10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

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

For the quarterly period ended March 31, 2018

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 No.: 00-54624

US HIGHLAND, INC.

(Exact name of registrant as specified in its charter)

  

Nevada	26-4144571
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

  

3500 Lennox Road, Suite 1500, Atlanta, Georgia 30309

(Address of principal executive offices)

 

(404) 419-2253

(Registrant’s telephone number, including area code)

___________________________________________________________

Former name, former address and former fiscal year, if changed since last report

 

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

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	Smaller reporting company	x

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

APPLICABLE ONLY TO CORPORATE ISSUERS:

As of May 15, 2018, there were 435,981,911 shares of the registrant's common stock, par value $0.01 per share outstanding.

EXPLANATORY NOTE

The sole purpose of this Amendment No. 1 to US Highland, Inc.’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2018 (the “Form 10-Q”) is to file Exhibit 101 with the Form 10-Q in accordance with Rule 405 of Regulation S-T. Due to a technical error, the eXtensible Business Reporting Language (“XBRL”) data associated with the Form 10-Q was inadvertently omitted from that filing. No other changes have been made to the Form 10-Q, and this Amendment No. 1 does not reflect events occurring subsequent to the original filing date, and does not modify or update in any way disclosures made in the original filing.

 Item 6. Exhibits

Exhibit	Description
32.1	Section 906 Certification of Principal Executive Officer
32.2	Section 906 Certification of Principal Financial and Accounting Officer
Exhibit 101 consists of the following materials from the Form 10-Q, filed with the Securities and Exchange Commission on May 21, 2018, formatted in XBRL:
101.INS	XBRL Instance Document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Calculation Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	XBRL Taxonomy Extension Labels Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document

2

SIGNATURES

In accordance with 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 hereunto duly authorized.

	U.S. HIGHLAND, INC.
Date: May 24, 2018	By:	/s/ Everett M. Dickson
	Name:	Everett M. Dickson
	Title:	Chief Executive Officer
		(Principal Executive Officer)
Date: May 24, 2018	By:	/s/ Everett M. Dickson
	Name:	Everett M. Dickson
	Title:	Interim Chief Financial Officer
		(Principal Financial and Accounting Officer)

3

EX-32.1

EXHIBIT 32.1

Certification of Principal Executive Officer

 Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Everett M. Dickson, the Chief Executive Officer of U.S. Highland, Inc. (the “Company”), hereby certify, that, to my knowledge:

1.	The Quarterly Report on Form 10-Q/A for the period ended March 31, 2018 (the “Report”) of the Company fully complies with the requirements of Section 13(a)/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 Company.

Dated: May 24, 2018	By:	/s/ Everett M. Dickson
	Name:	Everett M. Dickson
	Title:	Chief Executive Officer
		(Principal Executive Officer)

EX-32.2

EXHIBIT 32.2 

Certification of Principal Financial Officer

Pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, I, Everett M. Dickson, the Interim Chief Financial Officer of U.S. Highland, Inc. (the “Company”), hereby certify, that, to my knowledge:

1.	The Quarterly Report on Form 10-Q/A for the period ended March 31, 2018 (the “Report”) of the Company fully complies with the requirements of Section 13(a)/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 Company.

Dated: May 24, 2018	By:	/s/ Everett M. Dickson
	Name:	Everett M. Dickson
	Title:	Interim Chief Financial Officer
		(Principal Financial and Accounting Officer)

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Document And Entity Information - shares	3 Months Ended
	Mar. 31, 2018	May 15, 2018
Document And Entity Information
Entity Registrant Name	US HIGHLAND, INC.
Entity Central Index Key	0001381871
Document Type	10-Q
Document Period End Date	Mar. 31, 2018
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		435,981,911
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2018

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Consolidated Condensed Balance Sheets - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Current Assets
Cash	$ 8,143	$ 3,066
Deposit in acquisition	115,000	75,000
Total Current Assets	123,143	78,066
Total Assets	123,143	78,066
Current Liabilities
Accounts payable	347,965	350,465
Accrued liabilities	734,839	704,987
Convertible debentures, net of discounts of $35,240 and $180,716 respectively	810,104	768,753
Derivative liabilities	320,360	409,948
Loans payable ($0 and $370,000 related parties, respectively	481,000	481,000
Total Liabilities	2,694,268	2,715,154
Commitments and Contingencies
Stockholders' Equity (Deficit):
Preferred stock
Common stock, 1,000,000,000 shares authorized, $0.01 par value; 401,391,827 and 345,450,049 shares and outstanding at March 31, 2018 and December 31, 2017, respectively	4,013,921	3,454,502
Treasury stock, at cost - 58,333 shares	(773,500)	(773,500)
Additional paid-in capital	69,342,437	69,892,158
Accumulated deficit	(75,187,848)	(75,244,112)
Total Stockholder's Deficit	(2,571,125)	(2,637,087)
Total Liabilities and Stockholders' Equity	123,143	78,066
Series A Preferred Stock
Stockholders' Equity (Deficit):
Preferred stock	33,815	33,815
Series B Preferred Stock
Stockholders' Equity (Deficit):
Preferred stock	$ 50	$ 50

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Consolidated Condensed Balance Sheets (Parenthetical) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Current Liabilities
Convertible debentures, net of discounts	$ 35,240	$ 180,716
Loans payable - related parties	$ 0	$ 370,000
Stockholders' Equity (Deficit):
Common Stock, shares authorized	1,000,000,000	1,000,000,000
Common Stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Common Stock, shares issued	401,391,827	345,450,049
Common Stock, shares outstanding	401,391,827	345,450,049
Treasury Stock - shares	58,333	58,333
Series A Preferred Stock
Stockholders' Equity (Deficit):
Preferred Stock, shares authorized	3,500,000	3,500,000
Preferred Stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Preferred Stock, shares issued	3,381,520	3,381,520
Preferred Stock, shares outstanding	3,381,520	3,381,520
Series B Preferred Stock
Stockholders' Equity (Deficit):
Preferred Stock, shares authorized	10,000	10,000
Preferred Stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Preferred Stock, shares issued	5,000	5,000
Preferred Stock, shares outstanding	5,000	5,000

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Consolidated Condensed Statements of Operations (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
Consolidated Condensed Statements Of Operations
Revenue
Operating Expenses
General and administrative	25,423
Professional fees	37,000	27,562
Total Operating Expenses	62,423	27,562
Loss from operations	(62,423)	(27,562)
Other Income (Expense)
Interest expense	(39,742)	(192,249)
Change in fair value of derivatives	194,734	(27,242)
Loss on convertible notes	(36,305)
Total other income (expense)	118,687	(219,491)
Income (loss) before provision for income taxes	56,264	(247,053)
Provision for income taxes
Net Income (Loss)	$ 56,264	$ (247,053)
Income (loss) per share, basic	$ 0.00	$ (0.00)
Income (loss) per share, diluted	$ 0.00	$ (0.00)
Weighted average shares outstanding, basic	362,573,320	315,661,069
Weighted average shares outstanding, diluted	680,091,502	315,661,069

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Consolidated Condensed Statements of Cash Flows (Unaudited) - USD ($)	3 Months Ended
	Mar. 31, 2018	Mar. 31, 2017
CASH FLOW FROM OPERATING ACTIVITES:
Net income (loss)	$ 56,264	$ (247,053)
Adjustments to reconcile net loss to net cash used in operating activities:
Accretion expense		165,122
Change in fair value of derivatives	(194,734)	27,242
Loss on Convertible debt	36,305
Debt discount amortization	1,510
Changes in Operating Assets and Liabilities:
Prepaid expenses and deposit	(40,000)
Accounts payable and accrued liabilities	(2,500)	6,472
Accrued liabilities - related parties	38,232	48,127
Net Cash Used in Operating Activities	(104,923)	(90)
CASH FLOWS FROM INVESTING ACTIVITIES:
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from convertible debt	110,000
Net Cash Provided by Financing Activities	110,000
Net Increase (Decrease) in Cash	5,077	(90)
Cash at Beginning of Period	3,066	260
Cash at End of Period	8,143	170
Cash paid during the period for:
Interest
Income taxes

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Summary of Business and Basis of Presentation

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

NOTE 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. During 2017, the Company exited the recreational power sports OEM and leisure activity vehicles markets.

Basis of Presentation

The Company’s 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 subsidiaries, USH Distribution Corp., and Powersports Brand Alliance, Inc. All significant intercompany transactions and balances have been eliminated.

The unaudited 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, 2017 included in the Company’s Annual Report on Form 10-K filed on April 4, 2018 (the “2017 Annual Report”).

Recently issued accounting pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

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 March 31, 2018 current liabilities exceed current assets by $2,571,125 and the Company has an accumulated deficit of $75,187,848. 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, internally generated working capital and monetization of intellectual property assets. 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. Management is currently pursuing a business strategy which includes raising the necessary funds to finance the Company's development and marketing efforts.

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Deposits on acquisition

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

Note 2 - Deposits on acquisition

On March 8, 2018, the Company entered into a share exchange agreement with TruFood Provisions Co (TruFood). Per the agreement, the Company will exchange 65% of the issued and outstanding stocks of US Highland, and cash, for 100% of the equity of TruFood. It is expected that all other debt related to the operation of TruFood will be retired at or prior to the closing date. As of March 31, 2018, the Company had deposited $115,000 related to this acquisition.

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Loans Payable

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

NOTE 3 - Loans Payable

Loans payable consist of the following:		March 31, 2018			December 31, 2017
a)	On May 30, 2013 and August 12, 2013, the Company received advances from a director for $2,000 and $25,000, respectively. On August 12, 2013, the Company entered into an unsecured, non-guaranteed, demand loan agreement with the director for $27,000. The loan bears interest at 1% per annum compounded monthly.	$	27,000		$	27,000
b)	On February 27, 2014, and March 19, 2015, the Company received advances from a director of $6,000, and $10,200, respectively. During the year ended December 31, 2015, the Company repaid $13,200. The advances are unsecured, due on demand and bears interest at 1% per annum compounded and calculated monthly.	$	3,000		$	3,000
c)	On September 18, 2014, May 29, 2015, July 3, 2015, December 2, 2015, and January 4, 2016, the Company entered into unsecured, non-guaranteed, loan agreements pursuant to which the Company received proceeds of $35,000, $4,000, $5,000, $22,000, and $45,000, respectively. The loans bear interest at 8% per annum compounded annually and are due 1 year after the date of issuance. On May 31, 2017, the Company executed a conversion addendum for each of the original loans for $22,000 and $45,000. The terms per the addendum allow the note holder to convert any portion of the principal and accrued interest into shares of common stock at $0.0001 per share.	$	111,000		$	111,000
d)	On December 4, 2014, January 29, 2015, August 12, 2015, August 21, 2015, September 1, 2015, September 15, 2015, November 13, 2015, and December 23, 2015, the Company issued unsecured notes payable of $20,000, $20,000, $20,000, $25,000, $40,000, $25,000, $30,000 and $10,000, respectively, to a significant shareholder. The notes bear interest at an annual rate of 8% per annum, are uncollateralized, and due 1 year after the date of issuance.	$	190,000		$	190,000
f)	On September 2, 2016 the Company issued an unsecured note payable of $100,000 respectively to a significant shareholder. The note bears interest at an annual rate of 5% per annum, is uncollateralized, and due 1 year after the date of issuance.	$	100,000		$	100,000
g)	On September 2, 2016 the Company issued an unsecured note payable of $50,000 respectively to a significant shareholder. The note bears interest at an annual rate of 5% per annum, is uncollateralized, and due 1 year after the date of issuance.	$	50,000		$	50,000
	Total	$	481,000		$	481,000
	Less Short-Term Portion		(481,000	)		(481,000	)
	Long Term Loans Payable	$	-		$	-

Above notes are past due as of the issuance of these financial statements.

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Convertible Debentures

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

NOTE 4 - Convertible Debentures

a)	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. During the year ended December 31, 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. The note is secured against substantially all of the assets of the Company.
	The note may be prepaid by the Company without penalty with 30 days prior notice. The note is convertible into shares of the Company’s common stock at any time at a conversion price equal to $0.02 per share and is subject to adjustment upon the issuance of certain dilutive instruments and other events. The conversion price was subsequently reduced to $0.01 per share upon the failure to file various reports with the SEC within 120 days of the issuance of the note.
	On December 31, 2015, the Company and the note holder agreed to extend the maturity date to December 31, 2016. Interest shall accrue at 12% per annum but may be reduced to 8% for any period of time in which the interest is paid in cash and not accrued. The Company accounted for the modification in accordance with ASC 405-20 and ASC 470-50-40. As the present value of the future cash flows was more than 10% different than the cash flows of the original debt, it was determined that the original and new debt instruments are substantially different, and the Company treated the original convertible note extinguished and exchanged for a new convertible note. The Company recorded a gain on extinguishment of debt of $492,585. The Company also recognized the fair value of the embedded conversion feature of $16,507,415 as a derivative liability and reduced the value of the convertible loan to $nil.
	During the year ended December 31, 2015, the Company recorded total accretion of $500,000. At March 31, 2018 and December 31, 2017, the carrying value of the note was $500,000.

b)	On February 11, 2016, the Company entered into two convertible promissory notes for a total of $275,000, pursuant to which the Company received proceeds of $237,500, net of an original issue discount of $25,000 and legal fees of $12,500. The notes are convertible at a price equal to 60% of the lowest trading price of the Company's common stock for the 20 prior trading days, bearing interest at 8% per annum and due on February 11, 2017. Due to these provisions, the embedded conversion options qualified for derivative accounting and bifurcation under ASC 815-15 Derivatives and Hedging. The initial fair value of the derivative liabilities of $308,492 resulted in a full discount to the note payable of $250,000 and the recognition of $59,492 as additional interest expense.
	During the year ended December 31, 2017, the entire balance of the discounts and costs were recognized in full. At March 31, 2018 and December 31, 2017, the carrying value of the notes was $275,000 and $275,000 with unamortized discount of $nil and $0, respectively. These notes are past due as of the issuance of these financial statements, as a result the interest rate increased to 24%.
c)	On May 17, 2016, the Company entered into a convertible promissory note for $55,000, pursuant to which the Company received proceeds of $48,000, net of an original issue discount of $5,000 and legal fees of $2,000. The notes are convertible at a price equal to 55% of the lowest trading price of the Company's common stock for the 20 prior trading days, bearing interest at 8% per annum and due on May 17, 2017. Due to these provisions, the embedded conversion options qualified for derivative accounting and bifurcation under ASC 815-15 Derivatives and Hedging. The initial fair value of the derivative liabilities of $95,047 resulted in a full discount to the note payable of $50,000 and the recognition of $45,047 as additional interest expense.
	At March 31, 2018 and December 31, 2017, the carrying value of the notes was $35,400 and $59,400 with unamortized discount of $nil and $0, respectively. These notes are past due as of the issuance of these financial statements, as a result the interest rate increased to 24%.
d)	On October 30, 2017, the Company entered into a convertible promissory note for $25,000, pursuant to which the Company received proceeds of $25,000. The notes are convertible at any time after September 13, 2018 at a mutually agreed upon conversion price, bearing interest rate at 10% per annum and due on October 30, 2019. Due to these provisions, the embedded conversion options does not currently qualify for derivative accounting and bifurcation under ASC 815-15 Derivatives and Hedging.
	At March 31, 2018 and December 31, 2017, the carrying value of the note was $25,000 and $25,000, respectively.

e)	On November 18, 2017, the Company entered into a convertible promissory note for $25,000, pursuant to which the Company received proceeds of $25,000. The notes are convertible at any time after September 13, 2018 at a mutually agree upon conversion price, bearing interest rate at 10% per annum and due on November 30, 2019. Due to these provisions, the embedded conversion options does not currently quality for derivative accounting and bifurcation under ASC 815-15 Derivatives and Hedging.
	During January and February 2018, the Company received an additional $75,000 under the same terms as the preciously issued convertible promissory note.
	At March 31, 2018 and December 31, 2017, the carrying value of the notes was $100,000 and $25,000, respectively.
f)	On March 16, 2018, the Company entered into a convertible promissory note for $36,750, pursuant to which the Company received proceeds of $35,000, net of an original issue discount of fees of $1,750. The note is convertible at a price equal to 55% of the lowest trading price of the Company's common stock for the 20 prior trading days, bearing interest at 8% per annum and due on March 15, 2019. Due to these provisions, the embedded conversion options qualified for derivative accounting and bifurcation under ASC 815-15 Derivatives and Hedging. The initial fair value of the derivative liabilities of $71,305 resulted in a full discount to the note payable of $36,750 and the recognition of $36,305 as a loss on the issuance of a convertible note.

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Derivative Liabilities

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

NOTE 5 - Derivative Liabilities

The embedded conversion options of the Company’s convertible debentures described in Note 3 contain conversion features that qualify for embedded 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 as a gain or loss on derivative financial instruments.

The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities:

	March 31, 2018			December 31, 2017
Balance at the beginning of the period	$	409,948		$	402,881
Addition of new derivative liabilities		71,305			-
Change in fair value of embedded conversion option		(127,052	)		44,084
Derecognition of derivatives upon settlement of convertible notes		(33,841	)		(37,017	)
Balance at the end of the period	$	320,360		$	409,948

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, 2017		335	%		1.39	%		0	%	0.25 – 2.50
At March 31, 2018		140.0% – 344.5	%		1.73%-2.07	%		0	%	0.25 - .95

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Preferred Stock

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

NOTE 6 - Preferred Stock

a)	On September 30, 2015, the Company designated 3,500,000 shares of the Company’s 3,550,000 authorized “blank check” preferred stock as Series A Convertible Preferred Stock. The Series A Convertible Preferred Stock shall, with respect to dividend rights, rights on liquidation, winding up and dissolution, rank senior to (i) all classes of common stock of the Company and (ii) any class or series of capital stock of the Company hereafter created (unless, with the consent of the holders of Series A Convertible Preferred Stock). The holders of the Series A Preferred Stock shall not entitled to receive any dividends and shall have the voting equivalency of 10 shares of common stock. Each holder of Series A Preferred Stock shall have the right at any time or from time to time from and after the day immediately following the date the Series A Preferred Stock is first issued, to convert each share of Series A Preferred Stock into 10 fully-paid and non-assessable share of common stock, par value $0.01 per share, of the Company. In connection with any conversion hereunder, each holder of Series A Convertible Preferred Stock if such conversion would cause such holder or any of its assignees to beneficially own more than 4.99% of the common stock of the Company.
b)	On September 30, 2015, the Company issued an aggregate of 3,381,520 shares of Series A Convertible Preferred Stock at a fair value of $12,849,776 to settle convertible and promissory notes in the amount of $1,487,000 and accrued interest of $203,760. The Company recorded a gain on settlement of debt of $1,495,529.
c)	On November 20, 2015, the Company designated 10,000 shares of the Company’s 3,550,000 authorized “blank check” preferred stock as Series B Convertible Preferred Stock. The Series B Convertible Preferred Stock shall, with respect to dividend rights, rights on liquidation, winding up and dissolution, rank senior to (i) all classes of common stock of the Company and (ii) any class or series of capital stock of the Company hereafter created (unless, with the consent of the holders of Series B Convertible Preferred Stock). The holders of the Series B Preferred Stock shall not entitled to receive any dividends and shall have the voting equivalency of 4,000 shares of common stock. Each holder of Series B Preferred Stock shall have the right at any time or from time to time from and after the day immediately following the date the Series B Preferred Stock is first issued, to convert each share of Series B Preferred Stock into 4,000 fully-paid and non-assessable share of common stock, par value $0.01 per share, of the Company. In connection with any conversion hereunder, each holder of Series B Convertible Preferred Stock if such conversion occurred would cause such holder or any of its assignees to beneficially own more than 4.99% of the common stock of the Company.

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Common Stock

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

NOTE 7 - Common Stock

During the three months ended March 31, 2018, the Company issued 55,941,778 shares of common stock to settle $35,159 of principal and $8,380 of accrued interest on its convertible notes.

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Subsequent Events

3 Months Ended

Mar. 31, 2018

Notes to Financial Statements

NOTE 8 - Subsequent Events

In accordance with ASC 855-140, Subsequent Events, the Company analyzed its operations subsequent to March 31, 2018, through the date the financial statements were available to be issued, and has determined that there are no material subsequent events to disclose in these financial statements other then the following.

Subsequent to March 31, 2018, the Company issued 34,590,084 shares of common stock to settle $11,798 of principal and $4,805 of accrued interest on a convertible note.

On May 1, 2018, the Company entered into a Letter of Intent (“LOI”) regarding the proposed acquisition which is anticipated to be by a newly formed Canadian acquisition subsidiary of UHLN, of the assets of Supreme Sweets, Inc.

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Summary of Business and Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2018

Summary Of Business And Basis Of Presentation Policies

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. During 2017, the Company exited the recreational power sports OEM and leisure activity vehicles markets.

Basis of Presentation

The Company’s 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 subsidiaries, USH Distribution Corp., and Powersports Brand Alliance, Inc. All significant intercompany transactions and balances have been eliminated.

The unaudited 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, 2017 included in the Company’s Annual Report on Form 10-K filed on April 4, 2018 (the “2017 Annual Report”).

Recently issued accounting pronouncements

The Company has implemented all new accounting pronouncements that are in effect. These pronouncements did not have any material impact on the financial statements unless otherwise disclosed, and the Company does not believe that there are any other new accounting pronouncements that have been issued that might have a material impact on its financial position or results of operations.

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 March 31, 2018 current liabilities exceed current assets by $2,571,125 and the Company has an accumulated deficit of $75,187,848. 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, internally generated working capital and monetization of intellectual property assets. 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. Management is currently pursuing a business strategy which includes raising the necessary funds to finance the Company's development and marketing efforts.

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Loans Payable (Tables)

3 Months Ended

Mar. 31, 2018

Loans Payable Tables

Schedule of Debt

Loans payable consist of the following:		March 31, 2018			December 31, 2017
a)	On May 30, 2013 and August 12, 2013, the Company received advances from a director for $2,000 and $25,000, respectively. On August 12, 2013, the Company entered into an unsecured, non-guaranteed, demand loan agreement with the director for $27,000. The loan bears interest at 1% per annum compounded monthly.	$	27,000		$	27,000
b)	On February 27, 2014, and March 19, 2015, the Company received advances from a director of $6,000, and $10,200, respectively. During the year ended December 31, 2015, the Company repaid $13,200. The advances are unsecured, due on demand and bears interest at 1% per annum compounded and calculated monthly.	$	3,000		$	3,000
c)	On September 18, 2014, May 29, 2015, July 3, 2015, December 2, 2015, and January 4, 2016, the Company entered into unsecured, non-guaranteed, loan agreements pursuant to which the Company received proceeds of $35,000, $4,000, $5,000, $22,000, and $45,000, respectively. The loans bear interest at 8% per annum compounded annually and are due 1 year after the date of issuance. On May 31, 2017, the Company executed a conversion addendum for each of the original loans for $22,000 and $45,000. The terms per the addendum allow the note holder to convert any portion of the principal and accrued interest into shares of common stock at $0.0001 per share.	$	111,000		$	111,000
d)	On December 4, 2014, January 29, 2015, August 12, 2015, August 21, 2015, September 1, 2015, September 15, 2015, November 13, 2015, and December 23, 2015, the Company issued unsecured notes payable of $20,000, $20,000, $20,000, $25,000, $40,000, $25,000, $30,000 and $10,000, respectively, to a significant shareholder. The notes bear interest at an annual rate of 8% per annum, are uncollateralized, and due 1 year after the date of issuance.	$	190,000		$	190,000
f)	On September 2, 2016 the Company issued an unsecured note payable of $100,000 respectively to a significant shareholder. The note bears interest at an annual rate of 5% per annum, is uncollateralized, and due 1 year after the date of issuance.	$	100,000		$	100,000
g)	On September 2, 2016 the Company issued an unsecured note payable of $50,000 respectively to a significant shareholder. The note bears interest at an annual rate of 5% per annum, is uncollateralized, and due 1 year after the date of issuance.	$	50,000		$	50,000
	Total	$	481,000		$	481,000
	Less Short-Term Portion		(481,000	)		(481,000	)
	Long Term Loans Payable	$	-		$	-

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Derivative Liabilities (Tables)

3 Months Ended

Mar. 31, 2018

Derivative Liabilities Tables

Summary of Changes in Fair Value of Financial Liabilities

	March 31, 2018			December 31, 2017
Balance at the beginning of the period	$	409,948		$	402,881
Addition of new derivative liabilities		71,305			-
Change in fair value of embedded conversion option		(127,052	)		44,084
Derecognition of derivatives upon settlement of convertible notes		(33,841	)		(37,017	)
Balance at the end of the period	$	320,360		$	409,948

Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions

	Expected Volatility			Risk-free Interest Rate			Expected Dividend Yield			Expected Life (in years)
At December 31, 2017		335	%		1.39	%		0	%	0.25 – 2.50
At March 31, 2018		140.0% – 344.5	%		1.73%-2.07	%		0	%	0.25 - .95

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Summary of Business and Basis of Presentation (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Summary Of Business And Basis Of Presentation Details Narrative
State of incorporation	Oklahoma
Date of incorporation	Feb. 05, 1999
Stockholder's Deficit	$ (2,571,125)	$ (2,637,087)
Accumulated deficit	$ (75,187,848)	$ (75,244,112)

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Deposits on acquisition (Details Narrative) - USD ($)	Mar. 31, 2018	Mar. 08, 2018	Dec. 31, 2017
Deposit in acquisition	$ 115,000		$ 75,000
TruFood Provisions Co [Member] | Share exchange agreement [Member]
Exchange of issued and outstanding shares, percentage		65.00%
Ownership percentage to be acquired under agreement		100.00%
Deposit in acquisition	$ 115,000

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Loans Payable (Details) - USD ($)	Mar. 31, 2018	Dec. 31, 2017
Loan Payable	$ 481,000	$ 481,000
Less Short Term	(481,000)	(481,000)
Long Term
Loan 1 [Member]
Loan Payable	27,000	27,000
Loan 2 [Member]
Loan Payable	3,000	3,000
Loan 3 [Member]
Loan Payable	111,000	111,000
Loan 4 [Member]
Loan Payable	190,000	190,000
Loan 5 [Member]
Loan Payable	100,000	100,000
Loan 6 [Member]
Loan Payable	$ 50,000	$ 50,000

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Loans Payable (Details Narrative) - USD ($)										1 Months Ended							12 Months Ended
	Sep. 02, 2016	Jan. 04, 2016	Dec. 02, 2015	Nov. 13, 2015	Sep. 01, 2015	Aug. 12, 2015	Jul. 03, 2015	Dec. 04, 2014	Aug. 12, 2013	May 31, 2017	Dec. 23, 2015	Sep. 15, 2015	Aug. 21, 2015	May 29, 2015	Jan. 29, 2015	Sep. 18, 2014	Dec. 31, 2015	Mar. 31, 2018	Dec. 31, 2017	Mar. 19, 2015	Feb. 27, 2014	May 30, 2013
Conversion into common stock per share																		$ 0.01	$ 0.01
Loan 6 [Member] | Unsecured Notes Payable [Member]
Interest rate	5.00%
Maturity period	1 year
Notes payable	$ 50,000
Loan 5 [Member] | Unsecured Notes Payable [Member]
Interest rate	5.00%
Maturity period	1 year
Notes payable	$ 100,000
Loan 4 [Member] | Unsecured Notes Payable [Member] | Significant shareholder [Member]
Interest rate				8.00%	8.00%	8.00%		8.00%			8.00%	8.00%	8.00%		8.00%
Maturity period				1 year	1 year	1 year		1 year			1 year	1 year	1 year		1 year
Notes payable				$ 30,000	$ 40,000	$ 20,000		$ 20,000			$ 10,000	$ 25,000	$ 25,000		$ 20,000
Loan 3 [Member]
Conversion of loans										$ 22,000
Conversion into common stock per share										$ 0.0001
Loan 3 [Member] | Unsecured, Non-Guaranteed Loan Agreement [Member]
Proceeds from issuance of debt		$ 45,000	$ 22,000				$ 5,000							$ 4,000		$ 35,000
Interest rate		8.00%	8.00%				8.00%							8.00%		8.00%
Maturity period		1 year	1 year				1 year							1 year		1 year
Loan 3 One [Member]
Conversion of loans										$ 45,000
Loan 2 [Member] | Director [Member]
Due to related party																				$ 10,200	$ 6,000
Interest rate																				1.00%	1.00%
Repayment of related party debt																	$ 13,200
Loan 1 [Member] | Director [Member]
Due to related party									$ 25,000													$ 2,000
Interest rate									1.00%													1.00%
Loan 1 [Member] | Director [Member] | Unsecured, Non-Guaranteed Loan Agreement [Member]
Proceeds from issuance of debt									$ 27,000

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Convertible Debentures (Details Narrative) - USD ($)

3 Months Ended

12 Months Ended

Mar. 31, 2018

Mar. 31, 2017

Dec. 31, 2017

Dec. 31, 2015

Proceeds from Convertible notes

$ 110,000

Interest expense

39,742

192,249

Amortization of debt discount

1,510

Convertible Note [Member]

Note payable

$ 500,000

$ 500,000

Accretion expense

$ 500,000

December 31, 2015 [Member] | Convertible Note [Member]

Due date

Dec. 31, 2016

Fair value of the conversion feature

$ 16,507,415

Interest rate

12.00%

Present value of the future cash flows

10.00%

Gain/Loss on settlement of debt

$ 492,585

Reduced interest rate

8.00%

July 25, 2013 [Member] | Convertible Note [Member]

Convertible note

$ 500,000

Due date

Jul. 31, 2014

Terms of conversion feature

The note is convertible into shares of the Company’s common stock at any time at a conversion price equal to $0.02 per share and is subject to adjustment upon the issuance of certain dilutive instruments and other events. The conversion price was subsequently reduced to $0.01 per share upon the failure to file various reports with the SEC within 120 days of the issuance of the note

Description for prepayment of note

The note may be prepaid by the Company without penalty with 30 days prior notice

Note payable

$ 500,000

Common stock shares issuable upon exercise of warrants

12,500,000

Interest rate

8.00%

Unamortized discount

$ 500,000

Revenues percentage

100.00%

July 25, 2013 [Member] | Convertible Note [Member] | Exercise price 0.10 [Member]

Common stock shares issuable upon exercise of warrants

2,500,000

Exercise price

$ 0.10

July 25, 2013 [Member] | Convertible Note [Member] | Exercise price 0.05 [Member]

Common stock shares issuable upon exercise of warrants

10,000,000

Exercise price

$ 0.05

Convertible Promissory Notes [Member]

Note payable

$ 275,000

$ 275,000

Interest rate

24.00%

Unamortized discount

$ 0

Convertible Promissory Notes [Member] | March 16, 2018 [Member]

Convertible note

$ 36,750

Due date

Mar. 15, 2019

Terms of conversion feature

The note is convertible at a price equal to 55% of the lowest trading price of the Company's common stock for the 20 prior trading days, bearing interest at 8% per annum and due on March 15, 2019.

Fair value of derivative liability

$ 71,305

Proceeds from Convertible notes

$ 35,000

Interest rate

8.00%

Gain/Loss on settlement of debt

$ 36,305

Legal fees

1,750

Amortization of debt discount

36,750

Convertible Promissory Notes [Member] | February 11, 2016 [Member]

Convertible note

$ 275,000

Due date

Feb. 11, 2017

Terms of conversion feature

The notes are convertible at a price equal to 60% of the lowest trading price of the Company's common stock for the 20 prior trading days, bearing interest at 8% per annum and due on February 11, 2017

Fair value of derivative liability

$ 308,492

Note payable

250,000

Proceeds from Convertible notes

$ 237,500

Interest rate

8.00%

Unamortized discount

$ 25,000

Legal fees

12,500

Interest expense

59,492

Convertible Promissory Notes Foure [Member] | January and February, 2018 [Member]

Convertible note

75,000

Convertible Promissory Notes Three [Member]

Note payable

100,000

25,000

Convertible Promissory Notes Three [Member] | November 18, 2017 [Member]

Convertible note

$ 25,000

Due date

Nov. 30, 2019

Proceeds from Convertible notes

$ 25,000

Interest rate

10.00%

Convertible Promissory Notes Two [Member]

Note payable

$ 25,000

25,000

Convertible Promissory Notes Two [Member] | October 30, 2017 [Member]

Convertible note

$ 25,000

Due date

Oct. 30, 2019

Proceeds from Convertible notes

$ 25,000

Interest rate

10.00%

Convertible Promissory Notes One [Member]

Note payable

$ 35,400

59,400

Interest rate

24.00%

Unamortized discount

$ 0

Convertible Promissory Notes One [Member] | May 17, 2016 [Member]

Convertible note

$ 55,000

Due date

May 17, 2017

Terms of conversion feature

The notes are convertible at a price equal to 55% of the lowest trading price of the Company's common stock for the 20 prior trading days, bearing interest at 8% per annum and due on May 17, 2017

Fair value of derivative liability

$ 95,047

Note payable

50,000

Proceeds from Convertible notes

$ 48,000

Interest rate

8.00%

Unamortized discount

$ 5,000

Legal fees

2,000

Interest expense

$ 45,047

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Derivative Liabilities (Details) - USD ($)	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Derivative Liabilities Details
Balance at the beginning of period	$ 409,948	$ 402,881
Addition of new derivative liabilities	71,305
Change in fair value of embedded conversion option	(127,052)	44,084
Derecognition of derivatives upon settlement of convertible notes	(33,841)	(37,017)
Balance at the end of the period	$ 320,360	$ 409,948

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Derivative Liabilities (Details 1)	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017
Expected Volatility		335.00%
Risk-free Interest Rate		1.39%
Expected Dividend Yield	0.00%	0.00%
Minimum [Member]
Expected Volatility	140.00%
Risk-free Interest Rate	1.73%
Expected Life (in years)	3 months	3 months
Maximum [Member]
Expected Volatility	344.50%
Risk-free Interest Rate	2.07%
Expected Life (in years)	11 months 12 days	2 years 6 months

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Preferred Stock (Details Narrative) - USD ($)

1 Months Ended

Sep. 30, 2015

Nov. 20, 2015

Series B Preferred Stock

Convertible Preferred Stock, designated

10,000

Convertible Preferred Stock, authorized

3,550,000

Series A Convertible Preferred Stock conversion description

Each holder of Series B Preferred Stock shall have the right at any time or from time to time from and after the day immediately following the date the Series B Preferred Stock is first issued, to convert each share of Series B Preferred Stock into 4,000 fully-paid and non-assessable share of common stock, par value $0.01 per share, of the Company.

Ownership percentage after conversion

4.99%

Series A Preferred Stock

Convertible Preferred Stock, designated

3,500,000

Convertible Preferred Stock, authorized

3,550,000

Shares issued

3,381,520

Preferred stock at a fair value

$ 12,849,776

Convertible and promissory notes settlement amount

1,487,000

Accrued interest settle amount

203,760

Gain/Loss on settlement of debt

$ 1,495,529

Series A Convertible Preferred Stock conversion description

each share of Series A Preferred Stock into 10 fully-paid and non-assessable share of common stock, par value $0.01 per share, of the Company.

Ownership percentage after conversion

4.99%

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Common Stock (Details Narrative) - Convertible Note [Member]	3 Months Ended
	Mar. 31, 2018 USD ($) shares
Debt conversion, converted instrument, shares Issued | shares	55,941,778
Debt conversion, converted instrument, amount	$ 35,159
Accrued interest	$ 8,380

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Subsequent Events (Details Narrative) - Subsequent Event [Member]	3 Months Ended
	Mar. 31, 2018 USD ($) shares
Debt conversion, converted instrument, shares Issued | shares	34,590,084
Debt conversion, converted instrument, amount	$ 11,798
Accrued interest	$ 4,805