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 September 30, 2009





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





HEARTLAND,
INC.


(Exact
name of registrant as specified in its charter)





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





1005
N. 19th
Street


Middlesboro,
KY  40965


(Address of principal executive offices)
(Zip Code)





606-248-7323


(Registrant’s
telephone no., including area code)





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days. Yes x No o





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).  Yes  ̈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. See
the definitions of “large accelerated filer,” “accelerated filer” and “smaller
reporting company” in Rule 12b-2 of the Exchange Act.





Large
      accelerated filer o
            Accelerated
      filer o





Non
accelerated filer o  (Do not check if
a smaller reporting company)  Smaller reporting company x





Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act). Yes oNo x





State the
number of shares outstanding of each of the issuer's classes of common equity,
as of the latest practicable date:  As of November 5, 2009, there were
44,667, 558 shares of common stock,
$.001 par value per share, outstanding.





1





HEARTLAND,
INC.





FORM
10-Q


TABLE
OF CONTENTS











PART
      I. FINANCIAL INFORMATIONITEM
      1. FINANCIAL STATEMENTS
            
            3ITEM
      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
    OPERATION
            
            10ITEM
      3. QUANTITATIVE AND QUALITATIVE  DISCLOSURES ABOUT MARKET
      RISK
            
            12ITEM
      4. CONTROLS AND PROCEDURES
            
            12PART
      II. OTHER INFORMATIONITEM
      1. - LEGAL PROCEEDINGS
            
            13ITEM
      1a – RISK FACTORS
            
            13ITEM
      2. - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS
            
            13ITEM
      3. - DEFAULTS UPON SENIOR SECURITIES
            
            13ITEM
      4. – SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
            
            13ITEM
      5. - OTHER INFORMATION
            
            13ITEM
      6. - EXHIBITS
            
            14SIGNATURES
            
            14





2





PART I.  FINANCIAL INFORMATION











ITEM
1. FINANCIAL STATEMENTS


HEARTLAND, INC. AND
SUBSIDIARIES


CONDENSED CONSOLIDATED
BALANCE SHEETS








ASSETS





Sept.
      30,
            
            
            Dec.
      31,2009
            
            
            2008(Unaudited)CURRENT
      ASSETSCash
            
            $
            3,337,694
            
            
            $
            4,101,692Accounts
      receivable, net
            
            
            5,777,642
            
            
            
            4,885,878Inventory
            
            
            4,042,648
            
            
            
            2,775,635Prepaid
      expenses and other current assets
            
            
            170,628
            
            
            
            817,666Total
      current assets
            
            
            13,328,612
            
            
            
            12,580,871PROPERTY,
      PLANT AND EQUIPMENT, net
            
            
            13,119,751
            
            
            
            10,256,234OTHER
      ASSETS
            
            
            757,747
            
            
            
            68,112Total
      assets
            
            $
            27,206,110
            
            
            $
            22,905,217








3





HEARTLAND, INC. AND
SUBSIDIARIES


CONDENSED CONSOLIDATED
BALANCE SHEETS - continued








LIABILITIES AND
STOCKHOLDERS’ EQUITY








Sept.
      30,
            
            
            Dec.
      31,2009
            
            
            2008(Unaudited)CURRENT
      LIABILITIESAccounts
      payable
            
            $
            3,406,498
            
            
            $
            2,741,435Other
      current liabilities
            
            
            1,329,104
            
            
            
            1,244,170Current
      portion of notes payable
            
            
            4,011,381
            
            
            
            1,205,594Current
      portion of notes payable to related parties
            
            
            120,521
            
            
            
            129,127Total
      current liabilities
            
            
            8,867,504
            
            
            
            5,320,326LONG-TERM
      OBLIGATIONSNotes
      payable, less current portion
            
            
            7,685,539
            
            
            
            8,204,783Notes
      payable to related parties, less current portion
            
            
            3,240,124
            
            
            
            3,330,872Other
      long-term liabilities
            
            
            1,841,547
            
            
            
            878,215Total
      long term liabilities
            
            
            12,767,210
            
            
            
            12,413,870Total
      liabilities
            
            
            21,634,714
            
            
            
            17,734,196STOCKHOLDERS’
      EQUITYPreferred
      stock $0.001 par value 5,000,000 sharesauthorized,
      2,370,000 shares issued and outstanding
            
            
            2,370
            
            
            
            2,370Additional
      paid-in capital – preferred stock
            
            
            713,567
            
            
            
            713,567Common
      stock, $0.001 par value 100,000,000 sharesauthorized;  44,667,558
      and 42,759,047 shares issued andoutstanding
      at Sept. 30, 2009 and Dec. 31, 2008, respectively
            
            
            44,668
            
            
            
            42,759Additional
      paid-in capital – common stock
            
            
            17,440,011
            
            
            
            17,011,726Accumulated
      deficit
            
            
            (12,629,220
            )
            
            
            (12,599,401
            )Total
      stockholders’ equity
            
            
            5,571,396
            
            
            
            5,171,021Total
      Liabilities and Stockholders’ Equity
            
            $
            27,206,110
            
            
            $
            22,905,217




The
accompanying notes are an integral part of the unaudited condensed consolidated
financial statements.


4


HEARTLAND, INC. AND
SUBSIDIARIES


CONDENSED CONSOLIDATED
STATEMENTS OF INCOME


(Unaudited)




Three
      Months Ended
              
              
              Nine
      Months EndedSeptember
      30,
              
              
              September
      30,2009
              
              
              2008
              
              
              2009
              
              
              2008SALES
              
              $
              24,874,767
              
              
              $
              5,425,498
              
              
              $
              67,392,032
              
              
              $
              15,684,082Cost
      of goods sold
              
              
              (22,204,230
              )
              
              
              (4,337,807
              )
              
              
              (59,559,303
              )
              
              
              (12,908,296
              )Gross
      profit
              
              
              2,670,537
              
              
              
              1,087,691
              
              
              
              7,832,729
              
              
              
              2,775,786EXPENSES
              
              
              (
      2,637,282
              )
              
              
              (467,083
              )
              
              
              (
      7,602,252
              )
              
              
              (1,338,386
              )NET
      OPERATING (LOSS)INCOME
              
              
              33,255
              
              
              
              620,608
              
              
              
              230,477
              
              
              
              1,437,400Other
      income (expense)
              
              
              (154,967
              )
              
              
              (64,145
              )
              
              
              (268,010
              )
              
              
              (49,681
              )(LOSS)
      INCOME BEFORE INCOME TAXES
              
              
              (121,712
              )
              
              
              556,463
              
              
              
              (37,533
              )
              
              
              1,387,719Federal
      and state income taxesIncome
      taxes, current period
              
              
              (25,597
              )
              
              
              -
              
              
              
              (73,152
              )
              
              
              -Income
      tax benefit, deferred
              
              
              33,228
              
              
              
              -
              
              
              
              88,340
              
              
              
              -(LOSS)
      INCOME FROM CONTINUING OPERATIONS
              
              
              (114,081
              )
              
              
              556,463
              
              
              
              (22,345
              )
              
              
              1,387,719LESS:
      Preferred Dividends
              
              
              (14,813
              )
              
              
              (14,812
              )
              
              
              (44,439
              )
              
              
              (44,438
              )NET
      (LOSS) INCOME AVAILABLE TO COMMON STOCKHOLDERS
              
              $
              (128,895
              )
              
              $
              541,651
              
              
              $
              (66,784
              )
              
              $
              1,343,281




The
accompanying notes are an integral part of the unaudited condensed consolidated
financial statements.


5


HEARTLAND, INC. AND
SUBSIDIARIES


CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS





(Unaudited)








Nine
      Months EndedSeptember
      30,2009
            
            
            2008NET
      CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES
            
            $
            (498,823
            )
            
            $
            1,216,816CASH
      FLOWS FROM INVESTING ACTIVITIESNet
      payments for property, plant and equipment
            
            
            (3,848,133
            )
            
            
            (1,374,020
            )Net
      proceeds from disposition of assets
            
            
            260,000
            
            
            
            -NET
      CASH USED IN INVESTING ACTIVITIES
            
            
            (3,588,133
            )
            
            
            (1,374,020
            )CASH
      FLOWS FROM FINANCING ACTIVITIESNet
      proceeds from notes payable
            
            
            3,422,312
            
            
            
            686,934Net
      payments on notes to related parties
            
            
            (99,354
            )
            
            
            (74,845
            )Payments
      on capital lease
            
            
            -
            
            
            
            (34,891
            )Proceeds
      from issuance of common stock
            
            
            -
            
            
            
            220,000NET
      CASH PROVIDED BY FINANING ACTIVITIES
            
            
            3,322,958
            
            
            
            797,198(DECREASE)
      INCREASE IN CASH
            
            
            (763,998
            )
            
            
            639,994CASH,
      BEGINNING OF PERIOD
            
            
            4,101,692
            
            
            
            216,570CASH,
      END OF PERIOD
            
            $
            3,337,694
            
            
            $
            856,564SUPPLEMENTAL
      DISCLOSURES OF CASH FLOW INFORMATIONInterest
      paid
            
            $
            702,774
            
            
            $
            57,669Taxes
      paid
            
            $
            73,152
            
            
            $
            -NON
      CASH INVESTING AND FINANCING ACTIVITIESAmortization
      of deferred compensation as share based compensation
            
            $
            75,231
            
            
            $
            90,000Issuance
      of common stock for services and settlement
            
            $
            315,000
            
            
            $
            -Issuance of common stock in payment of convertible promissory notes &
      accrued interest
            
            $
            32,490
            
            
            $
            124,377Issuance
      of common stock for dividends
            
            $
            7,473
            
            
            $
            83,379Purchase
      of Mound facilities by settlement of amount to/from former
      landlord
            
            $
            -
            
            
            $
            141,657Settlement
      of amount due from landlord
            
            $
            -
            
            
            $
            426,321Settlement
      of amount due to landlord
            
            $
            -
            
            
            $
            284,664







The
accompanying notes are an integral part of the unaudited condensed consolidated
financial statements.




6





HEARTLAND, INC. AND
SUBSIDIARIES


NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)


SEPTEMBER 30,
2009





NOTE A
            BASIS OF
  PRESENTATION





The
accompanying unaudited consolidated financial statements have been prepared in
accordance with Regulation S-K promulgated by the Securities and Exchange
Commission and do not include all of the information and notes required by
generally accepted accounting principles in the United States for complete
financial statements.  In the opinion of management, these interim
financial statements include all adjustments, which include only normal
recurring adjustments, necessary in order to make the financial statements not
misleading.  The results of operations for such interim periods are
not necessarily indicative of results of operations for a full
year.  The unaudited consolidated financial statements should be read
in conjunction with the audited consolidated financial statements and notes
thereto of the Company and management’s discussion and analysis of financial
condition and results of operations included in the Company’s Annual Report for
the year ended December 31, 2008 as filed with the Securities and Exchange
Commission on Form 10-K.





The
balance sheet at December 31, 2008 has been derived from the audited financial
statements of that date, but does not include all of the information and notes
required by accounting principles generally accepted in United States of America
for complete financial statements.





We have
evaluated subsequent events that have occurred since the end of the quarter
through November 4, 2009.




NOTE B
            COMMON
STOCK


During
the quarter ended September 30, 2009, the Company issued 75,000 shares of common
stock. The shares were valued based on the share price on September 15, 2009 and
a total expense of $30,000 was recorded as an operational expense.





During
the quarter ended June 30, 2009, the Company authorized the issuance of 886,362
shares of common stock. The issuance related to the following:





Description
            
            Quantity
            
            Closing
      Price DateBoard
      Compensation
            
            
            136,362
            
            June
      15, 2009Employment
      Contract – Tom Miller
            
            
            750,000
            
            Valued
      at $0.15/share886,362





During
the quarter ended March 31, 2009, the Company authorized the issuance of 947,149
shares of common stock. The issuance related to the following:





Description
            
            Quantity
            
            Closing
      Price DateStock
      Dividend
            
            
            28,377
            
            Monthly
      averageConversion
      of Debt & Related Interested
            
            
            32,410
            
            Set
      by note at $1/shareBoard
      Compensation
            
            
            136,362
            
            March
      15, 2009Employment
      Contract – Randy Frevert
            
            
            750,000
            
            Valued
      at $0.15/share947,149





7





HEARTLAND, INC. AND
SUBSIDIARIES


NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)


SEPTEMBER 30,
2009








NOTE C
            EARNINGS PER
  SHARE





Basic
earnings per share assumes no dilution and is computed by dividing net income
available to common stockholders by the weighted average number of common shares
outstanding during each period. Diluted earnings per share reflect, in periods
in which they have a dilutive effect, the effect of common shares issuable upon
the exercise of stock options and warrants, using the treasury stock method of
computing such effects.





The
following table sets forth the computation of basic and diluted earnings per
share for the nine months ended September 30:




2009
            
            
            2008Basic:Net
      income available to common stockholders
            
            $
            (66,784
            )
            
            $
            1,343,281Weighted
      average common shares outstanding
            
            
            44,023,582
            
            
            
            37,017,096Income
      per share
            
            $
            (0.00
            )
            
            $
            0.04Diluted:Net
      income available to common stockholders
            
            $
            (1
            )
            
            $
            1,343,281Adjusted
      weighted average common shares outstanding
            
            
            (1
            )
            
            
            39,879,976Income
      per share
            
            $
            (1
            )
            
            $
            0.03





The
following table sets forth the computation of basic and diluted earnings per
share for the three months ended September 30:


2009
            
            
            2008Basic:Net
      (loss) income available to common stockholders
            
            $
            (128,895
            )
            
            $
            541,651Weighted
      average common shares outstanding
            
            
            44,592,558
            
            
            
            37,998,822(Loss)
      income per share
            
            $
            (0.00
            )
            
            $
            0.01Diluted:Net
      income available to common stockholders
            
            
            (1
            )
            
            $
            541,651Adjusted
      weighted average common shares outstanding
            
            
            (1
            )
            
            
            40,596,008Income
      per share
            
            
            (1
            )
            
            $
            0.01


(1)Due to the net loss
available to common shareholders, adding diluting securities to the denominator
would not properly reflect earnings per share.





NOTE D
            BUSINESS
SEGMENTS





The
consolidated financial statements include the accounts of Heartland, Inc.
(“Heartland”) and its wholly owned subsidiaries, Mound Technologies, Inc.
(“Mound”), Lee Oil Company, Inc. (“Lee Oil”), and Heartland Steel, Inc. (“HS”)
for the three and nine month periods ending September 30, 2009.  Mound
was the only operating segment for the three and nine month periods ending
September 30, 2008.





All
significant intercompany accounts and transactions have been
eliminated.




8








HEARTLAND, INC. AND
SUBSIDIARIES


NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS


(Unaudited)


SEPTEMBER 30,
2009








NOTE D
            BUSINESS SEGMENTS
    (Continued)





The
following table reflects the Company’s segments for the three and nine month
periods ended September 30, 2009:


Holding
            
            
            Oil
            
            
            Steel
            
            
            SteelCompany
            
            
            Distributor
            
            
            Fabricator
            
            
            Distributor(Heartland)
            
            
            (Lee
      Oil)
            
            
            (Mound)
            
            
            (HS)
            
            
            ConsolidatedTotal
      Assets
            
            $
            2,755,369
            
            
            $
            12,846,136
            
            
            $
            7,950,402
            
            
            $
            3,654,203
            
            
            $
            27,206,110Three
      MonthsRevenues
      from External Customers
            
            
            -
            
            
            
            21,481,262
            
            
            
            3,291,515
            
            
            
            101,990
            
            
            
            24,874,767Intersegment
      Revenues
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            544,345
            
            
            
            544,345Gross
      Margins
            
            
            -
            
            
            
            2,248,389
            
            
            
            373,075
            
            
            
            49,073
            
            
            
            2,670,537Loss
      From OperationsBefore
      Income Taxes
            
            
            (401,796
            )
            
            
            270,936
            
            
            
            134,499
            
            
            
            (125,350
            )
            
            
            (121,712
            )Nine
      MonthsRevenues
      from External Customers
            
            
            -
            
            
            
            57,199,442
            
            
            
            9,555,517
            
            
            
            637,073
            
            
            
            67,392,032Intersegment
      Revenues
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            544,345
            
            
            
            544,345Gross
      Margins
            
            
            -
            
            
            
            6,143,442
            
            
            
            1,615,463
            
            
            
            73,824
            
            
            
            7,832,729Loss
      From OperationsBefore
      Income Taxes
            
            
            (1,163,470
            )
            
            
            724,289
            
            
            
            840,217
            
            
            
            (438,568
            )
            
            
            (37,533
            )




Total
assets increased by approximately $3.5 million from the amount reported in the
December 31, 2008 annual report because of the construction of the building at
HS. All revenue and gross margins for the periods prior to October 1, 2008 would
be attributable to Mound since it was the only operating segment during the
first three quarters of 2008. The expenses related to Heartland were $215,766
and $600,994 for the three and nine month periods ended September 30, 2008
respectively.





NOTE E
            CONSTRUCTION
NOTE





On April
9, 2009, the Company entered into a $2 million construction note with a related
party bank for the construction of the future home of HS. The note bears
interest at 7.75% and will be converted into a long-term note once construction
is completed (not to exceed two years). At the time of conversion, the note will
have a term of 20 years. The note is collateralized by the building that is
being constructed.





NOTE F
            SUBSEQUENT
EVENTS





As of
November 1, 2009, the Company has completed the construction on the building
referenced in Note E and has officially moved the HS operations to that
location. The Company is currently working with the related party bank to
convert the construction note into a normal long-term note. Upon conversion, of
which there is no guarantee, the Company will reclassify the presentation of the
note from a short-term liability to a long-term liability.




9





ITEM
2.  MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OERATION.





The
following discussion should be read in conjunction with the financial statements
included in this Form 10-Q.  The following discussion and analysis
provides certain information, which the Company’s management believes is
relevant to an assessment and understanding of the Company’s results of
operations and financial condition for the quarterly period ended September 30,
2009. The statements contained in this section that are not historical
facts are forward-looking statements (as such term is defined in the Private
Securities Litigation Reform Act of 1995) that involve risks and
uncertainties.  Such forward-looking statements may be identified by,
among other things, the use of forward-looking terminology such
as  “believes,” “expects,” “may,” “will,” should” or “anticipates” or
the negative thereof or other variations thereon or comparable terminology, or
by discussions of strategy that involve risks and uncertainties.  From
time to time, we or our representatives have made or may make forward-looking
statements, orally or in writing.  Such forward-looking statements may
be included in our various filings with the SEC, or press releases or oral
statements made by or with the approval of our authorized executive
officers.





These
forward-looking statements, such as statements regarding anticipated future
revenues, capital expenditures and other statements regarding matters that are
not historical facts, involve predictions.  Our actual results,
performance or achievements could differ materially from the results expressed
in, or implied by, these forward-looking statements.  We do not
undertake any obligation to publicly release any revisions to these
forward-looking statements or to reflect the occurrence of unanticipated
events.  Many important factors affect our ability to achieve our
objectives, including, among other things, technological and other developments
within a given field, intense and evolving competition, the lack of an
“established trading market” for our shares, and our ability to obtain
additional financing, as well as other risks detailed from time to time in our
public disclosure filings with the SEC.





Overview





The
Company currently manages its business as three operational segments and files
as a consolidated entity. Operating segments are defined as components of an
enterprise about which separate financial information is available that is
evaluated regularly by the chief operating decision makers. The three
operational segments we currently report are:





·
            Mound
      – Steel Fabrication – Primarily focused on the fabrication of metal
      products including structural steel, steel stairs and railings, bar
      joists, metal decks, and other miscellaneous steel
    products.


·
            Lee
      Oil – Oil Distribution – Primarily focused on the wholesale and retail
      distribution of petroleum products including those sold to the motoring
      public through our retail
locations.


·
            Heartland
      Steel – Wholesale Steel – This is a startup segment of the business that
      we are developing into a service center for the distribution of steel
      products. This segment of the business will not be fully operational until
      later in the 2009.








Results
of Operations
 
 Nine
months ended September 30, 2009 as compared to the nine months ended September
30, 2008
 
 The main
differences between the results of operations from the first three quarters of
2008 to the first three quarters of 2009 can be attributed primarily to the Lee
Oil acquisition that took place in the fourth quarter of 2008 and the startup of
operations relating to Heartland Steel. A further breakdown is provided in NOTE
D – BUSINESS SEGMENTS of the financial statements.
 
 Revenues.Revenues increased for the three months ended September 30, 2009 to
$24,874,767 from $5,425,498 for the three months ended September 30, 2008.
Revenues increased from $15,684,082 to $67,392,032 for the nine months ended
September 30, 2008 and 2009 respectively.
  10
 
 Cost of Goods
Sold.Cost of Goods Sold increased for the three and nine months ended
September 30, 2009 to $22,204,230 and $59,559,303 from $4,337,807 and
$12,908,296 for the three and nine months ended September 30, 2008.
 
 Gross Profit.Gross Profits increased for three months ended September 30, 2009 to
$2,670,537 from $1,087,691 for the three months ended September 30, 2008. The
gross profit for the nine months ended September 30, 2009 was $7,832,729 and
$2,775,786 for the nine months ended September 30, 2008.
 
 Expenses.Expenses increased for three months ended September 30, 2009 to
$2,637,282 from $467,083 for the three months ended September 30,
2008.  Expenses rose from $1,338,386 to $7,602,252 for the nine months
ended September 30, 2008 and 2009 respectively. In addition to the expenses
attributed to the Lee Oil acquisition, the current nine month period ending
September 30, 2009 includes expenses related to two employment contracts. The
chief operating officers of both Mound and HS were issued 750,000 shares of
common shares each as an inducement to enter into long-term employment
contracts. These shares were valued based on the share price on the date of
authorization and expensed accordingly. The total expense recorded was
$225,000.
 
 Other (expense)
income.The interest expense recorded for the nine months ended September
30, 2009 was $702,774 compared to the $57,669 expense recorded for the nine
months ended September 30, 2008. This was primarily attributable to the interest
associated with the acquisition of Lee Oil. The interest relating to the
construction of the new HS building is being capitalized until the construction
is completed. The interest expense related to the new construction will begin in
November. See Note E.
 
 Net Income Before
income Taxes.Net Income before Income Taxes decreased for the nine
months ended September 30, 2009 to a loss of $37,533 from a profit $1,387,719
for the nine months ended September 30, 2008. This decrease is primarily
attributable some costs associated with the startup at Heartland Steel including
the expensing of the shares associated with the chief operating officers
employment contract, additional interest expense associated with the Lee Oil
acquisition in the fourth quarter of 2008, and  lower gross revenues
and profits generated from the Mound operations.
 
 Liquidity and Capital
Resources


Sources of
Liquidity
 
 As of
September 30, 2009, the Company had accumulated deficit of
$12,629,220.  As of December 31, 2008, the Company had accumulated
deficit of $12,599,401.
 
 The
Company has used $498,823 in operating activities for the nine months ended
September 30, 2009 primarily to fund additional accounts receivable and
inventory. We consider this to be normal with the price of oil and steel both
rising and would expect a reversal if these prices begin to
fall.





The
Company has used $3,588,133 in investing activities for the nine months ended
September 30, 2009 primarily related to the construction of a building for the
HS operations.





The
Company’s generated cash flow from financing activities of $3,322,958 for the
nine months ended September 30, 2009 primarily related to a construction loan as
described in NOTE E – CONSTRUCTION NOTE of the financial
statements.


Our
principal source of liquidity is cash on hand and the conversion of accounts
receivable into cash. We also believe cash provided from operating activities
will be a positive source of liquidity going forward, but would seek outside
financing for any major expansion, betterment project, or possible future
acquisitions as these would be considered long term projects.




11





As of
September 30, 2009, the Company believes that cash on hand, cash generated by
operations, and available bank borrowings will be sufficient to pay trade
creditors, operating expenses in the normal course of business, and meet all of
its bank and subordinate debt obligations for the next 12 months.





Due to
the current price of our common stock, we do not expect to fund future projects
through the issuance of shares but rather will fund such projects through cash
on hand and financing, if available.
 
 ITEM
3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK





We are a
smaller reporting company as defined by Rule 12b-2 of the Securities Exchange
Act of 1934 and, as such, are not required to provide the information under this
Item.





ITEM
4.  Controls and Procedures





Evaluation
of Disclosure Controls and Procedures


With the
participation of the Chief Executive Officer (the principal executive officer)
and Chief Financial Officer (the principal financial officer); the Company’s
management has evaluated the effectiveness of the Company’s disclosure controls
and procedures (as defined in Rule 13a-15(e) under the Securities Exchange
Act of 1934, as amended (the “Exchange Act”)), as of the end of the quarterly
period covered by this Quarterly Report on Form 10-Q. Based on this evaluation,
our chief executive officer and our chief financial officer concluded that our
disclosure controls and procedures are not effective to ensure that information
required to be disclosed by us in reports that we file or submit under the
Exchange Act is recorded, processed, summarized and reported within the time
periods specified in Securities and Exchange Commission rules and forms. The
ineffectiveness of our disclosure controls and procedures is the result of
certain deficiencies in internal controls constituting material weaknesses as
discussed below. The material weaknesses identified did not result in the
restatement of any previously reported financial statements or any other related
financial disclosure, nor does management believe that it had any effect on the
accuracy of the Company's financial statements for the current reporting
period.





The
Company has limited accounting personnel with significant knowledge of generally
accepted accounting principles and lacks enough segregation of duties for there
to be proper internal controls over all accounting and financial reporting
operations.  The lack of sufficient staff with significant knowledge of
generally accepted accounting principles or oversight from outside parties could
result in ineffective oversight and monitoring.





The
Company is currently reviewing its policies and is evaluating its disclosure
controls and procedures so that it will be able to determine the changes it can
and should make to make such controls more effective.





Changes
in Internal Controls over Financial Reporting





There has
been no change in our internal control over financial reporting that occurred
during our last fiscal quarter that has materially affected, or is reasonably
likely to material affect, our internal control over financial
reporting.




12







PART
II.  OTHER INFORMATION








ITEM  1. 
LEGAL PROCEEDINGS





In the
normal course of our business, we and/or our subsidiaries are named as
defendants in suits filed in various state and federal courts. We believe that
none of the litigation matters in which we, or any of our subsidiaries, are
involved would have a material adverse effect on our consolidated financial
condition or operations.





There is
no past, pending or, to our knowledge, threatened litigation or administrative
action which has or is expected by our management to have a material effect upon
our business, financial condition or operations, including any litigation or
action involving our officers, directors, or other key personnel.





ITEM
1A.  RISK FACTORS




We are a
smaller reporting company as defined by Rule 12b-2 of the Securities Exchange
Act of 1934 and, as such, are not required to provide the information under this
Item.




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





The
Company issued 75,000 shares to its directors during the quarter ended September
30, 2009. The associated cost of $30,000 was expensed in the
quarter.





During
the quarter ended June 30, 2009, the Company issued 750,000 shares of common
stock to Tom Miller, pursuant to the terms of his employment agreement and
136,362 shares of common stock to its directors.





During
the quarter ended March 31, 2009, the Company issued 28,377 shares of common
stock as a stock dividend, 32,410 shares of common stock for the conversion of
debt and related interest, 136,362 shares as board compensation and 750,000
shares to Randy Frevert pursuant to the terms of his employment
agreement.





The above
securities were offered and sold to the above parties in private placement
transactions made in reliance upon exemptions from registration pursuant to
Section 4(2) under the Securities Act of 1933 and/or Rule 506 promulgated under
Regulation D thereunder. Each of the investors are accredited investors as
defined in Rule 501 of Regulation D promulgated under the Securities Act of
1933.





ITEM  3. 
DEFAULTS UPON SENIOR SECURITIES





None





ITEM  4. 
SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS





None





ITEM  5. 
OTHER INFORMATION





None




13





ITEM  6.  EXHIBITS
AND REPORTS ON FORM 8-K





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 Financial Officer





SIGNATURES





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





HEARTLAND,
      INC.(Registrant)Date:
      November 16, 2009
            
            By:
      /s/ Terry L. LeeTerry
      L. LeeChief
      Executive Officer andChairman
      of the Board(Principal
      Executive Officer)Date:
      November 16, 2009
            
            By:
      /s/ Mitchell L. Cox, CPAMitchell
      L. CoxChief
      Financial Officer(Principal
      Financialand
      Accounting Officer)