.

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 15.COMMITMENTS

The Company leases its facilities. The following is a schedule by years of future minimum rental payments required under operating leases that have non-cancellable lease terms in excess of one year as of December 31, 2013:

  Related parties  Others  Total 
          
Year ending December 31,            
2014 $-  $376,760  $376,760 
2015  -   177,033   177,033 
Thereafter  -   525,100   525,100 
             
Total $-  $1,078,893  $1,078,893 

See Note 6 of the Notes to Consolidated Financial Statements for related party leases. All leases expire prior to December 31, 2018. Real estate taxes, insurance, and maintenance expenses are obligations of the Company. It is expected that in the normal course of business, leases that expire will be renewed or replaced by leases on other properties; thus, it is anticipated that future minimum lease commitments will likely be more than the amounts shown for 2013. Rent expense for the years ended December 31, 2013 totaled $475,571.

As of December 31, 2014, the Company disposed all the equity interest of ACL Holdings on September 30, 2014 and leases were included in the disposal.

NOTE 16.ACQUISITION

On September 28, 2012, the Company completed its acquisition of 100% equity interest of Jussey Investments Limited (“Jussey”), a company incorporated in British Virgin Islands, for aggregate purchase consideration of approximately US$2,150,000, payable by way of cash or equivalent in favor to the seller within 5 business days after the completion of the acquisition. Jussey owns 100% equity interest in eVision Telecom Limited (“eVision”), a Hong Kong incorporated company, and 80% equity interest in USmart Electronic Products Limited (“UEP”), a Hong Kong incorporated company. Jussey indirectly owns 80% of Dongguan Kezheng Electronics Limited (“Kezheng”), a wholly foreign-owned enterprise (“WFOE”) organized under the laws of the PRC by UEP.

Through the acquisition, the Company has diversified its product portfolio, enhanced its distributor role to a Research and Develop (“R&D”) manufacturer with its own products and brands, entered the telecommunication industry, gained access to the 3G baseband licenses, and design and manufacturing matrix and facility.

The Company accounted for this acquisition of Jussey and its subsidiaries by acquisition method of accounting. The balance sheet items were stated at fair value. The fair value was accounted upon the issuance of fair value report from an independent valuator engaged for this acquisition.


F-27
29

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 17.SUBSEQUENT EVENTS

In preparing these financial statements, the Company evaluated the events and transactions that occurred from January 1, 2015 through April 15, 2015, the date these financial statements were issued. The Company has intention and decided to consider acquisition of potential business in other segment to broaden and strengthen the Company profitability. Final conclusion and arrangement will be finalized and to be completed by the first quarter of the year 2015. Despite mentioned the Company determined that there were no material subsequent events

NOTE 18.UNCERTAINTY OF ABILITY TO CONTINUE AS A GOING CONCERN

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 year ended December 31, 2014, the Company has generated revenue of $1,013,241 and has incurred an accumulated deficit $4,819,559. 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.

USMART MOBILE DEVICE INC. AND SUBSIDIARIES

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS AND RESERVES

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.

SCHEDULE III

QUARTERLY INFORMATION (UNAUDITED)

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.

S-1