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

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

| Maryland                                                                 | 000-27045                     | 36-4286069                                         |
|--------------------------------------------------------------------------|-------------------------------|----------------------------------------------------|
| (State      or other jurisdiction of      incorporation or organization) | (Commission      File Number) | (I.R.S.      Employer Identification Number)  |

| Large      accelerated filer o | Accelerated      filer o           |
|--------------------------------|-------------------------------------------------------------------------------------------|

----

| PART      I. FINANCIAL INFORMATION                                                       |   | 3      |
|------------------------------------------------------------------------------------------|--------|--------|
|                                                                                     |   |   |
| ITEM      1. FINANCIAL STATEMENTS                                                        |   | 3      |
|                                                                                     |   |   |
| ITEM      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF    OPERATION          |   | 11     |
|                                                                                     |   |   |
| ITEM      3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET      RISKS |   | 16     |
|                                                                                     |   |   |
| ITEM      4.  CONTROLS AND PROCEDURES                                          |   | 16     |
|                                                                                     |   |   |
| ITEM      4T. CONTROLS AND PROCEDURES                                                    |   | 16     |
|                                                                                     |   |   |
| PART      II. OTHER INFORMATION                                                          |   | 18     |
|                                                                                     |   |   |
| ITEM      1. - LEGAL PROCEEDINGS                                                         |   | 18     |
|                                                                                     |   |   |
| ITEM      1A. RISK FACTORS                                                               |   | 18     |
|                                                                                     |   |   |
| ITEM      2. - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF      PROCEEDS          |   | 18     |
|                                                                                     |   |   |
| ITEM      3. - DEFAULTS UPON SENIOR SECURITIES                                           |   | 18     |
|                                                                                     |   |   |
| ITEM      4. – SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                 |   | 18     |
|                                                                                     |   |   |
| ITEM      5. - OTHER INFORMATION                                                         |   | 19     |
|                                                                                     |   |   |
| ITEM      6. - EXHIBITS                                                                  |   | 19     |
|                                                                                     |   |   |
| SIGNATURES                                                                               |   | 20     |
|                                                                                     |   |   |

----

|                                                                                                    |   |           |      |   |              |   |
|---------------------------------------------------------------------------------------------------------|--------|----------------|-----------|--------|-------------------|--------|
|                                                                                                    |   | March      31, |      |   | December      31, |   |
|                                                                                                    |   | 2008           |      |   | 2007              |   |
|                                                                                                    |   | (Unaudited)    |      |   |              |   |
|                                                                                                    |   |           |      |   |              |   |
| CURRENT      ASSETS                                                                                     |   |           |      |   |              |   |
|    Cash                                                                                  |   | $              | 923,481   |   |              | $      | 216,570 |   |
|    Accounts      receivable, net                                                         |   |           | 2,817,417 |   |              |   | 3,188,591 |   |
|    Costs      and estimated earnings in excess of billings on uncompleted      contracts |   |           | 619,934   |   |              |   | 311,899 |   |
|    Inventory                                                                             |   |           | 1,532,635 |   |              |   | 904,409 |   |
|    Prepaid      expenses and other                                                       |   |           | 1,000     |   |              |   | 1,259 |   |
| Total      current assets                                                                               |   |           | 5,894,467 |   |              |   | 4,622,728 |   |
|                                                                                                    |   |           |      |   |              |   |   |   |
| PROPERTY,      PLANT AND EQUIPMENT, net                                                                 |   |           | 773,329   |   |              |   | 701,168 |   |
|                                                                                                    |   |           |      |   |              |   |   |   |
| OTHER      ASSETS                                                                                       |   |           |      |   |              |   |   |   |
|    Other      assets                                                                     |   |           | 457,321   |   |              |   | 426,321 |   |
| Total      other assets                                                                                 |   |           | 457,321   |   |              |   | 426,321 |   |
|                                                                                                    |   |           |      |   |              |   |   |   |
| Total      assets                                                                                       |   | $              | 7,125,117 |   |              | $      | 5,750,217 |   |
|                                                                                                    |   |           |      |   |              |   |   |   |

----

|                                                                                                                           |   |           |        |   |              |   |
|--------------------------------------------------------------------------------------------------------------------------------|--------|----------------|-------------|--------|-------------------|--------|
|                                                                                                                           |   | March      31, |        |   | December      31, |   |
|                                                                                                                           |   | 2008           |        |   | 2007              |   |
|                                                                                                                           |   | (Unaudited)    |        |   |              |   |
|                                                                                                                           |   |           |        |   |              |   |
| CURRENT      LIABILITIES                                                                                                       |   |           |        |   |              |   |
|    Convertible      promissory notes payable                                                                    |   | $              | 53,450      |   |              | $      | 53,450 |   |
|    Current      portion of notes payable                                                                        |   |           | 25,406      |   |              |   | 24,604 |   |
|    Current      portion of notes payable to related parties                                                     |   |           | 75,930      |   |              |   | 89,156 |   |
|    Current      portion of capital lease                                                                        |   |           | 6,782       |   |              |   | 8,320 |   |
|    Accounts      payable                                                                                        |   |           | 2,228,379   |   |              |   | 2,167,027 |   |
|    Obligations      to related parties                                                                          |   |           | 12,008      |   |              |   | 12,008 |   |
|    Accrued      payroll and related taxes                                                                       |   |           | 380,199     |   |              |   | 292,769 |   |
|    Accrued      interest                                                                                        |   |           | 126,183     |   |              |   | 124,847 |   |
|    Accrued      expenses                                                                                        |   |           | 569,322     |   |              |   | 587,942 |   |
|    Billings      in excess of costs and estimated earnings      on    uncompleted contracts |   |           | 766,675     |   |              |   | 195,432 |   |
| Total      current liabilities                                                                                                 |   |           | 4,244,334   |   |              |   | 3,555,555 |   |
|                                                                                                                           |   |           |        |   |              |   |   |   |
| LONG-TERM      OBLIGATIONS                                                                                                     |   |           |        |   |              |   |   |   |
|    Notes      payable, less current portion                                                                     |   |           | 173,906     |   |              |   | 180,799 |   |
|    Notes      payable to related parties, less current portion                                                  |   |           | 385,544     |   |              |   | 403,607 |   |
|    Capital      lease, less current portion                                                                     |   |           | 24,160      |   |              |   | 26,571 |   |
| Total      long term liabilities                                                                                               |   |           | 583,610     |   |              |   | 610,977 |   |
|                                                                                                                           |   |           |        |   |              |   |   |   |
| STOCKHOLDERS’      EQUITY                                                                                                |   |           |        |   |              |   |   |   |
|    Preferred      stock $0.001 par value 5,000,000 shares                                                       |   |           |        |   |              |   |   |   |
|    authorized,      2,370,000 shares issued and outstanding                                                     |   |           | 2,370       |   |              |   | 2,370 |   |
|    Additional      paid-in capital – preferred stock                                                      |   |           | 713,567     |   |              |   | 713,567 |   |
|    Common      stock, $0.001 par value 100,000,000 shares                                                       |   |           |        |   |              |   |   |   |
|    authorized;      37,147,105 and 36,567,105 shares issued and                                                 |   |           |        |   |              |   |   |   |
|    outstanding      at March 31, 2008 and December 31, 2007, respectively                                       |   |           | 37,146      |   |              |   | 36,566 |   |
|    Additional      paid-in capital – common stock                                                         |   |           | 16,100,942  |   |              |   | 15,789,790 |   |
|    Accumulated      deficit                                                                                     |   |           | (14,556,852 | )      |              |   | (14,958,608 | ) |
| Total      stockholders’ equity                                                                                          |   |           | 2,297,173   |   |              |   | 1,583,685 |   |
|                                                                                                                           |   |           |        |   |              |   |   |   |
| Total      Liabilities and Stockholders’ Equity                                                                          |   | $              | 7,125,117   |   |              | $      | 5,750,217 |   |
|                                                                                                                           |   |           |        |   |              |   |   |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | Three      Months Ended |       |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | March      31,          |       |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | 2008                    |       |   | 2007 |   |
| REVENUE      - SALES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $                       | 4,058,796  |   |   | $ | 3,401,070 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                    |       |   |   |   |   |   |
| COSTS      AND EXPENSES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                    |       |   |   |   |   |   |
|    Cost      of goods sold                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                    | 3,278,225  |   |   |   | 2,890,718 |   |
|    Selling,      general and administrative expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                    | 359,026    |   |   |   | 1,104,016 |   |
|    Depreciation      and amortization                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                    | 21,331     |   |   |   | 17,096 |   |
| Total      Costs and Expenses                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                    | 3,658,582  |   |   |   | 4,011,830 |   |
| NET      OPERATING INCOME (LOSS)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                    | 400,214    |   |   |   | (610,760 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                    |       |   |   |   |   |   |
| OTHER      INCOME (EXPENSE)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                    |       |   |   |   |   |   |
|    Other      income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                    | 9,555      |   |   |   | 11,119 |   |
|    Gain      (loss) on disposal of property, plant and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                    | --         |   |   |   | (19,432 | ) |
|    Interest      expense                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                    | (8,013     | ) |   |   | (45,776 | ) |
| Total      Other Income (Expense)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                    | 1,542      |   |   |   | (54,089 | ) |
| INCOME      (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                    | 401,756    |   |   |   | (664,849 | ) |
| FEDERAL      AND STATE INCOME TAXES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                    | --         |   |   |   | -- |   |
| INCOME      (LOSS) FROM CONTINUING OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                    | 401,756    |   |   |   | (664,849 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                    |       |   |   |   |   |   |
| DISCONTINUED      OPERATIONS:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                    |       |   |   |   |   |   |
|    Income      from discontinued operations (net of income tax expense of    $0)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                    | --         |   |   |   | 11,831 |   |
| Total      Discontinued Operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                    | --         |   |   |   | 11,831 |   |
| NET      INCOME (LOSS)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                    | 401,756    |   |   |   | (653,018 | ) |
| LESS:      Preferred Dividends                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                    | (14,813    | ) |   |   | (74,269 | ) |
| NET      INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   | $                       | 386,943    |   |   | $ | (727,287 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                    |       |   |   |   |   |   |
| EARNINGS      (LOSS) PER COMMON SHARE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                    |       |   |   |   |   |   |
| Continuing      operations      :Basic                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $                       | 0.011      |   |   | $ | (0.020 | ) |
|                                           :Diluted                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $                       | 0.010      |   |   | $ | (0.020 | ) |
| Discontinued      operations   :Basic                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $                       | --         |   |   | $ | 0.001 |   |
|                                           :Diluted                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $                       | --         |   |   | $ | 0.001 |   |
| Net      income      (loss)              :Basic                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | $                       | 0.010      |   |   | $ | (0.022 | ) |
|                                           :Diluted                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | $                       | 0.010      |   |   | $ | (0.022 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                    |       |   |   |   |   |   |
| WEIGHTED AVERAGE COMMON SHARES      OUTSTANDING: Basic                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                    | 36,997,661 |   |   |   | 33,517,327 |   |
|                                                                                                                 :      Diluted |   |                    | 39,706,597 |   |   |   | 33,517,327 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                    |       |   |   |   |   |   |

----

|                                                                                                     |   | Three      Months Ended |     |
|----------------------------------------------------------------------------------------------------------|--------|-------------------------|----------|
|                                                                                                     |   | March      31,          |     |
|                                                                                                     |   | 2008                    |     |   | 2007 |   |
|                                                                                                     |   |                    |     |   |   |   |
| CASH      FLOWS FROM OPERATING ACTIVITIES                                                                |   |                    |     |   |   |   |
| Income      (loss) from continuing operations before income taxes                                        |   | $                       | 401,756  |   |   | $ | (664,849 | ) |
|                                                                                                     |   |                    |     |   |   |   |   |   |
| Adjustments      to reconcile net income (loss) to cash flows used in operating      activities          |   |                    |     |   |   |   |   |   |
|     Stock      issued for services and settlement                                    |   |                    | --       |   |   |   | 499,290 |   |
|     Loss      on disposal of property, plant and equipment                           |   |                    | --       |   |   |   | 19,432 |   |
|     Depreciation      and amortization                                               |   |                    | 21,331   |   |   |   | 17,096 |   |
|     Share-based      compensation                                                    |   |                    | 21,732   |   |   |   | -- |   |
| Changes      in assets and liabilities                                                                   |   |                    |     |   |   |   |   |   |
|     Increase      in accounts receivable                                             |   |                    | 371,174  |   |   |   | 541,426 |   |
|     Increase  in      costs in excess of billings on uncompleted contracts |   |                    | (308,035 | ) |   |   | -- |   |
|     Decrease      (increase) in inventory                                            |   |                    | (628,226 | ) |   |   | 778 |   |
|     Decrease      (increase) in prepaids and other                                   |   |                    | 259      |   |   |   | (23,740 | ) |
|     Increase      (decrease) in accounts payable                                     |   |                    | 61,352   |   |   |   | (738,628 | ) |
|     Increase      in obligations to related parties                                  |   |                    | --       |   |   |   | 19,008 |   |
|     Increase      in accrued payroll and related taxes                               |   |                    | 87,430   |   |   |   | 31,352 |   |
|     Increase      in accrued interest                                                |   |                    | 1,336    |   |   |   | 68,319 |   |
|     Increase      (decrease) in accrued expenses                                     |   |                    | (18,620  | ) |   |   | 66,297 |   |
|     Increase      in billings in excess of costs on uncompleted contracts            |   |                    | 571,243  |   |   |   | 16,942 |   |
| Cash      provided by (used in) continuing operations before income      taxes                           |   |                    | 582,732  |   |   |   | (147,277 | ) |
|                                                                                                     |   |                    |     |   |   |   |   |   |
| Discontinued      operations                                                                             |   |                    |     |   |   |   |   |   |
|     Income      (loss) before income taxes                                           |   |                    | --       |   |   |   | 11,831 |   |
|     (Decrease)      increase in net liabilities of entities discontinued             |   |                    | --       |   |   |   | (45,206 | ) |
| Cash      used in discontinued operations                                                                |   |                    | --       |   |   |   | (33,375 | ) |
|                                                                                                     |   |                    |     |   |   |   |   |   |
| NET      CASH PROVIDED BY (USED IN) OPERATING                                                            |   |                    |     |   |   |   |   |   |
| ACTIVITIES                                                                                               |   |                    | 582,732  |   |   |   | (180,652 | ) |
|                                                                                                     |   |                    |     |   |   |   |   |   |
| CASH      FLOWS FROM INVESTING ACTIVITIES                                                                |   |                    |     |   |   |   |   |   |
|     Payments      for property, plant and equipment                                  |   |                    | (93,492  | ) |   |   | (39,260 | ) |
|     Payments      for other assets                                                   |   |                    | (31,000  | ) |   |   | -- |   |
|                                                                                                     |   |                    |     |   |   |   |   |   |
| NET      CASH (USED IN) INVESTING ACTIVITIES                                                             |   |                    | (124,492 | ) |   |   | (39,260 | ) |
|                                                                                                     |   |                    |     |   |   |   |   |   |

----

|                                                                                                |   | Three      Months Ended |    |
|-----------------------------------------------------------------------------------------------------|--------|-------------------------|---------|
|                                                                                                |   | March      31,          |    |
|                                                                                                |   | 2008                    |    |   | 2007 |   |
|                                                                                                |   |                    |    |   |   |   |
| CASH      FLOWS FROM FINANCING ACTIVITIES                                                           |   |                    |    |   |   |   |
|     Payments      on notes payable                                              |   | $                       | (6,091  | ) |   | $ | (10,467 | ) |
|     Payments      on notes payable to related parties                           |   |                    | (31,289 | ) |   |   | (17,422 | ) |
|     Payments      on capital lease                                              |   |                    | (3,949  | ) |   |   | -- |   |
|     Proceeds      from issuance of common stock                                 |   |                    | 290,000 |   |   |   | 135,000 |   |
|     Proceeds      from issuance of preferred stock                              |   |                    | --      |   |   |   | 152,500 |   |
| NET      CASH PROVIDED BY FINANING ACTIVITIES                                                       |   |                    | 248,671 |   |   |   | 259,611 |   |
|                                                                                                |   |                    |    |   |   |   |   |   |
| INCREASE  IN      CASH                                                                    |   |                    | 706,911 |   |   |   | 39,699 |   |
|                                                                                                |   |                    |    |   |   |   |   |   |
| CASH,      BEGINNING OF PERIOD                                                                      |   |                    | 216,570 |   |   |   | 249,209 |   |
|                                                                                                |   |                    |    |   |   |   |   |   |
| CASH,      END OF PERIOD                                                                            |   | $                       | 923,481 |   |   | $ | 288,908 |   |
|                                                                                                |   |                    |    |   |   |   |   |   |
| SUPPLEMENTAL      DISCLOSURES OF CASH FLOW INFORMATION                                              |   |                    |    |   |   |   |   |   |
|     Interest      paid                                                          |   | $                       | 6,678   |   |   | $ | 10,832 |   |
|     Taxes      paid                                                             |   | $                       | --      |   |   | $ | -- |   |
|                                                                                                |   |                    |    |   |   |   |   |   |
| NON      CASH INVESTING AND FINANCING ACTIVITIES                                                    |   |                    |    |   |   |   |   |   |
|     Amortization      of deferred compensation as share based compensation      |   | $                       | 21,732  |   |   | $ | -- |   |
|     Issuance      of common stock for services and settlement                   |   | $                       | --      |   |   | $ | 499,290 |   |
|          Issuance of common stock for payment of obligations to related      parties |   | $                       | --      |   |   | $ | 50,000 |   |
|                                                                                                |   |                    |    |   |   |   |   |   |

----

| NOTE A | BASIS OF  PRESENTATION |
|--------|------------------------|

| NOTE B | ACCOUNTING  POLICIES |
|--------|----------------------|

| NOTE C | GOINGCONCERN |
|--------|--------------|

| NOTE D | STOCKHOLDERS’  EQUITY |
|--------|-----------------------------|

----

| NOTE D | STOCKHOLDERS EQUITY    (Continued) |
|--------|------------------------------------|

| NOTE E | INVENTORY |
|--------|-----------|

|  Raw      material                                 |   | $      | 1,523,443 |   |
|--------------------------------------------------------------|--------|--------|-----------|--------|
|  Work in      process - manufacturing    |   |   | 9,192     |   |
|                                                         |   | $      | 1,532,635 |   |

----

| NOTE F | DISCONTINUED  OPERATIONS |
|--------|--------------------------|

|  Revenue                               |   | $      | 2,274,625 |   |
|---------------------------------------------|--------|--------|-----------|--------|
|  Income      before income taxes  |   |   | 11,831    |   |
|  Net      assets (liabilities)         |   |   | 168,515   |   |

| NOTE G | SUBSEQUENTEVENT |
|--------|-----------------|

| NOTE H | RECLASSIFICATIONS |
|--------|-------------------|

----

----

| (B)   | BUSINESS      DEVELOPMENT |
|-----------------|---------------------------|

----

----

----

|   | -      Material off-balance sheet activities, including the use of structured      finance or special purpose entities; |
|--------|-------------------------------------------------------------------------------------------------------------------------|
|   | -      Trading activities in non-exchange traded contracts; or                                                          |
|   | -      Transactions with persons or entities that benefit from their      non-independent relationship with theCompany. |

----

Disclosure 
Controls and 
Procedures

controls and 
procedures as of March 31, 2008.

controls and 
procedures refer to 
controls and other 
procedures designed to ensure thatinformation required to be disclosed in the reports we file or submit under theSecurities Exchange Act is recorded, processed, summarized and reported withinthe time periods specified in the rules and forms of the SEC and that suchinformation is accumulated and communicated to our management, including ourchief executive officer and chief financial officer, as appropriate, to allowtimely decisions regarding required disclosure. In designing and evaluating ourdisclosure 
controls and 
procedures, management recognizes that any
controls and 
procedures, no matter how well designed andoperated, can provide only reasonable assurance of achieving the desired controlobjectives, and management is required to apply its judgment in evaluating andimplementing possible 
controls and
procedures. 

controls and 
procedures under the supervision of our chiefexecutive officer and our chief financial officer. Based on that evaluation, ourchief executive officer and our chief financial officer concluded that becauseof the significant deficiencies in internal control over financial reportingdescribed below, our disclosure 
controls and 
procedures were not effective as of March 31,2008. 

----

|   | · | In      2007, we engaged Mitchell Cox, our new CFO.  Mr. Cox has extensive      experience in internal control and U.S. GAAP reporting compliance, and      together with our chief executive officer will oversee and manage our      financial reporting process and required training of the accounting staff.        |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | We      have committed to the establishment of effective internal audit functions,      however, due to the scarcity of qualified candidates with extensive      experience in U.S. GAAP reporting and accounting in the region, we were      not able to hire sufficient internal audit resources before end of 2007.      However, we will increase our search for qualified candidates with      assistance from recruiters and through referrals.  |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | · |  In      2008, we intend to appoint additional directors with to serve on an audit      committee.                                                                                                                                                                                                                                                                                                                                                     |

controls may become inadequate because ofchanges in conditions, or that the degree of compliance with the policies and
procedures may deteriorate.

Controls over FinancialReporting 

controls over financial reporting during thefirst quarter of fiscal year 2008 that have materially affected, or arereasonably likely to materially affect, our internal control over financialreporting. 

----

----

| Exhibit    31.1         |   |  Certification      of Terry L. Lee, Chief Executive Officer& Chairman of the    Board |
|-------------------------|--------|-------------------------------------------------------------------------------------------------|
|                    |   |                                                                                            |
| Exhibit    31.2         |   |  Certification      of Mitchell L Cox, CPA, Chief Financial Officer                        |
|                    |   |                                                                                            |
| Exhibit      32.1  |   |  Certification      of Terry L. Lee, Chief Executive Officer& Chairman of the    Board |
|                    |   |                                                                                            |
| Exhibit      32.2  |   |  Certification      of Mitchell L. Cox, CPA, Chief FinancialOfficer                        |

----

|                    |   |                              |
|-------------------------|--------|-----------------------------------|
|                    |   | HEARTLAND,      INC.              |
|                    |   | (Registrant)                      |
|                    |   |                              |
|                    |   |                              |
| Date:      May 19, 2008 |   | By:      /s/ Terry L. Lee         |
|                    |   | Terry      L. Lee                 |
|                    |   | Chief      Executive Officer and  |
|                    |   | Chairman      of the Board        |
|                    |   | (Duly      Authorized Officer)    |
|                    |   |                              |
|                    |   |                              |
| Date:      May 19, 2008 |   | By:      /s/ Mitchell L. Cox, CPA |
|                    |   | Mitchell      L. Cox              |
|                    |   | Chief      Financial Officer      |
|                    |   | (Principal      Financial         |
|                    |   | and      Accounting Officer)      |
|                    |   |                              |