10-Q

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C.  20549

FORM 10-Q

[X]      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934

            For the quarterly period ended: June 30, 2013

OR

[  ]      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: 000-54624

US HIGHLAND, INC. 

(Exact name of registrant as specified in its charter)

Oklahoma 26-4144571 

     (State or other jurisdiction of incorporation or organization)          (I.R.S. Employer Identification No.)

1411 N. 105^th East Avenue, Tulsa, OK74116 

      (Address of principal executive offices)                                              (Zip Code)

Registrant's Telephone number, including area code:  (918)-895-8300

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 such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for at least the part 90 days.

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 (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). 

Yes [  ] 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 in Rule 12b-2 of the Exchange Act.

[  ] Large accelerated filer     [  ] Accelerated filer

[  ] Non-accelerated filer       [x] Smaller reporting company

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

Yes [  ] No [x]

Number of the Registrant’s common stock outstanding as of May 5, 2014: 77,727,663 common shares

 

US Highland, Inc.

Form 10-Q

For the Fiscal Period Ended June 30, 2013

Table of Contents

Part I – Financial Information

ITEM 1. FINANCIAL STATEMENTS (UNAUDITED)                                                                                                  3

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

                      CONDITION AND RESULTS OF OPERATIONS                                                                                    15

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET

                      RISK                                                                                                                                                               16

ITEM 4. CONTROLS AND PROCEDURES                                                                                                                    16

Part II – Other Information

ITEM 1. LEGAL PROCEEDINGS                                                                                                                                     17

ITEM 1A. RISK FACTORS                                                                                                                                              17

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS                                     17

ITEM 3. DEFAULTS UPON SENIOR SECURITIES                                                                                                     17

ITEM 4. MINE SAFETY DISCLOSURES                                                                                                                       17

ITEM 5. OTHER INFORMATION                                                                                                                                  17

ITEM 6. EXHIBITS                                                                                                                                                            17

2

 

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

The Company’s unaudited interim condensed consolidated financial statements for the six month period ended June 30, 2013 and for the comparable period in the prior year form part of this quarterly report. They are prepared in accordance with United States generally accepted accounting principles.

US Highland, Inc.

Index to the Unaudited Condensed Consolidated Financial Statements

Unaudited Condensed Consolidated Balance Sheets                                                                                                             4

Unaudited Condensed Consolidated Statements of Operations                                                                                           5

Unaudited Condensed Consolidated Statements of Cash Flows                                                                                          6

Unaudited Condensed Consolidated Statements of Stockholders' Deficiency                                                                   7

Notes to the Unaudited Condensed Consolidated Financial Statements                                                                            8

3

 

US Highland, Inc.

Unaudited Condensed Consolidated Balance Sheets

	June 30, 2013 $	December 31, 2012 $
ASSETS
Current Assets
Cash	1,550	10,498
Prepaid expenses	32,119	7,119
Total Current Assets	33,669	17,617
Long-term deposits	11,491	11,756
Property and Equipment, net	25,728	30,850
Total Assets	70,888	60,223
LIABILITIES AND STOCKHOLDERS’ DEFICIENCY
Current Liabilities
Accounts payable	588,651	402,903
Accrued liabilities	222,846	182,472
Convertible debentures	57,833	58,333
Derivative liabilities	1,044,913	941,464
Loans payable ($60,000 and $0 related parties, respectively)	283,825	221,900
Total Liabilities	2,198,068	1,807,072
Commitments
Stockholders’ Deficiency
Common Stock, 100,000,000 shares authorized, $0.01 par value; 77,194,336and 67,757,669 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively	771,943	672,743
Common Stock Reserved for Future Issuance	118,001	114,303
Subscriptions Receivable	–	(1,000)
Additional Paid-in Capital	54,736,512	51,337,434
Accumulated Deficit	(56,980,136)	(53,096,829)
	(1,353,680)	(973,349)
Treasury Stock, at cost – 58,333 shares at June 30, 2013 and December 31, 2012	(773,500)	(773,500)
Total Stockholders’ Deficiency	(2,127,180)	(1,746,849)
Total Liabilities and Stockholders’ Deficiency	70,888	60,223

(The accompanying notes are an integral part of these unaudited condensed consolidated financial statements)

4

 

US Highland, Inc.

Unaudited Condensed Consolidated Statements of Operations

	Three Months Ended June 30,		Six Months Ended June 30,
	2013	2012	2013	2012
	$	$	$	$
Revenue	–	–	–	–
Operating Expenses
Depreciation	2,561	1,197	5,122	2,270
General and administrative	135,769	233,828	296,365	471,782
Professional fees	66,176	342,844	3,118,149	688,366
Research and development	–	50,178	–	148,804
Total Operating Expenses	204,506	628,047	3,419,636	1,311,222
Operating Loss	(204,506)	(628,047)	(3,419,636)	(1,311,222)
Other Income (Expense)
Interest expense	(5,514)	(537,225)	(13,171)	(833,869)
Change in fair value of derivatives	134,728	(4,080,013)	(453,484)	(4,204,396)
Other income	771	140	2,984	560
Gain on settlement of debt	–	4,139,040	–	4,144,559
Total Other Income (Expense)	129,985	(478,059)	(463,671)	(893,147)
Net Loss	(74,521)	(1,106,106)	(3,883,307)	(2,204,369)
Net Loss Per Common Share – Basic and Diluted	(0.00)	(1.27)	(0.05)	(2.54)
Weighted Average Number of Common Shares Outstanding – Basic and Diluted	77,194,000	868,800	74,029,600	868,800

(The accompanying notes are an integral part of these unaudited condensed consolidated financial statements)

5

 

US Highland, Inc.

Unaudited Condensed Consolidated Statements of Cash Flows

	Six Months Ended June 30,
	2013	2012
	$	$
Operating Activities
Net loss	(3,883,307)	(2,204,369)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation	5,122	2,270
Accretion expense	–	724,760
Change in fair value of derivative	453,484	4,204,396
Warrants issued for consulting services	2,599,801	–
Gain on settlement of debt	–	(4,144,559)
Shares issuable for interest expense	3,698	15,375
Changes in operating assets and liabilities:
Prepaid expenses and deposits	(24,735)	32,896
Accounts payable and accrued liabilities	547,064	83,500
Net Cash Used in Operating Activities	(298,873)	(1,285,731)
Investing Activities
Investment in property and equipment	–	(32,171)
Net Cash Used in Investing Activities	–	(32,171)
Financing Activities
Proceeds from convertible debt	–	1,275,000
Proceeds from loans payable	61,925	–
Repayment of loans	(500)	(5,000)
Proceeds from issuance of common stock	228,500	–
Net Cash Provided by Financing Activities	289,925	1,270,000
Increase (Decrease) In Cash	(8,948)	(47,902)
Cash - Beginning of Period	10,498	65,544
Cash - End of Period	1,550	17,642
Non-cash Investing and Financing Activities
Warrants issued to settle debt	229,942	–
Common stock issued to settle debt	21,000	–

(The accompanying notes are an integral part of these unaudited condensed consolidated financial statements)

6

 

US Highland, Inc.

Unaudited Condensed Consolidated Statement of Stockholders’ Deficiency

				Common
				Stock
			Additional	Reserved	Stock
	Common Stock		Paid-in	For Future	Subscriptions	Accumulated	Treasury
	Shares	Amount	Capital	Issuance	Receivable	Deficit	Stock	Total
	#	$	$	$	$	$	$	$
Balance, December 31, 2011	868,778	8,687	45,845,828	93,100	–	(46,287,004)	(773,500)	(1,112,889)
Shares issued upon conversion of warrants	2,000,000	20,000	1,180,995	–	(1,000)	–	–	1,199,995
Beneficial conversion features	–	–	2,015,500	–	–	–	–	2,015,500
Shares issued for consulting services	500,000	167	14,000	–	–	–	–	14,167
Shares issued upon conversion of debentures	58,888,891	588,889	2,061,111	–	–	–	–	2,650,000
Shares issued for cash	5,500,000	55,000	220,000	–	–	–	–	275,000
Shares issuable in payment of accrued interest	–	–	–	21,203	–	–	–	21,203
Net loss for the year	–	–	–	–	–	(6,809,825)	–	(6,809,825)
Balance, December 31, 2012	67,757,669	672,743	51,337,434	114,303	(1,000)	(53,096,829)	(773,500)	(1,746,849)
Shares issued upon conversion of warrants	5,000,000	50,000	3,202,278	–	–	–	–	3,252,278
Subscriptions received	–	–	–	–	1,000	–	–	1,000
Cancellation of shares issued in error	(483,333)	–	–	–	–	–	–	–
Shares issued to settle debt	420,000	4,200	16,800	–	–	–	–	21,000
Shares issued for cash	4,500,000	45,000	180,000	–	–	–	–	225,000
Shares issuable in payment of accrued interest	–	–	–	3,698	–	–	–	3,698
Net loss for the period	–	–	–	–	–	(3,883,307)	–	(3,883,307)
Balance, June 30, 2013	77,194,336	771,943	54,736,512	118,001	–	(56,980,136)	(773,500)	(2,127,180)

(The accompanying notes are an integral part of these unaudited condensed consolidated financial statements)

7

 

US Highland, Inc.

Notes to the Unaudited Condensed Consolidated Financial Statements

1.Summary of Business and Basis of Presentation

Organization and Business

US Highland, Inc. was originally formed as a Limited Liability Company on February 5, 1999 under the name The Powerhouse, L.L.C. pursuant to the laws of the State of Oklahoma.  On November 9, 2006, Powerhouse Productions, L.L.C. filed Articles of Conversion changing the entity from a limited liability company to a corporation under the name Harcom Productions, Inc.  On January 25, 2010, Articles of Merger were filed with the state of Oklahoma merging U.S. Highland, Inc., an Oklahoma corporation into Harcom Productions, Inc. and the name of the corporation was changed to US Highland, Inc. US Highland, Inc. (the “Company”) is a recreational power sports Original Equipment Manufacturer (“OEM”), developing motorcycles, quads, single cylinder engines, and v-twin engines under its own brand and for other OEMs.

Basis of Presentation

The Company’s condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States.  These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, US Highlands Electric Inc.  All significant intercompany transactions and balances have been eliminated. 

The unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments (consisting of normal recurring adjustments unless otherwise indicated) which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. Certain prior year amounts have been reclassified to conform to current year presentation.

Certain information in footnote disclosures normally included in the financial statements were prepared in conformity with accounting principles generally accepted in the United States of America and have been condensed or omitted pursuant to such principles and the financial results for the periods presented may not be indicative of the full year’s results. The Company believes the disclosures are adequate to make the information presented not misleading.

These financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the fiscal year ended December 31, 2012 included in the Company’s Annual Report on Form 10K filed on March 10, 2014 (the “2012 Annual Report”).

Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2012 Annual Report.

Going concern

The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles which contemplate continuation of the Company as a going-concern basis. The going concern basis assumes that assets are realized and liabilities are extinguished in the ordinary course of business at amounts disclosed in the consolidated financial statements. The Company has incurred recurring losses from operations, and as of June 30, 2013, current liabilities exceed current assets by $2,164,399, and the Company has an accumulated deficit of $56,980,136. The Company’s ability to continue as a going concern depends upon its ability to obtain adequate funding to support its operations through continuing investments of debt and/or equity by qualified investors/creditors, and internally generated working capital. These factors raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

8

 

US Highland, Inc.

Notes to the Unaudited Condensed Consolidated Financial Statements

2.     Property and Equipment

Property and equipment consists of the following:

	Useful Life	June 30, 2013 $	December 31, 2012 $
Computers and office equipment	3 years	14,130	14,130
Manufacturing equipment	5 - 10 years	25,853	25,853
		39,983	39,983
Accumulated depreciation		(14,255)	(9,133)
Property and equipment, net		25,728	30,850

Depreciation expense amounted to approximately $5,122 and $2,270 for the six months ended June 30, 2013 and 2012, respectively.

3.     Loans Payable

Loans payable consist of the following:		June 30, 2013 $	December 31, 2012 $
a)	Loans payable that are unsecured, non-guaranteed, past due and are non-interest bearing.	40,325	38,400
b)	Note payable which is unsecured, non-guaranteed, past due and bears interest at 10% per annum.	7,500	7,500
c)	On January 15, 2011, the Company entered into 8 unsecured, non-guaranteed, loan agreements pursuant to which the Company received proceeds of $56,000. If the loans were not repaid within 90 days they then bear interest at 1% per month. In addition, if the loan was not repaid within 90 days, the Company is required to issue 167 common shares every month until the loan is repaid in full. As of June 30, 2013 and December 31, 2012, the Company recognized the fair value of 4,500 and 3,500 common shares issuable for interest expense of $118,002 and $114,303, respectively, as shares reserved for future issuance. The Company has not yet issued these common shares. As at June 30, 2013, the Company has also accrued interest expense of $16,520 (December 31, 2012 - $13,160).	56,000	56,000
d)	On August 28, 2012, the Company entered into an unsecured, non-guaranteed, demand loan agreement pursuant to which the Company received proceeds of $75,000. The loan bears interest at an annual rate of 7% payable monthly. The loan is repayable on demand.	75,000	75,000
e)	On October 3, 2012, the Company entered into an unsecured, non-guaranteed, demand loan agreement pursuant to which the Company received proceeds of $45,000. The loan bears interest at an annual rate of 7% payable monthly. The loan is repayable on demand.	45,000	45,000
f)	On May 31, 2013 and June 19, 2013, the Company received two unsecured, non-guaranteed, non-interest bearing demand loans for $40,000 and $20,000, respectively. These loans were subsequently secured with convertible debentures. Refer to Note 9(b).	60,000	–
		283,825	221,900

4.     Convertible Debenture

Effective January 25, 2010, the Company issued a convertible note for $225,000. Pursuant to the terms of the agreement, the loan is unsecured, non-interest bearing, and was due on December 21, 2010.  The note is convertible into shares of the Company’s common stock at any time at a variable conversion price equal to 65% of the average of the closing bid prices of the common stock during the 28 trading days prior to the date of the conversion notice and is subject to adjustment upon the issuance of certain dilutive instruments.  Due to these provisions, the embedded conversion option qualifies for derivative accounting and bifurcation under ASC 815-15 Derivatives and Hedging. The initial fair value of the derivative liability of $538,249 resulted in a full discount to the note payable of $225,000 and the recognition of a loss on derivatives of $313,249.

9

US Highland, Inc.

Notes to the Unaudited Condensed Consolidated Financial Statements

During the year ended December 31, 2010, the carrying value of the convertible note had been fully accreted over the term up to the face value of the convertible note.

On June 2, 2010, the Company issued 6,386 restricted shares of common stock upon the conversion of the principal amount of $166,667. The fair value of the derivative liability at June 2, 2010, was $266,425 and $197,352 was reclassified to additional paid-in capital upon conversion. During the six months ended June 30, 2013, the Company repaid $500 of the note.  At June 30, 2013, the carrying value of the note is $57,833 (December 31, 2012 - $58,333). The Company did not repay the remaining outstanding principal on the maturity date. The note is in default at June 30, 2013.

5.     Derivative Liabilities

The embedded conversion option of the Company convertible debenture described in Note 4 contains a conversion feature that qualifies for embedded derivative classification.  The warrants described in Note 7 also qualify for derivative classification.  The fair value of these liabilities will be re-measured at the end of every reporting period and the change in fair value will be reported in the statement of operations included in other income or expenses.

The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities for the periods ended June 30, 2013 and December 31, 2012:

	June 30, 2013	December 31, 2012
	$	$
Balance at the beginning of period	941,464	646,831
Addition of new derivative liabilities (embedded conversion options)	–	1,010,478
Addition of new derivative liabilities (warrants)	2,899,741	2,134,182
Change in fair value of warrants	455,570	(364,842)
Change in fair value of embedded conversion option	(2,087)	4,059,964
Conversion of warrants	(3,249,778) 3	(1,199,995)
Settlement of embedded conversion options	–	(5,345,154)
Balance at the end of the period	1,044,913	941,464

The following table summarizes the change in fair value of derivatives:

	Change in Fair Value of Derivative Liabilities
	$
Three months ended June 30, 2012:
Fair value of derivative liabilities in excess of note proceeds received	(348,161)
Change in fair value of derivative liabilities during the three months ended June 30, 2012	(3,731,852)
Change in fair value of derivatives	(4,080,013)
Three months ended June 30, 2013:
Change in fair value of derivative liabilities during the three months ended June 30, 2013	134,728
Change in fair value of derivatives	134,728

	Change in Fair Value of Derivative Liabilities
	$
Six months ended June 30, 2012:
Fair value of derivative liabilities in excess of note proceeds received	(349,109)
Change in fair value of derivative liabilities during the six months ended June 30, 2012	(3,855,287)
Change in fair value of derivatives	(4,204,396)
Six months ended June 30, 2013:
Fair value of derivative liabilities in excess of note proceeds received	–
Change in fair value of derivative liabilities during the six months ended June 30, 2013	(453,484)
Change in fair value of derivatives	(453,484)

10

US Highland, Inc.

Notes to the Unaudited Condensed Consolidated Financial Statements

The Company uses Level 3 inputs for its valuation methodology for the warrant derivative liabilities and embedded conversion option liabilities as their fair values were determined by using the Black-Scholes option pricing model based on various assumptions.   The model incorporates the price of a share of the Company’s common stock (as quoted on the Over the Counter Bulletin Board), volatility, risk free rate, dividend rate and estimated life. Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are classified based on the lowest level of input that is significant to the fair value measurement. The following table shows the assumptions used in the calculations:

	Expected Volatility	Risk-free Interest Rate	Expected Dividend Yield	Expected Life (in years)
At December 31, 2012	277% - 308%	0.27% - 0.41%	0%	1.97-2.50
At issuance	285% - 329%	0.42% - 1.41%	0%	3.00
At June 30, 2013	200% - 279%	0.15% - 1.04%	0%	1.17-3.00

6.     Common Stock

Share transactions for the six months ended June 30, 2013:

a)On February 15, 2013, the Company issued 5,000,000 shares of common upon the exercise of a warrant at $0.0005 per share described in Note 8(f) for cash proceeds of $2,500. 

b)On March 13, 2013, the Company issued 4,500,000 shares of common stock in consideration for cash at $0.05 per share to a shareholder. This transaction resulted in the shareholder becoming a significant shareholder.

c)On March 18, 2013, a director of the Company converted $21,000 of amounts owed to him by the Company into 420,000 shares of common stock. The amount owed had no terms of repayment and was non-interest bearing.

7.     Stock Purchase Warrants

a)On January 23, 2013, the Company issued a warrant to purchase 5,000,000 common shares at $0.0005 per share exercisable for three years pursuant to the management securities agreement described in Note 8(f). The Company recorded the fair value of the warrant of $2,599,801 as consulting expenses. On February 15, 2013 the Company issued 5,000,000 common shares upon the exercise of the warrant. Upon the exercise of the warrant the Company reclassified the fair value of the warrant of $3,249,778 to additional paid in capital. During the six month period ended June 30, 2013, the Company recorded a loss on the change in fair value of the derivative liability of $649,977 prior to the exercise of the warrant.

b)On April 1, 2013, the Company entered into a settlement agreement with a consultant to settle $149,971 of services provided in 2012. Pursuant to the agreement, the Company will pay $10,000 and issue a warrant to purchase 300,000 shares of common stock at $0.0005 per share exercisable for three years. The warrant meets the criteria for classification as a derivative liability and during the six month period ended June 30, 2013, the Company recorded a loss on the change in fair value of the derivative liability of $42,009.

c)On April 8, 2013, the Company entered into a settlement agreement with a consultant to settle $149,971 of services provided in 2012.  Pursuant to the agreement, the Company will pay $10,000 and issue a warrant to purchase 300,000 shares of common stock at $0.0005 per share exercisable for three years. The warrant meets the criteria for classification as a derivative liability and during the six month period ended June 30, 2013, the Company recorded a loss on the change in fair value of the derivative liability of $42,008.

A summary of the changes in the Company’s common share purchase warrants is presented below:

	Number	Weighted Average Exercise Price	Weighted Average Remaining Term
Balance December 31, 2012	979,166	$ 0.59	2.33 years
Issued	5,600,000	0.0005
Exercised	(5,000,000)	0.0005
Balance June 30, 2013	1,579,166	$ 0.37	2.19 years

11

 

US Highland, Inc.

Notes to the Unaudited Condensed Consolidated Financial Statements

8.     Commitments

a)The Company entered into a consulting agreement dated September 20, 2011 with a director of the Company for services to be provided for a term of three years. The Company agreed to pay $2,250 per month, as well as issue 16,667 shares of common stock. On July 31, 2012, the Company issued 500,000 shares of common stock.  The Company erred and should have issued the director 16,667 shares and subsequently cancelled 483,333 of the shares.   During the six months ended June 30, 2013, the Company recorded $10,000 (June 30, 2012 - $27,250) of professional fees.

b)The Company entered into an employment agreement dated October 14, 2011 with an officer of the Company for services to be provided for an initial term of three years, and on a year-to-year basis thereafter. The Company agreed to pay $8,000 per month, increasing to $10,000 per month on the seventh month, and further to $12,000 per month on the tenth month. During the six months ended June 30, 2013, the Company recorded $72,000 (June 30, 2012 - $68,000) of general and administrative expenses.

c)The Company entered into an employment agreement dated November 10, 2011 with an officer of the Company for services to be provided for an initial term of three years, and on a year-to-year basis thereafter. The Company agreed to pay $6,000 per month, increasing to $8,000 per month on the seventh month, and further to $10,000 per month on the tenth month. During the six months ended June 30, 2013, the Company recorded $48,445 (June 30, 2012 - $56,000) of professional fees.

d)The Company entered into two employment agreements dated November 10, 2011, effective June 15, 2011, with two employees for services to be provided for an initial term of three years, and on a year-to-year basis thereafter. The Company agreed to pay each employee $6,000 per month, increasing to $8,000 per month on the seventh month, and further to $10,000 per month on the tenth month. During the six months ended June 30, 2013, the Company recorded $264,942 (June 30, 2012 - $112,000) of professional fees.

e)On October 1, 2012, the Company entered into a management securities agreement with a consultant.  Pursuant to the agreement the Consultant will provide management services for a period of one year in consideration for a warrant to purchase 2,000,000 common shares of the Company at $0.0005 per share for 3 years (on December 7, 2012, the consultant exercised the warrant).  Pursuant to an amendment to the agreement entered into on January 23, 2013, the consultant will provide additional services in consideration for $20,000 per month from February 1, 2013 to March 31, 2014 and was issued a warrant to purchase 5,000,000 common shares of the Company at $0.0005 per share exercisable for 3 years (on February 15, 2013, the consultant exercised the warrant).  On October 28, 2013, the Company entered into a settlement agreement to terminate the contract with the consultant effective July 10, 2013. Refer to Note 7 and 9(a).

f)During the year ended December 31, 2012, the Company entered into two leases for the provision of office and warehouse space until April 30, 2015.  On April 1, 2013, the Company entered into an amendment to the lease agreements. Pursuant to the amendment, one of the leases was terminated and the other was extended to March 31, 2019.  Refer to Note 9(e). During the six months ended June 30, 2013, the Company recognized $24,746 of rent expense.  The Company’s future minimum lease payments are as follows:

Fiscal year ending December 31, 2013	$ 24,912
Fiscal year ending December 31, 2014	51,652
Fiscal year ending December 31, 2015	53,645
Fiscal year ending December 31, 2016	55,634
Fiscal year ending December 31, 2017	57,631
Fiscal year ending December 31, 2018	59,624
Fiscal year ending December 31, 2019	15,280
	$ 318,378

9.     Subsequent Events

a)August 12, 2013, the Company received advances of $25,000 and entered into an unsecured, non-guaranteed, demand loan agreement with the director for $27,000.  The Company had previous received a $2,000 advance from the director.  Refer to Note 3(f). The loan bears interest at 1% per annum compounded monthly.  In addition, the Company is required to issue 5,000 common shares every month until the loan is repaid in full. 

b)Effective July 25, 2013, the Company issued a convertible note to secure the demand loan of $75,000 described in Note 3(d). Pursuant to the terms of the agreement, the loan is unsecured and due on July 31, 2014.  The note is convertible into shares of the Company’s common stock at any time at a price of $0.035.  The note bears interest at 8% per annum compounded monthly, and is due on demand.

c)Effective July 25, 2013, the Company issued a convertible note to secure the demand loan of $45,000 described in Note 3(e). Pursuant to the terms of the agreement, the loan is unsecured and due on July 31, 2014.  The note is convertible into shares of the Company’s common stock at any time at a price of $0.035.  The note bears interest at 8% per annum compounded monthly, and is due on demand.

d)On July 25, 2013, the Company issued a convertible note for up to $500,000 and warrants to purchase 12,500,000         underlying shares of the Company’s common stock. The warrants are exercisable into 10,000,000 common shares of the Company at $0.05 per share and 2,500,000 shares at an exercise price of $0.10 per share until July 31, 2014.   Subsequent to June 30, 2013, the Company received proceeds of $500,000 under the note. The note bears interest at 8% per annum compounded monthly, and principal and interest are due on July 31, 2014.  In addition, so long as any amounts are due hereunder, the Company is obligated to remit to the lender 100% of all revenues, payments and receivables from the sale of the first 50 engines sold by the Company. 

12

US Highland, Inc.

Notes to the Unaudited Condensed Consolidated Financial Statements

e)On July 25, 2013, the Company issued a convertible note for up to $500,000 and warrants to purchase 10,197,916 underlying shares of the Company’s common stock. The warrants are exercisable into 8,158,333 common shares of the Company at $0.05 per share and 2,039,583 shares at an exercise price of $0.10 per share until July 31, 2014.   Subsequent to June 30, 2013, the Company received proceeds of $273,700 under the note. The Company will not receive any additional funding from the note. The note bears interest at 8% per annum compounded monthly, and principal and interest are due on July 31, 2014.   

f)Effective October 7, 2013, the Company issued a convertible note for up to $500,000 and warrants to purchase 868,055 underlying shares of the Company’s common stock. The warrants are exercisable into 694,444 common shares of the Company at $0.05 per share and 173,611 shares at an exercise price of $0.10 per share until July 31, 2014.   Subsequent to June 30, 2013, the Company received proceeds of $25,000 under the note.  The Company will not receive any additional funding from the note. The note bears interest at 8% per annum compounded monthly, and principal and interest are due on July 31, 2014.   

g)Effective July 25, 2013, 2013, the Company issued a convertible note for up to $500,000 and warrants to purchase 739,584 underlying shares of the Company’s common stock. The warrants are exercisable into 591,667 common shares of the Company at $0.05 per share and 147,917 shares at an exercise price of $0.10 per share until July 31, 2014.   Subsequent to June 30, 2013, the Company received proceeds of $41,300 under the note. The Company will not receive any additional funding from the note. The note bears interest at 8% per annum compounded monthly, and principal and interest are due on July 31, 2014.   

h)Effective November 12, 2013, the Company issued a convertible note for up to $500,000 and warrants to purchase 694,445 underlying shares of the Company’s common stock. The warrants are exercisable into 555,556 common shares of the Company at $0.05 per share and 138,889 shares at an exercise price of $0.10 per share until July 31, 2014.   Subsequent to June 30, 2013, the Company received proceeds of $20,000 under the note. The Company will not receive any additional funding from the note. The note bears interest at 8% per annum compounded monthly, and principal and interest are due on July 31, 2014.   

i)On October 25, 2013, the Company issued 533,333 common shares with a fair value of $26,667 to a consultant as part of a settlement agreement to settle $80,000 of amounts owed to the consultant. 

j)On January 17, 2014, the Company entered into a note payable with a related party, pursuant to which the Company received proceeds of $50,000.  The note is bears interest at an annual rate of 8% per annum and due on January 17, 2016.

k)On January 29, 2014, the Company entered into a note payable with a related party, pursuant to which the Company received proceeds of $50,000.  The note is bears interest at an annual rate of 8% per annum and due on January 29, 2016.

l)On February 27, 2014, the Company received additional advances of $6,000 from a director.  The amount is unsecured, non-interest bearing and due on demand.

m)On March 3, 2014, the Company entered into a note payable with a related party, pursuant to which the Company received proceeds of $50,000.  The note is bears interest at an annual rate of 8% per annum and due on March 3, 2016.

n)On March 19, 2014, the Company entered into a note payable with a related party, pursuant to which the Company received proceeds of $150,000.  The note is bears interest at an annual rate of 8% per annum and due on March 19, 2016.

o)On April 25, 2014, the Company entered into a note payable with a related party, pursuant to which the Company received proceeds of $25,000.  The note is bears interest at an annual rate of 8% per annum and due on April 25, 2016.

p)On September 4, 2013, the Company issued a consultant a warrant to purchase 100,000 shares of common stock at $0.005 for three years for $29,655 of services.

q)On December 23, 2013, the Company entered into a settlement agreement with a consultant to settle $88,445 of services provided in 2012.  Pursuant to the agreement, the Company will pay $7,500 and issued a warrant to purchase 300,000 shares of common stock at $0.0005 per share for three years.

r)On December 23, 2013, the Board approved an amendment to the Articles of Incorporation to increase the authorized shares of common stock to 500,000,000 shares and authorize 3,550,000 shares of “blank check” preferred stock, par value $0.01.

s)On December 30, 2013, the Company entered into a settlement agreement with a consultant to settle $36,425 of services provided in 2012.  Pursuant to the agreement, the Company issued a warrant to purchase 135,000 shares of common stock at $0.0005 per share for three years

13

US Highland, Inc.

Notes to the Unaudited Condensed Consolidated Financial Statements

t)On December 30, 2013, the Company entered into a settlement agreement with a consultant to settle $26,982 of services provided in 2012.  Pursuant to the agreement, the Company issued a warrant to purchase 100,000 shares of common stock at $0.0005 per share for three years.

u)On January 2, 2014, the Company entered into a settlement agreement with a consultant to settle $11,800 of services provided in 2012.  Pursuant to the agreement, the Company issued a warrant to purchase 43,750 shares of common stock at $0.0005 per share for three years.

v)On January 3, 2014, the Company entered into a settlement agreement with a consultant to settle $41,806 of services provided in 2012.  Pursuant to the agreement, the Company issued a warrant to purchase 155,000 shares of common stock at $0.0005 per share for three years.

14

 

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements. For this purpose, any statements contained in this Report that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking information includes statements relating to future actions, prospective products, future performance or results of current or anticipated products, sales and marketing efforts, costs and expenses, interest rates, outcome of contingencies, financial condition, results of operations, liquidity, business strategies, cost savings, objectives of management, and other matters. You can identify forward-looking statements by those that are not historical in nature, particularly those that use terminology such as “may,” “will,” “should,” “expects,” “anticipates,” “contemplates,” “estimates,” “believes,” “plans,” “projected,” “predicts,” “potential,” or “continue” or the negative of these similar terms. The Private Securities Litigation Reform Act of 1995 provides a “safe harbor” for forward-looking information to encourage companies to provide prospective information about themselves without fear of litigation so long as that information is identified as forward-looking and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those projected in the information.

These forward-looking statements are not guarantees of future performance and involve risks, uncertainties and assumptions that we cannot predict. In evaluating these forward-looking statements, you should consider various factors, including the following: (a) those risks and uncertainties related to general economic conditions, (b) whether we are able to manage our planned growth efficiently and operate profitable operations, (c) whether we are able to generate sufficient revenues or obtain financing to sustain and grow our operations, (d) whether we are able to successfully fulfill our primary requirements for cash, which are explained below under “Liquidity and Capital Resources”. We assume no obligation to update forward-looking statements, except as otherwise required under the applicable federal securities laws.

Results of Operations

For the periods ended June 30, 2013 and June 30, 2012

Revenues

The Company had no revenues during the three month periods ended June 30, 2013 and 2012.

The Company had no revenues during the six month periods ended June 30, 2013 and 2012.

Operating Expenses

Operating expenses for the three month period ended June 30, 2013 were $204,506, which was comprised primarily of $135,769 for general and administrative expenses, and $66,176 for professional fees as compared to operating expenses of $628,047 for the three month period ended June 30, 2012, which was comprised primarily of $233,828 for general and administrative expenses, and $342,844 for professional fees. The decrease in general and administrative expenses of $98,059 resulted primarily from a reduction in travel expenses from $32,560 in fiscal 2012 to $3,864 in fiscal 2013, and a reduction in payroll from $118,310 in fiscal 2012 to $87,314 in fiscal 2013.  The decrease in professional fees of $276,668 resulted primarily from the Company reducing the number of consultants utilized during the three month period ended June 30, 2013 as compared to the three month period ended June 30, 2012.

Operating expenses for the six month period ended June 30, 2013 were $3,419,636, which was comprised primarily of $296,365 for general and administrative expenses, and $3,118,149 for professional fees as compared to operating expenses of $1,311,222 for the six month period ended June 30, 2012, which was comprised primarily of $471,782 for general and administrative expenses, $148,804 for research and development expenses, and $688,366 for professional fees. The decrease in general and administrative expenses of $175,417 resulted primarily a reduction in travel expenses from $64,292 in fiscal 2012 to $6,429 in fiscal 2013, a reduction in shipping and handling from $17,058 in fiscal 2012 to $0 in fiscal 2013, and a reduction in repairs and maintenance from $34,382 in fiscal 2012 to $829 in fiscal 2013. The increase in professional fees of $2,429,783 resulted primarily from the issuance of a warrant to a consultant to purchase common shares, which was recorded at a fair value of $2,599,801 offset by a general reduction in other professional fees of $483,668. The Company did not issue any warrants during the six months ended June 30, 2012.

Net Loss

Net loss for the three month period ended June 30, 2013 was $74,521, compared to net loss of $1,106,106 for the three month period ended June 30, 2012. The loss in fiscal 2013 includes $5,514 in interest expense as compared to $537,225 in fiscal 2012. The decrease of $531,711 resulted primarily from the decrease in accretion expense. The

15

 

Company recognized $0 of accretion during the three months ended June 30, 2013 as compared to $475,953 during the three months ended June 30, 2012. The Company recognized a gain on change in fair value of derivatives of $134,728 during the three months ended June 30, 2013 as compared to a loss on change in fair value of derivatives of $4,080,013 during the three months ended June 30, 2012. The Company recognized a gain on settlement of debt of $4,139,040 during the three months ended June 30, 2012. The Company did not settle any debt during the three months ended June 30, 2013.

Net loss for the six month period ended June 30, 2013 was $3,883,307, compared to net loss of $2,204,369 for the six month period ended June 30, 2012. The loss in fiscal 2013 includes $13,171 in interest expense as compared to $833,869 in fiscal 2012. The decrease of $820,698 resulted primarily from the decrease in accretion expense. The Company recognized $0 of accretion during the six months ended June 30, 2013 as compared to $719,241 during the six months ended June 30, 2012. The Company recognized a loss on change in fair value of derivatives of $453,484 during the six months ended June 30, 2013 as compared to a loss on change in fair value of derivatives of $4,204,396 during the six months ended June 30, 2012. The Company recognized a gain on settlement of debt of $4,144,559 during the six months ended June 30, 2012. The Company did not settle any debt during the six months ended June 30, 2013.

Liquidity and Capital Resources

As of June 30, 2013, we had cash of $1,550 and a working capital deficiency of $2,164,399. The future of the Company is dependent upon its ability to obtain future financing, upon cash generated from our operations and our ability to borrow cash when needed from related parties.  During the fiscal year ended December 31, 2013, the Company received $860,000 of proceeds for the issuance convertible notes.  We estimate that we will require $2,188,000 over the twelve month period ending December 31, 2014. Management believes that our cash balance will not be sufficient to meet our working capital requirements for the next twelve month period. We plan to raise the capital required to satisfy our immediate short-term needs and additional capital required to meet our estimated funding requirement for the next twelve months primarily through equity and or debt financings. There is no assurance that we will be able to obtain further funds required for our continued working capital requirements. 

We cannot be certain that the required additional financing will be available or available on terms favorable to us. We currently do not have any arrangements or commitments in place for any other financings. If additional funds are raised by the issuance of our securities, existing stockholders will experience dilution of their ownership interest. If adequate funds are not available or not available on acceptable terms, we may be unable to fund our operations.

During the six month period ended June 30, 2013, we used $298,873 in cash in operating activities and did not use any cash for investing activities.  This compares to the six month period ended June 30, 2012 when we used $1,285,731 in cash in operating activities and paid $32,171 to acquire property and equipment. We received proceeds of $61,925 from the issuance of loans payable and $228,500 from the issue of common stock during the six months ended June 30, 2013. This compares to the six month period ended June 30, 2012 when we received $1,275,000 from the issuance of convertible debt. We made cash repayments of $500 for notes payable during the six months ended June 30, 2013 as compared to $5,000 during the six months ended June 30, 2012.

As of June 30, 2013 we did not have any established lines of credit with any banks or any other arrangements, agreements, or commitments for financing our operations.

Going Concern

The Company has no revenues and has incurred a net loss of approximately $3,883,000 for the six month period ended June 30, 2013. In addition, at June 30, 2013, there is an accumulated deficit of $56,980,136.  These factors raise substantial doubt about the Company’s ability to continue as a going concern.

There can be no assurance that sufficient funds required during the next year or thereafter will be generated from operations or available from external sources such as debt or equity financings, or other potential sources. The inability to generate cash flow from operations or to raise capital from external sources will force the Company to substantially curtail and cease operations, therefore, having a material adverse effect on its business. Furthermore, there can be no assurance that any funds, if available, will possess attractive terms or not have a significant dilutive effect on the Company’s existing stockholders. 

Off-balance sheet arrangements: 

The Company has no off-balance sheet arrangements.

16

 

Recent Pronouncements

Management does not anticipate that any new accounting pronouncements will have a material impact on the financial statements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable

ITEM 4.  CONTROLS AND PROCEDURES

Management’s Report on Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’). Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based upon our evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective, as of June 30, 2013, in ensuring that material information that we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.

The effectiveness of our disclosure controls and procedures and our internal control over financial reporting is subject to various inherent limitations, including cost limitations, judgments used in decision making, assumptions about the likelihood of future events, the soundness of our systems, the possibility of human error, and the risk of fraud. Moreover, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions and the risk that the degree of compliance with policies or procedures may deteriorate over time. Because of these limitations, there can be no assurance that any system of disclosure controls and procedures or internal control over financial reporting will be successful in preventing all errors or fraud or in making all material information known in a timely manner to the appropriate levels of management.

The Company had not filed its quarterly reports or any annual reports with the SEC since the fourth quarter of 2012.  Management intends to implement internal controls to ensure that similar situations do not occur in the future and that required SEC filings will be timely. Management has retained the services of a new accounting firm, as well as an auditing firm specializing in public companies and a strong reputation in the auditing community. We have also hired a highly qualified financial consultant with extensive experience with public companies in the manufacturing industry. This newly implemented three tier process ties the Company’s bookkeeping activities with a full service accounting firm that handles all financial reporting activities and the Company’s interface with the selected auditing firm.

Changes in Internal Control over Financial Reporting: 

During the quarter covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
  

The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, the registrant's principal executive and principal financial officers, or persons performing similar functions, and effected by the registrant's board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:

17

 

(a)	pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant;
(b)	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant; and
(c)	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant's assets that could have a material effect on the financial statements.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

None.

ITEM 1A. RISK FACTORS

As a “small reporting company”, we are not required to provide the information required by this Item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

On April 1, 2013, the Company entered into a settlement agreement with a consultant to settle $149,971 of services provided in 2012. Pursuant to the agreement, the Company will pay $10,000 and issue a warrant to purchase 300,000 shares of common stock at $0.0005 per share exercisable for three years. The issuance was conducted in reliance upon an exemption from registration provided under Section 4(2) of the Securities Act of 1933, as amended.

On April 8, 2013, the Company entered into a settlement agreement with a consultant to settle $149,971 of services provided in 2012. Pursuant to the agreement, the Company will pay $10,000 and issue a warrant to purchase 300,000 shares of common stock at $0.0005 per share exercisable for three years. The warrant meets the criteria for classification as a derivative liability and during the six month period ended June 30, 2013, the Company recorded a loss on the change in fair value of the derivative liability of $42,008.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

None.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

None.

ITEM 6. EXHIBITS

ExhibitDescription 

31                                    Section 302 Certification of Principal Executive Officer

32                                    Section 906 Certification of Principal Executive Officer

101.INS*                        XBRL Instance

101.SCH*                      XBRL Taxonomy Extension Schema

101.CAL*                      XBRL Taxonomy Extension Calculations

101.DEF*                       XBRL Taxonomy Extension Definitions

101.LAB*                      XBRL Taxonomy Extension Labels

101.PRE*                       XBRL Taxonomy Extension Presentation

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

18

 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned duly authorized person.

                                                                                 US Highland, Inc.

By: /s/ John R. Fitzpatrick, III,  

John R. Fitzpatrick, III

President, Chief Executive Officer and Chief Financial Officer

                                                                                 (Principal Executive, Financial and Accounting Officer)

Date: May 5, 2014

19

EX-31

 

EXHIBIT 31

CERTIFICATION OF

PRINCIPAL EXECUTIVE OFFICER AND PRINCIPAL FINANCIAL OFFICER PURSUANT TO

SECTION 302(a) OF THE SARBANES-OXLEY ACT OF 2002

I, John R. Fitzpatrick, III, certify that:

1.      I have reviewed this quarterly report on Form 10-Q of US Highland, Inc., a Nevada corporation, for the quarter ended June 30, 2013;

2.      Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.      Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.      The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.      Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.      Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.      Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.      Disclosed in this report any change in registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.      The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.      All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.      Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: May 5, 2014	By:	/s/ John R. Fitzpatrick, III
		John R. Fitzpatrick, III
		President, Chief Executive Officer and Chief Financial Officer (Principal Executive, Financial, and Accounting Officer)

EX-32

 

EXHIBIT 32

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned, John R. Fitzpatrick, III, President, Chief Executive Officer and Chief Financial Officer of US Highland, Inc. (the “Registrant”), certifies, under the standards set forth and solely for the purposes of 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that the Quarterly Report on Form 10-Q of the Registrant for the quarter ended June 30, 2013 (the “Report”):

 (1)   fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Registrant.
Date: May 5, 2014		By:	/s/ John R. Fitzpatrick, III
			John R. Fitzpatrick, III
			President, Chief Executive Officer and Chief Financial Officer (Principal Executive, Financial, and Accounting Officer)

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

8. Commitments (Details) (USD $)	0 Months Ended																			3 Months Ended		6 Months Ended		12 Months Ended	17 Months Ended	36 Months Ended
	Jan. 02, 2014	Jan. 03, 2014	Dec. 30, 2013	Dec. 31, 2013	Dec. 23, 2013	Nov. 12, 2013	Oct. 25, 2013	Oct. 08, 2013	Sep. 04, 2013	Jul. 25, 2013	Jul. 28, 2013	Jul. 26, 2013	Jul. 28, 2013	Jul. 31, 2013	May 30, 2013	Apr. 08, 2013	Mar. 18, 2013	Jan. 23, 2013	Oct. 02, 2012	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012	Jun. 30, 2014	Sep. 21, 2014	Oct. 14, 2013	Oct. 14, 2012	Sep. 10, 2012	Jun. 10, 2012	Nov. 10, 2011	Oct. 14, 2011
8. Commitments (Details) [Line Items]
Contractual Obligation, Due in Next Twelve Months																			$ 20,000							$ 2,250	$ 12,000	$ 10,000	$ 10,000	$ 8,000	$ 6,000	$ 8,000
Stock Issued During Period, Shares, Reverse Stock Splits (in Shares)																	21,000									16,667
Stock Issued During Period, Shares, Issued for Services (in Shares)	11,800						533,333						147,917						2,000,000							500,000
Weighted Average Number of Shares, Common Stock Subject to Repurchase or Cancellation (in Shares)																										483,333
Accrued Professional Fees																				10,000	27,250	10,000	27,250
General and Administrative Expense																				135,769	233,828	296,365	471,782
Other Cost and Expense, Operating																						48,445	56,000
Officers' Compensation																						264,942	112,000
Investment Warrants, Exercise Price (in Dollars per share)																		$ 0.0005	$ 0.0005						$ 0.0005
Debt Conversion, Converted Instrument, Warrants or Options Issued (in Shares)	43,750	155,000	135,000	100,000	300,000	555,556		173,611	100,000	75,000	10,000,000	2,500,000		591,667	5,000	300,000		5,000,000						979,166	5,000,000
RentExpense																						24,746
EmploymentContract2
8. Commitments (Details) [Line Items]
Contractual Obligation, Due in Next Twelve Months																													$ 10,000	$ 8,000	$ 6,000

XML

3. Loans Payable (Details) - 3. Loans Payable (USD $)	Jun. 30, 2013	Dec. 31, 2012
3. Loans Payable (Details) - 3. Loans Payable [Line Items]
Loan Payable	$ 60,000
Loan1
3. Loans Payable (Details) - 3. Loans Payable [Line Items]
Loan Payable	40,325	38,400
Loan2
3. Loans Payable (Details) - 3. Loans Payable [Line Items]
Loan Payable	7,500	7,500
Loan3
3. Loans Payable (Details) - 3. Loans Payable [Line Items]
Loan Payable	56,000	56,000
Loan4
3. Loans Payable (Details) - 3. Loans Payable [Line Items]
Loan Payable	75,000	75,000
Loan5
3. Loans Payable (Details) - 3. Loans Payable [Line Items]
Loan Payable	45,000	45,000
Loan6
3. Loans Payable (Details) - 3. Loans Payable [Line Items]
Loan Payable	$ 283,825	$ 221,900

XML

3. Loans Payable

6 Months Ended

Jun. 30, 2013

Disclosure Text Block [Abstract]

Short-term Debt [Text Block]

3.     Loans Payable

Loans payable consist of the following:		June 30, 2013 $	December 31, 2012 $
a)	Loans payable that are unsecured, non-guaranteed, past due and are non-interest bearing.	40,325	38,400
b)	Note payable which is unsecured, non-guaranteed, past due and bears interest at 10% per annum.	7,500	7,500
c)	On January 15, 2011, the Company entered into 8 unsecured, non-guaranteed, loan agreements pursuant to which the Company received proceeds of $56,000. If the loans were not repaid within 90 days they then bear interest at 1% per month. In addition, if the loan was not repaid within 90 days, the Company is required to issue 167 common shares every month until the loan is repaid in full. As of June 30, 2013 and December 31, 2012, the Company recognized the fair value of 4,500 and 3,500 common shares issuable for interest expense of $118,002 and $114,303, respectively, as shares reserved for future issuance. The Company has not yet issued these common shares. As at June 30, 2013, the Company has also accrued interest expense of $16,520 (December 31, 2012 - $13,160).	56,000	56,000
d)	On August 28, 2012, the Company entered into an unsecured, non-guaranteed, demand loan agreement pursuant to which the Company received proceeds of $75,000. The loan bears interest at an annual rate of 7% payable monthly. The loan is repayable on demand.	75,000	75,000
e)	On October 3, 2012, the Company entered into an unsecured, non-guaranteed, demand loan agreement pursuant to which the Company received proceeds of $45,000. The loan bears interest at an annual rate of 7% payable monthly. The loan is repayable on demand.	45,000	45,000
f)	On May 31, 2013 and June 19, 2013, the Company received two unsecured, non-guaranteed, non-interest bearing demand loans for $40,000 and $20,000, respectively. These loans were subsequently secured with convertible debentures. Refer to Note 9(b).	60,000	–
		283,825	221,900

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5. Derivative Liabilities (Details) - The Company uses Level 3 inputs for its valuation methodology for the warrant derivative liabilities	0 Months Ended	6 Months Ended	12 Months Ended
	Jan. 23, 2013	Jun. 30, 2013	Dec. 31, 2012
The Company uses Level 3 inputs for its valuation methodology for the warrant derivative liabilities [Abstract]
As at		0.15%	0.27%
As at		1.17%	1.97%
At issuance	0.42%
At issuance	3.00%

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5. Derivative Liabilities (Details) - The following table summarizes the change in fair value of derivatives: (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
The following table summarizes the change in fair value of derivatives: [Abstract]
Fair value of derivative liabilities in excess of note proceeds received	$ 134,728	$ (4,080,013)	$ (453,484)	$ (4,204,396)
Change in fair value of derivative liabilities during year ended December 31			$ (3,731,852)

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6. Common Stock (Details) (USD $)	0 Months Ended				36 Months Ended
	Mar. 18, 2013	Mar. 13, 2013	Feb. 15, 2013	Jun. 02, 2010	Sep. 21, 2014	Jan. 03, 2014	Jan. 02, 2014	Dec. 31, 2013	Dec. 30, 2013	Dec. 23, 2013	Nov. 12, 2013	Oct. 08, 2013	Oct. 07, 2013	Sep. 04, 2013	Jul. 31, 2013	Jul. 29, 2013	Jul. 28, 2013	Jul. 26, 2013	Jul. 25, 2013	Mar. 13, 2012
Stockholders' Equity Note [Abstract]
Debt Conversion, Converted Instrument, Shares Issued	420,000		5,000,000	6,386
Debt Conversion, Converted Instrument, Amount (in Dollars)		$ 4,500,000	$ 0.0005
Debt Instrument, Convertible, Conversion Price (in Dollars per share)						$ 0.0005	$ 0.0005	$ 0.0005	$ 0.0005	$ 0.0005	$ 0.05	$ 0.10	$ 0.05	$ 0.005	$ 0.05	$ 0.05	$ 0.05	$ 0.10	$ 0.035	$ 0.05
Stock Issued During Period, Shares, Reverse Stock Splits	21,000				16,667

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7. Stock Purchase Warrants (Details) (USD $)	0 Months Ended																			3 Months Ended		6 Months Ended		12 Months Ended	17 Months Ended
	Jan. 02, 2014	Jan. 03, 2014	Dec. 30, 2013	Dec. 31, 2013	Dec. 23, 2013	Nov. 12, 2013	Oct. 25, 2013	Oct. 08, 2013	Sep. 04, 2013	Jul. 25, 2013	Jul. 28, 2013	Jul. 26, 2013	Jul. 31, 2013	May 30, 2013	Apr. 08, 2013	Feb. 15, 2013	Jan. 23, 2013	Oct. 02, 2012	Apr. 02, 2011	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012	Jun. 30, 2014	Nov. 13, 2013	Jul. 30, 2013	Jul. 27, 2013
7. Stock Purchase Warrants (Details) [Line Items]
Debt Conversion, Converted Instrument, Warrants or Options Issued (in Shares)	43,750	155,000	135,000	100,000	300,000	555,556		173,611	100,000	75,000	10,000,000	2,500,000	591,667	5,000	300,000		5,000,000							979,166	5,000,000
Investment Warrants, Exercise Price (in Dollars per share)																	$ 0.0005	$ 0.0005							$ 0.0005
Professional Fees		$ 41,806	$ 36,425	$ 26,982	$ 88,445		$ 80,000		$ 29,655						$ 149,971		$ 2,599,801		$ 149,971	$ 66,176	$ 342,844	$ 3,118,149	$ 688,366
Class of Warrant or Right, Date from which Warrants or Rights Exercisable																	Dec. 31, 2008
Adjustments to Additional Paid in Capital, Warrant Issued																3,249,778
Derivative Liability																				1,044,913		1,044,913		941,464
Other Notes Payable															10,000				10,000
Shares Issued, Price Per Share (in Dollars per share)											$ 0.10				$ 0.0005											$ 0.10	$ 0.10	$ 0.035
StockPurchaseAgreementForJanuary232013
7. Stock Purchase Warrants (Details) [Line Items]
Derivative Liability																				649,977		649,977
StockPurchaseAgreementForApril82013
7. Stock Purchase Warrants (Details) [Line Items]
Derivative Liability																				$ 42,009		$ 42,009

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2. Property and Equipment

6 Months Ended

Jun. 30, 2013

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment Disclosure [Text Block]

2.     Property and Equipment

Property and equipment consists of the following:

	Useful Life	June 30, 2013 $	December 31, 2012 $
Computers and office equipment	3 years	14,130	14,130
Manufacturing equipment	5 - 10 years	25,853	25,853
		39,983	39,983
Accumulated depreciation		(14,255)	(9,133)
Property and equipment, net		25,728	30,850

Depreciation expense amounted to approximately $5,122 and $2,270 for the six months ended June 30, 2013 and 2012, respectively.

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7. Stock Purchase Warrants (Details) - A summary of the changes in the Company’s common share purchase warrants is presented below:	0 Months Ended															12 Months Ended	17 Months Ended
	Jan. 02, 2014	Jan. 03, 2014	Dec. 30, 2013	Dec. 31, 2013	Dec. 23, 2013	Nov. 12, 2013	Oct. 08, 2013	Sep. 04, 2013	Jul. 25, 2013	Jul. 28, 2013	Jul. 26, 2013	Jul. 31, 2013	May 30, 2013	Apr. 08, 2013	Jan. 23, 2013	Dec. 31, 2012	Jun. 30, 2014
A summary of the changes in the Company’s common share purchase warrants is presented below: [Abstract]
Balance;	43,750	155,000	135,000	100,000	300,000	555,556	173,611	100,000	75,000	10,000,000	2,500,000	591,667	5,000	300,000	5,000,000	979,166	5,000,000
Issued																5,600,000
Exercised																(5,000,000)

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US Highland, Inc. - Consolidated Balance Sheets (USD $)	Jun. 30, 2013	Dec. 31, 2012
Current Assets
Cash	$ 1,550	$ 10,498
Prepaid expenses	32,119	7,119
Total Current Assets	33,669	17,617
Long-term deposits	11,491	11,756
Property and Equipment, net	25,728	30,850
Total Assets	70,888	60,223
Current Liabilities
Accounts payable	588,651	402,903
Accrued liabilities	222,846	182,472
Convertible debentures	57,833	58,333
Derivative liabilities	1,044,913	941,464
Loans payable ($60,000 and $0 related parties, respectively)	283,825	221,900
Total Liabilities	2,198,068	1,807,072
Common Stock, 100,000,000 shares authorized, $0.01 par value; 77,194,336 and 67,757,669 shares issued and outstanding at June 30, 2013 and December 31, 2012, respectively	771,943	672,743
Common Stock Reserved for Future Issuance (in Shares)	118,001	114,303
Subscriptions Receivable		(1,000)
Additional Paid-in Capital	54,736,512	51,337,434
Accumulated Deficit	(56,980,136)	(53,096,829)
	(1,353,680)	(973,349)
Treasury Stock, at cost – 58,333 shares at June 30, 2013 and December 31, 2012	(773,500)	(773,500)
Total Stockholders’ Deficiency	(2,127,180)	(1,746,849)
Total Liabilities and Stockholders’ Deficiency	$ 70,888	$ 60,223

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US Highland, Inc. - Consolidated Statements of Stockholder's Equity (Deficit) (USD $)	Common Stock [Member]	Additional Paid-in Capital [Member]	Receivables from Stockholder [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Total
Balance, December 31 at Dec. 31, 2011
Balance, December 31 (in Shares)	67,757,669					114,303
Shares issued upon conversion of warrants	$ 20,000	$ 1,180,995	$ (1,000)			$ 1,199,995
Shares issued upon conversion of warrants (in Shares)	2,000,000
Beneficial conversion features		2,015,500				2,015,500
Shares issued for consulting services	167	14,000				14,167
Shares issued for consulting services (in Shares)	500,000
Shares issued upon conversion of debentures	588,889	2,061,111				2,650,000
Shares issued upon conversion of debentures (in Shares)	58,888,891
Shares issued for cash	55,000	220,000				275,000
Shares issued for cash (in Shares)	5,500,000
Shares issuable in payment of accrued interest						21,203
Shares issuable in payment of accrued interest (in Shares)						21,203
Net loss for the year				(6,809,825)		(6,809,825)
Balance, December 31 at Dec. 31, 2012	672,743	51,337,434	(1,000)	(53,096,829)	(773,500)	(1,746,849)
Balance, December 31 (in Shares)	77,194,336					118,001
Shares issued upon conversion of warrants	50,000	3,202,278				3,252,278
Shares issued upon conversion of warrants (in Shares)	5,000,000					229,942
Subscriptions received			1,000			1,000
Cancellation of shares issued in error (in Shares)	(483,333)
Shares issued to settle debt	4,200	16,800				21,000
Shares issued to settle debt (in Shares)	420,000
Shares issued for consulting services						(3,698)
Shares issued for cash	45,000	180,000				225,000
Shares issued for cash (in Shares)	4,500,000
Shares issuable in payment of accrued interest						3,698
Shares issuable in payment of accrued interest (in Shares)						3,698
Net loss for the year				(3,883,307)		(3,883,307)
Balance, December 31 at Jun. 30, 2013	771,943	54,736,512		(56,980,136)	(773,500)	(2,127,180)
Balance, December 31 at Mar. 31, 2013
Balance, December 31 (in Shares)						118,001
Subscriptions received			1,000			1,000
Net loss for the year						(74,521)
Balance, December 31 at Jun. 30, 2013					$ (773,500)	$ (2,127,180)

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9. Subsequent Events (Details) (USD $)	0 Months Ended																							3 Months Ended		6 Months Ended		12 Months Ended	17 Months Ended	36 Months Ended
	Jan. 02, 2014	Jan. 03, 2014	Dec. 30, 2013	Dec. 31, 2013	Dec. 23, 2013	Nov. 12, 2013	Nov. 13, 2013	Oct. 25, 2013	Oct. 07, 2013	Oct. 08, 2013	Sep. 04, 2013	Jul. 25, 2013	Jul. 28, 2013	Jul. 26, 2013	Jul. 28, 2013	Jul. 29, 2013	Jul. 30, 2013	Jul. 31, 2013	May 30, 2013	Apr. 08, 2013	Jan. 23, 2013	Oct. 02, 2012	Apr. 02, 2011	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012	Dec. 31, 2012	Jun. 30, 2014	Sep. 21, 2014	Apr. 25, 2014	Mar. 19, 2014	Mar. 03, 2014	Feb. 27, 2014	Jan. 29, 2014	Jan. 17, 2014	Aug. 12, 2013	Jul. 27, 2013	Mar. 13, 2012	Jan. 25, 2010
Subsequent Events [Abstract]
Notes Payable (in Dollars)																																					$ 25,000
Debt Instrument, Interest Rate, Stated Percentage							8.00%			8.00%			8.00%	8.00%	8.00%		8.00%														8.00%	8.00%	8.00%		8.00%	8.00%	1.00%
Debt Conversion, Converted Instrument, Warrants or Options Issued	43,750	155,000	135,000	100,000	300,000	555,556				173,611	100,000	75,000	10,000,000	2,500,000				591,667	5,000	300,000	5,000,000							979,166	5,000,000
Debt Instrument, Convertible, Conversion Price (in Dollars per share)	$ 0.0005	$ 0.0005	$ 0.0005	$ 0.0005	$ 0.0005	$ 0.05			$ 0.05	$ 0.10	$ 0.005	$ 0.035	$ 0.05	$ 0.10	$ 0.05	$ 0.05		$ 0.05																					$ 0.05
Debt Instrument, Interest Rate, Effective Percentage												8.00%																										8.00%
Convertible Notes Payable (in Dollars)						500,000	20,000		500,000	25,000			500,000	500,000	500,000	500,000	273,700	500,000																				45,000		225,000
Shares Issued, Price Per Share (in Dollars per share)							$ 0.10						$ 0.10		$ 0.10		$ 0.10			$ 0.0005																		$ 0.035
Stock Repurchased During Period, Shares						694,445			868,055				12,500,000			10,197,916		739,584
Stock Issued During Period, Shares, Conversion of Convertible Securities							138,889		694,444							8,158,333	2,039,583									229,942
Stock Issued During Period, Shares, Issued for Services	11,800							533,333							147,917							2,000,000								500,000
Stock Issued During Period, Value, Issued for Services (in Dollars)								26,667																		(3,698)	(15,375)	14,167
Professional Fees (in Dollars)		41,806	36,425	26,982	88,445			80,000			29,655									149,971	2,599,801		149,971	66,176	342,844	3,118,149	688,366
Notes Payable, Related Parties (in Dollars)																															$ 25,000	$ 150,000	$ 50,000	$ 6,000	$ 50,000	$ 50,000
Common Stock, Shares Authorized					500,000,000																			100,000,000		100,000,000		100,000,000
Preferred Stock, Shares Authorized					3,550,000
Preferred Stock, Par or Stated Value Per Share (in Dollars per share)					$ 0.01

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1. Nature of Operations (Details) (USD $)	Jun. 30, 2013
Disclosure Text Block [Abstract]
WorkingCapital	$ 2,164,399
Operating Loss Carryforwards	$ 56,980,136

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2. Property and Equipment (Details) - Property and equipment is recorded at cost and is comprised of: (USD $)	Jun. 30, 2013	Dec. 31, 2012
Property and equipment is recorded at cost and is comprised of: [Abstract]
Computers and office equipment	$ 3	$ 14,130
Manufacturing equipment	5	25,853
	39,983	39,983
Accumulated depreciation	(14,255)	(9,133)
Property and equipment, net	$ 25,728	$ 30,850

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1. Nature of Operations

6 Months Ended

Jun. 30, 2013

Disclosure Text Block [Abstract]

Nature of Operations [Text Block]

Organization and Business

US Highland, Inc. was originally formed as a Limited Liability Company on February 5, 1999 under the name The Powerhouse, L.L.C. pursuant to the laws of the State of Oklahoma.  On November 9, 2006, Powerhouse Productions, L.L.C. filed Articles of Conversion changing the entity from a limited liability company to a corporation under the name Harcom Productions, Inc.  On January 25, 2010, Articles of Merger were filed with the state of Oklahoma merging U.S. Highland, Inc., an Oklahoma corporation into Harcom Productions, Inc. and the name of the corporation was changed to US Highland, Inc. US Highland, Inc. (the “Company”) is a recreational power sports Original Equipment Manufacturer (“OEM”), developing motorcycles, quads, single cylinder engines, and v-twin engines under its own brand and for other OEMs.

Basis of Presentation

The Company’s condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States.  These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, US Highlands Electric Inc.  All significant intercompany transactions and balances have been eliminated. 

The unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments (consisting of normal recurring adjustments unless otherwise indicated) which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. Certain prior year amounts have been reclassified to conform to current year presentation.

Certain information in footnote disclosures normally included in the financial statements were prepared in conformity with accounting principles generally accepted in the United States of America and have been condensed or omitted pursuant to such principles and the financial results for the periods presented may not be indicative of the full year’s results. The Company believes the disclosures are adequate to make the information presented not misleading.

These financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the fiscal year ended December 31, 2012 included in the Company’s Annual Report on Form 10K filed on March 10, 2014 (the “2012 Annual Report”).

Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2012 Annual Report.

Going concern

The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles which contemplate continuation of the Company as a going-concern basis. The going concern basis assumes that assets are realized and liabilities are extinguished in the ordinary course of business at amounts disclosed in the consolidated financial statements. The Company has incurred recurring losses from operations, and as of June 30, 2013, current liabilities exceed current assets by $2,164,399, and the Company has an accumulated deficit of $56,980,136. The Company’s ability to continue as a going concern depends upon its ability to obtain adequate funding to support its operations through continuing investments of debt and/or equity by qualified investors/creditors, and internally generated working capital. These factors raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

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US Highland, Inc. - Consolidated Balance Sheets (Parentheticals) (USD $)	Jun. 30, 2013	Dec. 31, 2012
Loans payable - related parties (in Dollars)	$ 60,000	$ 0
Common Stock, shares authorized	100,000,000	100,000,000
Common Stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Common Stock, shares issued	77,194,336	67,757,669
Common Stock, shares outstanding	77,194,336	67,757,669
Treasury Stock – shares	58,333	58,333

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2. Property and Equipment (Tables)

6 Months Ended

Jun. 30, 2013

Property, Plant and Equipment [Abstract]

Property, Plant and Equipment [Table Text Block]

	Useful Life	June 30, 2013 $	December 31, 2012 $
Computers and office equipment	3 years	14,130	14,130
Manufacturing equipment	5 - 10 years	25,853	25,853
		39,983	39,983
Accumulated depreciation		(14,255)	(9,133)
Property and equipment, net		25,728	30,850

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Document And Entity Information	6 Months Ended
	Jun. 30, 2013	May 05, 2014
Document and Entity Information [Abstract]
Entity Registrant Name	US Highland, Inc.
Document Type	10-Q
Current Fiscal Year End Date	--12-31
Entity Common Stock, Shares Outstanding		77,727,663
Amendment Flag	false
Entity Central Index Key	0001381871
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Filer Category	Smaller Reporting Company
Entity Well-known Seasoned Issuer	No
Document Period End Date	Jun. 30, 2013
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q2

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3. Loans Payable (Tables)

6 Months Ended

Jun. 30, 2013

Disclosure Text Block [Abstract]

Schedule of Debt [Table Text Block]

Loans payable consist of the following:		June 30, 2013 $	December 31, 2012 $
a)	Loans payable that are unsecured, non-guaranteed, past due and are non-interest bearing.	40,325	38,400
b)	Note payable which is unsecured, non-guaranteed, past due and bears interest at 10% per annum.	7,500	7,500
c)	On January 15, 2011, the Company entered into 8 unsecured, non-guaranteed, loan agreements pursuant to which the Company received proceeds of $56,000. If the loans were not repaid within 90 days they then bear interest at 1% per month. In addition, if the loan was not repaid within 90 days, the Company is required to issue 167 common shares every month until the loan is repaid in full. As of June 30, 2013 and December 31, 2012, the Company recognized the fair value of 4,500 and 3,500 common shares issuable for interest expense of $118,002 and $114,303, respectively, as shares reserved for future issuance. The Company has not yet issued these common shares. As at June 30, 2013, the Company has also accrued interest expense of $16,520 (December 31, 2012 - $13,160).	56,000	56,000
d)	On August 28, 2012, the Company entered into an unsecured, non-guaranteed, demand loan agreement pursuant to which the Company received proceeds of $75,000. The loan bears interest at an annual rate of 7% payable monthly. The loan is repayable on demand.	75,000	75,000
e)	On October 3, 2012, the Company entered into an unsecured, non-guaranteed, demand loan agreement pursuant to which the Company received proceeds of $45,000. The loan bears interest at an annual rate of 7% payable monthly. The loan is repayable on demand.	45,000	45,000
f)	On May 31, 2013 and June 19, 2013, the Company received two unsecured, non-guaranteed, non-interest bearing demand loans for $40,000 and $20,000, respectively. These loans were subsequently secured with convertible debentures. Refer to Note 9(b).	60,000	–
		283,825	221,900

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US Highland, Inc. - Consolidated Statements of Operation (USD $)	3 Months Ended		6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012	Jun. 30, 2013	Jun. 30, 2012
Operating Expenses
Depreciation	$ 2,561	$ 1,197	$ 5,122	$ 2,270
General and administrative	135,769	233,828	296,365	471,782
Professional fees	66,176	342,844	3,118,149	688,366
Research and development		50,178		148,804
Total Operating Expenses	204,506	628,047	3,419,636	1,311,222
Operating Loss	(204,506)	(628,047)	(3,419,636)	(1,311,222)
Other Income (Expense)
Interest expense	(5,514)	(537,225)	(13,171)	(833,869)
Change in fair value of derivatives	134,728	(4,080,013)	(453,484)	(4,204,396)
Other income	771	140	2,984	560
Gain on settlement of debt		4,139,040		4,144,559
Total Other Income (Expense)	129,985	(478,059)	(463,671)	(893,147)
Net Loss	$ (74,521)	$ (1,106,106)	$ (3,883,307)	$ (2,204,369)
Net Loss Per Common Share – Basic and Diluted (in Dollars per share)	$ 0.00	$ (1.27)	$ (0.05)	$ (2.54)
Weighted Average Number of Common Shares Outstanding – Basic and Diluted (in Shares)	77,194,000	868,800	74,029,600	868,800

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6. Common Stock

6 Months Ended

Jun. 30, 2013

Stockholders' Equity Note [Abstract]

Stockholders' Equity Note Disclosure [Text Block]

6.     Common Stock

Share transactions for the six months ended June 30, 2013:

a) On February 15, 2013, the Company issued 5,000,000 shares of common upon the exercise of a warrant at $0.0005 per share described in Note 8(f) for cash proceeds of $2,500. 

b) On March 13, 2013, the Company issued 4,500,000 shares of common stock in consideration for cash at $0.05 per share to a shareholder. This transaction resulted in the shareholder becoming a significant shareholder.

c) On March 18, 2013, a director of the Company converted $21,000 of amounts owed to him by the Company into 420,000 shares of common stock. The amount owed had no terms of repayment and was non-interest bearing.

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5. Derivative Liabilities

6 Months Ended

Jun. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Instruments and Hedging Activities Disclosure [Text Block]

5.     Derivative Liabilities

The embedded conversion option of the Company convertible debenture described in Note 4 contains a conversion feature that qualifies for embedded derivative classification.  The warrants described in Note 7 also qualify for derivative classification.  The fair value of these liabilities will be re-measured at the end of every reporting period and the change in fair value will be reported in the statement of operations included in other income or expenses.

The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities for the periods ended June 30, 2013 and December 31, 2012:

	June 30, 2013	December 31, 2012
	$	$
Balance at the beginning of period	941,464	646,831
Addition of new derivative liabilities (embedded conversion options)	–	1,010,478
Addition of new derivative liabilities (warrants)	2,899,741	2,134,182
Change in fair value of warrants	455,570	(364,842)
Change in fair value of embedded conversion option	(2,087)	4,059,964
Conversion of warrants	(3,249,778) 3	(1,199,995)
Settlement of embedded conversion options	–	(5,345,154)
Balance at the end of the period	1,044,913	941,464

The following table summarizes the change in fair value of derivatives:

	Change in Fair Value of Derivative Liabilities
	$
Three months ended June 30, 2012:
Fair value of derivative liabilities in excess of note proceeds received	(348,161)
Change in fair value of derivative liabilities during the three months ended June 30, 2012	(3,731,852)
Change in fair value of derivatives	(4,080,013)
Three months ended June 30, 2013:
Change in fair value of derivative liabilities during the three months ended June 30, 2013	134,728
Change in fair value of derivatives	134,728

	Change in Fair Value of Derivative Liabilities
	$
Six months ended June 30, 2012:
Fair value of derivative liabilities in excess of note proceeds received	(349,109)
Change in fair value of derivative liabilities during the six months ended June 30, 2012	(3,855,287)
Change in fair value of derivatives	(4,204,396)
Six months ended June 30, 2013:
Fair value of derivative liabilities in excess of note proceeds received	–
Change in fair value of derivative liabilities during the six months ended June 30, 2013	(453,484)
Change in fair value of derivatives	(453,484)

The Company uses Level 3 inputs for its valuation methodology for the warrant derivative liabilities and embedded conversion option liabilities as their fair values were determined by using the Black-Scholes option pricing model based on various assumptions.   The model incorporates the price of a share of the Company’s common stock (as quoted on the Over the Counter Bulletin Board), volatility, risk free rate, dividend rate and estimated life. Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As required, these are classified based on the lowest level of input that is significant to the fair value measurement. The following table shows the assumptions used in the calculations:

	Expected Volatility	Risk-free Interest Rate	Expected Dividend Yield	Expected Life (in years)
At December 31, 2012	277% - 308%	0.27% - 0.41%	0%	1.97-2.50
At issuance	285% - 329%	0.42% - 1.41%	0%	3.00
At June 30, 2013	200% - 279%	0.15% - 1.04%	0%	1.17-3.00

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2. Property and Equipment (Details) (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Property, Plant and Equipment [Abstract]
Depreciation, Depletion and Amortization, Nonproduction	$ 5,122	$ 2,270

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5. Derivative Liabilities (Tables)

6 Months Ended

Jun. 30, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivative Instruments [Table Text Block]

	June 30, 2013	December 31, 2012
	$	$
Balance at the beginning of period	941,464	646,831
Addition of new derivative liabilities (embedded conversion options)	–	1,010,478
Addition of new derivative liabilities (warrants)	2,899,741	2,134,182
Change in fair value of warrants	455,570	(364,842)
Change in fair value of embedded conversion option	(2,087)	4,059,964
Conversion of warrants	(3,249,778) 3	(1,199,995)
Settlement of embedded conversion options	–	(5,345,154)
Balance at the end of the period	1,044,913	941,464

Fair Value, by Balance Sheet Grouping [Table Text Block]

	Change in Fair Value of Derivative Liabilities
	$
Three months ended June 30, 2012:
Fair value of derivative liabilities in excess of note proceeds received	(348,161)
Change in fair value of derivative liabilities during the three months ended June 30, 2012	(3,731,852)
Change in fair value of derivatives	(4,080,013)
Three months ended June 30, 2013:
Change in fair value of derivative liabilities during the three months ended June 30, 2013	134,728
Change in fair value of derivatives	134,728

	Change in Fair Value of Derivative Liabilities
	$
Six months ended June 30, 2012:
Fair value of derivative liabilities in excess of note proceeds received	(349,109)
Change in fair value of derivative liabilities during the six months ended June 30, 2012	(3,855,287)
Change in fair value of derivatives	(4,204,396)
Six months ended June 30, 2013:
Fair value of derivative liabilities in excess of note proceeds received	–
Change in fair value of derivative liabilities during the six months ended June 30, 2013	(453,484)
Change in fair value of derivatives	(453,484)

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions [Table Text Block]

	Expected Volatility	Risk-free Interest Rate	Expected Dividend Yield	Expected Life (in years)
At December 31, 2012	277% - 308%	0.27% - 0.41%	0%	1.97-2.50
At issuance	285% - 329%	0.42% - 1.41%	0%	3.00
At June 30, 2013	200% - 279%	0.15% - 1.04%	0%	1.17-3.00

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9. Subsequent Events

6 Months Ended

Jun. 30, 2013

Subsequent Events [Abstract]

Subsequent Events [Text Block]

9.     Subsequent Events

a) August 12, 2013, the Company received advances of $25,000 and entered into an unsecured, non-guaranteed, demand loan agreement with the director for $27,000.  The Company had previous received a $2,000 advance from the director.  Refer to Note 3(f). The loan bears interest at 1% per annum compounded monthly.  In addition, the Company is required to issue 5,000 common shares every month until the loan is repaid in full. 

b) Effective July 25, 2013, the Company issued a convertible note to secure the demand loan of $75,000 described in Note 3(d). Pursuant to the terms of the agreement, the loan is unsecured and due on July 31, 2014.  The note is convertible into shares of the Company’s common stock at any time at a price of $0.035.  The note bears interest at 8% per annum compounded monthly, and is due on demand.

c) Effective July 25, 2013, the Company issued a convertible note to secure the demand loan of $45,000 described in Note 3(e). Pursuant to the terms of the agreement, the loan is unsecured and due on July 31, 2014.  The note is convertible into shares of the Company’s common stock at any time at a price of $0.035.  The note bears interest at 8% per annum compounded monthly, and is due on demand.

d) On July 25, 2013, the Company issued a convertible note for up to $500,000 and warrants to purchase 12,500,000         underlying shares of the Company’s common stock. The warrants are exercisable into 10,000,000 common shares of the Company at $0.05 per share and 2,500,000 shares at an exercise price of $0.10 per share until July 31, 2014.   Subsequent to June 30, 2013, the Company received proceeds of $500,000 under the note. The note bears interest at 8% per annum compounded monthly, and principal and interest are due on July 31, 2014.  In addition, so long as any amounts are due hereunder, the Company is obligated to remit to the lender 100% of all revenues, payments and receivables from the sale of the first 50 engines sold by the Company. 

e) On July 25, 2013, the Company issued a convertible note for up to $500,000 and warrants to purchase 10,197,916 underlying shares of the Company’s common stock. The warrants are exercisable into 8,158,333 common shares of the Company at $0.05 per share and 2,039,583 shares at an exercise price of $0.10 per share until July 31, 2014.   Subsequent to June 30, 2013, the Company received proceeds of $273,700 under the note. The Company will not receive any additional funding from the note. The note bears interest at 8% per annum compounded monthly, and principal and interest are due on July 31, 2014.   

f) Effective October 7, 2013, the Company issued a convertible note for up to $500,000 and warrants to purchase 868,055 underlying shares of the Company’s common stock. The warrants are exercisable into 694,444 common shares of the Company at $0.05 per share and 173,611 shares at an exercise price of $0.10 per share until July 31, 2014.   Subsequent to June 30, 2013, the Company received proceeds of $25,000 under the note.  The Company will not receive any additional funding from the note. The note bears interest at 8% per annum compounded monthly, and principal and interest are due on July 31, 2014.   

g) Effective July 25, 2013, 2013, the Company issued a convertible note for up to $500,000 and warrants to purchase 739,584 underlying shares of the Company’s common stock. The warrants are exercisable into 591,667 common shares of the Company at $0.05 per share and 147,917 shares at an exercise price of $0.10 per share until July 31, 2014.   Subsequent to June 30, 2013, the Company received proceeds of $41,300 under the note. The Company will not receive any additional funding from the note. The note bears interest at 8% per annum compounded monthly, and principal and interest are due on July 31, 2014.   

h) Effective November 12, 2013, the Company issued a convertible note for up to $500,000 and warrants to purchase 694,445 underlying shares of the Company’s common stock. The warrants are exercisable into 555,556 common shares of the Company at $0.05 per share and 138,889 shares at an exercise price of $0.10 per share until July 31, 2014.   Subsequent to June 30, 2013, the Company received proceeds of $20,000 under the note. The Company will not receive any additional funding from the note. The note bears interest at 8% per annum compounded monthly, and principal and interest are due on July 31, 2014.   

i) On October 25, 2013, the Company issued 533,333 common shares with a fair value of $26,667 to a consultant as part of a settlement agreement to settle $80,000 of amounts owed to the consultant. 

j) On January 17, 2014, the Company entered into a note payable with a related party, pursuant to which the Company received proceeds of $50,000.  The note is bears interest at an annual rate of 8% per annum and due on January 17, 2016.

k) On January 29, 2014, the Company entered into a note payable with a related party, pursuant to which the Company received proceeds of $50,000.  The note is bears interest at an annual rate of 8% per annum and due on January 29, 2016.

l) On February 27, 2014, the Company received additional advances of $6,000 from a director.  The amount is unsecured, non-interest bearing and due on demand.

m) On March 3, 2014, the Company entered into a note payable with a related party, pursuant to which the Company received proceeds of $50,000.  The note is bears interest at an annual rate of 8% per annum and due on March 3, 2016.

n) On March 19, 2014, the Company entered into a note payable with a related party, pursuant to which the Company received proceeds of $150,000.  The note is bears interest at an annual rate of 8% per annum and due on March 19, 2016.

o) On April 25, 2014, the Company entered into a note payable with a related party, pursuant to which the Company received proceeds of $25,000.  The note is bears interest at an annual rate of 8% per annum and due on April 25, 2016.

p) On September 4, 2013, the Company issued a consultant a warrant to purchase 100,000 shares of common stock at $0.005 for three years for $29,655 of services.

q) On December 23, 2013, the Company entered into a settlement agreement with a consultant to settle $88,445 of services provided in 2012.  Pursuant to the agreement, the Company will pay $7,500 and issued a warrant to purchase 300,000 shares of common stock at $0.0005 per share for three years.

r) On December 23, 2013, the Board approved an amendment to the Articles of Incorporation to increase the authorized shares of common stock to 500,000,000 shares and authorize 3,550,000 shares of “blank check” preferred stock, par value $0.01.

s) On December 30, 2013, the Company entered into a settlement agreement with a consultant to settle $36,425 of services provided in 2012.  Pursuant to the agreement, the Company issued a warrant to purchase 135,000 shares of common stock at $0.0005 per share for three years

t) On December 30, 2013, the Company entered into a settlement agreement with a consultant to settle $26,982 of services provided in 2012.  Pursuant to the agreement, the Company issued a warrant to purchase 100,000 shares of common stock at $0.0005 per share for three years.

u) On January 2, 2014, the Company entered into a settlement agreement with a consultant to settle $11,800 of services provided in 2012.  Pursuant to the agreement, the Company issued a warrant to purchase 43,750 shares of common stock at $0.0005 per share for three years.

v) On January 3, 2014, the Company entered into a settlement agreement with a consultant to settle $41,806 of services provided in 2012.  Pursuant to the agreement, the Company issued a warrant to purchase 155,000 shares of common stock at $0.0005 per share for three years.

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7. Stock Purchase Warrants

6 Months Ended

Jun. 30, 2013

Warrants and Rights Note Disclosure [Abstract]

Schedule of Stockholders' Equity Note, Warrants or Rights [Table Text Block]

7.     Stock Purchase Warrants

a) On January 23, 2013, the Company issued a warrant to purchase 5,000,000 common shares at $0.0005 per share exercisable for three years pursuant to the management securities agreement described in Note 8(f). The Company recorded the fair value of the warrant of $2,599,801 as consulting expenses. On February 15, 2013 the Company issued 5,000,000 common shares upon the exercise of the warrant. Upon the exercise of the warrant the Company reclassified the fair value of the warrant of $3,249,778 to additional paid in capital. During the six month period ended June 30, 2013, the Company recorded a loss on the change in fair value of the derivative liability of $649,977 prior to the exercise of the warrant.

b) On April 1, 2013, the Company entered into a settlement agreement with a consultant to settle $149,971 of services provided in 2012. Pursuant to the agreement, the Company will pay $10,000 and issue a warrant to purchase 300,000 shares of common stock at $0.0005 per share exercisable for three years. The warrant meets the criteria for classification as a derivative liability and during the six month period ended June 30, 2013, the Company recorded a loss on the change in fair value of the derivative liability of $42,009.

c) On April 8, 2013, the Company entered into a settlement agreement with a consultant to settle $149,971 of services provided in 2012.  Pursuant to the agreement, the Company will pay $10,000 and issue a warrant to purchase 300,000 shares of common stock at $0.0005 per share exercisable for three years. The warrant meets the criteria for classification as a derivative liability and during the six month period ended June 30, 2013, the Company recorded a loss on the change in fair value of the derivative liability of $42,008.

A summary of the changes in the Company’s common share purchase warrants is presented below:

	Number	Weighted Average Exercise Price	Weighted Average Remaining Term
Balance December 31, 2012	979,166	$ 0.59	2.33 years
Issued	5,600,000	0.0005
Exercised	(5,000,000)	0.0005
Balance June 30, 2013	1,579,166	$ 0.37	2.19 years

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8. Commitments

6 Months Ended

Jun. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure [Text Block]

8.     Commitments

a) The Company entered into a consulting agreement dated September 20, 2011 with a director of the Company for services to be provided for a term of three years. The Company agreed to pay $2,250 per month, as well as issue 16,667 shares of common stock. On July 31, 2012, the Company issued 500,000 shares of common stock.  The Company erred and should have issued the director 16,667 shares and subsequently cancelled 483,333 of the shares.   During the six months ended June 30, 2013, the Company recorded $10,000 (June 30, 2012 - $27,250) of professional fees.

b) The Company entered into an employment agreement dated October 14, 2011 with an officer of the Company for services to be provided for an initial term of three years, and on a year-to-year basis thereafter. The Company agreed to pay $8,000 per month, increasing to $10,000 per month on the seventh month, and further to $12,000 per month on the tenth month. During the six months ended June 30, 2013, the Company recorded $72,000 (June 30, 2012 - $68,000) of general and administrative expenses.

c) The Company entered into an employment agreement dated November 10, 2011 with an officer of the Company for services to be provided for an initial term of three years, and on a year-to-year basis thereafter. The Company agreed to pay $6,000 per month, increasing to $8,000 per month on the seventh month, and further to $10,000 per month on the tenth month. During the six months ended June 30, 2013, the Company recorded $48,445 (June 30, 2012 - $56,000) of professional fees.

d) The Company entered into two employment agreements dated November 10, 2011, effective June 15, 2011, with two employees for services to be provided for an initial term of three years, and on a year-to-year basis thereafter. The Company agreed to pay each employee $6,000 per month, increasing to $8,000 per month on the seventh month, and further to $10,000 per month on the tenth month. During the six months ended June 30, 2013, the Company recorded $264,942 (June 30, 2012 - $112,000) of professional fees.

e) On October 1, 2012, the Company entered into a management securities agreement with a consultant.  Pursuant to the agreement the Consultant will provide management services for a period of one year in consideration for a warrant to purchase 2,000,000 common shares of the Company at $0.0005 per share for 3 years (on December 7, 2012, the consultant exercised the warrant).  Pursuant to an amendment to the agreement entered into on January 23, 2013, the consultant will provide additional services in consideration for $20,000 per month from February 1, 2013 to March 31, 2014 and was issued a warrant to purchase 5,000,000 common shares of the Company at $0.0005 per share exercisable for 3 years (on February 15, 2013, the consultant exercised the warrant).  On October 28, 2013, the Company entered into a settlement agreement to terminate the contract with the consultant effective July 10, 2013. Refer to Note 7 and 9(a).

f) During the year ended December 31, 2012, the Company entered into two leases for the provision of office and warehouse space until April 30, 2015.  On April 1, 2013, the Company entered into an amendment to the lease agreements. Pursuant to the amendment, one of the leases was terminated and the other was extended to March 31, 2019.  Refer to Note 9(e). During the six months ended June 30, 2013, the Company recognized $24,746 of rent expense.  The Company’s future minimum lease payments are as follows:

Fiscal year ending December 31, 2013	$ 24,912
Fiscal year ending December 31, 2014	51,652
Fiscal year ending December 31, 2015	53,645
Fiscal year ending December 31, 2016	55,634
Fiscal year ending December 31, 2017	57,631
Fiscal year ending December 31, 2018	59,624
Fiscal year ending December 31, 2019	15,280
	$ 318,378

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Accounting Policies, by Policy (Policies)

6 Months Ended

Jun. 30, 2013

Accounting Policies [Abstract]

Consolidation, Policy [Policy Text Block]

Organization and Business

US Highland, Inc. was originally formed as a Limited Liability Company on February 5, 1999 under the name The Powerhouse, L.L.C. pursuant to the laws of the State of Oklahoma.  On November 9, 2006, Powerhouse Productions, L.L.C. filed Articles of Conversion changing the entity from a limited liability company to a corporation under the name Harcom Productions, Inc.  On January 25, 2010, Articles of Merger were filed with the state of Oklahoma merging U.S. Highland, Inc., an Oklahoma corporation into Harcom Productions, Inc. and the name of the corporation was changed to US Highland, Inc. US Highland, Inc. (the “Company”) is a recreational power sports Original Equipment Manufacturer (“OEM”), developing motorcycles, quads, single cylinder engines, and v-twin engines under its own brand and for other OEMs

Basis of Presentation and Significant Accounting Policies [Text Block]

Basis of Presentation

The Company’s condensed consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States.  These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, US Highlands Electric Inc.  All significant intercompany transactions and balances have been eliminated. 

The unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments (consisting of normal recurring adjustments unless otherwise indicated) which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. Certain prior year amounts have been reclassified to conform to current year presentation.

Certain information in footnote disclosures normally included in the financial statements were prepared in conformity with accounting principles generally accepted in the United States of America and have been condensed or omitted pursuant to such principles and the financial results for the periods presented may not be indicative of the full year’s results. The Company believes the disclosures are adequate to make the information presented not misleading.

These financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the fiscal year ended December 31, 2012 included in the Company’s Annual Report on Form 10K filed on March 10, 2014 (the “2012 Annual Report”)

Description of New Accounting Pronouncements Not yet Adopted [Text Block]

Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2012 Annual Report

Going Concern Note

Going concernThe accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles which contemplate continuation of the Company as a going-concern basis. The going concern basis assumes that assets are realized and liabilities are extinguished in the ordinary course of business at amounts disclosed in the consolidated financial statements. The Company has incurred recurring losses from operations, and as of June 30, 2013, current liabilities exceed current assets by $2,164,399, and the Company has an accumulated deficit of $56,980,136. The Company's ability to continue as a going concern depends upon its ability to obtain adequate funding to support its operations through continuing investments of debt and/or equity by qualified investors/creditors, and internally generated working capital. These factors raise substantial doubt about the Company's ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern

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8. Commitments (Details) - During the year ended December 31, 2012, the Company entered into two leases for the provis (USD $)	Dec. 31, 2019
During the year ended December 31, 2012, the Company entered into two leases for the provis [Abstract]
Fiscal year ending December 31, 2013	$ 24,912
Fiscal year ending December 31, 2014	51,652
Fiscal year ending December 31, 2015	53,645
Fiscal year ending December 31, 2016	55,634
Fiscal year ending December 31, 2017	57,631
Fiscal year ending December 31, 2018	59,624
Fiscal year ending December 31, 2019	15,280
	$ 318,378

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8. Commitments (Tables)

6 Months Ended

Jun. 30, 2013

Commitments and Contingencies Disclosure [Abstract]

Schedule of Finite-Lived Intangible Assets, Future Amortization Expense [Table Text Block]

Fiscal year ending December 31, 2013	$ 24,912
Fiscal year ending December 31, 2014	51,652
Fiscal year ending December 31, 2015	53,645
Fiscal year ending December 31, 2016	55,634
Fiscal year ending December 31, 2017	57,631
Fiscal year ending December 31, 2018	59,624
Fiscal year ending December 31, 2019	15,280
	$ 318,378

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4. Convertible Debentures (Details) (USD $)	0 Months Ended			6 Months Ended	12 Months Ended
	Mar. 18, 2013	Feb. 15, 2013	Jun. 02, 2010	Jun. 30, 2013	Jan. 25, 2011	Nov. 13, 2013	Nov. 12, 2013	Oct. 08, 2013	Oct. 07, 2013	Jul. 31, 2013	Jul. 30, 2013	Jul. 29, 2013	Jul. 28, 2013	Jul. 27, 2013	Jul. 26, 2013	Jan. 25, 2010
Debt Disclosure [Abstract]
Convertible Notes Payable						$ 20,000	$ 500,000	$ 25,000	$ 500,000	$ 500,000	$ 273,700	$ 500,000	$ 500,000	$ 45,000	$ 500,000	$ 225,000
Debt Instrument, Convertible, Threshold Percentage of Stock Price Trigger					65.00%
Debt Instrument, Fair Value Disclosure					538,249
Debt Instrument, Unamortized Discount					225,000
Derivative, Loss on Derivative					313,249
Debt Conversion, Converted Instrument, Shares Issued (in Shares)	420,000	5,000,000	6,386
Investment Owned, Balance, Principal Amount			166,667
Convertible Debt, Fair Value Disclosures			266,425
Adjustments to Additional Paid in Capital, Share-based Compensation and Exercise of Stock Options			197,352
Repayments of Notes Payable				$ 500

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US Highland, Inc. - Consolidated Statements of Cash Flows (USD $)	6 Months Ended
	Jun. 30, 2013	Jun. 30, 2012
Operating Activities
Net loss	$ 3,883,307	$ 2,204,369
Depreciation	5,122	2,270
Accretion expense		724,760
Change in fair value of derivative	453,484	4,204,396
Warrants issued for consulting services	2,599,801
Gain on settlement of debt		(4,144,559)
Shares issuable for interest expense	3,698	15,375
Changes in operating assets and liabilities:
Prepaid expenses and deposits	(24,735)	32,896
Accounts payable and accrued liabilities	547,064	83,500
Net Cash Used in Operating Activities	(298,873)	(1,285,731)
Investing Activities
Investment in property and equipment		(32,171)
Net Cash Used in Investing Activities		(32,171)
Financing Activities
Proceeds from convertible debt		1,275,000
Proceeds from loans payable	61,925
Repayment of loans	(500)	(5,000)
Proceeds from issuance of common stock	228,500
Net Cash Provided by Financing Activities	289,925	1,270,000
Increase (Decrease) In Cash	(8,948)	(47,902)
Cash - Beginning of Period	10,498	65,544
Cash - End of Period	1,550	17,642
Non-cash Investing and Financing Activities
Warrants issued to settle debt (in Shares)	229,942
Common stock issued to settle debt	$ 21,000

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4. Convertible Debentures

6 Months Ended

Jun. 30, 2013

Debt Disclosure [Abstract]

Debt Disclosure [Text Block]

4.     Convertible Debenture

Effective January 25, 2010, the Company issued a convertible note for $225,000. Pursuant to the terms of the agreement, the loan is unsecured, non-interest bearing, and was due on December 21, 2010.  The note is convertible into shares of the Company’s common stock at any time at a variable conversion price equal to 65% of the average of the closing bid prices of the common stock during the 28 trading days prior to the date of the conversion notice and is subject to adjustment upon the issuance of certain dilutive instruments.  Due to these provisions, the embedded conversion option qualifies for derivative accounting and bifurcation under ASC 815-15 Derivatives and Hedging. The initial fair value of the derivative liability of $538,249 resulted in a full discount to the note payable of $225,000 and the recognition of a loss on derivatives of $313,249.

During the year ended December 31, 2010, the carrying value of the convertible note had been fully accreted over the term up to the face value of the convertible note.

On June 2, 2010, the Company issued 6,386 restricted shares of common stock upon the conversion of the principal amount of $166,667. The fair value of the derivative liability at June 2, 2010, was $266,425 and $197,352 was reclassified to additional paid-in capital upon conversion. During the six months ended June 30, 2013, the Company repaid $500 of the note.  At June 30, 2013, the carrying value of the note is $57,833 (December 31, 2012 - $58,333). The Company did not repay the remaining outstanding principal on the maturity date. The note is in default at June 30, 2013.

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5. Derivative Liabilities (Details) - The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial (USD $)	6 Months Ended	12 Months Ended
	Jun. 30, 2013	Dec. 31, 2012
The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial [Abstract]
Balance,	$ 1,044,913	$ 941,464
Addition of new derivative liabilities (embedded conversion options)		1,010,478
Addition of new derivative liabilities (warrants)	2,899,741	2,134,182
Change in fair value of warrants	455,570	(364,842)
Change in fair value of embedded conversion option	(2,087)	4,059,964
Conversion of warrants	3,252,278	1,199,995
Settlement of embedded conversion options		$ 2,015,500

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7. Stock Purchase Warrants (Tables)

6 Months Ended

Jun. 30, 2013

Warrants and Rights Note Disclosure [Abstract]

Schedule of Share-based Compensation, Stock Options and Stock Appreciation Rights Award Activity [Table Text Block]

	Number	Weighted Average Exercise Price	Weighted Average Remaining Term
Balance December 31, 2012	979,166	$ 0.59	2.33 years
Issued	5,600,000	0.0005
Exercised	(5,000,000)	0.0005
Balance June 30, 2013	1,579,166	$ 0.37	2.19 years