Cruzani, Inc. - FORM 10-Q - August 20, 2015

Attached files

file	filename
EX-32.1 - CERTIFICATION - Cruzani, Inc.	uhln_ex321.htm
EX-32.2 - CERTIFICATION - Cruzani, Inc.	uhln_ex322.htm
EX-31.1 - CERTIFICATION - Cruzani, Inc.	uhln_ex311.htm
EX-31.2 - CERTIFICATION - Cruzani, Inc.	uhln_ex312.htm
XML - IDEA: XBRL DOCUMENT - Cruzani, Inc.	R9999.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended: June 30, 2015

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

For the transition period from __________ to___________

Commission File Number: 000-54624

US HIGHLAND, INC.

(Exact name of registrant as specified in its charter)

Oklahoma		26-4144571
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1411 N. 105^thEast Avenue, Tulsa, OK		74116
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code: (918) 558-1358

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 at the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ No x

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

Large accelerated filer	¨	Accelerated filer	¨
Non-accelerated filer	¨	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

Number of the Registrant’s common stock outstanding as of August 17, 2015: 77,727,669 common shares

US Highland, Inc.

Form 10-Q

For the Quarterly Period Ended June 30, 2015

Table of Contents

PART I – FINANCIAL INFORMATION

ITEM 1.	FINANCIAL STATEMENTS (UNAUDITED)	3

ITEM 2.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	17

ITEM 3.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	19

ITEM 4.	CONTROLS AND PROCEDURES	19

PART II – OTHER INFORMATION

ITEM 1.	LEGAL PROCEEDINGS	21

ITEM 1A.	RISK FACTORS	21

ITEM 2.	UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	21

ITEM 3.	DEFAULTS UPON SENIOR SECURITIES	21

ITEM 4.	MINE SAFETY DISCLOSURES	21

ITEM 5.	OTHER INFORMATION	21

ITEM 6.	EXHIBITS	22

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

The Company’s unaudited interim consolidated financial statements for the six-month period ended June 30, 2015 and for the comparable period in the prior year form part of this quarterly report. They are prepared in accordance with United States generally accepted accounting principles.

US Highland, Inc.

Unaudited Consolidated Balance Sheets

	June 30, 2015			December 31, 2014

ASSETS
Current Assets
Cash and cash equivalents	$	5,935		$	14,035
Prepaid expenses		90,529			95,748
Deposit in Highlon acquisition		150,000			150,000

Total Current Assets		246,464			259,783
Deposits		5,284			11,478
Property and equipment, net		6,987			10,288

Total Assets	$	258,735		$	281,549

LIABILITIES AND STOCKHOLDERS’ DEFICIT
Current Liabilities
Accounts payable	$	493,254		$	499,586
Accrued liabilities ($344,435 and $255,830 related parties, respectively)		796,341			656,482
Convertible debentures ($121,798 and $nil related parties, respectively), net of discounts of $651,902 and $773,700, respectively		380,431			259,633
Derivative liabilities		89,872,077			46,065,517
Loans payable ($742,000 and $268,000 related parties, respectively)		1,040,000			391,500

Total Current Liabilities		92,582,103			47,872,718

Long-term loan payable ($157,000 and $607,000 related parties, respectively)		157,000			607,000

Total Liabilities		92,739,103			48,479,718
Commitments
Stockholders’ Deficit
Preferred stock, 3,550,000 shares authorized, par value $0.01; no shares issued and outstanding		–			–
Common stock, 500,000,000 shares authorized, $0.01 par value; 77,727,669 shares issued and outstanding		777,276			777,276
Common stock reserved for future issuance; 263,000 and 244,000 shares at June 30, 2015 and December 31, 2014		178,850			152,236
Treasury stock, at cost – 58,333 shares		(773,500	)		(773,500	)
Additional paid-in capital		54,757,845			54,757,845
Accumulated deficit		(147,420,839	)		(103,112,026	)
Total Stockholders’ Deficit		(92,480,368	)		(48,198,169	)
Total Liabilities and Stockholders’ Deficit	$	258,735		$	281,549

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

US Highland, Inc.

Unaudited Consolidated Statements of Operations

	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2015			2014			2015			2014


Revenue	$	–		$	–		$	–		$	–

Write-down of inventory		–			125,616			–			125,616

Gross Margin		–			(125,616	)		–			(125,616	)

Operating Expenses

Depreciation		1,547			2,536			3,301			5,158
General and administrative		80,191			375,161			187,776			534,954
Professional fees		31,768			117,392			54,920			333,119

Total Operating Expenses		113,506			495,089			245,997			873,231

Operating Loss		(113,506	)		(620,705	)		(245,997	)		(998,847	)

Other Income (Expense)

Interest expense		(145,992	)		(376,782	)		(256,281	)		(567,761	)
Change in fair value of derivatives		(35,777,246	)		(10,499,869	)		(43,806,560	)		(8,809,435	)
Other income					396			25			501

Total Other Income (Expense)		(35,923,238	)		(10,876,255	)		(44,062,816	)		(9,376,695	)

Net Loss	$	(36,036,744	)	$	(11,496,960	)	$	(44,308,813	)	$	(10,375,542	)

Net Loss Per Common Share:
- Basic and Diluted	$	(0.46	)	$	(0.15	)	$	(0.57	)	$	(0.13	)
Basic and diluted weighted average common shares outstanding		77,727,669			77,727,669			77,727,669			77,727,669

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

US Highland, Inc.

Consolidated Statement of Stockholders’ Deficit

							Common
							Stock
					Additional		Reserved		Stock
	Common Stock				Paid-in		For Future		Subscriptions		Accumulated			Treasury
	Shares		Amount		Capital		Issuance		Receivable		Deficit			Stock			Total

Balance, December 31, 2014		77,727,669	$	777,276	$	54,757,845	$	152,236	$	–	$	(103,112,026	)	$	(773,500	)	$	(48,198,169	)

Shares issuable for payment of accrued interest		–		–		–		26,614		–		–			–			26,614

Net loss		–		–		–		–		–		(44,308,813	)		–			(44,308,813	)

Balance, June 30, 2015		77,727,669	$	777,276	$	54,757,845	$	178,850	$	–	$	(147,420,839	)	$	(773,500	)	$	(92,480,368	)

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

US Highland, Inc.

Unaudited Consolidated Statements of Cash Flows

	For the Six Months Ended June 30, 2015			For the Six Months Ended June 30, 2014

Operating Activities
Net loss	$	(44,308,813	)	$	(10,375,542	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation		3,301			5,158
Amortization expense		121,798			506,276
Change in fair value of derivatives		43,806,560			8,809,435
Write down of inventory		–			125,616
Shares issuable for interest expense		26,614			7,008
Changes in operating assets and liabilities:

Inventory		–			(25,790	)
Prepaid expenses and deposits		5,219			13,660
Accounts payable & accrued liabilities		51,115			463,666
Accrued liabilities – related parties		88,606			–
Net Cash Used in Operating Activities		(205,600	)		(470,513	)
Financing Activities

Proceeds from loans payable		189,000			434,300
Proceeds from loans payable – related parties		30,200			–
Repayment of loans		(8,500	)		(4,300	)
Repayment of loans – related parties		(13,200	)		-
Net Cash Provided by Financing Activities		197,500			430,000
Decrease In Cash		(8,100	)		(40,513	)
Cash - Beginning of Period		14,035			43,044
Cash - End of Period	$	5,935		$	2,531
Supplemental Cash Flows Information:
Cash paid for income taxes	$	–		$	–
Cash paid for interest	$	–		$	–
Non-cash Investing and Financing Activities
Warrants issued to settle debt	$	–		$	53,606

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

US Highland, Inc.

Notes to the Consolidated Financial Statements

For The Six Months Ended June 30, 2015

(Unaudited)

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

Basis of Presentation

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

The unaudited 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, 2014 included in the Company’s Annual Report on Form 10-K filed on July 9, 2015 (the “2014 Annual Report”).

Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies to those previously disclosed in the 2014 Annual Report.

Going Concern

The accompanying consolidated financial statements have been prepared in conformity with generally accepted accounting principles which contemplate continuation of the Company as a going-concern basis. The going concern basis assumes that assets are realized and liabilities are extinguished in the ordinary course of business at amounts disclosed in the consolidated financial statements. The Company has incurred recurring losses from operations, and as of June 30, 2015, current liabilities exceed current assets by $92,335,639, and the Company has an accumulated deficit of $147,420,839. 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, marketing and manufacturing efforts.

US Highland, Inc.

Notes to the Consolidated Financial Statements

For The Six Months Ended June 30, 2015

(Unaudited)

2. Deposit on Highlon Distribution Inc. Acquisition

On December 30, 2014, the Company entered into a share exchange agreement with Highlon Distribution, Inc. (Highlon). Per the agreement, the Company will exchange 100 shares of the Company’s common stock for 100% of the Highlon shares. In addition, the Company will transfer $150,000 to Highlon within five days from the execution of the agreement. Highlon is a distribution management business focusing on marketing existing product in logistics area. Currently, parties are negotiating final terms of the share exchange.

3. Property and Equipment

Property and equipment is recorded at cost and is comprised of:

	Useful Life	June 30, 2015			December 31, 2014

Computers and office equipment	3 years	$	15,930		$	15,930
Manufacturing equipment	5 - 10 years		19,513			19,513

			35,443			35,443
Accumulated depreciation			(28,456	)		(25,155	)

Property and equipment, net		$	6,987		$	10,288

Depreciation expense amounted to approximately $3,301 and $5,158 for the six months ended June 30, 2015 and 2014, respectively.

4. Related Party Transactions

	a)	During the six months ended June 30, 2015, the Company entered into an unsecured, non-guaranteed loan agreement with a significant shareholder for $20,000. Refer to Note 5(g).

	b)	During the six months ended June 30, 2015, the Company entered into an unsecured, non-guaranteed loan agreement with a director for $10,200. During the six months ended June 30, 2015, the Company repaid $13,200 of loans owed to the director. Refer to Note 5(e).

US Highland, Inc.

Notes to the Consolidated Financial Statements

For The Six Months Ended June 30, 2015

(Unaudited)

5. Loans Payable

Loans payable consist of the following:		June 30, 2015			December 31, 2014

a)	Loans payable that are unsecured, non-guaranteed, past due and are non-interest bearing.	$	25,000			$	25,000
b)	Note payable which is unsecured, non-guaranteed, past due and bears interest at 10% per annum.		-				7,500
c)	On January 15, 2011, the Company entered into 8 unsecured, non-guaranteed, loan agreements pursuant to which the Company received proceeds of $56,000. If the loans were not repaid within 90 days they then bear interest at 1% per month. In addition, if the loan was not repaid within 90 days, the Company is required to issue 167 common shares every month until the loan is repaid in full. As at June 30, 2015, and December 31, 2014, the Company recognized the fair value of 282,000 and 164,000 common shares issuable for interest expense of $178,850 and $152,236, respectively, as shares reserved for future issuance. The Company has not yet issued these common shares. As at June 30, 2015, the Company has also accrued interest expense of $29,960 (December 31, 2014 - $26,600).		56,000				56,000
d)	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. In addition, the Company is required to issue 5,000 common shares every month until the loan is repaid in full. As at June 30, 2015 and December 31, 2014, the Company recognized the fair value of 110,000 and 80,000 common shares issuable for interest expense of $47,500 and $26,500, respectively, as shares reserved for future issuance. The Company has not yet issued these common shares. As at June 30, 2015, the Company has also accrued interest expense of $522 (December 31, 2014- $385).		27,000				27,000
e)	On February 27, 2014, and March 19, 2015, the Company received advances from a director of $6,000, and $10,200, respectively. During the six months ended June 30, 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				6,000
f)	On September 18, 2014, February 18, 2015, March 9, 2015, March 31, 2015, May 8, 2015 and May 29, 2015 the Company entered into unsecured, non-guaranteed, loan agreements pursuant to which the Company received proceeds of $35,000, $20,000, $50,000, $50,000, $65,000 and $4,000, respectively. The loans bear interest at 8% per annum compounded annually and is due 1 year after the date of issuance.		224,000				35,000
g)	On August 26, 2014, December 4, 2014, December 18, 2014, and January 29, 2015, the Company issued unsecured notes payable of $15,000, $20,000, $200,000 and $20,000, 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.		255,000				235,000
h)	The Company issued the following unsecured notes payable to a significant shareholder. The notes bear interest at an annual rate of 8% per annum, are uncollateralized, and are due 2 years after the date of issuance:
1.	On January 17, 2014, the Company issued a $50,000 note payable.		50,000				50,000
2.	On January 29, 2014 the Company issued a $50,000 note payable.		50,000				50,000
3.	On February 19, 2014, the Company issued a $25,000 note payable.		25,000				25,000
4.	On March 3, 2014, the Company issued a $50,000 note payable.		50,000				50,000
5.	On March 19, 2014, the Company issued a $150,000 note payable.		150,000				150,000
6.	On April 25, 2014, the Company issued a $25,000 note payable.		25,000				25,000
7.	On May 19, 2014, the Company issued a $25,000 note payable.		25,000				25,000
8.	On June 2, 2014, the Company issued an $18,000 note payable.		18,000				18,000
9.	On June 12, 2014, the Company issued a $32,000 note payable.		32,000				32,000
10.	On July 1, 2014, the Company issued a $25,000 note payable.		25,000				25,000
11.	On July 16, 2014, the Company issued a $75,000 note payable to a related party.		75,000				75,000
12.	On October 7, 2014, the Company issued a $30,000 note payable.		30,000				30,000
13.	On October 31, 2014, the Company issued a $20,000 note payable.		20,000				20,000
14.	On November 4, 2014, the Company issued a $32,000 note payable.		32,000				32,000
	Total	$	1,197,000			$	998,500
	Less Short Term		(1,040,000	)			(391,500	)
	Long Term	$	157,000			$	607,000

US Highland, Inc.

Notes to the Consolidated Financial Statements

For The Six Months Ended June 30, 2015

(Unaudited)

6. Convertible Debentures

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

		On June 2, 2010, the Company issued 6,386 restricted shares of common stock upon the conversion of the principal amount of $166,667. The fair value of the derivative liability at June 2, 2010, was $266,425 and $197,352 was reclassified to additional paid-in capital upon conversion. During the year ended December 31, 2013, the Company repaid $2,000 of the note, during the year ended December 31, 2014, the Company repaid an additional $3,000 and during the six months ended June 30, 2015, the Company repaid $1,000. At June 30, 2015 and December 31, 2014, the carrying value of the note was $52,333 and $53,333, respectively. The note is in default at June 30, 2015.

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

		The embedded conversion option qualifies for derivative accounting and bifurcation under ASC 815-15 Derivatives and Hedging. The initial fair value of the conversion feature of $577,797 resulted in a discount to the note payable of $75,000 and the recognition of a loss on derivatives of $502,797. As the note is due on demand the entire discount was recorded as interest expense on July 25, 2013. At June 30, 2015 and December 31, 2014, the carrying value of the note was $75,000.

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

		The embedded conversion option qualifies for derivative accounting and bifurcation under ASC 815-15 Derivatives and Hedging. The initial fair value of the conversion feature of $346,678 resulted in a discount to the note payable of $45,000 and the recognition of a loss on derivatives of $301,678. As the note is due on demand the entire discount was recorded as interest expense on July 25, 2013. At June 30, 2015 and December 31, 2014, the carrying value of the note was $45,000.

	d)	On July 25, 2013, the Company issued a convertible note for up to $500,000 and warrants to purchase 12,500,000 underlying shares of the Company’s common stock. The warrants are exercisable into 10,000,000 common shares of the Company at $0.05 per share and 2,500,000 shares at an exercise price of $0.10 per share until July 31, 2014. 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.

US Highland, Inc.

Notes to the Consolidated Financial Statements

For The Six Months Ended June 30, 2015

(Unaudited)

		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. The initial fair value of the conversion feature of $6,714,279 and warrants of $3,169,531 resulted in a discount to the note payable of $500,000 and the recognition of a loss on derivatives of $9,383,810.

		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. During the six months ended June 30, 2015, the Company recorded total accretion of $69,955. At June 30, 2015 and December 31, 2014, the carrying value of the note was $69,955 and $Nil with unamortized discount of $430,045 and $500,000, respectively.

	e)	On July 25, 2013, the Company issued a convertible note for up to $500,000 and warrants to purchase 10,197,916 underlying shares of the Company’s common stock. The warrants are exercisable into 8,158,333 common shares of the Company at $0.05 per share and 2,039,583 shares at an exercise price of $0.10 per share until July 31, 2014. During the year ended December 31, 2013, the Company received proceeds of $273,700 under the note. At November 30, 2013, the Company had determined that no additional funding would be received pursuant to the convertible note. The note bears interest at 8% per annum compounded monthly, and principal and interest are due on July 31, 2014.

		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 rate of 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. The initial fair value of the conversion feature of $5,278,978 and warrants of $2,450,519 resulted in a discount to the note payable of $273,700 and the recognition of a loss on derivatives of $7,455,797.

		The note was not repaid on July 31, 2014. On August 4, 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 $273,700. The Company also recognized the fair value of the embedded conversion feature of $13,685,849 as a derivative liability and reduced the value of the convertible loan to $nil.

US Highland, Inc.

Notes to the Consolidated Financial Statements

For The Six Months Ended June 30, 2015

(Unaudited)

		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 $225,431. The Company also recognized the fair value of the embedded conversion feature of $13,733,269 as a derivative liability and reduced the value of the convertible loan to $nil. During the six months ended June 30, 2015, the Company recorded total accretion of $51,843. At June 30, 2015 and December 31, 2014, the carrying value of the note was $51,843 and $Nil with unamortized discount of $221,857 and $273,700, respectively.

	f)	Effective November 12, 2013, the Company issued a convertible note for up to $500,000 and warrants to purchase 694,445 underlying shares of the Company’s common stock. The warrants are exercisable into 555,556 common shares of the Company at $0.05 per share and 138,889 shares at an exercise price of $0.10 per share until July 31, 2014. During the year ended December 31, 2013, the Company received proceeds of $20,000 under the note. At November 30, 2013, the Company had determined that no additional funding would be received pursuant to the convertible note. The note bears interest at 8% per annum compounded monthly, and principal and interest are due on July 31, 2014.

		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. The initial fair value of the conversion feature of $250,021 and warrants of $145,943, resulted in a discount to the note payable of $20,000 and the recognition of a loss on derivatives of $375,964. During the year ended December 31, 2014, the Company recorded accretion of $13,479. At June 30, 2015 and December 31, 2014, the carrying value of the note was $20,000. The note is in default at June 30, 2015.

	g)	Effective October 7, 2013, the Company issued a convertible note for up to $500,000 and warrants to purchase 868,055 underlying shares of the Company’s common stock. The warrants are exercisable into 694,444 common shares of the Company at $0.05 per share and 173,611 shares at an exercise price of $0.10 per share until July 31, 2014. During the year ended December 31, 2013, the Company received proceeds of $25,000 under the note. At November 30, 2013, the Company had determined that no additional funding would be received pursuant to the convertible note. The note bears interest at 8% per annum compounded monthly, and principal and interest are due on July 31, 2014.

		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. The initial fair value of the conversion feature of $312,522 and warrants of $182,522 resulted in a discount to the note payable of $25,000 and the recognition of a loss on derivatives of $470,045.

		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 $25,000. The Company also recognized the fair value of the embedded conversion feature of $1,250,082 as a derivative liability and reduced the value of the convertible loan to $nil.

US Highland, Inc.

Notes to the Consolidated Financial Statements

For The Six Months Ended June 30, 2015

(Unaudited)

		During the year ended December 31, 2014, the Company recorded total accretion of $42,032. At June 30, 2015 and December 31, 2014, the carrying value of the note was $25,000. The note is in default at June 30, 2015.

	h)	On July 25, 2013, the Company issued a convertible note for up to $500,000 and warrants to purchase 739,584 underlying shares of the Company’s common stock. The warrants are exercisable into 591,667 common shares of the Company at $0.05 per share and 147,917 shares at an exercise price of $0.10 per share until July 31, 2014. During the year ended December 31, 2013, the Company received proceeds of $41,300 under the note. At November 30, 2013, the Company had determined that no additional funding would be received pursuant to the convertible note. The note bears interest at 8% per annum compounded monthly, and principal and interest are due on July 31, 2014.

		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. The initial fair value of the conversion feature of $547,736 and warrants of $187,531, resulted in a discount to the note payable of $41,300 and the recognition of a loss on derivatives of $693,967.

		On August 4, 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 $41,300. The Company also recognized the fair value of the embedded conversion feature of $2,065,135 as a derivative liability and reduced the value of the convertible loan to $nil.

		During the year ended December 31, 2014, the Company recorded total accretion of $65,955. At June 30, 2015 and December 31, 2014, the carrying value of the note was $41,300. The note is in default at June 30, 2015.

US Highland, Inc.

Notes to the Consolidated Financial Statements

For The Six Months Ended June 30, 2015

(Unaudited)

7. Derivative Liabilities

The embedded conversion options of the Company’s convertible debentures described in Note 6 contain conversion features that qualify for embedded derivative classification. The warrants described in Notes 6 and 8 also qualify for derivative classification. The fair value of these liabilities will be re-measured at the end of every reporting period and the change in fair value will be reported in the statement of operations 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:

	June 30, 2015		December 31, 2014

Balance at the beginning of the period	$	46,065,517	$	29,430,719

Addition of new derivative liabilities (warrants)		–		53,606
Change in fair value of warrants		235,692		(5,184,569	)
Change in fair value of embedded conversion option		43,570,868		21,627,561
Modification of embedded conversion options		–		138,200
Balance at the end of the period	$	89,872,077	$	46,065,517

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

	Six Months Ended
	June 30, 2015			June 30, 2014
Change in fair value of derivative liabilities during the period	$	(43,806,560	)	$	(8,809,435	)

Change in fair value of derivatives	$	(43,806,560	)	$	(8,809,435	)

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, 2014	167% - 369%	0.04% - 0.67%		0	%	0.25-2.50
At June 30, 2015	81% - 226%	0.10% - 1.00%%		0	%	0.50-2.50

8. Stock Purchase Warrants

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

	Number			Weighted Average Exercise Price		Weighted Average Expected Life

Balance December 31, 2014		2,246,250		$	0.08	1.10 years

Expired		(956,250	)		0.19

Balance June 30, 2015		1,290,000		$	0.0005	1.16 years

US Highland, Inc.

Notes to the Consolidated Financial Statements

For The Six Months Ended June 30, 2015

(Unaudited)

9. Commitments

During 2012, the Company entered into two leases for the provision of office and warehouse space until April 30, 2015. On April 1, 2013, the Company entered into an amendment to the lease agreements. Pursuant to the amendment, one of the leases was terminated and the other was extended to June 30, 2019. During the six months ended June 30, 2015, the Company recognized $42,904 (2014 - $30,914) of rent expense. The Company’s future minimum lease payments are as follows:

Fiscal year ending	Amount
December 31, 2015		32,072
December 31, 2016		65,970
December 31, 2017		67,963
December 31, 2018		69,956
December 31, 2019		17,863
	$	253,824

	b)	The Company issued a $500,000 convertible note on July 25, 2013, of which 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.

	c)	On June 17, 2014, the Company was informed that a debtor will be instituting legal proceedings against the Company for collection of the sum of $76,712. The Company believes it owes the debtor $9,986 which it has recorded as owing. Accordingly, the Company intends to defend these potential matters vigorously.

	d)	On December 16, 2013, the Company was informed that a vendor will be instituting legal proceedings against the Company for collection of the sum of $12,455. The Company believes it does not owe the vendor anything. Accordingly, the Company intends to defend these potential matters vigorously.

	e)	On July 8, 2014, the Company filed civil actions against John R. Fitzpatrick, III, its former Chief Executive Officer, President, Chief Financial Officer, and a former director of the Company and against Mr. Steven (“Posie”) Pfaff, the Director of Manufacturing of the Company regarding an employment dispute. Mr. Fitzpatrick and Mr. Pfaff have answered the Petition and asserted various counterclaims against US Highland, Inc. and third party claims against directors of the Company and one of the Company’s attorneys. Mr. Fitzpatrick and Mr. Pfaff also filed complaints with the Oklahoma Department of Labor. On March 3, 2015, the Oklahoma Department of Labor entered awards of $ 72,000 in favor of Mr. Fitzpatrick and $ 54,000 in favor of Mr. Pfaff. Mr. Fitzpatrick and Mr. Pfaff are appealing these awards in Tulsa County District Court in the State of Oklahoma.

10. Subsequent Events

	a)	On July 3, 2015, the Company entered into an unsecured, non-guaranteed, loan agreement pursuant to which the Company received proceeds of $5,000. The loan bears interest at 8% per annum compounded annually and is due 1 year after the date of issuance.

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

Forward-Looking Statements

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

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

Results of Operations

For the periods ended June 30, 2015 and June 30, 2014

Revenues

The Company had no revenues during the six months ended June 30, 2015 and 2014.

The Company write-down inventory costs to their net realizable value during the period ended June 30, 2014. The Company had no inventory as of June 30, 2015.

Operating Expenses

Operating expenses declined approximately 77% for the three months ended June 30, 2015 which were $113,506, that was comprised primarily of $80,191 for general and administrative expenses and $31,768 for professional fees as compared to operating expenses of $495,089 for the three months ended June 30, 2014, which was comprised primarily of $375,161 for general and administrative expenses and $117,392 for professional fees. General and administrative expenses decreased during the three months ended June 30, 2015 over the three months ended June 30, 2014 as result of the accrual of severance fees as a result of the termination of two former employees during the period ended June 30, 2014.

Operating expenses declined approximately 72% for the six months ended June 30, 2015 which were $245,997, that was comprised primarily of $187,776 for general and administrative expenses and $54,920 for professional fees as compared to operating expenses of $873,231 for the six months ended June 30, 2014, which was comprised primarily of $534,954 for general and administrative expenses and $333,119 for professional fees. General and administrative expenses decreased during the six months ended June 30, 2015 over the six months ended June 30, 2014 as result of the accrual of severance fees as a result of the termination of two former employees during the period ended June 30, 2014.

Net Loss

Net loss for the three months ended June 30, 2015 increased approximately 213% to $36,036,744, compared to net loss of $11,496,960 for the three months ended June 30, 2014. The expenses in 2014 includes $376,782 in interest expense as compared to $145,992 in 2015. The decrease of $230,790 related to interest recorded for convertible debentures outstanding during the three months ended June 30, 2014 that were not outstanding during the comparative period. The Company recorded an unrealized loss as a result of an increase in the fair value of derivatives of $35,777,246 during the three months ended June 30, 2015 as compared to an unrealized loss as a result of an increase in the fair value of derivatives of $10,499,869 during the three months ended June 30, 2014.

Net loss for the six months ended June 30, 2015 increased approximately 327% to $44,308,813, compared to net loss of $10,375,542 for the six months ended June 30, 2014. The expenses in 2014 includes $567,761 in interest expense as compared to $256,281 in 2015. The decrease of $311,480 related to interest recorded for convertible debentures outstanding during the six months ended June 30, 2014 that were not outstanding during the comparative period. The Company recorded an unrealized loss as a result of an increase in the fair value of derivatives of $43,806,560 during the six months ended June 30, 2015 as compared to an unrealized loss as a result of an increase in the fair value of derivatives of $8,809,435 during the six months ended June 30, 2014.

Liquidity and Capital Resources

As of June 30, 2015, we had cash of $5,935 and a working capital deficiency of $92,335,639. The future of the Company is dependent upon its ability to obtain future financing, upon cash generated from our operations and our ability to borrow cash when needed from related parties. During the six months ended June 30, 2015, the Company received $189,000 of proceeds from the issuance of notes payable, and received proceeds of $30,200 loan from related parties. We estimated that we will require $2,188,000 over the twelve-month period ending June 30, 2016. The Company has $651,902 of convertible notes outstanding for which principal and interest was due on July 31, 2014. The convertible notes were extended and are now due on December 31, 2015. These notes are further described in Note 6 of the financial statements. Management believes that our cash balance will not be sufficient to meet our working capital requirements for the next twelve month period. We plan to raise the capital required to satisfy our immediate short-term needs and additional capital required to meet our estimated funding requirement for the next twelve months primarily through equity and or debt financings. There is no assurance that we will be able to obtain further funds required for our continued working capital requirements.

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

As of June 30, 2015, we did not have any established lines of credit with any banks or any other arrangements, agreements, or commitments for financing our operations.

Going Concern

The Company has no revenues and has incurred net losses. In addition, at June 30, 2015, there is an accumulated deficit of $147,420,839. These factors raise substantial doubt about the Company’s ability to continue as a going concern.

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

Off-balance sheet arrangements:

The Company has no off-balance sheet arrangements.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable

ITEM 4. CONTROLS AND PROCEDURES

Management’s Report on Disclosure Controls and Procedures

We carried out an evaluation, under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the ‘‘Exchange Act’’). Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Based upon our evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were not effective, as of June 30, 2015, in ensuring that material information that we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission rules and forms.

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

Management has implemented internal controls to ensure that its quarterly reports and annual reports are filed with the SEC on a timely basis. Management has retained the services of a new accounting firm. We have also hired a highly qualified financial consultant with extensive experience with public companies in the manufacturing industry. This newly implemented three tier process ties the Company’s bookkeeping activities with a full service accounting firm that handles all financial reporting activities and the Company’s interface with the selected auditing firm.

Changes in Internal Control over Financial Reporting:

During the six months ended June 30, 2015, there were no changes in internal controls over financial reporting. During the quarter covered by this report there were no changes in our internal control over financial reporting that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting other than as described above.

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

	(a)	pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of the registrant;

	(b)	provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the registrant are being made only in accordance with authorizations of management and directors of the registrant; and

	(c)	provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the registrant's assets that could have a material effect on the financial statements.

PART II – OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

On July 8, 2014, the Company filed civil actions against John R. Fitzpatrick, III, its former Chief Executive Officer, President, Chief Financial Officer, and a former director of the Company and against Steven ("Posie") Pfaff, the former Director of Manufacturing of the Company regarding an employment dispute. Mr. Fitzpatrick and Mr. Pfaff have answered the Petition and asserted various counterclaims against US Highland, Inc., and third party claims against directors of the Company and one of the Company’s attorneys.

Mr. Fitzpatrick and Mr. Pfaff also filed complaints with the Oklahoma Department of Labor. On March 3, 2015, the Oklahoma Department of Labor entered awards of $72,000 in favor of Mr. Fitzpatrick and $54,000 in favor of Mr. Pfaff. Mr. Fitzpatrick and Mr. Pfaff are appealing these awards in Tulsa County District Court in the State of Oklahoma.

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business.

ITEM 1A. RISK FACTORS

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

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

There were no sales of unregistered securities during the six months ended June 30, 2015.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

The Company is in default under the terms of a secured convertible promissory note dated July 25, 2013, that was due and payable on July 31, 2014, which remains unpaid and because of unpaid judgments the Company is negotiating a waiver of these provisions.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

ITEM 6. EXHIBITS

Exhibit		Description

31		Section 302 Certification of Principal Executive Officer

32		Section 906 Certification of Principal Executive Officer

101.INS*		XBRL Instance

101.SCH*		XBRL Taxonomy Extension Schema

101.CAL*		XBRL Taxonomy Extension Calculations

101.DEF*		XBRL Taxonomy Extension Definitions

101.LAB*		XBRL Taxonomy Extension Labels

101.PRE*		XBRL Taxonomy Extension Presentation

_______________

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

SIGNATURES

In accordance with to requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	U.S. HIGHLAND, INC.

Dated: August 19, 2015	By	/s/ Josh W. Whitaker
		Josh W. Whitaker
		Interim President and Chief Executive Officer

Cruzani, Inc. - FORM 10-Q - August 20, 2015

Attached files

Cruzani, Inc. Reports