10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2014.

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: 000-55154

INTELLIGENT HIGHWAY SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

Nevada	30-0680119
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification No.)

8 Light Sky Court

Sacramento, CA 95828

(Address of principal executive offices (Zip Code)

(916) 379-0324

(Registrant’s telephone number, including area code)

N/A

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

Yes x  No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§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 x  No ¨

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

Large accelerated filer ¨	Accelerated filer ¨
Non-accelerated filer  ¨   (do not check if smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ¨  No  x

As of November 19, 2014, there were 29,055,535 shares of common stock, $0.00001 par value outstanding.

INTELLIGENT HIGHWAY SOLUTIONS, INC.

TABLE OF CONTENTS

FORM 10-Q REPORT

SEPTEMBER 30, 2014

		Page
		Number
PART I - FINANCIAL INFORMATION		2
Item 1.	Financial Statements.	2
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	16
Item 3.	Quantitative and Qualitative Disclosures About Market Risk.	22
Item 4.	Controls and Procedures.	22
PART II - OTHER INFORMATION		23
Item 1.	Legal Proceedings.	23
Item 1A.	Risk Factors.	24
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds.	24
Item 3.	Defaults Upon Senior Securities.	24
Item 4.	Mine Safety Disclosures	24
Item 5.	Other Information.	24
Item 6.	Exhibits.	24
SIGNATURES		25

PART I - FINANCIAL INFORMATION

Item 1.  Financial Statements.

INTELLIGENT HIGHWAY SOLUTIONS

CONDENSED BALANCE SHEETS

	September 30, 2014			December 31, 2013
	(Unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	-		$	28,664
Accounts receivable, net of allowance of $0		202,942			-
Prepaid expenses		228,576			194,481
Deferred loan costs, current		98,659			138,324
Total current assets		530,177			361,469
Property and equipment, net of accumulated depreciation of $5,525 and $1,607		14,744			1,752
Deferred loan costs, net		4,706			60,128
Total assets	$	549,627		$	423,349
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Bank overdraft	$	11,785		$	40
Accounts payable		117,205			89,562
Accrued expenses and other liabilities		913,059			909,105
Notes payable, current portion		195,000			252,274
Convertible notes payable, current portion, net of discounts of $145,908 and $0		195,592			30,000
Notes payable, related party, current portion		10,000			-
Derivative liability		184,934			46,023
Accrued interest		73,938			113,599
Total current liabilities		1,701,513			1,440,603
Convertible notes payable, net of discounts of $161,613 and $651,780		73,223			248,220
Total liabilities		1,774,736			1,688,823
Stockholders' deficit
Common stock, $0.00001 par value; 100,000,000 shares authorized; 24,777,724 and 11,933,666 issued; 24,727,724 and 11,933,666 outstanding at September 30, 2014 and December 31, 2013		248			119
Common stock subscribed		40,000			-
Additional paid-in capital		4,955,033			2,071,274
Treasury stock, 50,000 shares at $.084 per share		(4,200	)		-
Accumulated deficit		(6,216,190	)		(3,336,867	)
Total stockholders' deficit		(1,225,109	)		(1,265,474	)
Total liabilities and stockholders' deficit	$	549,627		$	423,349

See accompanying notes to unaudited condensed financial statements.

2

INTELLIGENT HIGHWAY SOLUTIONS

CONDENSED STATEMENTS OF OPERATIONS (UNAUDITED)

	Three months ended September 30,						Nine months ended September 30,
	2014			2013			2014			2013
				(Restated)						(Restated)
Revenue	$	251,210		$	-		$	717,043		$	670,553
Cost of sales		201,328			-			555,208			809,764
Gross profit		49,882			-			161,835			(139,211	)
Operating expenses
Salaries and wages		23,913			58,812			130,749			186,029
General and administrative		434,165			185,052			1,524,204			571,063
Total operating expenses		458,078			243,864			1,654,953			757,092
Loss from operations		(408,196	)		(243,864	)		(1,493,118	)		(896,303	)
Other income (expense)
(Loss) gain on extinguishment of debt		(22,112	)		-			96,179			-
Gain (loss) on derivative fair value adjustment		138,011			27,213			(12,052	)		10,930
Loss on settlement		-			-			(175,000	)		-
Interest expense		(502,357	)		(154,658	)		(1,295,332	)		(316,161	)
Total other expense		(386,458	)		(127,445	)		(1,386,205	)		(305,231	)
Loss before income taxes		(794,654	)		(371,309	)		(2,879,323	)		(1,201,534	)
Provision for income taxes		-			-			-			-
Net loss	$	(794,654	)	$	(371,309	)	$	(2,879,323	)	$	(1,201,534	)
Basic and diluted loss per common share	$	(0.04	)	$	(0.04	)	$	(0.18	)	$	(0.12	)
Basic and diluted weighted average shares outstanding		20,735,595			10,404,666			16,079,394			10,404,666

See accompanying notes to unaudited condensed financial statements.

3

INTELLIGENT HIGHWAY SOLUTIONS

CONDENSED STATEMENT OF CASH FLOWS (UNAUDITED)

	Nine months ended September 30,
	2014			2013
				(Restated)
Cash flows from operating activities
Net loss	$	(2,879,323	)	$	(1,201,534	)
Adjustments to reconcile net loss to net cash used in operating activities
Common stock issued for services		987,556			-
Common stock issued for penalties		18,500			-
Common stock issued for settlement		269,833			-
Common stock issued as loan origination fee		-			6,250
Gain on forgiveness of debt		(96,179	)		-
Depreciation		3,918			504
Amortization of deferred loan costs		308,780			-
Amortization of loan origination fee		159,751			-
Loss on derivative fair value adjustment		12,052			(10,930	)
Excess derivative liability charged to interest		12,795			70,000
Allowance for doubtful accounts		-			(17,850	)
Amortization of debt discount		738,181			179,117
Changes in operating assets and liabilities
Accounts receivable		(202,942	)		275,910
Other receivables		-			120
Prepaid expenses		(34,095	)		16,519
Deferred loan costs		-			(78,500	)
Accounts payable		81,822			17,281
Accrued interest		31,098			5,649
Accrued expenses and other liabilities		3,954			15,142
Net cash used in operating activities		(584,299	)		(722,322	)
Cash flows from investing activities
Purchase of equipment		(16,910	)		-
Net cash used in investing activities		(16,910	)		-
Cash flows from financing activities
Repayment of bank overdraft		-			(1,678	)
Proceeds from bank overdraft		11,745			-
Proceeds from convertible notes payable		450,000			785,000
Proceeds from notes payable		225,000			-
Repayments of notes payable		(187,916	)		(39,589	)
Proceeds from related party notes payable		10,000			-
Proceeds from common stock subscriptions		40,000			-
Proceeds from common stock issued for cash		27,916			-
Purchase of treasury stock		(4,200	)		-
Net cash provided by financing activities		572,545			743,733
Change in cash and cash equivalents		(28,664	)		21,411
Cash at beginning of period		28,664			-
Cash at end of period	$	-		$	21,411
Supplemental disclosures of cash flow information
Cash paid for interest	$	-		$	47,507
Cash paid for income taxes	$	-		$	-
Supplemental disclosure of non-cash financing activities :
Common stock issued as loan repayment	$	602,503		$	-
Common stock issued as interest repayment	$	45,165		$	-
Debt discount on convertible notes	$	392,128		$	610,000
Initial measurements of derivative liabilities	$	312,128		$	30,000
Exchange of note payable and accrued interest for convertible note payable	$	212,526		$	-

See accompanying notes to unaudited condensed financial statements.

4

INTELLIGENT HIGHWAY SOLUTIONS, INC.

Notes to Unaudited Condensed Financial Statements

September 30, 2014

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization, Nature of Business and Trade Name

Intelligent Highway Solutions, Inc.  (the “Company” or “IHS”) was formed on April 22, 2011; IHS is a technology based intelligent highway solutions contractor. Through June 30, 2013, the Company’s primary focus was in the California transportation market providing services that range from providing labor, materials, and related equipment for corrective service and maintenance services for the State’s transportation infrastructure. Since that time, the Company has devoted its time to electrical service contracts. Additionally, the Company intends to develop transportation technology services that enable vehicles, roads, traffic lights, message signs, and other elements to become “intelligent” by embedding them with microchips and sensors and by empowering them to communicate with each other via wireless technologies. The acceleration of data collection and communication will allow state governments to improve transportation system performance by reducing congestion and increasing both traveler safety and convenience.

NOTE 2 – CONDENSED FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows for the periods ended September 30, 2014 and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2013 audited financial statements.  The results of operations for the periods ended September 30, 2014 are not necessarily indicative of the operating results for the full year.

NOTE 3 – GOING CONCERN

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

5

INTELLIGENT HIGHWAY SOLUTIONS, INC.

Notes to Unaudited Condensed Financial Statements

September 30, 2014

NOTE 4 - SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. A change in managements’ estimates or assumptions could have a material impact on the Company’s financial condition and results of operations during the period in which such changes occurred.

Actual results could differ from those estimates. The Company’s financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.

Accounts Receivable

Accounts receivable are carried at the expected net realizable value. The allowance for doubtful accounts, is based on management's assessment of the collectability of specific customer accounts and the aging of the accounts receivables. If there were a deterioration of a major customer's creditworthiness, or actual defaults were higher than historical experience, our estimates of the recoverability of the amounts due to us could be overstated, which could have a negative impact on operations. The Company had bad debt expense of $0 during the three and nine months ended September 30, 2014 and a bad debt recovery of $0 and $13,158 during the three and nine months ended September 30, 2013.

Property, Plant and Equipment

Property and equipment are carried at cost. Expenditures for maintenance and repairs are charged against operations. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in income for the period.

Depreciation is computed over the estimated useful lives of the related assets. The estimated useful lives of depreciable assets are:

	Estimated Useful Life
Furniture and fixtures	3 - 5 years
Machinery and equipment	5 years
Vehicles	5 years

6

INTELLIGENT HIGHWAY SOLUTIONS, INC.

Notes to Unaudited Condensed Financial Statements

September 30, 2014

For federal income tax purposes, depreciation is computed under the modified accelerated cost recovery system. For financial statements purposes, depreciation is computed under the straight-line method. Balances of each asset class as of September, 2014 and December 31, 2013 were:

	September 30, 2014			December 31, 2013
Machinery and equipment	$	2,149		$	2,149
Furniture and fixtures		6,273			1,210
Vehicles		11,847			-
Sub Total	$	20,269		$	3,359
Accumulated depreciation		(5,525	)		(1,607	)
Total	$	14,744		$	1,752

Depreciation expense for the nine months ended September 30, 2014 and 2013 was $3,918 and $504, respectively. Depreciation expense for the three months ended September 30, 2014 and 2013 was $2,071 and $168, respectively.

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following at September 30, 2014 and December 31, 2013:

	September 30, 2014		December 31, 2013
Deferred rent payable	$	893	$	2,673
Payroll tax liabilities		613,577		637,139
Other payroll accruals		57,917		51,711
Other		240,672		217,582
Total	$	913,059	$	909,105

Revenue Recognition

Service revenue is recognized in the period services are rendered and earned under service arrangements with clients where service fees are fixed or determinable and collectability is reasonably assured. The Company’s service revenue is largely attributable professional engineering services where the fee is based on the billable rate of the employees.

Cost of Sales

Cost of sales comprises of costs associated with providing services related to the Company’s contracts including direct labor costs, job materials, automobile fuel, insurance, maintenance and operating leases. Cost of sales totaled $201,328 and $0 for the three months ended September 30, 2014 and 2013, respectively. Cost of sales totaled $555,208 and $809,764 during the nine months ended September 30, 2014 and 2013, respectively.

Reclassifications

Certain prior-year amounts have been reclassified in order to conform to the current-year presentation. These reclassifications related to notes payable where prior periods had incorrectly shown certain notes as being related party, when in fact they were not.

Fair Value Measurements

The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

7

INTELLIGENT HIGHWAY SOLUTIONS, INC.

Notes to Unaudited Condensed Financial Statements

September 30, 2014

Convertible debt

The Company records a beneficial conversion feature related to the issuance of convertible debts that have conversion features at fixed or adjustable rates. The beneficial conversion feature for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features. The beneficial conversion feature will be accreted by recording additional non-cash interest expense over the expected life of the convertible notes.

Net Loss Per Share

Net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the specified period. Diluted earnings per common share is computed by dividing net income by the weighted average number of common shares and potential common shares during the specified period. For the three and nine months ended September 30, 2014 and 2013, potential common shares are not included in the diluted net loss per share calculation as their effect would be anti-dilutive.  Such potentially dilutive shares are excluded when the effect would be to reduce net loss per share.  There were 8,903,665 such potentially dilutive shares excluded for the three and nine months ended September 30, 2014 and 2013, respectively.

Recent Accounting Pronouncements

The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements.

NOTE 5 - FAIR VALUE MEASUREMENTS

On a recurring basis, we measure certain financial assets and liabilities based upon the fair value hierarchy.  The following table presents information about the Company’s liabilities measured at fair value as of September 30, 2014 and December 31, 2013:

	Level 1		Level 2		Level 3		Fair Value at September 30, 2014
Liabilities
Derivative Liability		-	$	184,934		-	$	184,934

	Level 1		Level 2		Level 3		Fair Value at December 31, 2013
Liabilities
Derivative Liability		-		46,023		-		46,023

The changes in the fair value of recurring fair value measurements are measured using the Black Scholes valuation model, and relate solely to the derivative liability as follows:

Balance at December 31, 2013	$	46,023
Derivative liabilities recorded		507,895
Change due to note conversion		(381,036	)
Fair value adjustment		12,052
Balance at September 30, 2014	$	184,934

8

INTELLIGENT HIGHWAY SOLUTIONS, INC.

Notes to Unaudited Condensed Financial Statements

September 30, 2014

NOTE 6 – NOTES PAYABLE

On November 21, 2011 the Company received a loan in the amount of $27,000 from Byrd & Company LLC, Emerging Markets Consulting LLC, and Douglas S. Hackett ($9,000 from each party). The loan is unsecured and bears a simple interest of 12% per annum to be amortized in 6 equal installments of principal and interest commencing January 1, 2012 through June 1, 2012. Our Chief Executive Officer, Devon Jones, and our Chief Financial Officer and Chief Operating Officer, Philip Kirkland, have personally guaranteed this loan.  On March 1, 2012, the Company issued Emerging Markets Consulting, LLC shares of common stock equivalent to $19,000, $10,000 for cash and $9,000 in satisfaction of the outstanding loan.  Accordingly, the loan from Emerging Markets Consulting, LLC is no longer outstanding.   Byrd& Company was repaid $3,803 and $3,917 during the years ended December 31, 2013 and 2012 with the remaining balance of $1,200 being forgiven during the year ended December 31, 2013. During the nine months ended September 30, 2014, the Company issued a total of 200,000 shares of common stock in satisfaction of the remaining $9,000 principal on the note with accrued interest of $2,888 being forgiven. There was $0 and $9,000 in principal plus accrued interest of $0 and $2,278 due at September 30, 2014 and December 31, 2013.

On April 14, 2014, the Company received a loan in the amount of $90,000 from Innovest, LLC. The loan is due on August 14, 2014 with $30,000 payment due on each June 14, 2014; July 14, 2014 and August 14, 2014. The loan is unsecured and non-interest bearing. In the event of default, the note shall bear interest at 18% per annum. Additionally, the Company is obligated to issue 50,000 shares of common stock in the event of late payments. The note holder was also issued 75,000 shares of common stock as an incentive to enter into the note. The Company did not make the required principal payment on July 17, 2014 resulting in 50,000 shares of common stock being issued to Innovest and the note beginning to accrue interest at the rate of 18% per annum. Additionally, the Company did not make the required principal payment on August 17, 2014 resulting in an additional 50,000 shares of common stock being issued to Innovest.

On May 22, 2014, the Company entered into two separate note agreements for $50,000 ($100,000 total). The notes carried a fixed interest amount of $400 and were due on June 15, 2014. If the loans were not repaid by the due date, the Company had the obligation to issue 25,000 shares of common stock to each note holder for each consecutive week the notes were outstanding. Additionally, the note holders each received 100,000 shares of common stock as an incentive to enter into the notes and had the right to sell back 25,000 shares of common stock to the Company for $2,100. The notes, including the fixed interest amounts, were repaid on June 26, 2014. Additionally, each note holder exercised its right to sell back 25,000 shares of common stock each to the Company for $2,100. Late penalties yielded an additional 50,000 common shares being issued to each note holder.

On August 5, 2014, the Company entered into two separate note agreements for $50,000 ($100,000 total). The notes carried a fixed interest amount of $800 and are due on October 4, 2014. If the loans were not repaid by the due date, the Company had the obligation to issue 25,000 shares of common stock to each note holder for each consecutive week the notes were outstanding. Additionally, the note holders each received 125,000 shares of common stock as an incentive to enter into the notes and had the right to sell back 50,000 shares of common stock to the Company for $4,200. There was a total of $100,000 in principal and $1,493 of accrued interest due at September 30, 2014.

On April 17, 2014, the Company received a loan in the amount of $20,000 from Seton Securities. An additional $5,000 was received on July 15, 2014. The loans are unsecured, due on demand and non-interest bearing. There was $25,000 and $0 in principal and no accrued interest due at September 30, 2014 and December 31, 2013.

On September 25, 2014, the Company received a loan from an unrelated party totaling $10,000. The note carried a fixed interest amount of $700 and is due on October 9, 2014. The note holder is entitled to receive 10,000 shares of common stock for each week beyond the due date the note is not repaid. Additionally, the Company issued 25,000 shares of common stock as an incentive to enter into the note. There was $10,000 in principal plus accrued interest of $250 at September 30, 2014.

NOTE 7 – CONVERTIBLE NOTES PAYABLE

On October 26, 2012, the Company received a loan totaling $30,000 from an unrelated party. The note bears interest at 10% per annum and had an original maturity date of April 26, 2013; however, the Company is in negotiations to extend the maturity date. There was $30,000 in principal plus accrued interest of $6,871 and $4,627 at September 30, 2014 and December 31, 2013. The principal and accrued interest may be converted at the option of the holder to common stock at $0.30.

On February 27, 2014, the Company received a loan totaling $339,026 from an unrelated party. The note bears interest at 10% per annum and matures February 27, 2015. Of the $339,026 total note, $212,526 was paid to former note holders on our behalf and $1,500 was withheld as debt issue costs resulting in net cash proceeds to the company of $125,000. Additionally, the note may be converted to common stock at the option of the holder at a rate equal to a 35% discount from the lowest daily volume weighted average price in the five days prior to conversion, but not less than $0.00004. On various dates during the nine months ended September 30, 2014, the Company accepted sixteen separate partial conversions of the note resulting in a total of 2,186,992 shares of common stock being issued in exchange for $202,526 of principal. There was $136,500 in principal plus $14,544 in accrued interest due at September 30, 2014.

On January 30, 2014, the Company entered into a note with an unrelated party to borrow up to $300,000 which would carry $35,000 as an original issue discount bringing the total note to $335,000 if fully borrowed. Upon closing the agreement, the Company received a loan totaling $50,000 which carried a prorated original issue discount of $5,833 bringing the total note to $55,833. An additional $55,000 was borrowed during the three months ended June 30, 2014. Additionally, the note may be converted to common stock at the option of the holder at a rate equal to the lesser of $0.65 or 60% of the lowest trade price in the twenty five (25) trading days prior to conversion and become convertible 180 days after the effective date which is July 29, 2014. The note requires a minimum of two million five hundred thousand (2,500,000) to be held in reserve in the instance of conversion. The note carried interest at 12% per annum and is due on January 30, 2016. During the three months ended September 30, 2014, the Company accepted four separate partial conversions from the note holder resulting in 1,090,000 shares of common stock being issued in exchange for $43,080 of principal and made cash repayments of $27,917. There was $39,837 in principal plus $5,129 in interest due at September 30, 2014.

On September 3, 2014, the Company received a loan totaling $100,000 from an unrelated party. The note carried fixed interest of $10,000 and was due on September 11, 2014. Additionally, the note may be converted to common stock at the option of the holder at a rate equal to a 35% discount from the lowest daily volume weighted average price in the five days prior to conversion, but not less than $0.00004. The note holder did not elect to convert any portion of the note and the principal plus fixed interest totaling $110,000 was repaid on September 11, 2014.

9

INTELLIGENT HIGHWAY SOLUTIONS, INC.

Notes to Unaudited Condensed Financial Statements

September 30, 2014

During the year ended December 31, 2013, the Company entered into debt agreements with various individuals to borrow a total of $900,000, of which $55,664 went directly to third parties to pay off amounts owed by the Company, $83,500 went to the placement agent and were recorded as debt issuance costs to be amortized over the life of the note, leaving the Company with net proceeds of $760,836. The notes accrue interest at 10% per annum and are due in are due in full between January and December 2015 with no repayments due before maturity. The principal and accrued interest may be converted at the option of the holder to common stock at $0.30. The intrinsic value of the conversion feature in these notes resulted in debt discounts totaling $800,000 which will be amortized over the lives of the notes. $210,925 of the debt discounts were recognized in interest expense during the year ended December 31, 2013 leaving an unamortized discount of $589,075 at December 31, 2013. The following table depicts the amounts due for each note as of December 31, 2013:

	Maturity Date	Principal		Debt Discount			Carrying Amount		Accrued Interest
Note holder 1	1/24/2015	$	100,000	$	-		$	100,000	$	8,795
Note holder 2	4/26/2015		60,000		(39,370	)		20,630		4,126
Note holder 3	5/3/2015		25,000		(16,712	)		8,288		1,658
Note holder 4	5/9/2015		100,000		(67,671	)		32,329		6,466
Note holder 4	5/31/2015		50,000		(35,342	)		14,658		2,932
Note holder 5	5/17/2015		50,000		(33,836	)		16,164		3,233
Note holder 6	5/30/2015		100,000		(66,849	)		33,151		6,630
Note holder 7	5/9/2015		50,000		(33,836	)		16,164		3,233
Note holder 8	5/9/2015		50,000		(34,315	)		15,685		3,137
Note holder 9	6/7/2015		25,000		(17,911	)		7,089		1,418
Note holder 10	7/1/2015		100,000		(74,932	)		25,068		5,014
Note holder 10	10/29/2015		25,000		(23,048	)		1,952		390
Note holder 11	7/15/2024		50,000		(38,425	)		11,575		2,315
Note holder 12	8/20/2015		25,000		(20,925	)		4,075		815
Note holder 12	10/18/2015		25,000		(22,911	)		2,089		418
Note holder 13	10/23/2015		20,000		(18,055	)		1,945		389
Note holder 16	12/30/2015		45,000		(44,939	)		63		12
Total		$	900,000	$	(589,075	)	$	310,925	$	50,981

During the nine months ended September 30, 2014, the Company entered into debt agreements with various individuals to borrow a total of $310,000 which was $305,000 in cash and $5,000 as a reduction of accounts payable. The notes accrue interest at 10% per annum and are due in are due in full between March and April 2016 with no repayments due before maturity. The principal and accrued interest may be converted at the option of the holder to common stock at $0.30. The intrinsic value of the conversion feature in these notes resulted in debt discounts totaling $310,000 which will be amortized over the lives of the notes. $20,089 of the debt discounts were recognized in interest expense during the nine months ended September 30, 2014 leaving an unamortized discount of $59,911 at September 30, 2014. Additionally, during the nine months ended September 30, 2014, the Company accepted the full conversion of nine notes and the partial conversion of another to common stock at $0.30 per share resulting in 1,733,332 shares of common stock being issued in consideration of $610,000 of principal plus 174,201 shares of common stock being issued in consideration of $55,358 of accrued interest. The following table depicts the amounts due for each note as of September 30, 2014:

	Maturity Date	Principal		Debt Discount			Carrying Amount		Accrued Interest
Note holder 1	1/24/2015	$	50,000	$	-		$	50,000	$	13,767
Note holder 1	4/24/2016		15,000		(11,733	)		3,267		653
Note holder 4	3/21/2016		30,000		(22,068	)		7,932		1,586
Note holder 7	5/9/2015		50,000		(15,137	)		34,863		6,973
Note holder 10	10/29/2015		25,000		(13,699	)		11,301		2,260
Note holder 11	7/15/2024		50,000		(19,726	)		30,274		6,055
Note holder 12	8/20/2015		25,000		(11,575	)		13,425		2,685
Note holder 12	10/18/2015		25,000		(13,562	)		11,438		2,288
Note holder 13	10/23/2015		20,000		(10,575	)		9,425		1,885
Note holder 16	12/30/2015		45,000		(28,110	)		16,890		3,378
Note holder 17	3/26/2016		25,000		(18,562	)		6,438		1,322
Note holder 18	4/4/2016		10,000		(7,548	)		2,452		490
Total		$	370,000	$	(172,295	)	$	197,705	$	43,342

10

INTELLIGENT HIGHWAY SOLUTIONS, INC.

Notes to Unaudited Condensed Financial Statements

September 30, 2014

NOTE 8 – RELATED PARTY TRANSACTIONS

We have engaged an entity controlled by the director of the Company to perform consulting services related to the development of new technologies. Payments to this party totaled $0 and $2,500 during the three months ended September 30, 2014 and 2013 and $2,500 and $12,275 during the nine months ended September 30, 2014 and 2013.

During the nine months ended September 30, 2014, the Company received an interest free $8,000 loan from a related party to fund operations. The loan is unsecured, due on demand and as such is included in current liabilities.

During the nine months ended September 30, 2014, the Company received an interest free $2,000 loan from a related party to fund operations. The loan is unsecured, due on demand and as such is included in current liabilities.

NOTE 9 – STOCKHOLDERS’ DEFICIT

The Company is authorized to issue up to 100,000,000 shares of $0.00001 par value common stock. During the nine months ended September 30, 2014, the Company issued a total of 5,100,000 common shares for services provided by various consultants; 7,500 common shares as settlement of a payable; 752,616 common shares as settlements of certain claims brought against the company by two separate entities; 5,510,324 common shares for total note conversions of $889,606; 174,201 common shares for total accrued interest conversions of $55,358; 199,407 common shares for total cash proceeds of $27,917; 100,000 common shares valued at $18,500 for default penalties on notes payable; 1,000,000 common shares as debt issue costs and repurchased a total of 50,000 common shares for $4,200 of cash.

There was 24,777,724 shares issued and 24,727,724 outstanding as of September 30, 2014.

NOTE 10 – COMMITMENTS AND CONTINGENCIES

The Company could become a party to various legal actions arising in the ordinary course of business. Matters that are probable of unfavorable outcomes to the Company and which can be reasonably estimated are accrued. Such accruals are based on information known about the matters, the Company’s estimates of the outcomes of such matters and its experience in contesting, litigating and settling similar matters.

As of the date of this report, except as described below, there are no material pending legal proceedings to which the Company is a party or of which any of their property is the subject, nor are there any such proceedings known to be contemplated by governmental authorities.

As of September 30, 2014 and December 31, 2013, the Company had accrued $613,577 and $637,139 and in payroll tax liabilities.  The payment of these liabilities has not been made due to our limited profitability.  Due to the uncertainty regarding our future profitability, it is difficult to predict our ability to pay these liabilities.   As a result, a federal tax lien has been levied that will have to be satisfied.

Vehicle Leases

The Company previously had entered into twelve separate month to month leases on various vehicles which required total monthly payments of $3,971. The vehicles related to these leases were purchased by the Company in April 2014.

Office and Warehouse Lease

The Company is required under the terms of the rental lease to make monthly lease payments.

The Company’s property lease is for an initial period of thirteen months from October 2011 and may be extended in two separate thirteen-month increments for up to a total term of 39 months. The Company may not terminate this lease prior to the agreed upon termination date. The minimum future annual rental commitments are as follows:

2014		10,881
2015		1,053
Total annual lease commitments	$	11,934

11

INTELLIGENT HIGHWAY SOLUTIONS, INC.

Notes to Unaudited Condensed Financial Statements

September 30, 2014

NOTE 11 – DERIVATIVE LIABILITY

As of September 30, 2014 the Company had a $184,934 derivative liability balance on the balance sheet and recorded a gain from derivative liability fair value adjustment of $138,011 and a loss from derivative fair value adjustment of $12,052 during the three and nine months ended September 30, 2014.  The derivative liability activity comes from convertible notes payable as follows:

As discussed in Note 7 – “Convertible Notes Payable”, during 2012, the Company issued an aggregate of $30,000 Convertible Promissory Notes to an unrelated party that matured on April 26, 2013. The Company is currently negotiating an extension of the maturity date and anticipates to successfully do so. The note bears interest at a rate of 10% per annum and can be convertible into the Company’s common shares, at the holder’s option, at the conversion rate of $0.30 per share.  The Company analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to “reset” provisions in the event the Company subsequently issues common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than conversion price of these notes. If these provisions are triggered, the conversion price of the note will be reduced.  The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability.

The embedded derivative for the note is carried on the Company’s balance sheet at fair value.  The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the income statement and the associated fair value carrying amount on the balance sheet is adjusted by the change.  The Company fair values the embedded derivative using the Black-Scholes option pricing model.  The aggregate fair value of the derivative at the inception date of the note was $73,451.  Of the total, $30,000 was recorded as a debt discount, which is up to but not more than the net proceeds of the notes.  $43,451 was charged to operations as non-cash interest expense. The fair value of $73,451 was recorded as a derivative liability on the balance sheet.

The debt discount for the note was amortized over the term of our stock’s opening trading day to the original maturity, or two days. On September 30, 2014, the Company marked-to-market the fair value of the derivative liabilities related to note and determined an aggregate fair value of $13 and recorded a gain of $13,295 and $40,920 from change in fair value of derivatives for three and nine months ended September 30, 2014. The fair value of the embedded derivatives for the notes was determined using the Black-Scholes option pricing model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 289%, (3) risk-free interest rate of .02%, (4) expected life of 0.07 of a year, and (5) estimated fair value of the Company’s common stock of $0.04 per share.

As discussed in Note 7 – “Convertible Notes Payable”, on February 27, 2014, the Company issued an aggregate of $339,026 Convertible Promissory Notes to an unrelated party that mature on February 27, 2015. The note bears interest at a rate of 10% per annum and can be convertible into the Company’s common shares, at the holder’s option, at the conversion rate equal to a 35% discount from the lowest daily volume weighted average price in the five days prior to conversion, but not less than $0.00004.  The Company analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to “reset” provisions in the event the Company subsequently issues common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than conversion price of these notes. If these provisions are triggered, the conversion price of the note will be reduced.  The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability.

12

INTELLIGENT HIGHWAY SOLUTIONS, INC.

Notes to Unaudited Condensed Financial Statements

September 30, 2014

The embedded derivative for the note is carried on the Company’s balance sheet at fair value.  The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the income statement and the associated fair value carrying amount on the balance sheet is adjusted by the change.  The Company fair values the embedded derivative using the Black-Scholes option pricing model.  The aggregate fair value of the derivative at the inception date of the note was $312,128 which was recorded as a debt discount, which is up to but not more than the net proceeds of the notes.  The fair value of $368,056 was recorded as a derivative liability on the balance sheet.

The debt discount for the notes will be amortized over the term of the note, or one year. On September 30, 2014, the Company marked-to-market the fair value of the derivative liabilities related to notes and determined an aggregate fair value of $170,858 and recorded a $14,813 and $197,601 loss from change in fair value of derivatives for three and nine months ended September 30, 2014. The fair value of the embedded derivatives for the notes was determined using the Black-Scholes option pricing model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 312%, (3) risk-free interest rate of .02%, (4) expected life of 0.41 of a year, and (5) estimated fair value of the Company’s common stock of $0.04 per share.

As discussed in Note 7 – “Convertible Notes Payable”, on January 30, 2014, the Company entered into a note with an unrelated party to borrow up to $300,000. The note may be converted to common stock at the option of the holder at a rate equal to the lesser of $0.65 or 60% of the lowest trade price in the twenty five (25) trading days prior to conversion and become convertible 180 days after the effective date which is July 29, 2014. The Company analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to “reset” provisions in the event the Company subsequently issues common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than conversion price of these notes. If these provisions are triggered, the conversion price of the note will be reduced.  The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability.

The embedded derivative for the note is carried on the Company’s balance sheet at fair value.  The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the income statement and the associated fair value carrying amount on the balance sheet is adjusted by the change.  The Company fair values the embedded derivative using the Black-Scholes option pricing model.  The aggregate fair value of the derivative at the date the note became convertible was $95,712 which resulted in a debt discount equal to the outstanding principal at the time of $82,917 with an excess of $12,795 being charged to interest expense.  The fair value of $95,712was recorded as a derivative liability on the balance sheet.

The debt discount for the notes will be amortized over the term of the note, or one year. On September 30, 2014, the Company marked-to-market the fair value of the derivative liabilities related to notes and determined an aggregate fair value of $14,063 and recorded a $39,484 gain from change in fair value of derivatives for three and nine months ended September 30, 2014. The fair value of the embedded derivatives for the notes was determined using the Black-Scholes option pricing model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 150.57%, (3) risk-free interest rate of .13%, (4) expected life of 1.33 of a year, and (5) estimated fair value of the Company’s common stock of $0.04 per share.

As discussed in Note 7 – “Convertible Notes Payable”, on September 3, 2014, the Company received a loan totaling $100,000 from an unrelated party. The note carried fixed interest of $10,000 and was due on September 11, 2014. Additionally, the note may be converted to common stock at the option of the holder at a rate equal to a 35% discount from the lowest daily volume weighted average price in the five days prior to conversion, but not less than $0.00004. The Company analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to “reset” provisions in the event the Company subsequently issues common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than conversion price of these notes. If these provisions are triggered, the conversion price of the note will be reduced.  The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability.

13

INTELLIGENT HIGHWAY SOLUTIONS, INC.

Notes to Unaudited Condensed Financial Statements

September 30, 2014

The embedded derivative for the note is carried on the Company’s balance sheet at fair value.  The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the income statement and the associated fair value carrying amount on the balance sheet is adjusted by the change.  The Company fair values the embedded derivative using the Black-Scholes option pricing model.  The aggregate fair value of the derivative on the date the note was entered into was $100,055 which resulted in a debt discount equal to the face value of the note of $100,000 an excess of $55 being charged to interest expense.  The fair value of $100,055 was recorded as a derivative liability on the balance sheet.

The debt discount for the note was amortized over the term of the note, or one week. On September 17, 2014, the note was repaid resulting in the elimination of the derivative liability and a gain on change in fair market value of derivatives of $100,055.

NOTE 12 – STOCK OPTIONS AND WARRANTS

The following table summarizes all stock option and warrant activity for the nine month period ended September 30, 2014:

	Shares		Weighted- Average Exercise Price Per Share
Outstanding, December 31, 2013		293,333	$	0.30
Granted		301,666		0.30
Exercised		-		-
Forfeited		-		-
Expired		-		-
Outstanding, September 30, 2014		594,999	$	0.30

The following table discloses information regarding outstanding and exercisable options and warrants at September 30, 2014:

		Outstanding						Exercisable
Exercise Prices		Number of Option Shares		Weighted Average Exercise Price		Weighted Average Remaining Life (Years)		Number of Option Shares		Weighted Average Exercise Price
$	0.30		594,999	$	0.30		2.89		494,999	$	0.30
			594,999	$	0.30		2.89		494,999	$	0.30

In determining the compensation cost of the stock options granted, the fair value of each option grant has been estimated on the date of grant using the Black-Scholes option pricing model. The assumptions used in these calculations are summarized as follows:

	September 30, 2014
Expected term of options granted		2 - 5 years
Expected volatility range		394 - 408	%
Range of risk-free interest rates		1.70 – 1.73	%
Expected dividend yield		0	%

14

INTELLIGENT HIGHWAY SOLUTIONS, INC.

Notes to Unaudited Condensed Financial Statements

September 30, 2014

NOTE 13 - RESTATEMENT

The Company has restated its results for the three and nine months ended September 30, 2013 to appropriately reflect the issuance of options as part of debt issue costs, the amortization of those issue costs, the recognition of prepaid expenses associated with common stock grants during the year ended December 31, 2012 and the treatment of previously capitalized leases as operating leases. The net effect on the revised balance sheet and statements of operations for September 30, 2013 are:

Balance Sheet:
	Original			Adjustments			As Restated
Total assets	$	87,013		$	453,316		$	540,329
Total current liabilities		1,251,938			735,483			1,987,421
Common stock		104			3			107
Additional paid in capital		826,086			278,599			1,104,685
Accumulated deficit		(2,209,911	)		(341,973	)		(2,551,884	)

Statement of Operations - three months ended September 30, 2013:
	Original			Adjustments			As Restated
Revenue	$	-		$	-		$	-
Cost of sales		-			-			-
Operating expenses		249,149			(5,285	)		243,864
Other income (expense)		(87,082	)		(40,363	)		(127,445	)
Provision for income taxes		-			-			-
Net loss		(336,231	)		(35,078	)		(371,309	)
Net loss per common share		(0.03	)		(0.01	)		(0.04	)
Weighted average shares outstanding		10,429,666			(25,000	)		10,404,666

Statement of Operations – nine months ended September 30, 2013:
	Original			Adjustments			As Restated
Revenue	$	670,553		$	-		$	670,553
Cost of sales		790,769			18,995			809,764
Operating expenses		818,255			(61,163	)		757,092
Other income (expense)		(244,909	)		(60,322	)		(305,231	)
Provision for income taxes		-			-			-
Net loss		(1,183,380	)		(18,154	)		(1,201,534	)
Net loss per common share		(0.11	)		(0.01	)		(0.12	)
Weighted average shares outstanding		10,413,182			(8,516	)		10,404,666

NOTE 14 – SUBSEQUENT EVENTS

On various dates in October and November 2014, the Company issued a total of 857,143 common shares to three separate investors for common stock subscriptions totaling $40,000 received during the three months ended September 30, 2014.

On October 15, 2014, the Company accepted a subscription agreement for 500,000 common shares at a price of $0.04 per share resulting in cash proceeds of $20,000.

On various dates in October and November 2014, the Company accepted three separate conversion notices from an existing note holder resulting in 1,210,668 common shares being issued in exchange for a $28,369 reduction in the note payable.

On October 8, 2014, the Company accepted a partial conversion notice from an existing note holder to convert $11,232 of the outstanding principal balance resulting in 600,000 shares being issued.

On October 30, 2014, the Company accepted a partial conversion notice from an existing note holder to convert $12,150 of the outstanding principal balance resulting in 810,000 shares being issued.

As discussed in Note 6 – “Notes Payable”, on August 5, 2014, the Company entered into two separate note agreements for $50,000 ($100,000 total). If the loans were not repaid by the due date, the Company had the obligation to issue 25,000 shares of common stock to each note holder for each consecutive week the notes were outstanding. The notes were not repaid by the due date resulting in 25,000 common shares being issued to each note holder weekly beginning on October 3, 2014 (50,000 common shares total per week). The common shares were valued at the closing price of our common stock on each date of issuance resulting in a total of 350,000 common shares being issued for default penalties on notes payable of $17,815.

15

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

Cautionary Notice Regarding Forward Looking Statements

The information contained in Item 2 contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Actual results may materially differ from those projected in the forward-looking statements as a result of certain risks and uncertainties set forth in this report. Although management believes that the assumptions made and expectations reflected in the forward-looking statements are reasonable, there is no assurance that the underlying assumptions will, in fact, prove to be correct or that actual results will not be different from expectations expressed in this report.

This filing contains a number of forward-looking statements which reflect management’s current views and expectations with respect to our business, strategies, products, future results and events, and financial performance. All statements made in this filing other than statements of historical fact, including statements addressing operating performance, events, or developments which management expects or anticipates will or may occur in the future, including statements related to distributor channels, volume growth, revenues, profitability, new products, adequacy of funds from operations, statements expressing general optimism about future operating results, and non-historical information, are forward looking statements. In particular, the words “believe,” “expect,” “intend,” “anticipate,” “estimate,” “may,” variations of such words, and similar expressions identify forward-looking statements, but are not the exclusive means of identifying such statements, and their absence does not mean that the statement is not forward-looking. These forward-looking statements are subject to certain risks and uncertainties, including those discussed below. Our actual results, performance or achievements could differ materially from historical results as well as those expressed in, anticipated, or implied by these forward-looking statements. We do not undertake any obligation to revise these forward-looking statements to reflect any future events or circumstances.

Overview

Intelligent Highway Solutions, Inc.  (the “Company” or “IHS”) was formed in April 22, 2011; IHS is a technology based intelligent highway solutions contractor. The Company’s primarily focus is in the California transportation market and plans to provide services that range from providing labor, materials, and related equipment for corrective service and maintenance services for the State’s transportation infrastructure. Additionally, the Company intends to develop transportation technology services that enable vehicles, roads, traffic lights, message signs, and other elements to become “intelligent” by embedding them with microchips and sensors and by empowering them to communicate with each other via wireless technologies. The acceleration of data collection and communication will allow state governments to improve transportation system performance by reducing congestion and increasing both traveler safety and convenience.

16

Plan of Operations

The Company plans to provide service and maintenance for California’s transportation sector.  The Company plans to seek further contracts in counties and municipalities throughout California and expand to neighboring states.

Additionally, the Company intends to expand to provide full service turn-key electrical services for the expanding intelligent highway services market sector. These contracts are typically bid on through the State and municipal entities. Typically, they involve the installation and purchase of materials and labor to provide a complete, operational system. Our primary focus will be in systems that are related to the intelligent highway sector, such as, but not limited to: (1) installation and materials for the installation of fiber optic cables; (2) installation and distribution of materials for the video monitoring systems deployed on the highway corridors; and (3) the distribution and installation of monitor devices and signage used in conjunction with the transportation network.

As an additional step, the Company, building off its experience in the service and maintenance of traffic monitoring systems, intends to develop wireless systems to replace existing hardwire loop detection systems, video monitoring systems, etc. The Company, in the fourth quarter of 2014, intends to introduce a wireless/battery-less loop detection system. The Company has received the approval of two service districts in California to deploy the new technology in a real-time, real-world application. The application of this new technology can be used on any freeway entrance ramps; freeway lanes to monitor traffic flow; at intersections to monitor traffic and send information to traffic signals and alert management of congestion.

Recent Developments

On April 24, 2013, the Company was informed that Mr. Michael Sullivan received notice on the same day from the Division of Procurement and Contracts of the California Department of Transportation (“Caltrans”) that Caltrans is terminating the nine Caltrans contracts (the “Caltrans Agreements”), dated as of June 1, 2011, between Michael J. Sullivan Communications and Caltrans effective upon receipt of the notice pursuant to its right to terminate the Caltrans Agreements upon thirty (30) days notice (the “Termination”). On June 21, 2011, the Company purchased the Caltrans Agreements from Mr. Sullivan. Pursuant to the Caltrans Agreements, the Company provided on-call, as needed, maintenance and repair of Caltrans’ Traffic Operations System Network.

As a result of the Termination, the Company is negotiating with Caltrans to enter into a new agreement to perform the same services as agreed upon in the Caltrans Agreements. However, as of the date hereof, the Company has not entered into an agreement and cannot make any assurance that an agreement will be executed.

On August 22, 2013 (the “Effective Date”), the Company entered into a distribution agreement (the “Distribution Agreement”) with SCS Lighting Solutions Inc. (“SCS”), whereby SCS appointed the Company as its exclusive distributer of SCS products in Sacramento, California and other locations, as determined by both parties in the future.  The SCS products include standard lighting solutions, as well as custom lighting products for indoor and outdoor applications.  If the Company does not make sales in the first year with revenues to SCS in the amount of Three Million dollars ($3,000,000), then the Distribution Agreement will become non-exclusive.

The Distribution Agreement’s initial term is for one (1) year from the Effective Date and will automatically renew for additional one (1) year increments, unless either party elects to terminate the Agreement by giving not less than sixty (60) days notice prior to the end of the current term.

17

Results of Operations

Revenue

Through the second quarter of 2013, we generated revenue through servicing contracts with Caltrans for the maintenance of the Tosnet system within certain areas of California. The contracts with Caltrans accounted for 100% of revenue during the three and nine months ended September, 2013. During the first quarter of 2014, we entered into an agreement with Honeywell Building Solutions (“Honeywell”) to provide electrical contracting services in connection with ongoing construction projects. This agreement accounted for 100% of our revenues during the three and nine months ended September 30, 2014.

Three months ended September 30, 2014 and 2013

	Three months ended September 30,
	2014		2013		Change
Revenue	$	251,210	$	-	$	251,210

Revenues for the three months ended September 30, 2014 were $251,210 compared to $0 during the same period in 2013. The increase of $251,210 is the result of discontinuing the Tosnet contracts early in the second quarter of 2013 and providing services to Honeywell Building Solutions during the full third quarter of 2014.

Nine months ended September 30, 2014 and 2013

	Nine months ended September 30,
	2014		2013		Change
Revenue	$	717,043	$	670,553	$	46,490

Revenues for the nine months ended September 30, 2014 were $717.043 compared to $670,553 during the same period in 2013. The increase of $46,490 or 7% is the result of discontinuing the Tosnet contracts early in the second quarter of 2013 and providing services to Honeywell Building Solutions during the full third quarter of 2014.

Cost of Goods Sold

Cost of goods sold consist of the costs associated with direct labor, truck leases and job materials associated with servicing the Honeywell contract in 2014 and maintaining the Tosnet systems during 2013. Such costs consist of direct labor and vehicle related costs including maintenance, rental, fuel, and insurance.

Three months ended September 30, 2014 and 2013

	Three months ended September 30,
	2014		2013		Change
Labor	$	181,986	$	-	$	181,986
Fuel		1,432		-		1,432
Vehicle Lease		9,386		-		9,386
Other		8,524		-		8,524
Total	$	201,328	$	-	$	201,328

18

Cost of goods sold for the three months ended September 30, 2014 were $201,328 compared to $0 during the same period in 2013. The increase of $201,328 is the result of the timing of the loss of our contracts with Caltrans to maintain the Tosnet system which occurred early in the second quarter of 2013. Where we were no longer servicing this contract during the third quarter of 2013, we incurred no costs of goods sold during the period. During the third quarter of 2014, we serviced the agreement with Honeywell resulting in the $201,328 increase.

Nine months ended September 30, 2014 and 2013

	Nine months ended September 30,
	2014		2013		Change
Labor	$	461,210	$	661,624	$	(200,414	)
Fuel		3,690		73,748		(70,058	)
Vehicle Lease		38,758		52,040		(13,282	)
Other		51,550		22,352		29,198
Total	$	555,208	$	809,764	$	(254,556	)

Cost of goods sold for the nine months ended September 30, 2014 were $555,208 compared to $809,764 during the same period in 2013. The decrease of $254,556 or 31% is the result of the loss of our contracts with Caltrans to maintain the Tosnet system. As a result of the loss of these contracts, we terminated the employment of the employees previously maintaining the system and incurred no other costs to maintain these contracts as we were no longer servicing them. During the nine months ended September 30, 2014, we entered into an agreement with Honeywell as described previously which is a much smaller scale project. We require fewer employees to service this contract as well as lesser overall vehicle related expenses.

Operating Expenses

Three months ended September 30, 2014 and 2013

	Three months ended September 30,
	2014		2013		Change
Salaries and wages	$	23,913	$	58,812	$	(34,899	)
Professional services		357,394		89,368		268,026
Other		76,770		95,684		(18,419	)
Total	$	458,077	$	243,864	$	214,213

Operating expenses for the three months ended September 30, 2014 were $458,077 compared to $243,864 during the same period in 2013. The increase of approximately 88% is the result of additional non-cash professional fees related to the recognition of stock based expenses that occurred in 2014 and were not existent in 2013. These fees were incremental to those incurred during the three months ended September 30, 2013. Additionally we incurred incremental costs in 2014 associated with the settlement of certain claims by former service providers.

19

Nine months ended September 30, 2014 and 2013

	Nine months ended September 30,
	2014		2013		Change
Salaries and wages	$	130,749	$	186,029	$	(55,280	)
Professional services		1,202,137		407,481		794,656
Accounts receivable factoring fees		-		55,684		(55,684	)
Other		322,066		107,898		214,168
Total	$	1,654,952	$	757,092	$	897,860

Operating expenses for the nine months ended September 30, 2014 were $1,654,952 compared to $757,092 during the same period in 2013. The increase of approximately 119% is the result of additional non-cash professional fees related to the recognition of stock based expenses that occurred in 2014 and were not existent in 2013. These fees were incremental to those incurred during the nine months ended September 30, 2013. Additionally we incurred incremental costs in 2014 associated with the settlement of certain claims by former service providers.

Other Income and Expenses

Three months ended September 30, 2014 and 2013

	Three months ended September 30,
	2014			2013			Change
Interest expense, net	$	(502,357	)	$	(154,658	)	$	(347,699	)
Gain on extinguishment of debt		(22,112	)		-			(22,112	)
Gain on derivative fair value adjustment		138,011			27,213			110,798
Total	$	(386,458	)	$	(127,445	)	$	(259,013	)

Other income and expenses during the three months ended September 30, 2014 were a net expense of $386,458 compared to $127,445 for the same period in 2013. The increase of $259,013 or approximately 203% was the result of additional non-cash interest expense recognized on the amortization of debt discounts and original debt issue costs totaling $437,161 during the three months ended September 30, 2014 compared to $151,267 during the same period in 2013. The $110,798 increase in gain on derivative fair value adjustment during the three months ended September 30, 2014 is the result of the change in the fair value of derivatives associated with a convertible note that were not present in 2013.

Nine months ended September 30, 2014 and 2013

	Nine months ended September 30,
	2014			2013			Change
Interest expense, net	$	(1,295,332	)	$	(316,161	)	$	(979,171	)
Gain on extinguishment of debt		96,179			-			96,179
Loss on settlement		(175,000	)		-			(175,000	)
(Loss) gain on derivative fair value adjustment		(12,052	)		10,930			(22,982	)
Total	$	(1,386,205	)	$	(305,231	)	$	(1,080,974	)

Other income and expenses during the nine months ended September 30, 2014 were a net expense of $1,386,205 compared to $305,231 for the same period in 2013, The increase of $1,080,974 or approximately 354% was the result of additional non-cash interest expense recognized on the amortization of debt discounts and original debt issue costs totaling $1,085,491 during the nine months ended September 30, 2014 compared to $206,945 during the same period in 2013. The $175,000 increase in loss on settlement during the nine months ended September 30, 2014 is the result of a one-time settlement event occurring in 2014 that was not present in 2013.

20

Net Loss

Three months ended September 30, 2014 and 2013

	Three months ended September 30,
	2014			2013			Change
Net loss	$	(794,653	)	$	(371,309	)	$	(423,344	)
As a percentage of revenue		-316	%

Net loss for the three months ended September 30, 2014 was $794,653 compared to $371,309 during the same period in 2013. The decrease of $423,344 is the result of reduced cost of goods sold from the loss of the Tosnet systems maintenance contracts, increased professional fees as described above and the recognition of non-cash operating and interest expenses associated with debt discounts and derivative liability on certain convertible notes.

Nine months ended September 30, 2014 and 2013

	Nine months ended September 30,
	2014			2013			Change
Net loss	$	(2,879,322	)	$	(1,201,534	)	$	(1,677,788	)
As a percentage of revenue		-402	%		-179	%		-222	%

Net loss for the nine months ended September 30, 2014 was $2,879,322 compared to $1,201,534 during the same period in 2013. The decrease of $1,677,788 is the result of reduced cost of goods sold from the loss of the Tosnet systems maintenance contracts, increased professional fees as described above and the recognition of non-cash operating and interest expenses associated with debt discounts and derivative liability on certain convertible notes.

Liquidity and Capital Resources

As of September 30, 2014, we had no cash, total current assets of $530,177 and total current liabilities of $1,701,513 creating a working capital deficit of $1,171,336. Current assets consisted of $202,942 of accounts receivable, $228,576 of prepaid expenses and current deferred loan costs of $98,659. Current liabilities consisted of a bank overdraft of $11,785, accounts payable $117,205, current notes payable of $195,000, current convertible notes payable net of discounts of $195,592, a derivative liability of $184,934, accrued interest of $73,938, loans from related parties totaling $10,000 and accrued expenses and other liabilities of $913,059.

Cash Flows from Operating Activities

Cash flows used in operating activities during the nine months ended September 30 was $584,299 which consisted of a net loss of $2,879,323, non-cash expenses and gains of $2,415,187 and negative changes in working capital of $120,163. Net cash used in operating activities during the same period in 2013 was $722,322 which consisted of a net loss of $1,201,534, non-cash expenses of $227,091 and positive changes in working capital of $252,121. The change in net cash used in operating activities was primarily due to an increase in net loss of $1,677,789 which was offset by a significantly greater amount of non-cash expenses and gains, and greater changes in prepaid expenses, accounts receivable, accounts payable and accrued liabilities.

We expect our cash used in operating activities will increase over the next twelve months as we are uncertain of our opportunities to generate revenue in the near term while we will still recognize significant non-cash expenses.

Cash Flows from Investing Activities

During the nine months ended September 30, 2014, we used $16,910 of cash in investing activities for the purchase of equipment compared to $0 during the nine months ended September 30, 2013.

21

Cash Flows from Financing Activities

Cash flows from financing activities during the nine months ended September 30, 2014 were $572,545 compared to $743,733 during the same period in 2013. Cash provided by financing activities during the nine months ended September 30, 2014 consisted of proceeds from convertible notes payable of $450,000, proceeds from notes payable of $225,000, proceeds from related party notes of $10,000, proceeds from the sale of common stock of $27,916, repayments of notes payable of $187,916, proceeds from bank overdrafts of $11,745, proceeds from common stock subscriptions of $40,000 and the purchase of 50,000 shares of treasury stock for $4,200. Cash provided by financing activities during the same period in 2013 consisted of repayments of a bank overdraft totaling $1,678, proceeds from convertible notes payable of $785,000 and repayments of notes payable of $39,589.

During the next twelve months, we anticipate generating additional cash from financing activities from entering into additional debt agreements and the additional issuance of common stock for cash as these activities will be required to fund operations.

Going Concern

Based on our financial history since inception, our independent registered public accounting firm has expressed substantial doubt as to our ability to continue as a going concern. We have generated very little revenue and have limited tangible assets. Our company has a limited operating history. Our company’s operations will be subject to all the risks inherent in the establishment of a developing enterprise and the uncertainties arising from the absence of a significant operating history. We may be unable to on a profitable basis. If our business plan is not successful, and we are not able to operate profitably, investors may lose some or all of their investment in our company.

Recent Accounting Pronouncements

The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements.

Critical Accounting Policies

There have been no changes in the Company's significant accounting policies for the three months ended September 30, 2014 as compared to those disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2013.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements.

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

We are a Smaller Reporting Company and are not required to provide the information under this item.

Item 4.  Controls and Procedures.

Disclosure of controls and procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports, filed under the Securities Exchange Act of 1934, is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable and not absolute assurance of achieving the desired control objectives. In reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures. In addition, the design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, a control may become inadequate because of changes in conditions or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

22

As required by the SEC Rule 13a-15(b), we carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this report. Based on the foregoing, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were not effective at the reasonable assurance level due to the material weaknesses described below.

In light of the material weaknesses described below, we performed additional analysis and other post-closing procedures to ensure our financial statements were prepared in accordance with generally accepted accounting principles.  Accordingly, we believe that the financial statements included in this report fairly present, in all material respects, our financial condition, results of operations and cash flows for the periods presented.

A material weakness is a control deficiency (within the meaning of the Public Company Accounting Oversight Board (PCAOB) Auditing Standard No. 2) or combination of control deficiencies that result in more than a remote likelihood that a material misstatement of the annual or interim financial statements will not be prevented or detected.  Management has identified the following two material weaknesses which have caused management to conclude that as of September 30, 2014 our disclosure controls and procedures were not effective at the reasonable assurance level:

1. We do not have written documentation of our internal control policies and procedures.  Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act which is applicable to us for the quarter ended September 30, 2014.  Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

2. We do not have sufficient segregation of duties within accounting functions, which is a basic internal control.  Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible.  However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals.  Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures and has concluded that the control deficiency that resulted represented a material weakness.

To address these material weaknesses, management performed additional analyses and other procedures to ensure that the financial statements included herein fairly present, in all material respects, our financial position, results of operations and cash flows for the periods presented.

Changes in internal controls over financial reporting.

There has been no change in our internal control over financial reporting that occurred during the fiscal quarter covered by this Quarterly Report on Form 10-Q that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.                  Legal Proceedings.

We are not currently involved in any litigation that we believe could have a material adverse effect on our financial condition or results of operations. There is no action, suit, proceeding, inquiry or investigation before or by any court, public board, government agency, self-regulatory organization or body pending or, to the knowledge of the executive officers of our company or any of our subsidiaries, threatened against or affecting our company, our common stock, any of our subsidiaries or of our companies or our subsidiaries’ officers or directors in their capacities as such, in which an adverse decision could have a material adverse effect.

23

Item 1A.              Risk Factors.

We are a Smaller Reporting Company and are not required to provide the information under this item.

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

None.

Item 3.                 Defaults Upon Senior Securities.

None

Item 4.                 Mine Safety Disclosures.

Not applicable

Item 5.                 Other Information.

None

Item 6.                 Exhibits.

Exhibit
Number	Exhibit Title
31.1*	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*	Certification of Principal Financial Office pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1+	Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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.
101.INS *	XBRL Instance Document
101.SCH *	XBRL Taxonomy Schema
101.CAL *	XBRL Taxonomy Calculation Linkbase
101.DEF *	XBRL Taxonomy Definition Linkbase
101.LAB *	XBRL Taxonomy Label Linkbase
101.PRE *	XBRL Taxonomy Presentation Linkbase

* Filed herewith.

+ In accordance with SEC Release 33-8238, Exhibit 32.1 and 32.2 are being furnished and not filed.

24

SIGNATURES

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

	INTELLIGENT HIGHWAY SOLUTIONS, INC.
Date: November 19, 2014	By:	/s/ Devon Jones
		Devon Jones
		Chief Executive Officer
		(Principal Executive Officer)
Date: November 19, 2014	By:	/s/ Philip Kirkland
		Philip Kirkland
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

25

EX-31.1

Exhibit 31.1

CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Devon Jones, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Intelligent Highway Solutions, Inc.;

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 quarterly report;

3.    Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

4.    The registrant’s other certifying officer 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 controls 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 quarterly 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;

d) disclosed in this report any change in the 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 quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5.    The registrant’s other certifying officer 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 function):

a) all significant deficiencies and material weaknesses in the design or operation of internal controls 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 controls over financial reporting.

Dated:  November 19, 2014	By:	/s/ Devon Jones
		Devon Jones
		Chief Executive Officer
		(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 302

OF THE SARBANES-OXLEY ACT OF 2002

I, Philip Kirkland, certify that:

1.    I have reviewed this quarterly report on Form 10-Q of Intelligent Highway Solutions, Inc.;

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 quarterly report;

3.    Based on my knowledge, the financial statements, and other financial information included in this quarterly 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 quarterly report;

4.    The registrant’s other certifying officer 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 controls 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 quarterly 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;

d) disclosed in this report any change in the 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 quarterly report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;

5.    The registrant’s other certifying officer 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 function):

a) all significant deficiencies and material weaknesses in the design or operation of internal controls 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 controls over financial reporting.

Dated:  November 19, 2014	By:	/s/ Philip Kirkland
		Philip Kirkland
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

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

In connection with the Quarterly Report of Intelligent Highway Solutions, Inc., (the “Company”) on Form 10-Q for the period ended September 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Devon Jones, Chief Executive Officer of the Company, certifies, pursuant to 18 U.S.C. section 1350 of the Sarbanes-Oxley Act of 2002, that:

(1)   The Report 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 Company.

Date: November 19, 2014	By:	/s/ Devon Jones
		Devon Jones
		Chief Executive Officer
		(Principal Executive Officer)

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement 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.

EX-32.2

Exhibit 32.2

CERTIFICATION OF PRINCIPAL FINANCIAL AND ACCOUNTING OFFICER

PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Intelligent Highway Solutions, Inc., (the “Company”) on Form 10-Q for the period ended September 30, 2014 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Philip Kirkland, Chief Financial Officer of the Company, certifies, pursuant to 18 U.S.C. section 1350 of the Sarbanes-Oxley Act of 2002, that:

(1)   The Report 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 Company.

Date: November 19, 2014	By:	/s/ Philip Kirkland
		Philip Kirkland
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement 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

COMMITMENTS AND CONTINGENCIES (Details Textual) (USD $)	9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Loss Contingencies [Line Items]
Accrued payroll tax liabilities	$ 613,577	$ 637,139
Monthly Payment of Operating Lease	$ 3,971
Office and Warehouse [Member]
Loss Contingencies [Line Items]
Term of lease	13 months
Description of term of lease	The Companys property lease is for an initial period of thirteen months from October 2011 and may be extended in two separate thirteen-month increments for up to a total term of 39 months.

XML

NOTES PAYABLE (Details Textual) (USD $)	0 Months Ended	9 Months Ended					0 Months Ended	1 Months Ended	9 Months Ended			1 Months Ended		9 Months Ended	0 Months Ended	12 Months Ended		0 Months Ended				0 Months Ended		0 Months Ended		0 Months Ended				1 Months Ended	9 Months Ended
	Aug. 05, 2014	Sep. 30, 2014	Sep. 30, 2013	May 22, 2014	Dec. 31, 2013	Nov. 21, 2011	Aug. 05, 2014 Note Agreements [Member]	May 22, 2014 Note Agreements [Member]	Sep. 30, 2014 Note Agreements [Member]	Aug. 05, 2014 Note Agreements One [Member]	May 22, 2014 Note Agreements One [Member]	May 22, 2014 Note Agreements Two [Member]	Aug. 05, 2014 Note Agreements Two [Member]	Sep. 30, 2014 Common Stock [Member]	Apr. 14, 2014 Innovest LLC [Member]	Dec. 31, 2013 Byrd & Company LLC [Member]	Dec. 31, 2012 Byrd & Company LLC [Member]	Jul. 15, 2014 Seton Securities [Member]	Sep. 30, 2014 Seton Securities [Member]	Apr. 17, 2014 Seton Securities [Member]	Dec. 31, 2013 Seton Securities [Member]	Apr. 14, 2014 Notes Payable [Member] Innovest LLC [Member]	Nov. 21, 2011 Notes Payable [Member] Byrd & Company LLC [Member]	Mar. 01, 2012 Notes Payable [Member] Emerging Markets Consulting LLC [Member]	Nov. 21, 2011 Notes Payable [Member] Emerging Markets Consulting LLC [Member]	Mar. 01, 2012 Notes Payable [Member] Emerging Markets Consulting LLC [Member] Common Stock [Member]	Sep. 30, 2014 Notes Payable [Member] Douglas S. Hackett [Member]	Dec. 31, 2013 Notes Payable [Member] Douglas S. Hackett [Member]	Nov. 21, 2011 Notes Payable [Member] Douglas S. Hackett [Member]	Sep. 25, 2014 Notes Payable [Member] Unrelated party [Member]	Sep. 30, 2014 Notes Payable [Member] Unrelated party [Member]
Short-term Debt [Line Items]
Borrowed amount				$ 100,000		$ 27,000	$ 100,000			$ 50,000	$ 50,000		$ 50,000						$ 25,000	$ 20,000	$ 0	$ 90,000	$ 9,000		$ 9,000				$ 9,000	$ 10,000
Interest rate per month					10.00%																	18.00%	12.00%
Notes Payable principal outstanding																											0	9,000
Accrued Interest																			0		0						0	2,278
Value of common stock in satisfaction of debt		602,503	0																					9,000
Stock Issued During Period, Value, New Issues	25,000																									19,000
Proceeds from Issuance of Common Stock		27,916	0																					10,000
Debt Instrument, Annual Principal Payment																3,803	3,917
Debt Instrument, Decrease, Forgiveness		(96,179)	0													1,200
Debt Instrument, Maturity Date, Description							The notes carried a fixed interest amount of $800 and are due on October 4, 2014.	The notes carried a fixed interest amount of $400 and were due on June 15, 2014.														The loan is due on August 14, 2014 with $30,000 payment due on each June 14, 2014; July 14, 2014 and August 14, 2014.								The note carried a fixed interest amount of $700 and is due on October 9, 2014.
Common stock incentive and right to sell description							Additionally, the note holders each received 125,000 shares of common stock as an incentive to enter into the notes and had the right to sell back 50,000 shares of common stock to the Company for $4,200.	Additionally, the note holders each received 100,000 shares of common stock as an incentive to enter into the notes and had the right to sell back 25,000 shares of common stock to the Company for $2,100. The notes, including the fixed interest amounts, were repaid on June 26, 2014.							The note holder was also issued 75,000 shares of common stock as an incentive to enter into the note. The Company did not make the required principal payment on July 17, 2014 resulting in 50,000 shares of common stock being issued to Innovest and the note beginning to accrue interest at the rate of 18% per annum. Additionally, the Company did not make the required principal payment on August 17, 2014 resulting in an additional 50,000 shares of common stock being issued to Innovest.															Additionally, the Company issued 25,000 shares of common stock as an incentive to enter into the note.
Common stock exercised and right to sell description								Additionally, each note holder exercised its right to sell back 25,000 shares of common stock each to the Company for $2,100.
Stock Issued During Period, Shares, New Issues							25,000	25,000
Additional shares issued for late penalties yielded								50,000				50,000																		10,000
Stock Issued During Period, Shares, Other														200,000
Debt Instrument, Periodic Payment, Principal		202,526							100,000					9,000																	10,000
Debt Instrument, Periodic Payment, Interest									1,493					2,888																	250
Proceeds from Loans																		$ 5,000

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STOCK OPTIONS AND WARRANTS (Tables)

9 Months Ended

Sep. 30, 2014

Stock Options And Warrants [Abstract]

Summarizes Of stock option and warrant activity

The following table summarizes all stock option and warrant activity for the nine month period ended September 30, 2014:

	Shares	Weighted- Average Exercise Price Per Share
Outstanding, December 31, 2013	293,333	$	0.30
Granted	301,666		0.30
Exercised	-		-
Forfeited	-		-
Expired	-		-
Outstanding, September 30, 2014	594,999	$	0.30

Outstanding and exercisable options and warrants

The following table discloses information regarding outstanding and exercisable options and warrants at September 30, 2014:

		Outstanding				Exercisable
Exercise Prices		Number of Option Shares	Weighted Average Exercise Price		Weighted Average Remaining Life (Years)	Number of Option Shares	Weighted Average Exercise Price
$	0.30	594,999	$	0.30	2.89	494,999	$	0.30
		594,999	$	0.30	2.89	494,999	$	0.30

Estimated of the date of grant using the Black-Scholes option pricing model

The assumptions used in these calculations are summarized as follows:

	September 30, 2014
Expected term of options granted	2 - 5 years
Expected volatility range	394 - 408	%
Range of risk-free interest rates	1.70 – 1.73	%
Expected dividend yield	0	%

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STOCK OPTIONS AND WARRANTS (Details 1) (USD $)	9 Months Ended
	Sep. 30, 2014	Dec. 31, 2013
Stock Options And Warrants [Line Items]
Outstanding, Number of Option Shares	594,999	293,333
Outstanding, Weighted Average Exercise Price	$ 0.30	$ 0.30
Outstanding, Weighted Average Remaining Life (Years)	2 years 10 months 20 days
Exercisable, Number of Option Shares	494,999
Exercisable, Weighted Average Exercise Price	$ 0.30
Exercise Price $0.30
Stock Options And Warrants [Line Items]
Weighted Average Exercise Price	$ 0.30
Outstanding, Number of Option Shares	594,999
Outstanding, Weighted Average Exercise Price	$ 0.30
Outstanding, Weighted Average Remaining Life (Years)	2 years 10 months 20 days
Exercisable, Number of Option Shares	494,999
Exercisable, Weighted Average Exercise Price	$ 0.30

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STOCKHOLDERS' DEFICIT (Details Textual) (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Stockholders Equity Note [Line Items]
Common Stock, Shares Authorized	100,000,000		100,000,000
Common Stock, Par or Stated Value Per Share	$ 0.00001		$ 0.00001
Stock Issued During Period, Shares, Issued for Services	5,100,000
Debt Conversion, Converted Instrument, Shares Issued	5,510,324
Debt Conversion, Converted Instrument, Amount	$ 889,606
Stock Repurchased During Period, Shares	50,000
Stock Repurchased During Period, Value	4,200
Common Stock, Shares, Issued	24,777,724		11,933,666
Common Stock, Shares, Outstanding, Ending Balance	24,727,724		11,933,666
Proceeds from Issuance of Common Stock	27,916	0
Common Stock [Member]
Stockholders Equity Note [Line Items]
Common Stock, Shares, Issued	199,407
Proceeds from Issuance of Common Stock	27,917
Settlement of Payable [Member]
Stockholders Equity Note [Line Items]
Stock Issued During Period, Shares, New Issues	7,500
Settlements of Certain Claims [Member]
Stockholders Equity Note [Line Items]
Stock Issued During Period, Shares, New Issues	752,616
Accrued Interest Conversions [Member]
Stockholders Equity Note [Line Items]
Debt Conversion, Converted Instrument, Shares Issued	174,201
Debt Conversion, Converted Instrument, Amount	55,358
Notes Payable [Member]
Stockholders Equity Note [Line Items]
Stock Issued During Period Shares Penalties On Notes Payable	100,000
Stock Issued During Period Value Penalties On Notes Payable	$ 18,500

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SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

SIGNIFICANT ACCOUNTING POLICIES

NOTE 4 - SIGNIFICANT ACCOUNTING POLICIES

Use of Estimates

The preparation of financial statements in accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. A change in managements’ estimates or assumptions could have a material impact on the Company’s financial condition and results of operations during the period in which such changes occurred.

Actual results could differ from those estimates. The Company’s financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.

Accounts Receivable

Accounts receivable are carried at the expected net realizable value. The allowance for doubtful accounts, is based on management's assessment of the collectability of specific customer accounts and the aging of the accounts receivables. If there were a deterioration of a major customer's creditworthiness, or actual defaults were higher than historical experience, our estimates of the recoverability of the amounts due to us could be overstated, which could have a negative impact on operations. The Company had bad debt expense of $0 during the three and nine months ended September 30, 2014 and a bad debt recovery of $0 and $13,158 during the three and nine months ended September 30, 2013.

Property, Plant and Equipment

Property and equipment are carried at cost. Expenditures for maintenance and repairs are charged against operations. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in income for the period.

Depreciation is computed over the estimated useful lives of the related assets. The estimated useful lives of depreciable assets are:

	Estimated Useful Life
Furniture and fixtures	3 - 5 years
Machinery and equipment	5 years
Vehicles	5 years

For federal income tax purposes, depreciation is computed under the modified accelerated cost recovery system. For financial statements purposes, depreciation is computed under the straight-line method. Balances of each asset class as of September, 2014 and December 31, 2013 were:

	September 30, 2014		December 31, 2013
Machinery and equipment	$	2,149	$	2,149
Furniture and fixtures		6,273		1,210
Vehicles		11,847		-
Sub Total	$	20,269	$	3,359
Accumulated depreciation		(5,525)		(1,607)
Total	$	14,744	$	1,752

Depreciation expense for the nine months ended September 30, 2014 and 2013 was $3,918 and $504, respectively. Depreciation expense for the three months ended September 30, 2014 and 2013 was $2,071 and $168, respectively.

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following at September 30, 2014 and December 31, 2013:

	September 30, 2014		December 31, 2013
Deferred rent payable	$	893	$	2,673
Payroll tax liabilities		613,577		637,139
Other payroll accruals		57,917		51,711
Other		240,672		217,582
Total	$	913,059	$	909,105

Revenue Recognition

Service revenue is recognized in the period services are rendered and earned under service arrangements with clients where service fees are fixed or determinable and collectability is reasonably assured. The Company’s service revenue is largely attributable professional engineering services where the fee is based on the billable rate of the employees.

Cost of Sales

Cost of sales comprises of costs associated with providing services related to the Company’s contracts including direct labor costs, job materials, automobile fuel, insurance, maintenance and operating leases. Cost of sales totaled $201,328 and $0 for the three months ended September 30, 2014 and 2013, respectively. Cost of sales totaled $555,208 and $809,764 during the nine months ended September 30, 2014 and 2013, respectively.

Reclassifications

Certain prior-year amounts have been reclassified in order to conform to the current-year presentation. These reclassifications related to notes payable where prior periods had incorrectly shown certain notes as being related party, when in fact they were not.

Fair Value Measurements

The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

Convertible debt

The Company records a beneficial conversion feature related to the issuance of convertible debts that have conversion features at fixed or adjustable rates. The beneficial conversion feature for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features. The beneficial conversion feature will be accreted by recording additional non-cash interest expense over the expected life of the convertible notes.

Net Loss Per Share

Net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the specified period. Diluted earnings per common share is computed by dividing net income by the weighted average number of common shares and potential common shares during the specified period. For the three and nine months ended September 30, 2014 and 2013, potential common shares are not included in the diluted net loss per share calculation as their effect would be anti-dilutive.  Such potentially dilutive shares are excluded when the effect would be to reduce net loss per share.  There were 8,903,665 such potentially dilutive shares excluded for the three and nine months ended September 30, 2014 and 2013, respectively.    

Recent Accounting Pronouncements

The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements.

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STOCK OPTIONS AND WARRANTS (Details 2)	9 Months Ended
	Sep. 30, 2014
Stock Options And Warrants [Line Items]
Expected volatility range, Minimum	394.00%
Expected volatility range, Maximum	408.00%
Range of risk-free interest rates, Minimum	1.70%
Range of risk-free interest rates, Maximum	1.73%
Expected dividend yield	0.00%
Maximum
Stock Options And Warrants [Line Items]
Expected term of options granted	5 years
Minimum
Stock Options And Warrants [Line Items]
Expected term of options granted	2 years

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SIGNIFICANT ACCOUNTING POLICIES (Details 2) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Other Payables [Line Items]
Deferred rent payable	$ 893	$ 2,673
Payroll tax liabilities	613,577	637,139
Other payroll accruals	57,917	51,711
Other	240,672	217,582
Total	$ 913,059	$ 909,105

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SIGNIFICANT ACCOUNTING POLICIES (Details 1) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 20,269	$ 3,359
Accumulated depreciation	(5,525)	(1,607)
Total	14,744	1,752
Machinery and equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	2,149	2,149
Furniture and fixtures [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	6,273	1,210
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Gross	$ 11,847	$ 0

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RESTATEMENT (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	Dec. 31, 2013
Net effect on revised statements of balance sheet and operations
Total assets	$ 549,627	$ 540,329	$ 549,627	$ 540,329	$ 423,349
Total current liabilities	1,701,513	1,987,421	1,701,513	1,987,421	1,440,603
Common stock	248	107	248	107	119
Additional paid in capital	4,955,033	1,104,685	4,955,033	1,104,685	2,071,274
Accumulated deficit	(6,216,190)	(2,551,884)	(6,216,190)	(2,551,884)	(3,336,867)
Revenue	251,210	0	717,043	670,553
Cost of sales	201,328	0	555,208	809,764
Operating expenses	458,078	243,864	1,654,953	757,092
Other income (expense)		(127,445)		(305,231)
Provision for income taxes	0	0	0	0
Net loss	(794,654)	(371,309)	(2,879,323)	(1,201,534)
Net loss per common share	$ (0.04)	$ (0.04)	$ (0.18)	$ (0.12)
Weighted average shares outstanding	20,735,595	10,404,666	16,079,394	10,404,666
Adjustments [Member]
Net effect on revised statements of balance sheet and operations
Total assets		453,316		453,316
Total current liabilities		735,483		735,483
Common stock		3		3
Additional paid in capital		278,599		278,599
Accumulated deficit		(341,973)		(341,973)
Revenue		0		0
Cost of sales		0		18,995
Operating expenses		(5,285)		(61,163)
Other income (expense)		(40,363)		(60,322)
Provision for income taxes		0		0
Net loss		(35,078)		(18,154)
Net loss per common share		$ (0.01)		$ (0.01)
Weighted average shares outstanding		(25,000)		(8,516)
Actual [Member]
Net effect on revised statements of balance sheet and operations
Total assets		87,013		87,013
Total current liabilities		1,251,938		1,251,938
Common stock		104		104
Additional paid in capital		826,086		826,086
Accumulated deficit		(2,209,911)		(2,209,911)
Revenue		0		670,553
Cost of sales		0		790,769
Operating expenses		249,149		818,255
Other income (expense)		(87,082)		(244,909)
Provision for income taxes		0		0
Net loss		$ (336,231)		$ (1,183,380)
Net loss per common share		$ (0.03)		$ (0.11)
Weighted average shares outstanding		10,429,666		10,413,182

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SIGNIFICANT ACCOUNTING POLICIES (Details Textual) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Significant Accounting Policies [Line Items]
Allowance for Loan and Lease Losses, Write-offs	$ 0		$ 0
Earnings Per Share, Potentially Dilutive Securities			For the three and nine months ended September 30, 2014 and 2013, potential common shares are not included in the diluted net loss per share calculation as their effect would be anti-dilutive. Such potentially dilutive shares are excluded when the effect would be to reduce net loss per share. There were 8,903,665 such potentially dilutive shares excluded for the three and nine months ended September 30, 2014 and 2013, respectively.
Depreciation	2,071	168	3,918	504
Cost of Goods Sold	201,328	0	555,208	809,764
Allowance for Loan and Lease Loss, Recovery of Bad Debts		$ 0		$ 13,158

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FAIR VALUE MEASUREMENTS (Details) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Liabilities
Derivative Liability	$ 184,934
Fair Value, Inputs, Level 1 [Member]
Liabilities
Derivative Liability	0	0
Fair Value, Inputs, Level 2 [Member]
Liabilities
Derivative Liability	184,934	46,023
Fair Value, Inputs, Level 3 [Member]
Liabilities
Derivative Liability	0	0
Fair Value, Measurements, Recurring [Member]
Liabilities
Derivative Liability	$ 184,934	$ 46,023

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GOING CONCERN

9 Months Ended

Sep. 30, 2014

Going Concern [Abstract]

GOING CONCERN

NOTE 3 – GOING CONCERN

The Company’s financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern which contemplates the realization of assets and liquidation of liabilities in the normal course of business. The Company has not yet established an ongoing source of revenues sufficient to cover its operating costs and allow it to continue as a going concern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable. If the Company is unable to obtain adequate capital, it could be forced to cease operations.

In order to continue as a going concern, the Company will need, among other things, additional capital resources. Management’s plan is to obtain such resources for the Company by obtaining capital from management and significant shareholders sufficient to meet its minimal operating expenses and seeking equity and/or debt financing. However management cannot provide any assurances that the Company will be successful in accomplishing any of its plans.

The ability of the Company to continue as a going concern is dependent upon its ability to successfully accomplish the plans described in the preceding paragraph and eventually secure other sources of financing and attain profitable operations. The accompanying 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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FAIR VALUE MEASUREMENTS (Details 1) (Fair Value, Inputs, Level 3 [Member], USD $)	9 Months Ended
	Sep. 30, 2014
Fair Value, Inputs, Level 3 [Member]
Fair Value, Net Derivative Asset (Liability) Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Balance	$ 46,023
Derivative liabilities recorded	507,895
Change due to note conversion	(381,036)
Fair value adjustment	12,052
Balance	$ 184,934

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DERIVATIVE LIABILITY (Details Textual) (USD $)	3 Months Ended		9 Months Ended					3 Months Ended	9 Months Ended	12 Months Ended	1 Months Ended	3 Months Ended	9 Months Ended	1 Months Ended	3 Months Ended	9 Months Ended	0 Months Ended	1 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013	May 22, 2014	Dec. 31, 2013	Nov. 21, 2011	Sep. 30, 2014 Debt one	Sep. 30, 2014 Debt one	Dec. 31, 2012 Debt one	Feb. 27, 2014 Debt two	Sep. 30, 2014 Debt two	Sep. 30, 2014 Debt two	Jan. 30, 2014 Debt three	Sep. 30, 2014 Debt three	Sep. 30, 2014 Debt three	Sep. 03, 2014 Debt four	Sep. 17, 2014 Debt four	Sep. 30, 2014 Debt four
DERIVATIVE LIABILITY [Line Items]
Derivative Liability	$ 184,934		$ 184,934
Gain on derivative fair value adjustment	138,011	27,213	(12,052)	10,930
Convertible Promissory Notes to unrelated party										30,000	339,026			300,000
Interest rate per month						10.00%				10.00%	10.00%
Conversion rates						$ 0.30				$ 0.30
Fair value of derivative								73,451	73,451
Non cash interest expense									43,451
Fair value of derivative liability								73,451	73,451			368,056	368,056		95,712	95,712			100,055
Unrelated party maturity date										Apr. 26, 2013	Feb. 27, 2015
Dividend yield									0.00%				0.00%			0.00%
Expected volatility									289.00%				312.00%			150.57%
Risk-free interest rate									0.02%				0.02%			13.00%
Expected life									25 days				4 months 28 days			1 year 3 months 29 days
Common stock price, per share								$ 0.04	$ 0.04			$ 0.04	$ 0.04		$ 0.04	$ 0.04
Derivative Liability, Current	184,934		184,934			46,023		13	13			170,858	170,858		14,063	14,063
Unrealized Gain (Loss) on Derivatives								13,295	40,920			14,813	197,601		39,484	39,484		100,055
Fair Value Of Derivative Liability recorded debt discount								30,000	30,000			312,128	312,128		95,712	95,712			100,055
Debt Instrument, Face Amount					100,000		27,000							300,000			100,000
Debt Instrument, Periodic Payment, Principal			202,526													82,917			100,000
Debt Instrument, Periodic Payment, Interest																$ 12,795			$ 55
Debt Instrument, Maturity Date, Description																	The note carried fixed interest of $10,000 and was due on September 11, 2014.
Debt Instrument, Convertible, Terms of Conversion Feature											common shares, at the holder’s option, at the conversion rate equal to a 35% discount from the lowest daily volume weighted average price in the five days prior to conversion, but not less than $0.00004.			The note may be converted to common stock at the option of the holder at a rate equal to the lesser of $0.65 or 60% of the lowest trade price in the twenty five (25) trading days prior to conversion and become convertible 180 days after the effective date which is July 29, 2014.			Additionally, the note may be converted to common stock at the option of the holder at a rate equal to a 35% discount from the lowest daily volume weighted average price in the five days prior to conversion, but not less than $0.00004.

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CONDENSED BALANCE SHEETS (USD $)	Sep. 30, 2014	Dec. 31, 2013
Current assets
Cash and cash equivalents	$ 0	$ 28,664
Accounts receivable, net of allowance of $0	202,942	0
Prepaid expenses	228,576	194,481
Deferred loan costs, current	98,659	138,324
Total current assets	530,177	361,469
Property and equipment, net of accumulated depreciation of $5,525 and $1,607	14,744	1,752
Deferred loan costs, net	4,706	60,128
Total assets	549,627	423,349
Current liabilities
Bank overdraft	11,785	40
Accounts payable	117,205	89,562
Accrued expenses and other liabilities	913,059	909,105
Notes payable, current portion	195,000	252,274
Convertible notes payable, current portion, net of discounts of $145,908 and $0	195,592	30,000
Notes payable, related party, current portion	10,000	0
Derivative liability	184,934	46,023
Accrued interest	73,938	113,599
Total current liabilities	1,701,513	1,440,603
Convertible notes payable, net of discounts of $161,613 and $651,780	73,223	248,220
Total liabilities	1,774,736	1,688,823
Stockholders' deficit
Common stock, $0.00001 par value; 100,000,000 shares authorized; 24,777,724 and 11,933,666 issued; 24,727,724 and 11,933,666 outstanding at September 30, 2014 and December 31, 2013	248	119
Common stock subscribed	40,000	0
Additional paid-in capital	4,955,033	2,071,274
Treasury stock, 50,000 shares at $.084 per share	(4,200)	0
Accumulated deficit	(6,216,190)	(3,336,867)
Total stockholders' deficit	(1,225,109)	(1,265,474)
Total liabilities and stockholders' deficit	$ 549,627	$ 423,349

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SUBSEQUENT EVENTS (Details Textual) (USD $)	0 Months Ended	9 Months Ended				0 Months Ended	1 Months Ended				3 Months Ended	0 Months Ended	1 Months Ended	2 Months Ended	0 Months Ended
	Aug. 05, 2014	Sep. 30, 2014	Sep. 30, 2013	May 22, 2014	Nov. 21, 2011	Aug. 05, 2014 Note Agreements [Member]	May 22, 2014 Note Agreements [Member]	Aug. 05, 2014 Note Agreements One [Member]	May 22, 2014 Note Agreements One [Member]	Aug. 05, 2014 Note Agreements Two [Member]	Sep. 30, 2014 Three Seperate Investors [Member]	Oct. 08, 2014 Subsequent Event [Member]	Oct. 30, 2014 Subsequent Event [Member]	Nov. 19, 2014 Subsequent Event [Member]	Oct. 15, 2014 Subsequent Event [Member] Subscription Agreements [Member]
Subsequent Event [Line Items]
Debt Instrument, Face Amount				$ 100,000	$ 27,000	$ 100,000		$ 50,000	$ 50,000	$ 50,000
Debt Conversion, Converted Instrument, Shares Issued		5,510,324										600,000	810,000	1,210,668
Debt Conversion, Converted Instrument, Amount		889,606										11,232	12,150	28,369
Stock Issued During Period, Value, Issued for Services		(987,556)	0								40,000
Stock Issued During Period, Shares, Issued for Services		5,100,000									857,143
Stock Issued During Period, Shares, New Issues						25,000	25,000								500,000
Sale of Stock, Price Per Share															$ 0.04
Stock Issued During Period, Value, New Issues	$ 25,000														$ 20,000
Common Stock Issued For Late Penalties On Notes Payable Description	The notes were not repaid by the due date resulting in 25,000 common shares being issued to each note holder weekly beginning on October 3, 2014 (50,000 common shares total per week). The common shares were valued at the closing price of our common stock on each date of issuance resulting in a total of 350,000 common shares being issued for default penalties on notes payable of $17,815

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization, Nature of Business and Trade Name

Intelligent Highway Solutions, Inc.  (the “Company” or “IHS”) was formed on April 22, 2011; IHS is a technology based intelligent highway solutions contractor. Through June 30, 2013, the Company’s primary focus was in the California transportation market providing services that range from providing labor, materials, and related equipment for corrective service and maintenance services for the State’s transportation infrastructure. Since that time, the Company has devoted its time to electrical service contracts. Additionally, the Company intends to develop transportation technology services that enable vehicles, roads, traffic lights, message signs, and other elements to become “intelligent” by embedding them with microchips and sensors and by empowering them to communicate with each other via wireless technologies. The acceleration of data collection and communication will allow state governments to improve transportation system performance by reducing congestion and increasing both traveler safety and convenience.

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CONVERTIBLE NOTES PAYABLE (Details Textual) (USD $)	9 Months Ended					9 Months Ended	0 Months Ended		1 Months Ended				3 Months Ended	9 Months Ended	12 Months Ended		9 Months Ended			9 Months Ended	12 Months Ended	1 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	May 22, 2014	Dec. 31, 2013	Nov. 21, 2011	Sep. 30, 2014 Common Stock [Member]	Sep. 03, 2014 Convertible Notes Payable [Member]	Sep. 11, 2014 Convertible Notes Payable [Member]	Sep. 03, 2014 Convertible Notes Payable [Member]	Feb. 27, 2014 Convertible Notes Payable [Member]	Jan. 30, 2014 Convertible Notes Payable [Member]	Oct. 26, 2012 Convertible Notes Payable [Member]	Sep. 30, 2014 Convertible Notes Payable [Member]	Sep. 30, 2014 Convertible Notes Payable [Member]	Dec. 31, 2013 Convertible Notes Payable [Member]	Jun. 30, 2014 Convertible Notes Payable [Member]	Sep. 30, 2014 Convertible Notes Payable [Member] Common Stock [Member]	Dec. 31, 2013 Third Party [Member]	Dec. 31, 2013 Placememnt Agent [Member]	Sep. 30, 2014 Interest Expense [Member]	Dec. 31, 2013 Interest Expense [Member]	Jan. 30, 2014 Convertible Notes Payable One [Member]	Sep. 30, 2014 Convertible Notes Payable One [Member]
Debt Instrument [Line Items]
Principal			$ 100,000		$ 27,000		$ 100,000		$ 100,000	$ 339,026	$ 300,000	$ 30,000	$ 370,000	$ 370,000	$ 900,000			$ 55,664	$ 83,500			$ 50,000
Interest rate				10.00%						10.00%		10.00%	10.00%	10.00%								12.00%
Note payable, maturity description							The note carried fixed interest of $10,000 and was due on September 11, 2014.					original maturity date of April 26, 2013; however, the Company is in negotiations to extend the maturity date.		full between March and April 2016	full between January and December 2015
Notes Payable principal outstanding												30,000										55,833
Debt Instrument, Increase, Accrued Interest	136,500													6,871	4,627								5,129
Conversion rates				$ 0.30		$ 0.30						$ 0.30	$ 0.30	$ 0.30
Proceeds from Convertible Debt	450,000	785,000													760,836
Amortization of Debt Discount (Premium)	738,181	179,117												310,000	800,000					20,089	210,925
Debt Instrument, Unamortized Discount	161,613			651,780									172,295	172,295	589,075								59,911
Repayments of Debt								110,000		212,526			27,917
Debt Issuance Cost										1,500
Proceeds from Issuance of Debt										125,000
Debt Instrument, Maturity Date										Feb. 27, 2015												Jan. 30, 2016
Debt Instrument, Convertible, Terms of Conversion Feature									Additionally, the note may be converted to common stock at the option of the holder at a rate equal to a 35% discount from the lowest daily volume weighted average price in the five days prior to conversion, but not less than $0.00004.	Additionally, the note may be converted to common stock at the option of the holder at a rate equal to a 35% discount from the lowest daily volume weighted average price in the five days prior to conversion, but not less than $0.00004.	Additionally, the note may be converted to common stock at the option of the holder at a rate equal to the lesser of $0.65 or 60% of the lowest trade price in the twenty five (25) trading days prior to conversion and become convertible 180 days after the effective date which is July 29, 2014.
Long-term Debt, Gross											335,000		197,705	197,705	310,925								39,837
Debt Instrument Minimum Amount Held In Reserve																2,500,000
Original Issue Discount											35,000											5,833
Debt Instrument, Periodic Payment, Principal	202,526					9,000							43,080	610,000
Debt Instrument, Periodic Payment, Interest						2,888								14,544			55,358
Debt Instrument Cash Amount													305,000	305,000
Debt Instrument Reduction Of Accounts Payable														5,000
Common Stock, Shares, Issued	24,777,724			11,933,666									2,186,992	2,186,992
Debt Instrument, Unused Borrowing Capacity, Amount																$ 55,000
Common Stock Shares Issued One													1,733,332	1,733,332
Common Stock Shares Issued Two	174,201
Debt Conversion, Converted Instrument, Shares Issued	5,510,324												1,090,000

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

Summary of liabilities measured at fair value on recurring basis

On a recurring basis, we measure certain financial assets and liabilities based upon the fair value hierarchy.  The following table presents information about the Company’s liabilities measured at fair value as of September 30, 2014 and December 31, 2013:

	Level 1	Level 2		Level 3	Fair Value at September 30, 2014
Liabilities
Derivative Liability	-	$	184,934	-	$	184,934

	Level 1	Level 2		Level 3	Fair Value at December 31, 2013
Liabilities
Derivative Liability	-		46,023	-		46,023

Shedule of changes in the fair value of recurring fair value measurements using significant unobservable inputs (Level 3)

The changes in the fair value of recurring fair value measurements are measured using the Black Scholes valuation model, and relate solely to the derivative liability as follows:

Balance at December 31, 2013	$	46,023
Derivative liabilities recorded		507,895
Change due to note conversion		(381,036)
Fair value adjustment		12,052
Balance at September 30, 2014	$	184,934

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RELATED PARTY TRANSACTIONS (Details Textual) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Related Party Transaction [Line Items]
Consulting Charges To Related Party	$ 0	$ 2,500	$ 2,500	$ 12,275
Related Party One [Member]
Related Party Transaction [Line Items]
Interest Expense, Related Party			8,000
Related Party Two [Member]
Related Party Transaction [Line Items]
Interest Expense, Related Party			$ 2,000

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COMMITMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

Schedule of minimum future annual rental commitments of office and warehouse lease

The minimum future annual rental commitments are as follows:

2014		10,881
2015		1,053
Total annual lease commitments	$	11,934

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CONDENSED FINANCIAL STATEMENTS

9 Months Ended

Sep. 30, 2014

Organization, Consolidation and Presentation of Financial Statements [Abstract]

CONDENSED FINANCIAL STATEMENTS

NOTE 2 – CONDENSED FINANCIAL STATEMENTS

The accompanying financial statements have been prepared by the Company without audit.  In the opinion of management, all adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations, and cash flows for the periods ended September 30, 2014 and for all periods presented herein, have been made.

Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted.  It is suggested that these condensed financial statements be read in conjunction with the financial statements and notes thereto included in the Company’s December 31, 2013 audited financial statements.  The results of operations for the periods ended September 30, 2014 are not necessarily indicative of the operating results for the full year.

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CONDENSED BALANCE SHEETS (Parenthetical) (USD $)	Sep. 30, 2014	Dec. 31, 2013
Allowance for doubtful accounts (in dollars)	$ 0	$ 0
Net accumulated depreciation (in dollars)	5,525	1,607
Debt Discount, unamortized Net of Discounts (in dollars)	145,908	0
Debt Discount, unamortized (in dollars)	$ 161,613	$ 651,780
Common Stock, Par Value	$ 0.00001	$ 0.00001
Common Stock, Authorized	100,000,000	100,000,000
Common stock, shares issued	24,777,724	11,933,666
Common stock, shares outstanding	24,727,724	11,933,666
Treasury Stock, Shares	50,000	50,000
Treasury Stock, Par Value	$ 0.084	$ 0.084

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STOCK OPTIONS AND WARRANTS

9 Months Ended

Sep. 30, 2014

Stock Options And Warrants [Abstract]

STOCK OPTIONS AND WARRANTS

NOTE 12 – STOCK OPTIONS AND WARRANTS

The following table summarizes all stock option and warrant activity for the nine month period ended September 30, 2014:

	Shares	Weighted- Average Exercise Price Per Share
Outstanding, December 31, 2013	293,333	$	0.30
Granted	301,666		0.30
Exercised	-		-
Forfeited	-		-
Expired	-		-
Outstanding, September 30, 2014	594,999	$	0.30

The following table discloses information regarding outstanding and exercisable options and warrants at September 30, 2014:

		Outstanding				Exercisable
Exercise Prices		Number of Option Shares	Weighted Average Exercise Price		Weighted Average Remaining Life (Years)	Number of Option Shares	Weighted Average Exercise Price
$	0.30	594,999	$	0.30	2.89	494,999	$	0.30
		594,999	$	0.30	2.89	494,999	$	0.30

In determining the compensation cost of the stock options granted, the fair value of each option grant has been estimated on the date of grant using the Black-Scholes option pricing model. The assumptions used in these calculations are summarized as follows:

	September 30, 2014
Expected term of options granted	2 - 5 years
Expected volatility range	394 - 408	%
Range of risk-free interest rates	1.70 – 1.73	%
Expected dividend yield	0	%

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Document And Entity Information	9 Months Ended
	Sep. 30, 2014	Nov. 19, 2014
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2014
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q3
Entity Registrant Name	Intelligent Highway Solutions, Inc.
Entity Central Index Key	0001549719
Current Fiscal Year End Date	--12-31
Entity Filer Category	Smaller Reporting Company
Trading Symbol	IHSI
Entity Common Stock, Shares Outstanding		29,055,535

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RESTATEMENT

9 Months Ended

Sep. 30, 2014

Accounting Changes and Error Corrections [Abstract]

RESTATEMENT

NOTE 13 - RESTATEMENT

The Company has restated its results for the three and nine months ended September 30, 2013 to appropriately reflect the issuance of options as part of debt issue costs, the amortization of those issue costs, the recognition of prepaid expenses associated with common stock grants during the year ended December 31, 2012 and the treatment of previously capitalized leases as operating leases. The net effect on the revised balance sheet and statements of operations for September 30, 2013 are:

Balance Sheet:
	Original		Adjustments		As Restated
Total assets	$	87,013	$	453,316	$	540,329
Total current liabilities		1,251,938		735,483		1,987,421
Common stock		104		3		107
Additional paid in capital		826,086		278,599		1,104,685
Accumulated deficit		(2,209,911)		(341,973)		(2,551,884)

Statement of Operations - three months ended September 30, 2013:
	Original		Adjustments		As Restated
Revenue	$	-	$	-	$	-
Cost of sales		-		-		-
Operating expenses		249,149		(5,285)		243,864
Other income (expense)		(87,082)		(40,363)		(127,445)
Provision for income taxes		-		-		-
Net loss		(336,231)		(35,078)		(371,309)
Net loss per common share		(0.03)		(0.01)		(0.04)
Weighted average shares outstanding		10,429,666		(25,000)		10,404,666

Statement of Operations – nine months ended September 30, 2013:
	Original		Adjustments		As Restated
Revenue	$	670,553	$	-	$	670,553
Cost of sales		790,769		18,995		809,764
Operating expenses		818,255		(61,163)		757,092
Other income (expense)		(244,909)		(60,322)		(305,231)
Provision for income taxes		-		-		-
Net loss		(1,183,380)		(18,154)		(1,201,534)
Net loss per common share		(0.11)		(0.01)		(0.12)
Weighted average shares outstanding		10,413,182		(8,516)		10,404,666

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CONDENSED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013	Sep. 30, 2014	Sep. 30, 2013
Revenue	$ 251,210	$ 0	$ 717,043	$ 670,553
Cost of sales	201,328	0	555,208	809,764
Gross profit	49,882	0	161,835	(139,211)
Operating expenses
Salaries and wages	23,913	58,812	130,749	186,029
General and administrative	434,165	185,052	1,524,204	571,063
Total operating expenses	458,078	243,864	1,654,953	757,092
Loss from operations	(408,196)	(243,864)	(1,493,118)	(896,303)
Other income (expense)
(Loss) gain on extinguishment of debt	(22,112)	0	96,179	0
Gain (loss) on derivative fair value adjustment	138,011	27,213	(12,052)	10,930
Loss on settlement	0	0	(175,000)	0
Interest expense	(502,357)	(154,658)	(1,295,332)	(316,161)
Total other expense	(386,458)	(127,445)	(1,386,205)	(305,231)
Loss before income taxes	(794,654)	(371,309)	(2,879,323)	(1,201,534)
Provision for income taxes	0	0	0	0
Net loss	$ (794,654)	$ (371,309)	$ (2,879,323)	$ (1,201,534)
Basic and diluted loss per common share	$ (0.04)	$ (0.04)	$ (0.18)	$ (0.12)
Basic and diluted weighted average shares outstanding	20,735,595	10,404,666	16,079,394	10,404,666

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CONVERTIBLE NOTES PAYABLE

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

CONVERTIBLE NOTES PAYABLE

NOTE 7 – CONVERTIBLE NOTES PAYABLE

On October 26, 2012, the Company received a loan totaling $30,000 from an unrelated party. The note bears interest at 10% per annum and had an original maturity date of April 26, 2013; however, the Company is in negotiations to extend the maturity date. There was $30,000 in principal plus accrued interest of $6,871 and $4,627 at September 30, 2014 and December 31, 2013. The principal and accrued interest may be converted at the option of the holder to common stock at $0.30.

On February 27, 2014, the Company received a loan totaling $339,026 from an unrelated party. The note bears interest at 10% per annum and matures February 27, 2015. Of the $339,026 total note, $212,526 was paid to former note holders on our behalf and $1,500 was withheld as debt issue costs resulting in net cash proceeds to the company of $125,000. Additionally, the note may be converted to common stock at the option of the holder at a rate equal to a 35% discount from the lowest daily volume weighted average price in the five days prior to conversion, but not less than $0.00004. On various dates during the nine months ended September 30, 2014, the Company accepted sixteen separate partial conversions of the note resulting in a total of 2,186,992 shares of common stock being issued in exchange for $202,526 of principal. There was $136,500 in principal plus $14,544 in accrued interest due at September 30, 2014.

On January 30, 2014, the Company entered into a note with an unrelated party to borrow up to $300,000 which would carry $35,000 as an original issue discount bringing the total note to $335,000 if fully borrowed. Upon closing the agreement, the Company received a loan totaling $50,000 which carried a prorated original issue discount of $5,833 bringing the total note to $55,833. An additional $55,000 was borrowed during the three months ended June 30, 2014. Additionally, the note may be converted to common stock at the option of the holder at a rate equal to the lesser of $0.65 or 60% of the lowest trade price in the twenty five (25) trading days prior to conversion and become convertible 180 days after the effective date which is July 29, 2014. The note requires a minimum of two million five hundred thousand (2,500,000) to be held in reserve in the instance of conversion. The note carried interest at 12% per annum and is due on January 30, 2016. During the three months ended September 30, 2014, the Company accepted four separate partial conversions from the note holder resulting in 1,090,000 shares of common stock being issued in exchange for $43,080 of principal and made cash repayments of $27,917. There was $39,837 in principal plus $5,129 in interest due at September 30, 2014.

On September 3, 2014, the Company received a loan totaling $100,000 from an unrelated party. The note carried fixed interest of $10,000 and was due on September 11, 2014. Additionally, the note may be converted to common stock at the option of the holder at a rate equal to a 35% discount from the lowest daily volume weighted average price in the five days prior to conversion, but not less than $0.00004. The note holder did not elect to convert any portion of the note and the principal plus fixed interest totaling $110,000 was repaid on September 11, 2014.

During the year ended December 31, 2013, the Company entered into debt agreements with various individuals to borrow a total of $900,000, of which $55,664 went directly to third parties to pay off amounts owed by the Company, $83,500 went to the placement agent and were recorded as debt issuance costs to be amortized over the life of the note, leaving the Company with net proceeds of $760,836. The notes accrue interest at 10% per annum and are due in are due in full between January and December 2015 with no repayments due before maturity. The principal and accrued interest may be converted at the option of the holder to common stock at $0.30. The intrinsic value of the conversion feature in these notes resulted in debt discounts totaling $800,000 which will be amortized over the lives of the notes. $210,925 of the debt discounts were recognized in interest expense during the year ended December 31, 2013 leaving an unamortized discount of $589,075 at December 31, 2013. The following table depicts the amounts due for each note as of December 31, 2013:

	Maturity Date	Principal		Debt Discount		Carrying Amount		Accrued Interest
Note holder 1	1/24/2015	$	100,000	$	-	$	100,000	$	8,795
Note holder 2	4/26/2015		60,000		(39,370)		20,630		4,126
Note holder 3	5/3/2015		25,000		(16,712)		8,288		1,658
Note holder 4	5/9/2015		100,000		(67,671)		32,329		6,466
Note holder 4	5/31/2015		50,000		(35,342)		14,658		2,932
Note holder 5	5/17/2015		50,000		(33,836)		16,164		3,233
Note holder 6	5/30/2015		100,000		(66,849)		33,151		6,630
Note holder 7	5/9/2015		50,000		(33,836)		16,164		3,233
Note holder 8	5/9/2015		50,000		(34,315)		15,685		3,137
Note holder 9	6/7/2015		25,000		(17,911)		7,089		1,418
Note holder 10	7/1/2015		100,000		(74,932)		25,068		5,014
Note holder 10	10/29/2015		25,000		(23,048)		1,952		390
Note holder 11	7/15/2024		50,000		(38,425)		11,575		2,315
Note holder 12	8/20/2015		25,000		(20,925)		4,075		815
Note holder 12	10/18/2015		25,000		(22,911)		2,089		418
Note holder 13	10/23/2015		20,000		(18,055)		1,945		389
Note holder 16	12/30/2015		45,000		(44,939)		63		12
Total		$	900,000	$	(589,075)	$	310,925	$	50,981

During the nine months ended September 30, 2014, the Company entered into debt agreements with various individuals to borrow a total of $310,000 which was $305,000 in cash and $5,000 as a reduction of accounts payable. The notes accrue interest at 10% per annum and are due in are due in full between March and April 2016 with no repayments due before maturity. The principal and accrued interest may be converted at the option of the holder to common stock at $0.30. The intrinsic value of the conversion feature in these notes resulted in debt discounts totaling $310,000 which will be amortized over the lives of the notes. $20,089 of the debt discounts were recognized in interest expense during the nine months ended September 30, 2014 leaving an unamortized discount of $59,911 at September 30, 2014. Additionally, during the nine months ended September 30, 2014, the Company accepted the full conversion of nine notes and the partial conversion of another to common stock at $0.30 per share resulting in 1,733,332 shares of common stock being issued in consideration of $610,000 of principal plus 174,201 shares of common stock being issued in consideration of $55,358 of accrued interest. The following table depicts the amounts due for each note as of September 30, 2014:

	Maturity Date	Principal		Debt Discount		Carrying Amount		Accrued Interest
Note holder 1	1/24/2015	$	50,000	$	-	$	50,000	$	13,767
Note holder 1	4/24/2016		15,000		(11,733)		3,267		653
Note holder 4	3/21/2016		30,000		(22,068)		7,932		1,586
Note holder 7	5/9/2015		50,000		(15,137)		34,863		6,973
Note holder 10	10/29/2015		25,000		(13,699)		11,301		2,260
Note holder 11	7/15/2024		50,000		(19,726)		30,274		6,055
Note holder 12	8/20/2015		25,000		(11,575)		13,425		2,685
Note holder 12	10/18/2015		25,000		(13,562)		11,438		2,288
Note holder 13	10/23/2015		20,000		(10,575)		9,425		1,885
Note holder 16	12/30/2015		45,000		(28,110)		16,890		3,378
Note holder 17	3/26/2016		25,000		(18,562)		6,438		1,322
Note holder 18	4/4/2016		10,000		(7,548)		2,452		490
Total		$	370,000	$	(172,295)	$	197,705	$	43,342

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NOTES PAYABLE

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

NOTES PAYABLE

NOTE 6 – NOTES PAYABLE

On November 21, 2011 the Company received a loan in the amount of $27,000 from Byrd & Company LLC, Emerging Markets Consulting LLC, and Douglas S. Hackett ($9,000 from each party). The loan is unsecured and bears a simple interest of 12% per annum to be amortized in 6 equal installments of principal and interest commencing January 1, 2012 through June 1, 2012. Our Chief Executive Officer, Devon Jones, and our Chief Financial Officer and Chief Operating Officer, Philip Kirkland, have personally guaranteed this loan.  On March 1, 2012, the Company issued Emerging Markets Consulting, LLC shares of common stock equivalent to $19,000, $10,000 for cash and $9,000 in satisfaction of the outstanding loan.  Accordingly, the loan from Emerging Markets Consulting, LLC is no longer outstanding.   Byrd& Company was repaid $3,803 and $3,917 during the years ended December 31, 2013 and 2012 with the remaining balance of $1,200 being forgiven during the year ended December 31, 2013. During the nine months ended September 30, 2014, the Company issued a total of 200,000 shares of common stock in satisfaction of the remaining $9,000 principal on the note with accrued interest of $2,888 being forgiven. There was $0 and $9,000 in principal plus accrued interest of $0 and $2,278 due at September 30, 2014 and December 31, 2013.

On April 14, 2014, the Company received a loan in the amount of $90,000 from Innovest, LLC. The loan is due on August 14, 2014 with $30,000 payment due on each June 14, 2014; July 14, 2014 and August 14, 2014. The loan is unsecured and non-interest bearing. In the event of default, the note shall bear interest at 18% per annum. Additionally, the Company is obligated to issue 50,000 shares of common stock in the event of late payments. The note holder was also issued 75,000 shares of common stock as an incentive to enter into the note. The Company did not make the required principal payment on July 17, 2014 resulting in 50,000 shares of common stock being issued to Innovest and the note beginning to accrue interest at the rate of 18% per annum. Additionally, the Company did not make the required principal payment on August 17, 2014 resulting in an additional 50,000 shares of common stock being issued to Innovest.

On May 22, 2014, the Company entered into two separate note agreements for $50,000 ($100,000 total). The notes carried a fixed interest amount of $400 and were due on June 15, 2014. If the loans were not repaid by the due date, the Company had the obligation to issue 25,000 shares of common stock to each note holder for each consecutive week the notes were outstanding. Additionally, the note holders each received 100,000 shares of common stock as an incentive to enter into the notes and had the right to sell back 25,000 shares of common stock to the Company for $2,100. The notes, including the fixed interest amounts, were repaid on June 26, 2014. Additionally, each note holder exercised its right to sell back 25,000 shares of common stock each to the Company for $2,100. Late penalties yielded an additional 50,000 common shares being issued to each note holder.

On August 5, 2014, the Company entered into two separate note agreements for $50,000 ($100,000 total). The notes carried a fixed interest amount of $800 and are due on October 4, 2014. If the loans were not repaid by the due date, the Company had the obligation to issue 25,000 shares of common stock to each note holder for each consecutive week the notes were outstanding. Additionally, the note holders each received 125,000 shares of common stock as an incentive to enter into the notes and had the right to sell back 50,000 shares of common stock to the Company for $4,200. There was a total of $100,000 in principal and $1,493 of accrued interest due at September 30, 2014.

On April 17, 2014, the Company received a loan in the amount of $20,000 from Seton Securities. An additional $5,000 was received on July 15, 2014. The loans are unsecured, due on demand and non-interest bearing. There was $25,000 and $0 in principal and no accrued interest due at September 30, 2014 and December 31, 2013.

On September 25, 2014, the Company received a loan from an unrelated party totaling $10,000. The note carried a fixed interest amount of $700 and is due on October 9, 2014. The note holder is entitled to receive 10,000 shares of common stock for each week beyond the due date the note is not repaid. Additionally, the Company issued 25,000 shares of common stock as an incentive to enter into the note. There was $10,000 in principal plus accrued interest of $250 at September 30, 2014.

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CONVERTIBLE NOTES PAYABLE (Tables)

9 Months Ended

Sep. 30, 2014

Debt Disclosure [Abstract]

Summary of amounts due for convertible notes payable

The following table depicts the amounts due for each note as of December 31, 2013:

	Maturity Date	Principal		Debt Discount		Carrying Amount		Accrued Interest
Note holder 1	1/24/2015	$	100,000	$	-	$	100,000	$	8,795
Note holder 2	4/26/2015		60,000		(39,370)		20,630		4,126
Note holder 3	5/3/2015		25,000		(16,712)		8,288		1,658
Note holder 4	5/9/2015		100,000		(67,671)		32,329		6,466
Note holder 4	5/31/2015		50,000		(35,342)		14,658		2,932
Note holder 5	5/17/2015		50,000		(33,836)		16,164		3,233
Note holder 6	5/30/2015		100,000		(66,849)		33,151		6,630
Note holder 7	5/9/2015		50,000		(33,836)		16,164		3,233
Note holder 8	5/9/2015		50,000		(34,315)		15,685		3,137
Note holder 9	6/7/2015		25,000		(17,911)		7,089		1,418
Note holder 10	7/1/2015		100,000		(74,932)		25,068		5,014
Note holder 10	10/29/2015		25,000		(23,048)		1,952		390
Note holder 11	7/15/2024		50,000		(38,425)		11,575		2,315
Note holder 12	8/20/2015		25,000		(20,925)		4,075		815
Note holder 12	10/18/2015		25,000		(22,911)		2,089		418
Note holder 13	10/23/2015		20,000		(18,055)		1,945		389
Note holder 16	12/30/2015		45,000		(44,939)		63		12
Total		$	900,000	$	(589,075)	$	310,925	$	50,981

The following table depicts the amounts due for each note as of September 30, 2014:

	Maturity Date	Principal		Debt Discount		Carrying Amount		Accrued Interest
Note holder 1	1/24/2015	$	50,000	$	-	$	50,000	$	13,767
Note holder 1	4/24/2016		15,000		(11,733)		3,267		653
Note holder 4	3/21/2016		30,000		(22,068)		7,932		1,586
Note holder 7	5/9/2015		50,000		(15,137)		34,863		6,973
Note holder 10	10/29/2015		25,000		(13,699)		11,301		2,260
Note holder 11	7/15/2024		50,000		(19,726)		30,274		6,055
Note holder 12	8/20/2015		25,000		(11,575)		13,425		2,685
Note holder 12	10/18/2015		25,000		(13,562)		11,438		2,288
Note holder 13	10/23/2015		20,000		(10,575)		9,425		1,885
Note holder 16	12/30/2015		45,000		(28,110)		16,890		3,378
Note holder 17	3/26/2016		25,000		(18,562)		6,438		1,322
Note holder 18	4/4/2016		10,000		(7,548)		2,452		490
Total		$	370,000	$	(172,295)	$	197,705	$	43,342

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2014

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

NOTE 14 – SUBSEQUENT EVENTS

On various dates in October and November 2014, the Company issued a total of 857,143 common shares to three separate investors for common stock subscriptions totaling $40,000 received during the three months ended September 30, 2014.

On October 15, 2014, the Company accepted a subscription agreement for 500,000 common shares at a price of $0.04 per share resulting in cash proceeds of $20,000.

On various dates in October and November 2014, the Company accepted three separate conversion notices from an existing note holder resulting in 1,210,668 common shares being issued in exchange for a $28,369 reduction in the note payable.

On October 8, 2014, the Company accepted a partial conversion notice from an existing note holder to convert $11,232 of the outstanding principal balance resulting in 600,000 shares being issued.

On October 30, 2014, the Company accepted a partial conversion notice from an existing note holder to convert $12,150 of the outstanding principal balance resulting in 810,000 shares being issued.

As discussed in Note 6 – “Notes Payable”, on August 5, 2014, the Company entered into two separate note agreements for $50,000 ($100,000 total). If the loans were not repaid by the due date, the Company had the obligation to issue 25,000 shares of common stock to each note holder for each consecutive week the notes were outstanding. The notes were not repaid by the due date resulting in 25,000 common shares being issued to each note holder weekly beginning on October 3, 2014 (50,000 common shares total per week). The common shares were valued at the closing price of our common stock on each date of issuance resulting in a total of 350,000 common shares being issued for default penalties on notes payable of $17,815.

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COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2014

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

NOTE 10 – COMMITMENTS AND CONTINGENCIES

The Company could become a party to various legal actions arising in the ordinary course of business. Matters that are probable of unfavorable outcomes to the Company and which can be reasonably estimated are accrued. Such accruals are based on information known about the matters, the Company’s estimates of the outcomes of such matters and its experience in contesting, litigating and settling similar matters.

As of the date of this report, except as described below, there are no material pending legal proceedings to which the Company is a party or of which any of their property is the subject, nor are there any such proceedings known to be contemplated by governmental authorities.

As of September 30, 2014 and December 31, 2013, the Company had accrued $613,577 and $637,139 and in payroll tax liabilities.  The payment of these liabilities has not been made due to our limited profitability.  Due to the uncertainty regarding our future profitability, it is difficult to predict our ability to pay these liabilities.   As a result, a federal tax lien has been levied that will have to be satisfied.

Vehicle Leases

The Company previously had entered into twelve separate month to month leases on various vehicles which required total monthly payments of $3,971. The vehicles related to these leases were purchased by the Company in April 2014.

Office and Warehouse Lease

The Company is required under the terms of the rental lease to make monthly lease payments.

The Company’s property lease is for an initial period of thirteen months from October 2011 and may be extended in two separate thirteen-month increments for up to a total term of 39 months. The Company may not terminate this lease prior to the agreed upon termination date. The minimum future annual rental commitments are as follows:

2014		10,881
2015		1,053
Total annual lease commitments	$	11,934

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RELATED PARTY TRANSACTIONS

9 Months Ended

Sep. 30, 2014

Related Party Transactions [Abstract]

RELATED PARTY TRANSACTIONS

NOTE 8 – RELATED PARTY TRANSACTIONS

We have engaged an entity controlled by the director of the Company to perform consulting services related to the development of new technologies. Payments to this party totaled $0 and $2,500 during the three months ended September 30, 2014 and 2013 and $2,500 and $12,275 during the nine months ended September 30, 2014 and 2013.

During the nine months ended September 30, 2014, the Company received an interest free $8,000 loan from a related party to fund operations. The loan is unsecured, due on demand and as such is included in current liabilities.

During the nine months ended September 30, 2014, the Company received an interest free $2,000 loan from a related party to fund operations. The loan is unsecured, due on demand and as such is included in current liabilities.

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STOCKHOLDERS' DEFICIT

9 Months Ended

Sep. 30, 2014

Stockholders' Equity Note [Abstract]

STOCKHOLDERS' DEFICIT

NOTE 9 – STOCKHOLDERS’ DEFICIT

The Company is authorized to issue up to 100,000,000 shares of $0.00001 par value common stock. During the nine months ended September 30, 2014, the Company issued a total of 5,100,000 common shares for services provided by various consultants; 7,500 common shares as settlement of a payable; 752,616 common shares as settlements of certain claims brought against the company by two separate entities; 5,510,324 common shares for total note conversions of $889,606; 174,201 common shares for total accrued interest conversions of $55,358; 199,407 common shares for total cash proceeds of $27,917; 100,000 common shares valued at $18,500 for default penalties on notes payable; 1,000,000 common shares as debt issue costs and repurchased a total of 50,000 common shares for $4,200 of cash.

There was 24,777,724 shares issued and 24,727,724 outstanding as of September 30, 2014.

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DERIVATIVE LIABILITY

9 Months Ended

Sep. 30, 2014

Derivative Instruments and Hedging Activities Disclosure [Abstract]

DERIVATIVE LIABILITY

NOTE 11 – DERIVATIVE LIABILITY

As of September 30, 2014 the Company had a $184,934 derivative liability balance on the balance sheet and recorded a gain from derivative liability fair value adjustment of $138,011 and a loss from derivative fair value adjustment of $12,052 during the three and nine months ended September 30, 2014.  The derivative liability activity comes from convertible notes payable as follows:

As discussed in Note 7 – “Convertible Notes Payable”, during 2012, the Company issued an aggregate of $30,000 Convertible Promissory Notes to an unrelated party that matured on April 26, 2013. The Company is currently negotiating an extension of the maturity date and anticipates to successfully do so. The note bears interest at a rate of 10% per annum and can be convertible into the Company’s common shares, at the holder’s option, at the conversion rate of $0.30 per share.  The Company analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to “reset” provisions in the event the Company subsequently issues common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than conversion price of these notes. If these provisions are triggered, the conversion price of the note will be reduced.  The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability.

The embedded derivative for the note is carried on the Company’s balance sheet at fair value.  The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the income statement and the associated fair value carrying amount on the balance sheet is adjusted by the change.  The Company fair values the embedded derivative using the Black-Scholes option pricing model.  The aggregate fair value of the derivative at the inception date of the note was $73,451.  Of the total, $30,000 was recorded as a debt discount, which is up to but not more than the net proceeds of the notes.  $43,451 was charged to operations as non-cash interest expense. The fair value of $73,451 was recorded as a derivative liability on the balance sheet.

The debt discount for the note was amortized over the term of our stock’s opening trading day to the original maturity, or two days. On September 30, 2014, the Company marked-to-market the fair value of the derivative liabilities related to note and determined an aggregate fair value of $13 and recorded a gain of $13,295 and $40,920 from change in fair value of derivatives for three and nine months ended September 30, 2014. The fair value of the embedded derivatives for the notes was determined using the Black-Scholes option pricing model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 289%, (3) risk-free interest rate of .02%, (4) expected life of 0.07 of a year, and (5) estimated fair value of the Company’s common stock of $0.04 per share.

As discussed in Note 7 – “Convertible Notes Payable”, on February 27, 2014, the Company issued an aggregate of $339,026 Convertible Promissory Notes to an unrelated party that mature on February 27, 2015. The note bears interest at a rate of 10% per annum and can be convertible into the Company’s common shares, at the holder’s option, at the conversion rate equal to a 35% discount from the lowest daily volume weighted average price in the five days prior to conversion, but not less than $0.00004.  The Company analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to “reset” provisions in the event the Company subsequently issues common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than conversion price of these notes. If these provisions are triggered, the conversion price of the note will be reduced.  The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability.

The embedded derivative for the note is carried on the Company’s balance sheet at fair value.  The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the income statement and the associated fair value carrying amount on the balance sheet is adjusted by the change.  The Company fair values the embedded derivative using the Black-Scholes option pricing model.  The aggregate fair value of the derivative at the inception date of the note was $312,128 which was recorded as a debt discount, which is up to but not more than the net proceeds of the notes.  The fair value of $368,056 was recorded as a derivative liability on the balance sheet.

The debt discount for the notes will be amortized over the term of the note, or one year. On September 30, 2014, the Company marked-to-market the fair value of the derivative liabilities related to notes and determined an aggregate fair value of $170,858 and recorded a $14,813 and $197,601 loss from change in fair value of derivatives for three and nine months ended September 30, 2014. The fair value of the embedded derivatives for the notes was determined using the Black-Scholes option pricing model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 312%, (3) risk-free interest rate of .02%, (4) expected life of 0.41 of a year, and (5) estimated fair value of the Company’s common stock of $0.04 per share.

As discussed in Note 7 – “Convertible Notes Payable”, on January 30, 2014, the Company entered into a note with an unrelated party to borrow up to $300,000. The note may be converted to common stock at the option of the holder at a rate equal to the lesser of $0.65 or 60% of the lowest trade price in the twenty five (25) trading days prior to conversion and become convertible 180 days after the effective date which is July 29, 2014. The Company analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to “reset” provisions in the event the Company subsequently issues common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than conversion price of these notes. If these provisions are triggered, the conversion price of the note will be reduced.  The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability.

The embedded derivative for the note is carried on the Company’s balance sheet at fair value.  The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the income statement and the associated fair value carrying amount on the balance sheet is adjusted by the change.  The Company fair values the embedded derivative using the Black-Scholes option pricing model.  The aggregate fair value of the derivative at the date the note became convertible was $95,712 which resulted in a debt discount equal to the outstanding principal at the time of $82,917 with an excess of $12,795 being charged to interest expense.  The fair value of $95,712was recorded as a derivative liability on the balance sheet.

The debt discount for the notes will be amortized over the term of the note, or one year. On September 30, 2014, the Company marked-to-market the fair value of the derivative liabilities related to notes and determined an aggregate fair value of $14,063 and recorded a $39,484 gain from change in fair value of derivatives for three and nine months ended September 30, 2014. The fair value of the embedded derivatives for the notes was determined using the Black-Scholes option pricing model based on the following assumptions: (1) dividend yield of 0%, (2) expected volatility of 150.57%, (3) risk-free interest rate of .13%, (4) expected life of 1.33 of a year, and (5) estimated fair value of the Company’s common stock of $0.04 per share.

As discussed in Note 7 – “Convertible Notes Payable”, on September 3, 2014, the Company received a loan totaling $100,000 from an unrelated party. The note carried fixed interest of $10,000 and was due on September 11, 2014. Additionally, the note may be converted to common stock at the option of the holder at a rate equal to a 35% discount from the lowest daily volume weighted average price in the five days prior to conversion, but not less than $0.00004. The Company analyzed the conversion feature of the agreement for derivative accounting consideration under ASC 815-15 “Derivatives and Hedging” and determined that the embedded conversion features should be classified as a derivative because the exercise price of these convertible notes are subject to “reset” provisions in the event the Company subsequently issues common stock, stock warrants, stock options or convertible debt with a stock price, exercise price or conversion price lower than conversion price of these notes. If these provisions are triggered, the conversion price of the note will be reduced.  The Company has determined that the conversion feature is not considered to be solely indexed to the Company’s own stock and is therefore not afforded equity treatment. In accordance with AC 815, the Company has bifurcated the conversion feature of the note and recorded a derivative liability.

The embedded derivative for the note is carried on the Company’s balance sheet at fair value.  The derivative liability is marked-to-market each measurement period and any unrealized change in fair value is recorded as a component of the income statement and the associated fair value carrying amount on the balance sheet is adjusted by the change.  The Company fair values the embedded derivative using the Black-Scholes option pricing model.  The aggregate fair value of the derivative on the date the note was entered into was $100,055 which resulted in a debt discount equal to the face value of the note of $100,000 an excess of $55 being charged to interest expense.  The fair value of $100,055 was recorded as a derivative liability on the balance sheet.

The debt discount for the note was amortized over the term of the note, or one week. On September 17, 2014, the note was repaid resulting in the elimination of the derivative liability and a gain on change in fair market value of derivatives of $100,055.

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CONVERTIBLE NOTES PAYABLE (Details) (USD $)					1 Months Ended						12 Months Ended							9 Months Ended	12 Months Ended					9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended	12 Months Ended	9 Months Ended
	Sep. 30, 2014	May 22, 2014	Dec. 31, 2013	Nov. 21, 2011	Feb. 27, 2014 Convertible Notes Payable [Member]	Sep. 30, 2014 Convertible Notes Payable [Member]	Sep. 03, 2014 Convertible Notes Payable [Member]	Jan. 30, 2014 Convertible Notes Payable [Member]	Dec. 31, 2013 Convertible Notes Payable [Member]	Oct. 26, 2012 Convertible Notes Payable [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Note holder 1 [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Note holder 2 [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Note holder 3 [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Note holder 4 i [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Note holder 4 ii [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Note holder 5 [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Note holder 6 [Member]	Sep. 30, 2014 Convertible Notes Payable [Member] Note holder 7 [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Note holder 7 [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Note holder 8 [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Note holder 9 [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Note holder 10 i [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Note holder 10 ii [Member]	Sep. 30, 2014 Convertible Notes Payable [Member] Note holder 11 [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Note holder 11 [Member]	Sep. 30, 2014 Convertible Notes Payable [Member] Note holder 12 i [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Note holder 12 i [Member]	Sep. 30, 2014 Convertible Notes Payable [Member] Note holder 12 ii [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Note holder 12 ii [Member]	Sep. 30, 2014 Convertible Notes Payable [Member] Note holder 13 [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Note holder 13 [Member]	Sep. 30, 2014 Convertible Notes Payable [Member] Note holder 16 [Member]	Dec. 31, 2013 Convertible Notes Payable [Member] Note holder 16 [Member]	Sep. 30, 2014 Convertible Notes Payable [Member] Note holder 17 [Member]	Sep. 30, 2014 Convertible Notes Payable [Member] Note Holder 18 [Member]	Sep. 30, 2014 Convertible Notes Payable [Member] Note holder 4 [Member]	Sep. 30, 2014 Convertible Notes Payable [Member] Note Holder 1 i [Member]	Sep. 30, 2014 Convertible Notes Payable [Member] Note Holder 1 ii [Member]	Sep. 30, 2014 Convertible Notes Payable [Member] Note Holder 10 [Member]
Debt Instrument [Line Items]
Maturity Date					Feb. 27, 2015						Jan. 24, 2015	Apr. 26, 2015	May 03, 2015	May 09, 2015	May 31, 2015	May 17, 2015	May 30, 2015	May 09, 2015	May 09, 2015	May 09, 2015	Jun. 07, 2015	Jul. 01, 2015	Oct. 29, 2015	Jul. 15, 2024	Jul. 15, 2024	Aug. 20, 2015	Aug. 20, 2015	Oct. 18, 2015	Oct. 18, 2015	Oct. 23, 2015	Oct. 23, 2015	Dec. 30, 2015	Dec. 30, 2015	Mar. 26, 2016	Apr. 04, 2016	Mar. 21, 2016	Jan. 24, 2015	Apr. 24, 2016	Oct. 29, 2015
Principal		$ 100,000		$ 27,000	$ 339,026	$ 370,000	$ 100,000	$ 300,000	$ 900,000	$ 30,000	$ 100,000	$ 60,000	$ 25,000	$ 100,000	$ 50,000	$ 50,000	$ 100,000	$ 50,000	$ 50,000	$ 50,000	$ 25,000	$ 100,000	$ 25,000	$ 50,000	$ 50,000	$ 25,000	$ 25,000	$ 25,000	$ 25,000	$ 20,000	$ 20,000	$ 45,000	$ 45,000	$ 25,000	$ 10,000	$ 30,000	$ 50,000	$ 15,000	$ 25,000
Debt Discount	(161,613)		(651,780)			(172,295)			(589,075)		0	(39,370)	(16,712)	(67,671)	(35,342)	(33,836)	(66,849)	(15,137)	(33,836)	(34,315)	(17,911)	(74,932)	(23,048)	(19,726)	(38,425)	(11,575)	(20,925)	(13,562)	(22,911)	(10,575)	(18,055)	(28,110)	(44,939)	(18,562)	(7,548)	(22,068)	0	(11,733)	(13,699)
Carrying Amount						197,705		335,000	310,925		100,000	20,630	8,288	32,329	14,658	16,164	33,151	34,863	16,164	15,685	7,089	25,068	1,952	30,274	11,575	13,425	4,075	11,438	2,089	9,425	1,945	16,890	63	6,438	2,452	7,932	50,000	3,267	11,301
Accrued Interest						$ 43,342			$ 50,981		$ 8,795	$ 4,126	$ 1,658	$ 6,466	$ 2,932	$ 3,233	$ 6,630	$ 6,973	$ 3,233	$ 3,137	$ 1,418	$ 5,014	$ 390	$ 6,055	$ 2,315	$ 2,685	$ 815	$ 2,288	$ 418	$ 1,885	$ 389	$ 3,378	$ 12	$ 1,322	$ 490	$ 1,586	$ 13,767	$ 653	$ 2,260

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SIGNIFICANT ACCOUNTING POLICIES (Tables)

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Schedule of estimated useful lives of depreciable assets

Depreciation is computed over the estimated useful lives of the related assets. The estimated useful lives of depreciable assets are:

	Estimated Useful Life
Furniture and fixtures	3 - 5 years
Machinery and equipment	5 years
Vehicles	5 years

Summary of property, plant and equipment

For federal income tax purposes, depreciation is computed under the modified accelerated cost recovery system. For financial statements purposes, depreciation is computed under the straight-line method. Balances of each asset class as of September, 2014 and December 31, 2013 were:

	September 30, 2014		December 31, 2013
Machinery and equipment	$	2,149	$	2,149
Furniture and fixtures		6,273		1,210
Vehicles		11,847		-
Sub Total	$	20,269	$	3,359
Accumulated depreciation		(5,525)		(1,607)
Total	$	14,744	$	1,752

Schedule of Accrued expenses and other liabilities

Accrued expenses and other liabilities consisted of the following at September 30, 2014 and December 31, 2013:

	September 30, 2014		December 31, 2013
Deferred rent payable	$	893	$	2,673
Payroll tax liabilities		613,577		637,139
Other payroll accruals		57,917		51,711
Other		240,672		217,582
Total	$	913,059	$	909,105

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RESTATEMENT (Tables)

9 Months Ended

Sep. 30, 2014

Accounting Changes and Error Corrections [Abstract]

Summary of restatement to prior year balance sheet and operations

The net effect on the revised balance sheet and statements of operations for September 30, 2013 are:

Balance Sheet:
	Original		Adjustments		As Restated
Total assets	$	87,013	$	453,316	$	540,329
Total current liabilities		1,251,938		735,483		1,987,421
Common stock		104		3		107
Additional paid in capital		826,086		278,599		1,104,685
Accumulated deficit		(2,209,911)		(341,973)		(2,551,884)

Statement of Operations - three months ended September 30, 2013:
	Original		Adjustments		As Restated
Revenue	$	-	$	-	$	-
Cost of sales		-		-		-
Operating expenses		249,149		(5,285)		243,864
Other income (expense)		(87,082)		(40,363)		(127,445)
Provision for income taxes		-		-		-
Net loss		(336,231)		(35,078)		(371,309)
Net loss per common share		(0.03)		(0.01)		(0.04)
Weighted average shares outstanding		10,429,666		(25,000)		10,404,666

Statement of Operations – nine months ended September 30, 2013:
	Original		Adjustments		As Restated
Revenue	$	670,553	$	-	$	670,553
Cost of sales		790,769		18,995		809,764
Operating expenses		818,255		(61,163)		757,092
Other income (expense)		(244,909)		(60,322)		(305,231)
Provision for income taxes		-		-		-
Net loss		(1,183,380)		(18,154)		(1,201,534)
Net loss per common share		(0.11)		(0.01)		(0.12)
Weighted average shares outstanding		10,413,182		(8,516)		10,404,666

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STOCK OPTIONS AND WARRANTS (Details) (USD $)	9 Months Ended
	Sep. 30, 2014
Stock Options And Warrants [Line Items]
Shares Outstanding Beginning Balance	293,333
Shares, Granted	301,666
Shares, Exercised	0
Shares, Forfeited	0
Shares, Expired	0
Shares Outstanding Ending Balance	594,999
Weighted Average Exercise Price Per Share, Beginning Balance	$ 0.30
Weighted Average Exercise Price Per Share, Granted	$ 0.30
Weighted Average Exercise Price Per Share, Exercised	$ 0
Weighted Average Exercise Price Per Share, Forfeited	$ 0
Weighted Average Exercise Price Per Share, Expired	$ 0
Weighted Average Exercise Price Per Share, Ending Balance	$ 0.30

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CONDENSED STATEMENT OF CASH FLOWS (USD $)	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2013
Cash flows from operating activities
Net loss	$ (2,879,323)	$ (1,201,534)
Adjustments to reconcile net loss to net cash used in operating activities
Common stock issued for services	987,556	0
Common stock issued for penalties	18,500	0
Common stock issued for settlement	269,833	0
Common stock issued as loan origination fee	0	6,250
Gain on forgiveness of debt	(96,179)	0
Depreciation	3,918	504
Amortization of deferred loan costs	308,780	0
Amortization of loan origination fee	159,751	0
Loss on derivative fair value adjustment	12,052	(10,930)
Excess derivative liability charged to interest	12,795	70,000
Allowance for doubtful accounts	0	(17,850)
Amortization of debt discount	738,181	179,117
Changes in operating assets and liabilities
Accounts receivable	(202,942)	275,910
Other receivables	0	120
Prepaid expenses	(34,095)	16,519
Deferred loan costs	0	(78,500)
Accounts payable	81,822	17,281
Accrued interest	31,098	5,649
Accrued expenses and other liabilities	3,954	15,142
Net cash used in operating activities	(584,299)	(722,322)
Cash flows from investing activities
Purchase of equipment	(16,910)	0
Net cash used in investing activities	(16,910)	0
Cash flows from financing activities
Repayment of bank overdraft	0	(1,678)
Proceeds from bank overdraft	11,745	0
Proceeds from convertible notes payable	450,000	785,000
Proceeds from notes payable	225,000	0
Repayments of notes payable	(187,916)	(39,589)
Proceeds from related party notes payable	10,000	0
Proceeds from common stock subscriptions	40,000	0
Proceeds from common stock issued for cash	27,916	0
Purchase of treasury stock	(4,200)	0
Net cash provided by financing activities	572,545	743,733
Change in cash and cash equivalents	(28,664)	21,411
Cash at beginning of period	28,664	0
Cash at end of period	0	21,411
Supplemental disclosures of cash flow information
Cash paid for interest	0	47,507
Cash paid for income taxes	0	0
Supplemental disclosure of non-cash financing activities:
Common stock issued as loan repayment	602,503	0
Common stock issued as interest repayment	45,165	0
Debt discount on convertible notes	392,128	610,000
Initial measurements of derivative liabilities	312,128	30,000
Exchange of note payable and accrued interest for convertible note payable	$ 212,526	$ 0

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FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2014

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

NOTE 5 - FAIR VALUE MEASUREMENTS

On a recurring basis, we measure certain financial assets and liabilities based upon the fair value hierarchy.  The following table presents information about the Company’s liabilities measured at fair value as of September 30, 2014 and December 31, 2013:

	Level 1	Level 2		Level 3	Fair Value at September 30, 2014
Liabilities
Derivative Liability	-	$	184,934	-	$	184,934

	Level 1	Level 2		Level 3	Fair Value at December 31, 2013
Liabilities
Derivative Liability	-		46,023	-		46,023

The changes in the fair value of recurring fair value measurements are measured using the Black Scholes valuation model, and relate solely to the derivative liability as follows:

Balance at December 31, 2013	$	46,023
Derivative liabilities recorded		507,895
Change due to note conversion		(381,036)
Fair value adjustment		12,052
Balance at September 30, 2014	$	184,934

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SIGNIFICANT ACCOUNTING POLICIES (Details)	9 Months Ended
	Sep. 30, 2014
Furniture and fixtures [Member] | Maximum [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	5 years
Furniture and fixtures [Member] | Minimum [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	3 years
Machinery and equipment [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	5 years
Vehicles [Member]
Property, Plant and Equipment [Line Items]
Property, Plant and Equipment, Useful Life	5 years

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COMMITMENTS AND CONTINGENCIES (Details) (Office and Warehouse [Member], USD $)	Sep. 30, 2014
Office and Warehouse [Member]
Operating Leased Assets [Line Items]
2014	$ 10,881
2015	1,053
Total annual lease commitments	$ 11,934

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SIGNIFICANT ACCOUNTING POLICIES (Policies)

9 Months Ended

Sep. 30, 2014

Accounting Policies [Abstract]

Use of Estimates

Use of Estimates

The preparation of financial statements in accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. A change in managements’ estimates or assumptions could have a material impact on the Company’s financial condition and results of operations during the period in which such changes occurred.

Actual results could differ from those estimates. The Company’s financial statements reflect all adjustments that management believes are necessary for the fair presentation of their financial condition and results of operations for the periods presented.

Cash and Cash Equivalents

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid debt instruments purchased with a maturity of three months or less to be cash equivalents.

Accounts Receivable

Accounts Receivable

Accounts receivable are carried at the expected net realizable value. The allowance for doubtful accounts, is based on management's assessment of the collectability of specific customer accounts and the aging of the accounts receivables. If there were a deterioration of a major customer's creditworthiness, or actual defaults were higher than historical experience, our estimates of the recoverability of the amounts due to us could be overstated, which could have a negative impact on operations. The Company had bad debt expense of $0 during the three and nine months ended September 30, 2014 and a bad debt recovery of $0 and $13,158 during the three and nine months ended September 30, 2013.

Property, Plant and Equipment

Property, Plant and Equipment

Property and equipment are carried at cost. Expenditures for maintenance and repairs are charged against operations. Renewals and betterments that materially extend the life of the assets are capitalized. When assets are retired or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any resulting gain or loss is reflected in income for the period.

Depreciation is computed over the estimated useful lives of the related assets. The estimated useful lives of depreciable assets are:

	Estimated Useful Life
Furniture and fixtures	3 - 5 years
Machinery and equipment	5 years
Vehicles	5 years

For federal income tax purposes, depreciation is computed under the modified accelerated cost recovery system. For financial statements purposes, depreciation is computed under the straight-line method. Balances of each asset class as of September, 2014 and December 31, 2013 were:

	September 30, 2014		December 31, 2013
Machinery and equipment	$	2,149	$	2,149
Furniture and fixtures		6,273		1,210
Vehicles		11,847		-
Sub Total	$	20,269	$	3,359
Accumulated depreciation		(5,525)		(1,607)
Total	$	14,744	$	1,752

Depreciation expense for the nine months ended September 30, 2014 and 2013 was $3,918 and $504, respectively. Depreciation expense for the three months ended September 30, 2014 and 2013 was $2,071 and $168, respectively.

Accrued Expenses and Other Liabilities

Accrued Expenses and Other Liabilities

Accrued expenses and other liabilities consisted of the following at September 30, 2014 and December 31, 2013:

	September 30, 2014		December 31, 2013
Deferred rent payable	$	893	$	2,673
Payroll tax liabilities		613,577		637,139
Other payroll accruals		57,917		51,711
Other		240,672		217,582
Total	$	913,059	$	909,105

Revenue Recognition

Revenue Recognition

Service revenue is recognized in the period services are rendered and earned under service arrangements with clients where service fees are fixed or determinable and collectability is reasonably assured. The Company’s service revenue is largely attributable professional engineering services where the fee is based on the billable rate of the employees.

Cost of Sales

Cost of Sales

Cost of sales comprises of costs associated with providing services related to the Company’s contracts including direct labor costs, job materials, automobile fuel, insurance, maintenance and operating leases. Cost of sales totaled $201,328 and $0 for the three months ended September 30, 2014 and 2013, respectively. Cost of sales totaled $555,208 and $809,764 during the nine months ended September 30, 2014 and 2013, respectively.

Reclassifications

Reclassifications

Certain prior-year amounts have been reclassified in order to conform to the current-year presentation. These reclassifications related to notes payable where prior periods had incorrectly shown certain notes as being related party, when in fact they were not.

Fair Value Measurements

Fair Value Measurements

The fair value of a financial instrument is the amount that could be received upon the sale of an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. Financial assets are marked to bid prices and financial liabilities are marked to offer prices. Fair value measurements do not include transaction costs. A fair value hierarchy is used to prioritize the quality and reliability of the information used to determine fair values. Categorization within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The fair value hierarchy is defined into the following three categories:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market-based inputs or inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

Convertible debt

Convertible debt

The Company records a beneficial conversion feature related to the issuance of convertible debts that have conversion features at fixed or adjustable rates. The beneficial conversion feature for the convertible instruments is recognized and measured by allocating a portion of the proceeds as an increase in additional paid-in capital and as a reduction to the carrying amount of the convertible instrument equal to the intrinsic value of the conversion features. The beneficial conversion feature will be accreted by recording additional non-cash interest expense over the expected life of the convertible notes.

Net Loss Per Share

Net Loss Per Share

Net loss per share is computed by dividing net loss by the weighted average number of common shares outstanding during the specified period. Diluted earnings per common share is computed by dividing net income by the weighted average number of common shares and potential common shares during the specified period. For the three and nine months ended September 30, 2014 and 2013, potential common shares are not included in the diluted net loss per share calculation as their effect would be anti-dilutive.  Such potentially dilutive shares are excluded when the effect would be to reduce net loss per share.  There were 8,903,665 such potentially dilutive shares excluded for the three and nine months ended September 30, 2014 and 2013, respectively.    

Recent Accounting Pronouncements

Recent Accounting Pronouncements

The Company has evaluated recent accounting pronouncements and their adoption has not had or is not expected to have a material impact on the Company’s financial position, or statements.