bowmo (BOMO) 10-Q 15 Feb 18 2017 Q3 Quarterly report Financial data

Document And Entity Information

Document And Entity Information - shares	9 Months Ended
	Sep. 30, 2017	Feb. 06, 2018
Document And Entity Information
Entity Registrant Name	US HIGHLAND, INC.
Entity Central Index Key	1,381,871
Document Type	10-Q
Document Period End Date	Sep. 30, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		345,450,049
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2,017

Consolidated Balance Sheets (Un

Consolidated Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Current Assets
Cash and cash equivalents		$ 260
Total Current Assets		260
Total Assets	0	260
Current Liabilities
Accounts payable	303,244	283,879
Accrued liabilities ($29,982 and $29,914 related parties, respectively)	661,370	539,844
Convertible debentures, net of discounts of $0 and $180,000, respectively	699,066	527,150
Derivative liabilities	460,403	402,881
Loans payable ($370,000 and $370,000 related parties, respectively)	481,000	481,000
Total Liabilities	2,605,083	2,234,754
Commitments
Stockholders' Deficit
Preferred stock, 40,000 shares authorized, par value $0.01; no shares issued and outstanding
Common stock, 500,000,000 shares authorized, $0.01 par value; 345,450,049 and 315,661,069 shares issued and outstanding at September 30, 2017 and December 31, 2016	3,454,502	3,156,612
Treasury stock, at cost - 58,333 shares	(773,500)	(773,500)
Additional Paid-in capital	69,892,158	69,892,158
Accumulated deficit	(75,212,108)	(75,543,629)
Total Stockholder's Deficit	(2,605,083)	(2,234,494)
Total Liabilities and Stockholder's Deficit	0	260
Series A Preferred Stock
Stockholders' Deficit
Preferred stock, 40,000 shares authorized, par value $0.01; no shares issued and outstanding	33,815	33,815
Series B Preferred Stock
Stockholders' Deficit
Preferred stock, 40,000 shares authorized, par value $0.01; no shares issued and outstanding	$ 50	$ 50

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) (Unaudited) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Current Liabilities
Accrued liabilities - related parties	$ 29,982	$ 29,914
Convertible debentures	0	180,000
Loans payable - related parties current	$ 370,000	$ 370,000
Stockholders' Deficiency
Preferred Stock, shares authorized	40,000	40,000
Preferred Stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Preferred Stock, shares issued	0	0
Preferred Stock, shares outstanding	0	0
Common Stock, shares authorized	500,000,000	500,000,000
Common Stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Common Stock, shares issued	345,450,049	315,661,069
Common Stock, shares outstanding	345,450,049	315,661,069
Treasury Stock - shares	58,333	58,333
Series A Preferred Stock
Stockholders' Deficiency
Preferred Stock, shares authorized	3,500,000	3,500,000
Preferred Stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Preferred Stock, shares issued	3,381,520	3,381,520
Preferred Stock, shares outstanding	3,381,520	3,381,520
Series B Preferred Stock
Stockholders' Deficiency
Preferred Stock, shares authorized	10,000	10,000
Preferred Stock, par value (in Dollars per share)	$ 0.01	$ 0.01
Preferred Stock, shares issued	5,000	5,000
Preferred Stock, shares outstanding	5,000	5,000

Consolidated Statements of Oper

Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Consolidated Statements Of Operations
Revenue
Operating Expenses
Depreciation				2,252
General and administrative	336	18,314	1,025	36,492
Professional fees	6,000	74,305	60,600	192,294
Total Operating Expenses	6,336	92,619	61,625	231,038
Operating Loss	(6,336)	(92,619)	(61,625)	(231,038)
Other Income (Expense)
Interest expense	(27,197)	(96,720)	(262,167)	(346,541)
Change in fair value of derivatives	780,165	583,695	(94,539)	17,067,061
Gain/Loss on settlement of debt		624,966		624,966
Loss on disposal of Assets		(73,912)		(211,681)
Loss of Convertible Notes	(250,149)	(1,749,404)	(250,149)	(1,749,404)
Other income				2,311
Total Other Income (Expense)	502,819	(711,375)	(606,855)	15,386,712
Net (Loss) Income	$ 496,483	$ 803,994	$ (668,480)	$ 15,155,674
Net Earnings (Loss) Per Common Share - Basic	$ 0	$ (0.01)	$ 0	$ 0.22
Net Earnings (Loss) Per Common Share - Diluted	$ 0	$ (0.01)	$ 0	$ 0.08
Basic weighted average common shares outstanding	332,174,525	88,870,474	321,226,043	68,473,319
Diluted weighted average common shares outstanding	885,135,636	88,870,474	321,226,043	184,074,234

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016
Operating Activities
Net income (loss)	$ (668,480)	$ 15,155,674
Adjustments to reconcile net income (loss) to cash used in operating activities:
Depreciation expense		2,252
Accretion expense	180,716	253,113
Amortization of deferred financing cost
Interest expense related to derivatives liability in excess of debt
Loss on settlement with Highlon
Change in fair value of derivatives	94,539	(17,067,061)
Loss/Gain on Settlement of Debt		(624,966)
Shares issuable for interest expense
Loss on Convertible debt	250,149	1,749,404
Changes in operating assets and liabilities:
Accounts Receivable
Prepaid expenses and deposit
Accounts payable and accrued liabilities	142,816	94,624
Accrued liabilities related parties		(56,572)
Net Cash Used in Operating Activities	(260)	(493,562)
Investing Activities
Issuance of Loans Receivable Lava
Net Cash Used in Investing Activities
Financing Activities
Proceeds from convertible debentures		285,500
Proceeds from loans payable		195,000
Net Cash Provided by Financing Activities	0	480,500
Increase (Decrease) In Cash	(260)	13,062
Cash - Beginning of Period	260	13,563
Cash - End of Period	0	501
Supplemental Cash Flows Information:
Cash paid for Income Taxes:
Cash paid for interest
Non-cash Investing and Financing Activities
Common shares issued for principal on convertible notes	$ 10,724	$ 1,738,913

Summary of Business and Basis o

Summary of Business and Basis of Presentation	9 Months Ended
	Sep. 30, 2017
Notes to Financial Statements
1. Summary of Business and Basis of Presentation	Organization and Business US Highland, Inc. was originally formed as a limited liability company on February 5, 1999 under the name The Powerhouse, L.L.C. pursuant to the laws of the State of Oklahoma. On November 9, 2006, Powerhouse Productions, L.L.C. filed Articles of Conversion changing the entity from a limited liability company to a corporation under the name Harcom Productions, Inc. On January 25, 2010, Articles of Merger were filed with the State of Oklahoma merging U.S. Highland, Inc., an Oklahoma corporation into Harcom Productions, Inc. and the name of the corporation was changed to US Highland, Inc. US Highland, Inc. (the “Company”) is a recreational power sports Original Equipment Manufacturer (“OEM”), developing motorcycles, quads, single cylinder engines, and v-twin engines under its own brand and for other OEMs. On September 23, 2015, the Company incorporated two wholly-owned subsidiaries, USH Distribution Corp., a Nevada corporation, and Powersports Brand Alliance, Inc., a Nevada corporation. The subsidiaries were formed to provide sales, marketing and distribution services of their power sport products and accessories. On September 25, 2015, the Company entered into a Joint Venture Agreement with M&M Sourcing Sdn. Bhd., a Malaysian entity (“M&M”) and jointly formed Lahva, Inc., a Nevada corporation (“Lahva”). The Company’s and M&M’s equity stake in Lahva is 40% and 60%, respectively. This agreement has been cancelled. Basis of Presentation The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, USH Distribution Corp., and Powersports Brand Alliance, Inc. All significant intercompany transactions and balances have been eliminated. The unaudited consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments (consisting of normal recurring adjustments unless otherwise indicated) which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. Certain prior year amounts have been reclassified to conform to current year presentation. Certain information in footnote disclosures normally included in the financial statements were prepared in conformity with accounting principles generally accepted in the United States of America and have been condensed or omitted pursuant to such principles and the financial results for the periods presented may not be indicative of the full year’s results. The Company believes the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the fiscal year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K filed on February 8, 2018 (the “2016 Annual Report”). Significant Accounting Policies There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2016 Annual Report. Going Concern The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles which contemplate continuation of the Company as a going-concern basis. The going concern basis assumes that assets are realized and liabilities are extinguished in the ordinary course of business at amounts disclosed in the consolidated financial statements. The Company has incurred recurring losses from operations, and as of September 30, 2017 current liabilities exceed current assets by $2,605,083 and the Company has an accumulated deficit of $75,212,108. The Company’s ability to continue as a going concern depends upon its ability to obtain adequate funding to support its operations through continuing investments of debt and/or equity by qualified investors/creditors, internally generated working capital and monetization of intellectual property assets. These factors raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Management is currently pursuing a business strategy which includes raising the necessary funds to finance the Company's development and marketing efforts. Description of New Business Decisions On June 15, 2017, Kevin G. Malone resigned as President and as a member of the Board of Directors (the “Board”) of the Company. The Board appointed Everett M. Dickson as President and Chief Executive Officer of the Company, and the Board appointed Mr. Dickson to fill the Board seat vacated by Mr. Malone.

Property and Equipment

Property and Equipment	9 Months Ended
	Sep. 30, 2017
Notes to Financial Statements
2. Property and Equipment	Depreciation expense amounted to $0 and $2,252 for the 9- months ended September 30, 2017 and 2016, respectively. On September 30, 2016, the company wrote off the property and equipment that was disposed.

Loans Payable

Loans Payable	9 Months Ended
	Sep. 30, 2017
Notes to Financial Statements
3. Loans Payable	September 30, 2017 December 31, 2016 Loans payable consist of the following: a) On May 30, 2013 and August 12, 2013, the Company received advances from a director for $2,000 and $25,000, respectively. On August 12, 2013, the Company entered into an unsecured, non-guaranteed, demand loan agreement with the director for $27,000. The loan bears interest at 1% per annum compounded monthly. $ 27,000 $ 27,000 b) On February 27, 2014, and March 19, 2015, the Company received advances from a director of $6,000, and $10,200, respectively. During the year ended December 31, 2015, the Company repaid $13,200. The advances are unsecured, due on demand and bears interest at 1% per annum compounded and calculated monthly. $ 3,000 $ 3,000 c) On September 18, 2014, May 29, 2015, July 3, 2015, December 2, 2015, and January 4, 2016, the Company entered into unsecured, non-guaranteed, loan agreements pursuant to which the Company received proceeds of $35,000, $4,000, $5,000, $22,000, and $45,000, respectively. The loans bear interest at 8% per annum compounded annually and are due 1 year after the date of issuance. $ 111,000 $ 111,000 d) On December 4, 2014, January 29, 2015, August 12, 2015, August 21, 2015, September 1, 2015, September 15, 2015, November 13, 2015, and December 23, 2015, the Company issued unsecured notes payable of $20,000, $20,000, $20,000, $25,000, $40,000, $25,000, $30,000 and $10,000, respectively, to a significant shareholder. The notes bear interest at an annual rate of 8% per annum, are uncollateralized, and due 1 year after the date of issuance. $ 190,000 $ 190,000 e) On September 2, 2016 the Company issued an unsecured note payable of $100,000 respectively to a significant shareholder. The note bears interest at an annual rate of 5% per annum, is uncollateralized, and due 1 year after the date of issuance. $ 100,000 $ 100,000 f) On September 2, 2016 the Company issued an unsecured note payable of $50,000 respectively to a significant shareholder. The note bears interest at an annual rate of 5% per annum, is uncollateralized, and due 1 year after the date of issuance. $ 50,000 $ 50,000 g) Total $ 481,000 $ 481,000 Less Short-Term Portion (481,000 ) (481,000 ) Long Term Loans Payable $ - $ - _________ Above notes are past due as of the issuance of these financial statements.

Convertible Debentures

Convertible Debentures	9 Months Ended
	Sep. 30, 2017
Notes to Financial Statements
4. Convertible Debentures	a) On July 25, 2013, the Company issued a convertible note for up to $500,000 and warrants to purchase 12,500,000 underlying shares of the Company’s common stock. The warrants are exercisable into 10,000,000 common shares of the Company at $0.05 per share and 2,500,000 shares at an exercise price of $0.10 per share until July 31, 2014. During the year ended December 31, 2013, the Company received proceeds of $500,000 under the note. The note bears interest at 8% per annum compounded monthly, and principal and interest are due on July 31, 2014. In addition, so long as any amounts are due hereunder, the Company is obligated to remit to the lender 100% of all revenues, payments and receivables from the sale of the first 50 engines sold by the Company. The note is secured against substantially all of the assets of the Company. The note may be prepaid by the Company without penalty with 30 days prior notice. The note is convertible into shares of the Company’s common stock at any time at a conversion price equal to $0.02 per share and is subject to adjustment upon the issuance of certain dilutive instruments and other events. The conversion price was subsequently reduced to $0.01 per share upon the failure to file various reports with the SEC within 120 days of the issuance of the note. Due to the potential adjustments to the conversion feature and the inability to conclude that the Company has enough unissued-authorized common shares to settle the warrants, the embedded conversion option and the warrants qualify for derivative accounting and bifurcation under ASC 815-15 Derivatives and Hedging On July 24, 2014, the Company and the note holder agreed to extend the maturity date to December 31, 2014, and increase the interest rate to 12% starting on August 1, 2014. The Company accounted for the modification in accordance with ASC 405-20 and ASC 470-50-40. As the present value of the future cash flows was more than 10% different than the cash flows of the original debt, it was determined that the original and new debt instruments are substantially different and the Company treated the original convertible note extinguished and exchanged for a new convertible note. The Company recorded a loss on extinguishment of debt of $474,668. The Company also recognized the fair value of the embedded conversion feature of $24,501,757 as a derivative liability and reduced the value of the convertible loan to $nil. On December 31, 2014, the Company and the note holder agreed to extend the maturity date to December 31, 2015. Interest shall accrue at 12% per annum but may be reduced to 8% for any period of time in which the interest is paid in cash and not accrued. The Company accounted for the modification in accordance with ASC 405-20 and ASC 470-50-40. As the present value of the future cash flows was more than 10% different than the cash flows of the original debt, it was determined that the original and new debt instruments are substantially different and the Company treated the original convertible note extinguished and exchanged for a new convertible note. The Company recorded a loss on extinguishment of debt of $411,820. The Company also recognized the fair value of the embedded conversion feature of $25,088,180 as a derivative liability and reduced the value of the convertible loan to $nil. On December 31, 2015, the Company and the note holder agreed to extend the maturity date to December 31, 2016. Interest shall accrue at 12% per annum but may be reduced to 8% for any period of time in which the interest is paid in cash and not accrued. The Company accounted for the modification in accordance with ASC 405-20 and ASC 470-50-40. As the present value of the future cash flows was more than 10% different than the cash flows of the original debt, it was determined that the original and new debt instruments are substantially different and the Company treated the original convertible note extinguished and exchanged for a new convertible note. The Company recorded a gain on extinguishment of debt of $492,585. The Company also recognized the fair value of the embedded conversion feature of $16,507,415 as a derivative liability and reduced the value of the convertible loan to $nil. During the year ended December 31, 2016, the Company recorded total accretion of $500,000. At September 30, 2017 and December 31, 2016, the carrying value of the note was $500,000. b) On February 11, 2016, the Company entered into two convertible promissory notes for a total of $275,000, pursuant to which the Company received proceeds of $237,500, net of an original issue discount of $25,000 and legal fees of $12,500. The notes are convertible at a price equal to 60% of the lowest trading price of the Company's common stock for the 20 prior trading days, bearing interest at 8% per annum and due on February 11, 2017. Due to these provisions, the embedded conversion options qualified for derivative accounting and bifurcation under ASC 815-15 Derivatives and Hedging . The initial fair value of the derivative liabilities of $308,492 resulted in a full discount to the note payable of $250,000 and the recognition of $59,492 as additional interest expense. During the Nine months ended September 30, 2017, the entire balance of the discounts and costs were recognized in full. At September 30, 2017, the carrying value of the notes was $275,000. These notes are past due as of the issuance of these financial statements. c) On May 17, 2016, the Company entered into a convertible promissory note for $55,000, pursuant to which the Company received proceeds of $48,000, net of an original issue discount of $5,000 and legal fees of $2,000. The notes are convertible at a price equal to 55% of the lowest trading price of the Company’s common stock for the 20 prior trading days, bearing interest at 8% per annum and due on May 17, 2017. Due to these provisions, the embedded conversion options qualified for derivative accounting and bifurcation under ASC 815-15 Derivatives and Hedging . The initial fair value of the derivative liabilities of $95,047 resulted in a full discount to the note payable of $50,000 and the recognition of $45,047 as additional interest expense. During the nine months ended September 30, 2017, the Company recorded total accretion of $29,862 and amortization of deferred financing cost of $500. At September 30, 2017, the carrying value of the note was $55,000. This note is past due as of the issuance of these financial statements.

Related Party Transactions

Related Party Transactions	9 Months Ended
	Sep. 30, 2017
Notes to Financial Statements
5. Related Party Transactions	a) At September 30, 2017 the Company owed two directors of the Company $29,000 for wages and consulting fees. In addition, the Company owes the director of the Company accrued interest of $982 and $914 at September 30, 2017 and December 31, 2016 respectively, which has been included in accrued liabilities.

Derivative Liabilities

Derivative Liabilities	9 Months Ended
	Sep. 30, 2017
Notes to Financial Statements
6. Derivative Liabilities	The embedded conversion options of the Company’s convertible debentures described in Note 4 contain conversion features that qualify for embedded derivative classification. The fair value of these liabilities will be re-measured at the end of every reporting period and the change in fair value will be reported in the statement of operations as a gain or loss on derivative financial instruments. The table below sets forth a summary of changes in the fair value of the Company’s Level 3 financial liabilities: 9- Month Period Ended September 30 2017 December 31, 2016 Balance at the beginning of the period $ 402,881 $ 16,886,192 Addition of new derivative liabilities - 403,539 Change in fair value of warrants - (290,276) Change in fair value of embedded conversion option 160,451 (16,596,574) Derecognition of derivatives upon settlement of convertible notes (102,929 ) - Balance at the end of the period $ 460,403 $ 402,881 The Company uses Level 3 inputs for its valuation methodology for the warrant derivative liabilities and embedded conversion option liabilities as their fair values were determined by using the Black- Scholes option pricing model based on various assumptions. The model incorporates the price of a share of the Company’s common stock (as quoted on the Over the Counter Bulletin Board), volatility, risk free rate, dividend rate and estimated life. Significant changes in any of these inputs in isolation would result in a significant change in the fair value measurement. As, required, these are classified based on the lowest level of input that is significant to the fair value measurement. The following table shows the assumptions used in the calculations: Expected Volatility Risk-free Interest Rate Expected Dividend Yield Expected Life (in years) At December 31, 2016 274.76% - 356.84% .05% 0% 0.25 – 0.38 At September 30, 2017 250%-416.26% 1.05-1.06% 0% 0.25

Preferred Stock

Preferred Stock	9 Months Ended
	Sep. 30, 2017
Notes to Financial Statements
7. Preferred Stock	a) On September 30, 2015, the Company designated 3,500,000 shares of the Company’s 3,550,000 authorized “blank check” preferred stock as Series A Convertible Preferred Stock. The Series A Convertible Preferred Stock shall, with respect to dividend rights, rights on liquidation, winding up and dissolution, rank senior to (i) all classes of common stock of the Company and (ii) any class or series of capital stock of the Company hereafter created (unless, with the consent of the holders of Series A Convertible Preferred Stock). The holders of the Series A Preferred Stock shall not entitled to receive any dividends and shall have the voting equivalency of 10 shares of common stock. Each holder of Series A Preferred Stock shall have the right at any time or from time to time from and after the day immediately following the date the Series A Preferred Stock is first issued, to convert each share of Series A Preferred Stock into 10 fully-paid and non-assessable share of common stock, par value $0.01 per share, of the Company. In connection with any conversion hereunder, each holder of Series A Convertible Preferred Stock if such conversion would cause such holder or any of its assignees to beneficially own more than 4.99% of the common stock of the Company. b) On September 30, 2015, the Company issued an aggregate of 3,381,520 shares of Series A Convertible Preferred Stock at a fair value of $12,849,776 to settle convertible and promissory notes in the amount of $1,487,000 and accrued interest of $203,760. The Company recorded a gain on settlement of debt of $1,495,529. c) On November 20, 2015, the Company designated 10,000 shares of the Company’s 3,550,000 authorized “blank check” preferred stock as Series B Convertible Preferred Stock. The Series B Convertible Preferred Stock shall, with respect to dividend rights, rights on liquidation, winding up and dissolution, rank senior to (i) all classes of common stock of the Company and (ii) any class or series of capital stock of the Company hereafter created (unless, with the consent of the holders of Series B Convertible Preferred Stock). The holders of the Series B Preferred Stock shall not entitled to receive any dividends and shall have the voting equivalency of 4,000 shares of common stock. Each holder of Series B Preferred Stock shall have the right at any time or from time to time from and after the day immediately following the date the Series B Preferred Stock is first issued, to convert each share of Series B Preferred Stock into 4,000 fully-paid and non-assessable share of common stock, par value $0.01 per share, of the Company. In connection with any conversion hereunder, each holder of Series B Convertible Preferred Stock if such conversion occurred would cause such holder or any of its assignees to beneficially own more than 4.99% of the common stock of the Company.

Common Stock

Common Stock	9 Months Ended
	Sep. 30, 2017
Notes to Financial Statements
8. Common Stock	a) During August, 2016, the Company issued 38,479,487 shares of common stock to settle $47,904 on debt conversions with two significant shareholders of the Company. b) During September, 2016, the Company issued 115,989,052 shares of common stock to settle $56,552 on a debt conversion with two significant shareholders of the Company. c) On October 6, 2016, the Company issued 24,705,278 shares of common stock to settle $4,330 on a debt conversion with two significant shareholders of the Company. d) During November, 2016, the Company issued 78,374,583 shares of common stock to settle $11,234 on a debt conversion with two significant shareholders of the Company. e) On July 13, 2017, the Company issued 29,788,980 shares of common stock to settle $8,800 on a debt conversion with a significant shareholder of the Company. f) As of September 30, 2017, there was an insufficient amount of the Company’s authorized common stock to satisfy the potential number of shares that would be required to satisfy the outstanding convertible preferred shares and convertible debt into common stock. In accordance with ASC 815 Derivatives and hedging, the Company analyzed which contracts could be classified as equity through the following sequencing methodology: contracts with no maturity date (convertible preferred shares) then contracts with the earliest maturity date first. Under this methodology, the management determined there was no additional liability, as there is already a derivative liability recorded for the embedded conversion feature.

Earnings (Loss) Per Share

Earnings (Loss) Per Share	9 Months Ended
	Sep. 30, 2017
Notes to Financial Statements
9. Earnings (Loss) Per Share	A reconciliation of the components of basic and diluted net income per common share is presented in the tables below: For the 9- Month Period Ended September 30 2017 2016 Income (Loss) Weighted Average Common Shares Outstanding Per Share Income (Loss) Weighted Average Common Shares Outstanding Per Share Basic: Income (loss) attributable to common stock $ (680,480 ) 321,226,043 $ 0.00 $ 15,155,674 68,473,000 $ 0.22 Diluted: Income (loss) attributable to common stock, including assumed conversions $ (680,480 ) 321,226,043 $ 0.00 $ 15,155,674 184,074,000 $ 0.08 As of September 30, 2017, all common stock equivalents were included as they would be anti-dilutive

Subsequent Events

Subsequent Events	9 Months Ended
	Sep. 30, 2017
Notes to Financial Statements
10. Subsequent Events	In accordance with ASC 855-140, Subsequent Events, a) On October 30, 2017 the Company issued a convertible note payable of $25,000. The note bears interest at an annual rate of 10% per annum, is uncollateralized, and due 2 years after the date of issuance. The notes will become convertible at a mutually agreed upon rate one year after the issuance date. b) On November 18, 2017 the Company issued a convertible note payable of $25,000. The note bears interest at an annual rate of 10% per annum, is uncollateralized, and due 2 years after the date of issuance. The notes will become convertible at a mutually agreed upon rate one year after the issuance date.

Summary of Business and Basis16

Summary of Business and Basis of Presentation (Policies)	9 Months Ended
	Sep. 30, 2017
Summary Of Business And Basis Of Presentation Policies
Organization and Business	US Highland, Inc. was originally formed as a limited liability company on February 5, 1999 under the name The Powerhouse, L.L.C. pursuant to the laws of the State of Oklahoma. On November 9, 2006, Powerhouse Productions, L.L.C. filed Articles of Conversion changing the entity from a limited liability company to a corporation under the name Harcom Productions, Inc. On January 25, 2010, Articles of Merger were filed with the State of Oklahoma merging U.S. Highland, Inc., an Oklahoma corporation into Harcom Productions, Inc. and the name of the corporation was changed to US Highland, Inc. US Highland, Inc. (the “Company”) is a recreational power sports Original Equipment Manufacturer (“OEM”), developing motorcycles, quads, single cylinder engines, and v-twin engines under its own brand and for other OEMs. On September 23, 2015, the Company incorporated two wholly-owned subsidiaries, USH Distribution Corp., a Nevada corporation, and Powersports Brand Alliance, Inc., a Nevada corporation. The subsidiaries were formed to provide sales, marketing and distribution services of their power sport products and accessories. On September 25, 2015, the Company entered into a Joint Venture Agreement with M&M Sourcing Sdn. Bhd., a Malaysian entity (“M&M”) and jointly formed Lahva, Inc., a Nevada corporation (“Lahva”). The Company’s and M&M’s equity stake in Lahva is 40% and 60%, respectively. This agreement has been cancelled.
Basis of Presentation	The Company’s consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. These consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries, USH Distribution Corp., and Powersports Brand Alliance, Inc. All significant intercompany transactions and balances have been eliminated. The unaudited consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) and reflect all adjustments (consisting of normal recurring adjustments unless otherwise indicated) which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods presented. Certain prior year amounts have been reclassified to conform to current year presentation. Certain information in footnote disclosures normally included in the financial statements were prepared in conformity with accounting principles generally accepted in the United States of America and have been condensed or omitted pursuant to such principles and the financial results for the periods presented may not be indicative of the full year’s results. The Company believes the disclosures are adequate to make the information presented not misleading. These financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto for the fiscal year ended December 31, 2016 included in the Company’s Annual Report on Form 10-K filed on February 8, 2018 (the “2016 Annual Report”).
Significant Accounting Policies	There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2016 Annual Report.
Going Concern	The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles which contemplate continuation of the Company as a going-concern basis. The going concern basis assumes that assets are realized and liabilities are extinguished in the ordinary course of business at amounts disclosed in the consolidated financial statements. The Company has incurred recurring losses from operations, and as of September 30, 2017 current liabilities exceed current assets by $2,605,083 and the Company has an accumulated deficit of $75,212,108. The Company’s ability to continue as a going concern depends upon its ability to obtain adequate funding to support its operations through continuing investments of debt and/or equity by qualified investors/creditors, internally generated working capital and monetization of intellectual property assets. These factors raise substantial doubt about the Company’s ability to continue as a going concern. These consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Management is currently pursuing a business strategy which includes raising the necessary funds to finance the Company's development and marketing efforts.
Description of New Business Decisions	On June 15, 2017, Kevin G. Malone resigned as President and as a member of the Board of Directors (the “Board”) of the Company. The Board appointed Everett M. Dickson as President and Chief Executive Officer of the Company, and the Board appointed Mr. Dickson to fill the Board seat vacated by Mr. Malone.

Loans Payable (Tables)

Loans Payable (Tables)	9 Months Ended
	Sep. 30, 2017
Loans Payable Tables
Schedule of Debt	September 30, 2017 December 31, 2016 Loans payable consist of the following: a) On May 30, 2013 and August 12, 2013, the Company received advances from a director for $2,000 and $25,000, respectively. On August 12, 2013, the Company entered into an unsecured, non-guaranteed, demand loan agreement with the director for $27,000. The loan bears interest at 1% per annum compounded monthly. $ 27,000 $ 27,000 b) On February 27, 2014, and March 19, 2015, the Company received advances from a director of $6,000, and $10,200, respectively. During the year ended December 31, 2015, the Company repaid $13,200. The advances are unsecured, due on demand and bears interest at 1% per annum compounded and calculated monthly. $ 3,000 $ 3,000 c) On September 18, 2014, May 29, 2015, July 3, 2015, December 2, 2015, and January 4, 2016, the Company entered into unsecured, non-guaranteed, loan agreements pursuant to which the Company received proceeds of $35,000, $4,000, $5,000, $22,000, and $45,000, respectively. The loans bear interest at 8% per annum compounded annually and are due 1 year after the date of issuance. $ 111,000 $ 111,000 d) On December 4, 2014, January 29, 2015, August 12, 2015, August 21, 2015, September 1, 2015, September 15, 2015, November 13, 2015, and December 23, 2015, the Company issued unsecured notes payable of $20,000, $20,000, $20,000, $25,000, $40,000, $25,000, $30,000 and $10,000, respectively, to a significant shareholder. The notes bear interest at an annual rate of 8% per annum, are uncollateralized, and due 1 year after the date of issuance. $ 190,000 $ 190,000 e) On September 2, 2016 the Company issued an unsecured note payable of $100,000 respectively to a significant shareholder. The note bears interest at an annual rate of 5% per annum, is uncollateralized, and due 1 year after the date of issuance. $ 100,000 $ 100,000 f) On September 2, 2016 the Company issued an unsecured note payable of $50,000 respectively to a significant shareholder. The note bears interest at an annual rate of 5% per annum, is uncollateralized, and due 1 year after the date of issuance. $ 50,000 $ 50,000 g) Total $ 481,000 $ 481,000 Less Short-Term Portion (481,000 ) (481,000 ) Long Term Loans Payable $ - $ -

Derivative Liabilities (Tables)

Derivative Liabilities (Tables)	9 Months Ended
	Sep. 30, 2017
Derivative Liabilities Tables
Summary of Changes in Fair Value of Financial Liabilities	9- Month Period Ended September 30 2017 December 31, 2016 Balance at the beginning of the period $ 402,881 $ 16,886,192 Addition of new derivative liabilities - 403,539 Change in fair value of warrants - (290,276) Change in fair value of embedded conversion option 160,451 (16,596,574) Derecognition of derivatives upon settlement of convertible notes (102,929 ) - Balance at the end of the period $ 460,403 $ 402,881
Schedule of Share-based Payment Award, Stock Options, Valuation Assumptions	Expected Volatility Risk-free Interest Rate Expected Dividend Yield Expected Life (in years) At December 31, 2016 274.76% - 356.84% .05% 0% 0.25 – 0.38 At September 30, 2017 250%-416.26% 1.05-1.06% 0% 0.25

Earnings (Loss) Per Share (Tabl

Earnings (Loss) Per Share (Tables)	9 Months Ended
	Sep. 30, 2017
Earnings Loss Per Share Tables
Earnings (Loss) Per Share	For the 9- Month Period Ended September 30 2017 2016 Income (Loss) Weighted Average Common Shares Outstanding Per Share Income (Loss) Weighted Average Common Shares Outstanding Per Share Basic: Income (loss) attributable to common stock $ (680,480 ) 321,226,043 $ 0.00 $ 15,155,674 68,473,000 $ 0.22 Diluted: Income (loss) attributable to common stock, including assumed conversions $ (680,480 ) 321,226,043 $ 0.00 $ 15,155,674 184,074,000 $ 0.08

Summary of Business and Basis20

Summary of Business and Basis of Presentation (Details Narrative) - USD ($)	2 Months Ended	9 Months Ended
	Sep. 25, 2015	Sep. 30, 2017	Dec. 31, 2016
State or Country of incorporation		Oklahoma
Date of incorporation		Feb. 5, 1999
Working capital deficit		$ (2,605,083)
Accumulated deficit		$ (75,212,108)	$ (75,543,629)
Minimum [Member]
Ownership percentage	40.00%
Maximum [Member]
Ownership percentage	60.00%

Property and Equipment (Details

Property and Equipment (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Property And Equipment Details Narrative
Depreciation expense				$ 2,252

Loans Payable (Details)

Loans Payable (Details) - USD ($)	Sep. 30, 2017	Dec. 31, 2016
Loan Payable	$ 481,000	$ 481,000
Less Short Term	(481,000)	(481,000)
Long Term
Loan 1 [Member]
Loan Payable	27,000	27,000
Loan 2 [Member]
Loan Payable	3,000	3,000
Loan 3 [Member]
Loan Payable	111,000	111,000
Loan 4 [Member]
Loan Payable	190,000	190,000
Loan 5 [Member]
Loan Payable	100,000	100,000
Loan 6 [Member]
Loan Payable	$ 50,000	$ 50,000

Loans Payable (Details Narrativ

Loans Payable (Details Narrative) - USD ($)

Sep. 02, 2016

Jan. 04, 2016

Dec. 02, 2015

Nov. 13, 2015

Sep. 01, 2015

Aug. 12, 2015

Jul. 03, 2015

Dec. 04, 2014

Aug. 12, 2013

Dec. 23, 2015

Sep. 15, 2015

Aug. 21, 2015

May 29, 2015

Jan. 29, 2015

Sep. 18, 2014

Dec. 31, 2015

Mar. 19, 2015

Feb. 27, 2014

May 30, 2013

Loan 2 [Member] | Director [Member]

Due to related party

$ 10,200

$ 6,000

Interest rate

1.00%

1.00%

Repayment of related party debt

$ 13,200

Loan 1 [Member] | Director [Member]

Due to related party

$ 25,000

$ 2,000

Interest rate

1.00%

Loan 1 [Member] | Director [Member] | Unsecured, Non-Guaranteed Loan Agreement [Member]

Proceeds from issuance of debt

$ 27,000

Loan 6 [Member] | Unsecured Notes Payable [Member]

Interest rate

5.00%

Maturity period

1 year

Notes payable

$ 50,000

Loan 5 [Member] | Unsecured Notes Payable [Member]

Interest rate

5.00%

Maturity period

1 year

Notes payable

$ 100,000

Loan 4 [Member] | Unsecured Notes Payable [Member] | Significant shareholder [Member]

Interest rate

8.00%

8.00%

8.00%

8.00%

8.00%

8.00%

8.00%

8.00%

Maturity period

1 year

1 year

1 year

1 year

1 year

1 year

1 year

1 year

Notes payable

$ 30,000

$ 40,000

$ 20,000

$ 20,000

$ 10,000

$ 25,000

$ 25,000

$ 20,000

Loan 3 [Member] | Unsecured, Non-Guaranteed Loan Agreement [Member]

Proceeds from issuance of debt

$ 45,000

$ 22,000

$ 5,000

$ 4,000

$ 35,000

Interest rate

8.00%

8.00%

8.00%

8.00%

8.00%

Maturity period

1 year

1 year

1 year

1 year

1 year

Convertible Debentures (Details

Convertible Debentures (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Dec. 31, 2016
Convertible notes proceeds				$ 285,500
Gain/Loss on settlement of debt		$ 624,966		624,966
Interest expense	27,197	$ 96,720	262,167	$ 346,541
Convertible Promissory Notes One [Member]
Note payable	55,000		55,000
Recorded accretion			29,862
Amortization of deferred financing cost			500
Convertible Promissory Notes [Member]
Note payable	275,000		275,000
May 17, 2016 [Member] | Convertible Promissory Notes One [Member]
Convertible note	55,000		$ 55,000
Due date			May 17, 2017
Terms of conversion feature			The notes are convertible at a price equal to 55% of the lowest trading price of the Company's common stock for the 20 prior trading days, bearing interest at 8% per annum and due on May 17, 2017
Fair value of the derivative liability	95,047		$ 95,047
Note payable	50,000		50,000
Convertible notes proceeds			$ 48,000
Interest rate			8.00%
Unamortized discount	5,000		$ 5,000
Legal fees			2,000
Interest expense			45,047
February 11, 2016 [Member] | Convertible Promissory Notes [Member]
Convertible note	275,000		$ 275,000
Due date			Feb. 11, 2017
Terms of conversion feature			The notes are convertible at a price equal to 60% of the lowest trading price of the Company's common stock for the 20 prior trading days, bearing interest at 8% per annum and due on February 11, 2017
Fair value of the derivative liability	308,492		$ 308,492
Note payable	250,000		250,000
Convertible notes proceeds			$ 237,500
Interest rate			8.00%
Unamortized discount	25,000		$ 25,000
Interest expense			59,492
Convertible Note [Member]
Note payable	500,000		$ 500,000		$ 500,000
Recorded accretion					$ 500,000
Convertible Note [Member] | December 31, 2015 [Member]
Due date			Dec. 31, 2016
Fair value of the conversion feature			$ 16,507,415
Interest rate			12.00%
Present value of the future cash flows			10.00%
Gain/Loss on settlement of debt			$ 492,585
Reduced interest rate			8.00%
Convertible Note [Member] | December 31, 2014 [Member]
Due date			Dec. 31, 2015
Fair value of the conversion feature			$ 25,088,180
Interest rate			12.00%
Present value of the future cash flows			10.00%
Gain/Loss on settlement of debt			$ 411,820
Reduced interest rate			8.00%
Convertible Note [Member] | July 24, 2014 [Member]
Due date			Dec. 31, 2014
Fair value of the conversion feature			$ 24,501,757
Interest rate			12.00%
Present value of the future cash flows			10.00%
Gain/Loss on settlement of debt			$ 474,668
Convertible Note [Member] | July 25, 2013 [Member]
Convertible note	500,000		$ 500,000
Due date			Jul. 31, 2014
Terms of conversion feature			The note is convertible into shares of the Company’s common stock at any time at a conversion price equal to $0.02 per share and is subject to adjustment upon the issuance of certain dilutive instruments and other events. The conversion price was subsequently reduced to $0.01 per share upon the failure to file various reports with the SEC within 120 days of the issuance of the note
Description for prepayment of note			The note may be prepaid by the Company without penalty with 30 days prior notice
Note payable	$ 500,000		$ 500,000
Loss on derivatives			$ 9,383,810
Common stock shares issuable upon exercise of warrants	12,500,000		12,500,000
Interest rate			8.00%
Warrants, value			$ 3,169,531
Fair value of the conversion feature			6,714,279
Unamortized discount	$ 500,000		$ 500,000
Revenues percentage			100.00%
Convertible Note [Member] | July 25, 2013 [Member] | Exercise price 0.10 [Member]
Common stock shares issuable upon exercise of warrants	2,500,000		2,500,000
Exercise price	$ 0.10		$ 0.10
Convertible Note [Member] | July 25, 2013 [Member] | Exercise price 0.05 [Member]
Common stock shares issuable upon exercise of warrants	10,000,000		10,000,000
Exercise price	$ 0.05		$ 0.05

Related Party Transactions (Det

Related Party Transactions (Details Narrative) - Owed directors [Member] - USD ($)	9 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Accrued interest	$ 982	$ 914
Wages and consulting fees	$ 29,000

Derivative Liabilities (Details

Derivative Liabilities (Details) - USD ($)	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Derivative Liabilities Details
Balance at the beginning of period	$ 402,881	$ 16,886,192
Addition of new derivative liabilities		403,539
Change in fair value of warrants		(290,276)
Change in fair value of embedded conversion option	160,451	16,596,574
Derecognition of derivatives upon settlement of convertible notes	(102,929)
Balance at the end of the period	$ 460,403	$ 402,881

Derivative Liabilities (Detai27

Derivative Liabilities (Details 1)	9 Months Ended	12 Months Ended
	Sep. 30, 2017	Dec. 31, 2016
Risk-free Interest Rate		0.05%
Expected Dividend Yield	0.00%	0.00%
Expected Life (in years)	2 months 30 days
Minimum [Member]
Expected Volatility	250.00%	274.76%
Risk-free Interest Rate	1.05%
Expected Life (in years)		2 months 30 days
Maximum [Member]
Expected Volatility	416.26%	356.84%
Risk-free Interest Rate	1.06%
Expected Life (in years)		4 months 17 days

Preferred Stock (Details Narrat

Preferred Stock (Details Narrative) - USD ($)	1 Months Ended	3 Months Ended		9 Months Ended
	Nov. 20, 2015	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2015
Gain/Loss on settlement of debt			$ 624,966		$ 624,966
Series B Preferred Stock
Convertible Preferred Stock, designated	10,000
Convertible Preferred Stock, authorized	3,550,000
Series A Convertible Preferred Stock conversion description	Each holder of Series B Preferred Stock shall have the right at any time or from time to time from and after the day immediately following the date the Series B Preferred Stock is first issued, to convert each share of Series B Preferred Stock into 4,000 fully-paid and non-assessable share of common stock, par value $0.01 per share, of the Company.
Ownership percentage after conversion	4.99%
Series A Preferred Stock
Convertible Preferred Stock, designated						3,500,000
Convertible Preferred Stock, authorized						3,550,000
Shares issued						3,381,520
Preferred stock at a fair value						$ 12,849,776
Convertible and promissory notes settle amount						1,487,000
Accrued interest settle amount						203,760
Gain/Loss on settlement of debt						$ 1,495,529
Series A Convertible Preferred Stock conversion description						Each share of Series A Preferred Stock into 10 fully-paid and non-assessable share of common stock, par value $0.01 per share, of the Company.
Ownership percentage after conversion						4.99%

Common Stock (Details Narrative

Common Stock (Details Narrative) - USD ($)	Jul. 13, 2017	Oct. 06, 2016	Nov. 30, 2016	Sep. 30, 2016	Aug. 31, 2016
Equity [Abstract]
Debt conversion, converted instrument, shares Issued	29,788,980	24,705,278	78,374,583	115,989,052	38,479,487
Debt conversion, converted instrument, amount	$ 8,800	$ 4,330	$ 11,234	$ 56,552	$ 47,904

Earnings (Loss) Per Share (Deta

Earnings (Loss) Per Share (Details) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2017	Sep. 30, 2016	Sep. 30, 2017	Sep. 30, 2016
Basic:
Income (loss) attributable to common stock	$ 496,483	$ 803,994	$ (668,480)	$ 15,155,674
Diluted:
Income (loss) attributable to common stock, including assumed conversions			$ (680,480)	$ 15,155,674
Weighted Average Common Shares Outstanding
Income (loss) attributable to common stock	332,174,525	88,870,474	321,226,043	68,473,319
Diluted:
Income (loss) attributable to common stock, including assumed conversions	885,135,636	88,870,474	321,226,043	184,074,234
Basic:
Income (loss) attributable to common stock	$ 0	$ (0.01)	$ 0	$ 0.22
Diluted:
Income (loss) attributable to common stock, including assumed conversions	$ 0	$ (0.01)	$ 0	$ 0.08

Subsequent Events (Details Narr

Subsequent Events (Details Narrative) - Subsequent Event [Member] - USD ($)	Nov. 18, 2017	Oct. 30, 2017
Convertible note payable, issued	$ 25,000	$ 25,000
Convertible note payable, bearing interest rate, annualy	10.00%	10.00%