**UNITED
      STATES**


**SECURITIES
      AND EXCHANGE COMMISSION**


**Washington,
      D.C. 20549**




**FORM
      10-QSB**





**QUARTERLY
                REPORT****UNDER
                SECTION 13 OR 15(d)****OF
                THE SECURITIES EXCHANGE ACT OF
                1934**





**FOR
      QUARTER ENDED SEPTEMBER 30,  2007**







**HEARTLAND,
      INC.**


(Exact
      name of small business 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)








124
      Brooklyn Street


Cumberland
      Gap, Tennessee 37724


(Address
      of principal executive offices) (Zip Code)





P.O.
      Box
      4320


Harrogate,
      Tennessee 37752


(Mailing
      Address of principal executive offices) (Zip Code)





Registrant's
      telephone number, including area code: (423) 869-7255





**---------------------------------------------------------------------------**


(Former
      name, former address and former fiscal year, if changed since last
      report)







Check
      whether the issuer (1) filed all reports required to be filed by Section 13
      or
      15(d) of the Securities Exchange Act during the past 12 months (or for such
      shorter period that the registrant was required to file such reports), and
      (2)
      has been subject to such filing requirements for the past 90
      days.     Yes [X]   No
      [  ]




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





Number
      of
      shares of the registrant’s common stock outstanding as of November 16, 2007 was:
      36,237,105




Transitional
      small business disclosure format (Check one) YES o NO x








1





**HEARTLAND,
      INC.**





**FORM
      10-QSB**


**TABLE
      OF CONTENTS**








PART
                I. FINANCIAL INFORMATION
            
            3ITEM
                1. FINANCIAL STATEMENTS
            
            3ITEM
                2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
                OPERATION
            
            17ITEM
                3. CONTROLS AND PROCEDURES
            
            25PART
                II. OTHER INFORMATION
            
            25ITEM
                1. - LEGAL PROCEEDINGS
            
            25ITEM
                2. - CHANGES IN SECURITIES AND USE OF PROCEEDS
            
            25ITEM
                3. - DEFAULTS UPON SENIOR SECURITIES
            
            25ITEM
                4. - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
            
            26ITEM
                5. - OTHER INFORMATION
            
            26ITEM
                6. - EXHIBITS
            
            26SIGNATURES
            
            26





2





PART  I.  FINANCIAL  INFORMATION








**ITEM
      1. FINANCIAL STATEMENTS**





3
  **HEARTLAND,
        INC. AND SUBSIDIARIES**
 
 **CONDENSED
        CONSOLIDATED BALANCE SHEET**
 
 **SEPTEMBER
        30, 2007 (UNAUDITED)**
 
 **ASSETS**
 
 
 CURRENT
                      ASSETSCash
                  
                  $
                  263,363Accounts
                        receivable, net of
                        allowance for doubtful accountsof $197,525
                  
                  
                  3,876,648Cost and estimated earnings in excess of billings onuncompleted
                        contracts
                  
                  
                  211,872Inventory
                  
                  
                  1,104,485Prepaid
                      expenses and
                      other
                  
                  
                  1,620Total
                      current
                      assets
                  
                  
                  5,457,988PROPERTY,
                      PLANT AND EQUIPMENT, net
                  
                  
                  894,815OTHER
                      ASSETS
                  
                  
                  23,465Total
                      assets
                  
                  $
                  6,376,268
  
 The
        accompanying notes are an integral part of the unaudited consolidated financial
        statements.
  4
  **HEARTLAND,
        INC. AND SUBSIDIARIES**
 
 **CONDENSED
        CONSOLIDATED BALANCE SHEET**
 
 **SEPTEMBER
        30, 2007 (UNAUDITED)**
 
 **LIABILITIES
        AND STOCKHOLDERS’ EQUITY**
  
 CURRENT
                      LIABILITIESAccounts
                      payable
                  
                  $
                  1,931,500Convertible
                      promissory notes
                      payable
                  
                  
                  53,450Current
                      portion of notes
                      payable
                  
                  
                  41,203Current
                      portion of notes payable
                      to related parties
                  
                  
                  88,835Obligations
                      to related
                      parties
                  
                  
                  12,008Accrued
                      payroll and related
                      taxes
                  
                  
                  528,694Accrued
                      interest
                  
                  
                  122,306Accrued
                      expenses
                  
                  
                  266,547Billings in excess of costs and estimated earnings onuncompleted
                        contracts
                  
                  
                  1,035,995Total
                      current
                      liabilities
                  
                  
                  4,080,538LONG-TERM
                      OBLIGATIONSNotes
                      payable, less current
                      portion
                  
                  
                  396,687Notes
                      payable to related parties,
                      less current portion
                  
                  
                  421,579Total
                      long term
                      liabilities
                  
                  
                  818,266STOCKHOLDERS’
                      EQUITYPreferred stock $0.001 par value 5,000,000 sharesAuthorized
                        2,330,000 shares issued and outstanding
                  
                  
                  2,330Additional
                      paid-in capital –
                      preferred stock
                  
                  
                  703,607Common stock, $0.001 par value 100,000,000 sharesauthorized;
                        36,237,105 shares issued and outstanding
                  
                  
                  36,237Additional
                      paid-in capital –
                      common stock
                  
                  
                  16,058,914Accumulated
                      deficit
                  
                  
                  (14,923,785
                  )Deferred
                      compensation
                  
                  
                  (399,839
                  )Total
                      stockholders’
                      equity
                  
                  
                  1,477,464Total
                      Liabilities and
                      Stockholders’ Equity
                  
                  $
                  6,376,268
 
  The
        accompanying notes are an integral part of the unaudited consolidated financial
        statements
  5
  **HEARTLAND,
        INC. AND SUBSIDIARIES**
 
 **CONDENSED
        CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)**
 
 
 
 Three
                      months ended September 30,
                  
                  
                  Nine
                      months ended September 30,2007
                  
                  
                  2006
                  
                  
                  2007
                  
                  
                  2006REVENUE
                      - SALES
                  
                  $
                  3,168,965
                  
                  
                  $
                  2,619,088
                  
                  
                  $
                  9,656,306
                  
                  
                  $
                  7,671,149COSTS
                      AND EXPENSESCost
                      of goods sold
                  
                  
                  2,920,674
                  
                  
                  
                  2,276,285
                  
                  
                  
                  8,613,137
                  
                  
                  
                  6,387,341Selling,
                      general and administrative expenses
                  
                  
                  288,173
                  
                  
                  
                  2,013,543
                  
                  
                  
                  1,946,307
                  
                  
                  
                  2,962,819Depreciation
                      and amortization
                  
                  
                  15,256
                  
                  
                  
                  14,425
                  
                  
                  
                  52,026
                  
                  
                  
                  41,802Total
                      costs and
                      expenses
                  
                  
                  3,224,103
                  
                  
                  
                  4,304,253
                  
                  
                  
                  10,611,470
                  
                  
                  
                  9,391,962NET
                      OPERATING LOSS
                  
                  
                  (55,138
                  )
                  
                  
                  (1,685,165
                  )
                  
                  
                  (955,164
                  )
                  
                  
                  (1,720,813
                  )OTHER
                      INCOME (EXPENSE)Other
                      income
                  
                  
                  6,652
                  
                  
                  
                  25,248
                  
                  
                  
                  23,735
                  
                  
                  
                  90,309Loss
                      on disposal of property,
                      plant and equipment
                  
                  
                  --
                  
                  
                  
                  --
                  
                  
                  
                  (19,432
                  )
                  
                  
                  --Interest
                      expense
                  
                  
                  (12,587
                  )
                  
                  
                  (2,864
                  )
                  
                  
                  (104,583
                  )
                  
                  
                  (196,834
                  )Total
                      other income
                      (expense)
                  
                  
                  (5,935
                  )
                  
                  
                  22,384
                  
                  
                  
                  (100,280
                  )
                  
                  
                  (106,525
                  )LOSS
                      FROM CONTINUING OPERATIONSBEFORE  INCOME
                      TAXES
                  
                  
                  (61,073
                  )
                  
                  
                  (1,662,781
                  )
                  
                  
                  (1,055,444
                  )
                  
                  
                  (1,827,338
                  )FEDERAL
                      AND STATE INCOME TAX
                  
                  
                  --
                  
                  
                  
                  --
                  
                  
                  
                  --
                  
                  
                  
                  --LOSS
                      FROM CONTINUING OPERATIONS
                  
                  
                  (61,073
                  )
                  
                  
                  (1,662,781
                  )
                  
                  
                  (1,055,444
                  )
                  
                  
                  (1,827,338
                  )DISCONTINUED
                      OPERATIONS:Income (loss) from discontinued operations(net of income tax
                        expenses of $0)
                  
                  
                  --
                  
                  
                  
                  9,363
                  
                  
                  
                  82,196
                  
                  
                  
                  (35,019
                  )Gain on disposal of discontinued operations(net of income tax
                        expenses of $0)
                  
                  
                  131,525
                  
                  
                  
                  --
                  
                  
                  
                  131,525
                  
                  
                  
                  4,004,060Loss from discontinued operations of VIEs(net of income tax
                        expenses of $0)
                  
                  
                  --
                  
                  
                  
                  --
                  
                  
                  
                  --
                  
                  
                  
                  (12,692
                  )Gain on disposal of discontinued operations of VIEs(net of income
                        tax expenses of $0)
                  
                  
                  --
                  
                  
                  
                  --
                  
                  
                  
                  --
                  
                  
                  
                  2,894,737Income
                      from discontinued
                      operations
                  
                  
                  131,525
                  
                  
                  
                  9,363
                  
                  
                  
                  213,721
                  
                  
                  
                  6,851,086NET
                      INCOME (LOSS)
                  
                  $
                  70,452
                  
                  
                  $
                  (1,653,418
                  )
                  
                  $
                  (841,723
                  )
                  
                  $
                  5,023,748LESS:  Preferred
                      dividends
                  
                  
                  (14,934
                  )
                  
                  
                  --
                  
                  
                  
                  (161,752
                  )
                  
                  
                  --Net
                      income (loss) available to common stockholders
                  
                  $
                  55,518
                  
                  
                  $
                  (1,653,418
                  )
                  
                  $
                  (1,003,475
                  )
                  
                  $
                  5,023,748
 
  The
        accompanying notes are an integral
        part of the unaudited consolidated financial statements
  6
  **HEARTLAND,
        INC. AND SUBSIDIARIES**
 
 **CONDENSED
        CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
        (CONTINUED)**
 
  2007
                    
                    
                    2006
                    
                    
                    2007
                    
                    
                    2006EARNINGS
                        (LOSS) PER COMMON SHAREContinuing
                        operationsBasic
                        and
                        diluted
                    
                    $
                    --
                    
                    
                    $
                    (.06
                    )
                    
                    $
                    (.04
                    )
                    
                    $
                    (.07
                    )Discontinued
                        operationsBasis
                    
                    $
                    --
                    
                    
                    $
                    --
                    
                    
                    $
                    .01
                    
                    
                    $
                    .27Net
                        income (loss)Basic
                        and
                        diluted
                    
                    $
                    --
                    
                    
                    $
                    (.06
                    )
                    
                    $
                    (.03
                    )
                    
                    $
                    .20WEIGHTED
                        AVERAGE COMMON SHARES OUTSTANDINGBasic
                        and
                        diluted
                    
                    
                    36,237,105
                    
                    
                    
                    25,990,530
                    
                    
                    
                    34,842,160
                    
                    
                    
                    25,110,513
 
  The
        accompanying notes are an integral
        part of the unaudited consolidated financial statements
  7
  **HEARTLAND,
        INC. AND SUBSIDIARIES**
 
 **CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)**
 
 
 Nine
                        months ened September 30,2007
                    
                    
                    2006(Unaudited)
                    
                    
                    (Unaudited)CASH
                        FLOWS FROM OPERATING ACTIVITIESContinuing
                        operations:Loss
                        from continuing
                        operations
                    
                    $
                    (1,055,444
                    )
                    
                    $
                    (1,827,338
                    )Adjustments
                        to reconcile net loss
                        to cash flows used in
                        operating activitiesStock
                        issued for services and
                        settlement
                    
                    
                    614,790
                    
                    
                    
                    2,091,790Preferred stock issued for services rendered
                    
                    
                    30,000
                    
                    
                    
                    --Net
                        loss on disposal of
                        property, plant and equipment
                    
                    
                    19,432
                    
                    
                    
                    --Depreciation
                        and
                        amortization
                    
                    
                    52,026
                    
                    
                    
                    39,693Stock
                        -based
                        compensation
                    
                    
                    21,044
                    
                    
                    
                    --Changes
                        in assets and
                        liabilities(Increase)
                        decrease
                        in:Accounts
                        receivable
                    
                    
                    (973,797
                    )
                    
                    
                    (466,269
                    )Costs
                        and estimated earnings in
                        excess of billings on uncompleted contract
                    
                    
                    341,705
                    
                    
                    
                    22,351Inventory
                    
                    
                    (246,294
                    )
                    
                    
                    (186,940
                    )Prepaid
                        expenses and
                        other
                    
                    
                    (620
                    )
                    
                    
                    (126,975
                    )Other
                        assets
                    
                    
                    (19,316
                    )
                    
                    
                    16,876Increase
                        (decrease)
                        in:Accounts
                        payable
                    
                    
                    (61,478
                    )
                    
                    
                    132,987Obligations
                        to related
                        parties
                    
                    
                    12,008
                    
                    
                    
                    --Accrued
                        payroll
                        taxes
                    
                    
                    (229,379
                    )
                    
                    
                    (241,323
                    )Accrued
                        interest
                    
                    
                    (266,472
                    )
                    
                    
                    63,439Accrued
                        expenses
                    
                    
                    97,645
                    
                    
                    
                    (88,406
                    )Billings
                        in excess of costs and
                        estimated earnings on uncompleted contract
                    
                    
                    782,498
                    
                    
                    
                    155,517Cash
                        used in continuing
                        operations
                    
                    
                    (881,652
                    )
                    
                    
                    (414,598
                    )Discontinued
                        operations:Income
                        from discontinued
                        operations
                    
                    
                    213,721
                    
                    
                    
                    6,851,086Decrease
                        in net assets
                        (liabilities) of entities discontinued
                    
                    
                    123,779
                    
                    
                    
                    (519,856
                    )Gain
                        on rescission of
                        acquisitions
                    
                    
                    --
                    
                    
                    
                    (6,335,000
                    )Cash
                        provided by (used in)
                        discontinued operations
                    
                    
                    337,500
                    
                    
                    
                    (3,770
                    )NET
                        CASH USED IN OPERATING
                        ACTIVITIES
                    
                    
                    (544,152
                    )
                    
                    
                    (418,368
                    )CASH
                        FLOWS FROM INVESTING ACTIVITIESPayments
                        for property, plant and
                        equipment
                    
                    
                    (46,618
                    )
                    
                    
                    (8,562
                    )NET
                        CASH USED IN INVESTING
                        ACTIVITIES
                    
                    
                    (46,618
                    )
                    
                    
                    (8,562
                    )
   The
        accompanying notes are an integral part of the unaudited consolidated financial
        statements
   8
  **HEARTLAND,
        INC. AND SUBSIDIARIES**
 
 **CONDENSED
        CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
        (CONTINUED)**
 
  Nine
                        months ended September 30,2007
                    
                    
                    2006CASH
                        FLOWS FROM FINANCING ACTIVITIESPayments
                        on notes payable
                    
                    
                    (30,082
                    )
                    
                    
                    (31,712
                    )Proceeds
                        from notes payable
                    
                    
                    --
                    
                    
                    
                    77,643Payments
                        on notes payable to related parties
                    
                    
                    (52,494
                    )
                    
                    
                    --Proceeds
                        from issuance of convertible promissory notes
                    
                    
                    --
                    
                    
                    
                    165,850Payments
                        on convertible promissory notes payable
                    
                    
                    (10,000
                    )
                    
                    
                    --Proceeds
                        from issuance of common stock
                    
                    
                    145,000
                    
                    
                    
                    243,283Proceeds
                        from issuance of preferred stock
                    
                    
                    552,500
                    
                    
                    
                    --NET
                        CASH PROVIDED BY FINANING
                        ACTIVITIES
                    
                    
                    604,924
                    
                    
                    
                    455,064INCREASE
                        IN CASH
                    
                    
                    14,154
                    
                    
                    
                    28,134CASH,
                        BEGINNING OF PERIOD
                    
                    
                    249,209
                    
                    
                    
                    87,460CASH,
                        END OF PERIOD
                    
                    $
                    263,363
                    
                    
                    $
                    115,594SUPPLEMENTAL
                        DISCLOSURES OF CASH FLOW INFORMATIONInterest
                        paid
                    
                    $
                    33,554
                    
                    
                    $
                    196,835NON
                        CASH INVESTING AND FINANCING ACTIVITIESIssuance
                        of common stock for
                        services and settlements
                    
                    $
                    614,790
                    
                    
                    $
                    2,091,790Issuance
                        of preferred stock for
                        services
                    
                    $
                    30,000
                    
                    
                    $
                    --Issuance
                        of common stock in
                        payment of convertible promissorynotes
                        payable and accrued
                        interest
                    
                    $
                    --
                    
                    
                    $
                    1,196,844Issuance
                        of common stock for
                        payment of obligations torelated
                        parties
                    
                    $
                    50,000
                    
                    
                    $
                    --Preferred
                        stock dividend from
                        imbedded beneficial conversion feature
                    
                    $
                    123,437
                    
                    
                    $
                    --Issuance
                        of common stock and
                        options for executive compensation
                    
                    $
                    420,883
                    
                    
                    $
                    --
 
  The
        accompanying notes are an integral part of the unaudited consolidated financial
        statements.
  9
  **HEARTLAND,
        INC. AND SUBSIDIARIES**
 
 **NOTES
        TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
        STATEMENTS**
 
  NOTE
                  A
              BASIS
                  OF PRESENTATION
 
 The
        accompanying unaudited condensed consolidated financial statements have been
        prepared in accordance with Regulation S-B promulgated by the Securities
        and
        Exchange Commission and do not include all of the information and footnotes
        required by generally accepted accounting principles in the United States
        for
        complete financial statements.  In the opinion of management, these
        interim unadited condensed consolidated 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 condensed 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, 2006 as
        filed with the Securities and Exchange Commission on Form 10-KSB.
 
 NOTE
                  B
              ACCOUNTING
                  POLICIES
 
 The
        accounting policies followed by the Company are set forth in Note B to the
        Company’s audited consolidated financials statements in the Company’s Annual
        Report for the year ended December 31, 2006 as filed with the Securities
        and
        Exchange Commission on Form 10-KSB.
  Reclassifications
  
  NOTE
                  C
              GOING
                  CONCERN
 
 As
        reflected in the accompanying unaudited condensed consolidated financial
        statements, the Company has an accumulated deficit of
        $14,923,785.  The Company’s auditors, in their opinion on the
        Company’s annual financial statements for 2006 dated April 16, 2007, included a
“going concern” qualification related to substantial doubt about the Company’s
        ability to continue as a going concern.
  10
  **HEARTLAND,
        INC. AND SUBSIDIARIES**
 
 **NOTES
        TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
        STATEMENTS**
 
  NOTE
                  D
              STOCKHOLDERS
                  EQUITY
 
 **Preferred
        Stock**
  In
        June
        11, 2004, the Board of Directors approved the authorization of 5,000,000
        shares
        of Series A Convertible Preferred Stock - par value $0.001.  As of
        September  30, 2007, the Company has 2,330,000 shares of Series A
        Convertible Preferred Stock issued and outstanding.  The preferred
        stock has a face value of $0.25 per share and the basis of conversion is
        one
        share of the Company’s common stock for each share of preferred
        stock.  The preferred stock has liquidation priority rights over all
        other stockholders.  The preferred shares can be converted at any time
        at the option of the stockholder, but will convert automatically at the end
        of
        three years into the Company’s common stock.
 
 The
        preferred shares carry a 10% annual stock dividend for the three years they
        are
        outstanding prior to conversion.  The Preferred dividend in arrears
        for the three and nine months ended September 30, 2007 was $14,935 and $38,315,
        respectively.
 
 The
        preferred shares include a Series A and Series B common stock purchase
        warrant.  The Series A warrant allows the holder to purchase 20% of
        the number of preferred shares purchased at $0.75 per share; the Series B
        warrant allows the holder to purchase 20% of the number of preferred shares
        purchased at $1.00 per share. Both series of warrants are exercisable over
        a
        three year period.  The Company can call in the warrants after 12
        months if the price of the common stock in the market is 150% of the warrant
        price for 10 consecutive days (i.e. $1.13 for the A warrant and $1.50 for
        the B
        warrant).
 
 During
        the quarter ended March 31, 2007, the Company sold 610,000 shares of Series
        A
        Convertible Preferred Stock (“Series A Preferred”) and received proceeds of
        $152,500.
 
 During
        the quarter ended June 30, 2007, the Company sold 1,600,000 shares of Series
        A
        Preferred and received proceeds of $400,000 [40,000 shares of Series A Preferred
        and proceeds of $10,000 were reclassified as 40,000 shares of common stock
        for
        misclassification during second quarter ended June 30, 2007].  In
        addition, 120,000 shares of Series A Preferred were issued for services valued
        at $30,000.
 
 There
        were no shares of preferred stock issued during the quarter ended September
        30,
        2007.
 
  11
  **HEARTLAND,
        INC. AND SUBSIDIARIES**
 
 **NOTES
        TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
        STATEMENTS**
  
 NOTE
                  D
              STOCKHOLDERS
                  EQUITY (Continued)
 
 **Preferred
        Stock (Continued)**
  Included
        with the Series A Preferred were 466,000 Series A warrants and 466,000 Series
        B
        warrants.  The Series A and Series B warrants were valued at $104,732
        using the Black-Scholes option-pricing model and such amount is included
        in
        Additional Paid in Capital – Preferred Stock. The assumptions used were as
        follows:
 
 Expected
        Life                                                                        
   3 years
 Expected
        Volatility                                                109.80%
        - 111.84%
 Risk
        Free
        Interest
        Rate                                              
                  2.5%
 Expected
        Dividends                                                     
                     --
 
 At
        September 30, 2007, there were 466,000 Series A warrants and 466,000 Series
        B
        warrants outstanding.
 
 In
        accordance with EMERGING ISSUES TASK FORCE ISSUE 98-5, ACCOUNTING FOR
        CONVERTIBLE SECURITIES WITH A BENEFICAL CONVERSION FEATURES OR CONTINGENTLY
        ADJUSTABLE CONVERSION RATIOS (“EITF 98-5), the Company recognized an imbedded
        beneficial conversion feature present in the Series A Convertible Preferred
        Stock.  The Company allocated a portion of the proceeds equal to the
        intrinsic value of that feature to additional paid in capital.  The
        Company recognized and measured an aggregate of $123,437 of the proceeds,
        which
        is equal to the intrinsic value of the imbedded beneficial conversion feature,
        to additional paid-in capital and as a dividend to the holders of the Series
        A
        Convertible Preferred Stock issued during the nine months ended September
        30,
        2007.
 
 **Common
        Stock**
 
 The
        Company has authorized 100,000,000 shares of common stock with a par value
        of
        $.001 per share.  As of September 30, 2007, the Company had 36,237,105
        shares of common stock issued and outstanding.
 
 During
        the quarter ended March 31, 2007, the Company’s common stock transactions were
        as follows:
 
 Issued
        1,182,000 common shares for services valued at $411,570, including 650,000
        shares valued at $211,250 issued to members of the Board of
        Directors.
 
  12
  **HEARTLAND,
        INC. AND SUBSIDIARIES**
 
 **NOTES
        TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
        STATEMENTS**
 
 
 NOTE
                  D
              STOCKHOLDERS
                  EQUITY (Continued)
 
 **Common
        Stock (Continued)**
 
 Issued
        635,000 common shares for cash of $115,000, including 210,000 shares issued
        for
        cash previously received.
 
 Issued
        77,000 shares of common stock for the settlement of amounts owed of
        $27,720.
 
 Issued
        400,000 common shares for $20,000 in cash, $50,000 in loan repayments and
        $60,000 of services.
 
 During
        the quarter ended June 30, 2007, the Company’s common stock transactions were as
        follows:
 
 Issued
        600,000 common shares for services valued at $115,500.
 
 Issued
        40,000 common shares for $10,000 [reclassified see Preferred].
 
 Per
        Executive Employee Agreement (see Note G):
 Issued
        1,000,000 common shares valued at $180,000.
 Granted
        five year employee non-statutory stock options to purchase 1,822,504 shares
        of
        common stock at an exercise price of $.33 per share.  The options were
        valued at $240,883 using the Black-Scholes option–pricing model and such amount
        is included in Additional Paid-in Capital.  The assumptions used were
        as follows
 
 Expected
        Life                                     
 5 years
 Expected
        Volatility                           
111.84%
 Risk
        Free
        Interest
        Rate                         
2.5%
 Expected
        Dividends                                   
--
 
 There
        were no shares of common stock issued during the quarter ended September
        30,
        2007.
 
 NOTE
                  E
              INVENTORY
 
 Inventory
        consists of the following at September 30, 2007:
 
 Raw
        material                                                                                                             
$1,094,971
 Work
        in
        process -
        manufacturing                                                                             9,514
 $1,104,485
 
  13
  **HEARTLAND,
        INC. AND SUBSIDIARIES**
 
 **NOTES
        TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
        STATEMENTS**
 
 
 
 
 NOTE
                  F
              DISCONTINUED
                  OPERATIONS
 
 In
        November 2007, in connection with the Company’s default under the terms of the
        acquisition note owed to the former owner of Karkela Construction, Inc. and
        the
        former owner’s intention to foreclose on the related security interest, the
        Company elected to discontinue efforts with respect to Karkela and forfeit
        the
        security interest pledged, the assets of Karkela including 100% of the equity
        interest of Karkela.  As a result, effective July 1, 2007, Karkela’s
        operations, which comprised the construction and property management segment,
        have been discontinued and Karkela is no longer a subsidiary of the
        Company.  As a result, the steel fabrication business comprises the
        operations of the company and no segment information is presented.
 
 On
        June
        21, 2006, the Company agreed to accept rescissions of the December 2004
        acquisition agreement from Evans Columbus, LLC effective March 31, 2006 and
        from
        Monarch Homes, Inc. effective June 1, 2006.  Additionally, in the
        second quarter of 2006, the Company concluded that it was no longer the primary
        beneficiary of the three entities previously reported as VIE’s, Mundus, Wyncrest
        and PAR.  Evans business was manufacturing and Monarch was included in
        the construction and property management segment.
 
 Cash
        of
        $392,399 is attributable to the discontinued entities as of December 31,
        2006.  Revenues, pre tax profit (loss) and net assets (liabilities) on
        the discontinued entities are as follows
  Nine
        months ended
 September
        30,
        2007                    
  Karkela
 
 Revenue                             
       $4,388,948
 Income before
 income
        taxes                          $    
82,196
 Net assets
        (liabilities)               $       
    --
 
 Three months ended
 September 30,
        2007                     
Karkela
 
 Revenue                                      $           --
 Income before
 income
        taxes                             $           --
 Net assets
        (liabilities)                 $       
   --
  14
  **HEARTLAND,
        INC. AND SUBSIDIARIES**
 
 **NOTES
        TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
        STATEMENTS**
 
 
 
 
 NOTE
                  F
              DISCONTINUED
                  OPERATIONS (Continued)
 
 Nine
        months ended
 September
        30,
        2006                          
 
Karkela                        
Evans                      
Monarch                  
  PAR           
    Wyncrest                    Mundus
 
 Revenue                                        
          $6,053,003                 
  $2,416,738               
   $1,844,709               $       
    --          
 $             --                    $             --
 Income
        (loss) before
 income
        taxes                              
   $   
(35,811)                  
$         792                 
 $       --                     
$    (12,692)        
$            --                 
   $         
   --
 Net
        assets
        (liabilities)                  
  $     89,366                  
 $            --                
   $       --                   
 $         
   --           $         
   --                
    $        
    --
 
 Three
        months ended
 September
        2006                                   Karkela                         Evans                    
  Monarch                    
PAR               
Wyncrest                    Mundus
 
 Revenue                                         
         $2,299,793                     $        
  --                    
$       --                   
 $        
   --            $           
--                   
 $          
 --
 Loss
        before
 income
        taxes                         
        $   
(11,176)                   $       
   --                  
  $       --                 
   $           
--             $           --                    
 $          
--
 Net
        assets
        (liabilities)                     $     89,366                   
$           --                    
$       --                     
$          
--             $          
--                     
 $         
 --
 
 NOTE
                  G
              EMPLOYEMENT
                  AGREEMENT
 
 Effective
        June 27, 2007, the Company entered into an employment agreement with its
        new
        chief executive officer.  The Agreement has a five year term with an
        annual base salary of $120,000.  Additional terms include the issuance
        of 1,000,000 shares of common stock and five year non-statutory stock options
        to
        purchase 1,823,504 shares of common stock at an exercise price of $.33 per
        share
        to executive.
 
 The
        fair
        value of the common stock ($180,000) and employee non-statutory and stock
        option
        ($240,833) have been recorded as deferred compensation and will be expensed
        over
        the five year term of the agreement.  Expense for the three and nine
        months ended September 30, 2007 was $21,044.
 
 The
        options were valued using the Black-Scholes option–pricing model and such amount
        is included in Additional Paid-in Capital.  The assumptions used were
        as follows:
 
 Expected
        Life                                
5 years
 Expected
        Volatility                     
111.84%
 Risk
        Free
        Interest
        Rate                    
2.5%
 Expected
        Dividends                             
 --
  15
  **HEARTLAND,
        INC. AND SUBSIDIARIES**
 
 **NOTES
        TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL
        STATEMENTS**
 
  NOTE
                  H
              LETTER
                  OF INTENT
 
 On
        September 28, 2007, the Company entered into a letter of intent with Harris
        Oil
        Co, Inc. (“Harris”) and DHS Development, LLC (“DHS”) (collectively “the
        sellers”) to purchase certain assets of the sellers on or before December 31,
        2007, unless extended.  The purchase price of $4,100,000 is for the
        following assets:
 
 ·
              All
                  equipment, supply contracts and other assets of
                  Harris;
 ·
              Three
                  convenience store sites of DHS located in Cookeville, TN, Hartsville,
                  TN
                  and Sparta, TN;
 ·
              30
                  year supply contracts on remaining DHS locations with a right of
                  first
                  refusal for purchase;
 ·
              10
                  year purchase option on remaining DHS locations if no bona fide
                  third
                  party offer has been received at an agreed upon appraised
                  value;
 ·
              The
                  letter of intent calls for the completion of definitive documentation,
                  completion of due diligence, and the completion of a US GAAP audit
                  of the
                  sellers’ companies prior to December 31,
                  2007.
 
 NOTE
                  I
              SUBSEQUENT
                  EVENTS
 
 In
        October 2007, the Board of Directors approved the issuance of 250,000 shares
        of
        common stock valued at $60,000 to a relative of an executive for services
        rendered.
  16
  **ITEM
      2.         MANAGEMENT’S DISCUSSION
      AND ANALYSIS OR PLAN OF OPERATION.**





Cautionary
      Statement Pursuant to Safe Harbor Provisions of the Private Securities
      Litigation Reform Act of 1995:





This
      Quarterly Report on Form 10-QSB for the quarterly period ended September 30,
      2007 contains "forward-looking" statements within the meaning of the Federal
      securities laws.  These forward-looking statements include, among
      others, statements concerning the Company's expectations regarding sales trends,
      gross and net operating margin trends, political and economic matters, the
      availability of equity capital to fund the Company's capital requirements,
      and
      other statements of expectations, beliefs, future plans and strategies,
      anticipated events or trends, and similar expressions concerning matters that
      are not historical facts.  The forward-looking statements in this
      Quarterly Report on Form 10-QSB for the quarterly period ended September 30,
      2007 are subject to risks and uncertainties that could cause actual results
      to
      differ materially from those results expressed in or implied by the statements
      contained herein.





The
      interim condensed consolidated financial statements have been prepared by
      Heartland, Inc. and in the opinion of management, reflect all material
      adjustments which are necessary to a fair statement of results for the interim
      periods presented, including normal recurring adjustments.  Certain
      information and footnote disclosures made in the most recent annual
      financial  statements included in the Company's Form 10-KSB for the
      year ended December 31, 2006, have been condensed or omitted for the interim
      statements.  It is the Company's opinion that, when the interim
      statements are read in conjunction with the December 31, 2006 financial
      statements, the disclosures are adequate to make the information presented
      not
      misleading.  The results of operations for the three and nine months
      ended September 30, 2007 are not necessarily indicative of the operating results
      for the full fiscal year.





**(A)          
      THE COMPANY**





Heartland,
      Inc. (the “Company”) was incorporated in the State of Maryland on April 6, 1999
      as Origin Investment Group, Inc. (“Origin”). On December 27, 2001, the Company
      went through a reverse merger with International Wireless, Inc. Thereafter
      on
      January 2, 2002, the Company changed its name from Origin to International
      Wireless, Inc. On November 15, 2003, the Company went through a reverse merger
      with PMI Wireless, Inc. Thereafter in May 2004, the Company changed its name
      from International Wireless, Inc. to our current name, Heartland,
      Inc.





The
      Company was originally formed as a non-diversified closed-end management
      investment company, as those terms are used in the Investment Company Act of
      1940 (“1940 Act”). The Company at that time elected to be regulated as a
      business development company under the 1940 Act. In December 7, 2001, the
      Company’s shareholders voted on withdrawing the Company from being regulated as
      a business development company and thereby no longer be subject to the 1940
      Act.





Unless
      the context indicates otherwise, the terms “Company,” “Corporate”, “Heartland,”
and “we” refer to Heartland, Inc. and its subsidiaries. Our executive offices
      are located at 124 Brooklyn Street, Cumberland Gap, Tennessee 37724, telephone
      number (423) 869-7255.  Our Internet address is
      www.heartlandholdingsinc.com for the corporate information. Additionally, our
      wholly-owned subsidiary, Mound Technologies, maintains the following web site
      -
      www.moundtechnologies.com.  The information contained on our web
      site(s) or connected to our web site is not incorporated by reference into
      this
      report and should not be considered part of this report.





Historically,
      we classified our operations into two reportable segments: steel
      fabrication and construction.  A third segment called “other” consists
      of corporate functions.  In November 2007, in connection with the
      Company’s default under the terms of the acquisition note owed to the former
      owner of Karkela Construction, Inc. and the former owner’s intention to
      foreclose on the related security interest, the Company elected to discontinue
      efforts with respect to Karkela and forfeit the security interest pledged
      including 100% of the equity interest of Karkela.  As a result,
      effective July 1, 2007, Karkela’s operations, which comprised the construction
      and property management segment, have been discontinued and Karkela is no longer
      a subsidiary of the Company.





We
      emphasize quality and innovation in our services, products, manufacturing,
      and
      marketing. We strive to provide well-built, dependable products supported by
      our
      service network.  We have committed funding for engineering and
      research in order to improve existing products and develop new products. Through
      these efforts, we seek to be responsive to trends that may affect our target
      markets now and in the future.








17





**(B)           BUSINESS
      DEVELOPMENT**





On
      December 10, 2003, the Company entered into an Acquisition Agreement to acquire
      100% of Mound Technologies, Inc. (“Mound”), a Nevada corporation with its
      corporate headquarters located in Springboro, Ohio. The acquisition was a stock
      for stock exchange in which the Company acquired all of the issued and
      outstanding common stock of Mound in exchange for 1,256,000 newly issued shares
      of its common stock. As a result of this transaction, Mound became a wholly
      owned subsidiary of the Company.  In May 2004, the Company changed its
      name from International Wireless, Inc. to our current name, Heartland,
      Inc.





On
      December 27, 2004, the Company entered into an Acquisition Agreement to acquire
      100% of Monarch Homes, Inc. (“Monarch”), a Minnesota corporation with its
      corporate headquarters located in Ramsey, MN for $5,000,000. The acquisition
      price was made up of:





*      $100,000
      at closing,


*
            a
                promissory note of $1,900,000 payable on or before February 15, 2005
                which, if not paid by that date, interest shall be due from then
                to actual
                payment at 8%, simple interest, compounded annually,
                and*
            six
                hundred sixty-seven thousand (667,000) restricted newly issued shares
                of
                the Company’s common stock provided at
                closing.





On
      June
      21, 2006, the Company agreed to accept rescissions of the December, 2004
      acquisition agreements from Monarch effective June 1, 2006.





18





On
      December 30, 2004, the Company entered into an Acquisition Agreement to acquire
      100% of Evans Columbus, LLS (“Evans”), an Ohio corporation with its corporate
      headquarters located in Blacklick, OH for $3,005,000. The acquisition price
      was
      paid as follows:





*      $5,000
      at closing, and


*      600,000
      restricted newly issued shares of the Company’s common stock provided at
      closing.





In
      the
      event the common stock of the Company was not trading at a minimum of $5.00
      as
      of December 30, 2005, the Company was required to compensate the original Evans
      shareholders for the difference in additional stock.  The Company has
      since rescinded this agreement and no longer owns Evans.  On June 21,
      2006, the Company agreed to accept rescissions of the December, 2004 acquisition
      agreements from Evans effective March 31, 2006.





On
      December 31, 2004, the Company entered into an Acquisition Agreement to acquire
      100% of Karkela Construction, Inc., a Minnesota corporation with its corporate
      headquarters located in St. Louis Park, MN for $3,000,000. The acquisition
      price
      consisted of the following:





*      $100,000
      at closing,


*      a
      short term promissory note payable of $50,000 on or before January 31,
      2005,


*     
      a promissory note of $1,305,000 payable on or before March 31, 2005 which,
      if
      not paid by that date, interest is due from December 31, 2004 to actual payment
      at 8%, simple interest, compounded annually and


*      500,000 restricted newly issued shares of
      the Company’s common stock provided at closing.





In
      the
      event the common stock of the Company was not trading at a minimum of $4.00
      as
      of December 31, 2005, the Company was required to compensate the original
      Karkela shareholders for the difference in additional stock.  As a
      result of the aforementioned, the Company issued the former Karkela shareholders
      262,500 shares of common stock on March 20, 2006.  In November 2007,
      in connection with the Company’s default under the terms of the acquisition note
      owed to the former owner of Karkela Construction, Inc. and the former owner’s
      intention to foreclose on the related security interest, the Company elected
      to
      discontinue efforts with respect to Karkela and forfeit the security interest
      pledged including 100% of the equity interest of Karkela.  As a
      result, effective July 1, 2007, Karkela’s operations, which comprised the
      construction and property management segment, have been discontinued and Karkela
      is no longer a subsidiary of the Company.





On
      September 28, 2007, the Company entered into a Letter of Intent (the “LOI”) with
      Harris Oil Co. Inc. (“Harris”) and DHS Development, LLC (“DHS” and collectively
      with Harris, the “Harris Sellers”) pursuant to which the Harris Sellers agreed
      to sell and the Company agreed to purchase certain assets of the Sellers on
      or
      prior to December 31, 2007 unless extended.  The assets to be
      purchased include the following:





·
            all
                equipment, supply contracts and other assets of Harris;·
            three
                convenience store sites of DHS located in Cookeville, TN, Hartsville,
                TN
                and Sparta, TN;





·
            30
                year supply contracts on remaining DHS locations with a right of
                first
                refusal for purchase; and·
            10
                year purchase option on remaining DHS locations if no bona fid third
                party
                offer has been received at an agreed upon appraised
                value.





The
      purchase price for the above assets is $4,100,000.  Harris Sellers
      have agreed to refrain for a period 180 days from the signing of the LOI from
      soliciting, initiating, encouraging, or accepting any proposal relating to
      the
      liquidation, purchase or sale of the Harris Seller’s stock or assets or from
      participating in any negotiations or discussions relating to these
      matters.  Except for the exclusivity and choice of law provisions,
      this LOI is non-binding.





The
      LOI
      calls for the completion of definitive documentation, completion of due
      diligence and the completion of a U.S. GAAP audit (to be paid for by the
      Company) of the assets prior to December 31, 2007.  Final closing is
      subject to approval of the final definitive agreements by the Boards of
      Directors of the Company.  There is no guarantee that the parties will
      reach a final agreement, that the Company will be able to successfully complete
      the audit of the assets or that the transaction will close on the terms set
      forth as agreed in the LOI.








19




**(C)           BUSINESS**





Our
      mission is to become a leading diversified company with business interests
      in
      well established industries. We plan to successfully grow our revenues by
      acquiring companies with historically profitable results, strong balance sheets,
      high profit margins, and solid management teams in place. By providing access
      to
      financial markets, expanded marketing opportunities and operating expense
      efficiencies, we hope to become the facilitator for future growth and higher
      long-term profits. In the process, we hope to develop new synergies among the
      acquired companies, which should allow for greater cost effectiveness and
      efficiencies, thus further enhancing each individual company’s strengths. To
      date, we have completed acquisitions in the steel fabrication, residential
      and
      commercial construction, and steel drum manufacturing industries. Additionally,
      we have identified acquisition opportunities in gasoline distribution, lumber
      manufacturing, and equipment distribution.





We
      are
      headquartered in Cumberland Gap, TN and currently trade on the OTC Bulletin
      Board under the symbol HTLJ. Including the senior management team, we currently
      employ 101 people.





Currently,
      we operate two one subsidiary, Mound Technologies, Inc. of Springboro, OH
      acquired in December 2003, which is engaged in steel fabrication.





**STEEL
      FABRICATION**





Mound
      Technologies, Inc. (“Mound”) was incorporated in the state of Nevada in November
      of 2002, with its corporate offices located in Springboro, Ohio. This business
      includes a Steel Fabrication (“Steel Fabrication”), a Property Management
      Division (“Property Management”) and a wholly owned subsidiary, Freedom Products
      of Ohio (“Freedom”).





The
      Steel
      Fabrication Division and Property Management Division are both located in
      Springboro, Ohio. The Steel Fabrication Division is a full service structural
      and miscellaneous steel fabricator. It also manufactures steel stairs and
      railings, both industrial and architectural quality. The present capacity of
      the
      facility is approximately 6,000 tons per year of structural and miscellaneous
      steel. This division had been previously known as Mound Steel Corporation,
      which
      was started at the same location in 1964.





The
      Steel
      Fabrication Division is focused on the fabrication of metal products. This
      Division produces structural steel, miscellaneous metals, steel stairs,
      railings, bar joists, metal decks and the erection thereof. This Division
      produced gross sales of approximately $7.4 million in 2004. In the steel
      products segment, steel joists and joist girders, and steel deck are sold to
      general contractors and fabricators throughout the United States. Substantially
      all work is to order and no unsold inventories of finished products are
      maintained. All sales contracts are firm fixed-price contracts and are normally
      competitively bid against other suppliers. Cold finished steel and steel
      fasteners are manufactured in standard sizes and inventories are
      maintained.





20





This
      division’s customers are typically U.S. based companies that require large
      structural steel fabrication, with needs such as building additions, new
      non-residential construction, etc. Customers are typically located within a
      one-day drive from the Company’s facilities. The Company is able to reach 70% of
      the U.S. population, yielding a significant potential customer base. Marketing
      of the Division’s products is done by advertising in industry directories,
      word-of-mouth from existing customers, and by the dedicated efforts of in-house
      sales staff monitoring business developments opportunities within the Company’s
      region. Large clients typically work with the Company on a continual basis
      for
      all their fabricated metal needs.





Competition
      overall in the U.S. steel fabrication industry has been reduced by approximately
      50% over the last few years due to economic conditions leading to the lack
      of
      sustained work. The number of regional competitors has gone down from ten (10)
      to three (3) over the past five years. Larger substantial work projects have
      declined dramatically with the downturn in the economy. Given the geographical
      operating territory of the Company, foreign competition is not a major factor.
      In addition to competition, steel pricing represents another significant
      challenge. The cost of steel, our highest input cost, has seen significant
      increases in recent years. The Company will manage this challenge by stockpiling
      the most common steel component products and incorporating price increases
      in
      job pricing as deemed appropriate.





**Competition
      and Other Factors**





We
      are
      subject to a wide variety of federal, state, and international environmental
      laws, rules, and regulations. These laws, rules, and regulations may affect
      the
      way we conduct our operations, and failure to comply with these regulations
      could lead to fines and other penalties.





Competition
      within the steel industry, both in the United States and globally, is intense
      and expected to remain so. Mound competes with large U.S. competitors such
      as
      United States Steel Corporation, Nucor Corporation, AK Steel Holding
      Corporation, Ispat Inland Inc. and IPSCO Inc along with a number of local
      suppliers. The steel market in the United States is also served by a number
      of
      non-U.S. sources and U.S. supply is subject to changes in worldwide demand
      and
      currency fluctuations, among other factors.





More
      than
      35 U.S. companies in the steel industry have declared bankruptcy since 1997
      and
      have either ceased production or more often continued to operate after being
      acquired or reorganized. In addition, many non-U.S. steel producers are owned
      and subsidized by their governments and their decisions with respect to
      production and sales may be influenced by political and economic policy
      considerations rather than by prevailing market conditions. The steel industry
      is highly cyclical in nature and subject to significant fluctuations in demand
      as a result of macroeconomic changes in global economies, including those
      resulting from currency volatility. The global steel industry is also generally
      characterized by overcapacity, which can result in downward pressure on steel
      prices and gross margins.





Mound
      competes with other flat-rolled steel producers (both integrated steel mills
      and
      mini-mills) and producers of plastics, aluminum, ceramics, carbon fiber,
      concrete, glass, plastic and wood that can be used in lieu of flat-rolled steels
      in manufactured products. Mini-mills generally offer a narrower range of
      products than integrated steel mills but can have some cost advantages as a
      result of their different production processes.





Price,
      quality, delivery and service are the primary competitive factors in all markets
      that Mound serves and vary in relative importance according to the product
      category and specific customer.





In
      some
      areas of our business, we are primarily an assembler, while in others we serve
      as a fully integrated manufacturer. We have strategically identified specific
      core manufacturing competencies for vertical integration and have chosen outside
      vendors to provide other products and services. We design component parts in
      cooperation with our vendors, contract with them for the development of tooling,
      and then enter into agreements with these vendors to purchase component parts
      manufactured using the tooling. Operations are also designed to be flexible
      enough to accommodate product design changes required to respond to market
      demand.





**Raw
      Materials**





Mound’s
      business depends on continued access to reliable supplies of various raw
      materials. Mound believes there will be adequate sources of its principal raw
      materials to meet its near term needs, although probably at higher prices than
      in the past.





21





**UNFAIR
      TRADE PRACTICES AND TRADE REMEDIES**





Under
      international agreement and U.S. law, remedies are available to domestic
      industries where imports are “dumped” or “subsidized” and such imports cause
      material injury to a domestic industry. Dumping involves selling for export
      a
      product at a price lower than the same or similar product is sold in the home
      market of the exporter or where the export prices are lower than a value that
      typically must be at or above the full cost of production. Subsidies from
      governments (including, among other things, grants and loans at artificially
      low
      interest rates) under certain circumstances are similarly actionable. The remedy
      available is an antidumping duty order or suspension agreement where injurious
      dumping is found and a countervailing duty order or suspension agreement where
      injurious subsidization is found. When dumping or subsidies continue after
      the
      issuance of an order, a duty equal to the amount of dumping or subsidization
      is
      imposed on the importer of the product. Such orders and suspension agreements
      do
      not prevent the importation of product, but rather require either that the
      product be priced at an un-dumped level or without the benefit of subsidies
      or
      that the importer pay the difference between such undumped or unsubsidized
      price
      and the actual price to the U.S. government as a duty.





**SECTION
      201 TARIFFS**





On
      March
      20, 2002, in response to an investigation initiated by the office of the
      President of the United States under Section 201 of the Trade Act of 1974,
      the
      President of the United States imposed a remedy to address the serious injury
      to
      the domestic steel industry that was found. The remedy was an additional tariff
      on specific products up to 30% (as low as 9%) in the first year and subject
      to
      reductions each year. The remedy provided was potentially for three years and
      a
      day, subject to an interim review after 18 months as to continued need. On
      December 4, 2003 by Proclamation 7741, the President of the United States
      terminated the import relief provided under this law pursuant to Section 204(b)
      (1) (A) of the Trade Act of 1974 on the basis that “the effectiveness of the
      action taken under Section 203 has been impaired by changed economic
      circumstances” based upon a report from the U.S. International Trade Commission
      and the advice from the Secretary of Commerce and the Secretary of Labor. Thus,
      no relief under this law was provided to domestic producers during
      2004.




**ENVIRONMENTAL
      MATTERS**





Mound’s
      operations are subject to a broad range of laws and regulations relating to
      the
      protection of human health and the environment. Mound expects to expend in
      the
      future, substantial amounts to achieve or maintain ongoing compliance with
      U.S.
      federal, state, and local laws and regulations, including the Resource
      Conservation and Recovery Act (RCRA), the Clean Air Act, and the Clean Water
      Act. These environmental expenditures are not projected to have a material
      adverse effect on Mound’s financial position or on Mound’s competitive position
      with respect to other similarly situated U.S. steelmakers subject to the same
      environmental requirements.





22




**RESULTS
      OF OPERATIONS FOR THE NINE MONTHS  ENDED SEPTEMBER 30, 2007 COMPARED TO THE
      NINE MONTHS ENDED SEPTEMBER 30, 2006.**





Revenues
      for the nine months ended September 30, 2007 were $9,656,306 compared
      to $7,671,149 for the same periods in 2006.  Total operating
      expenses were $10,611,470 for the nine months ended September 30, 2007
      compared to $9,391,962 for the same period in 2006.  The
      increases in revenue were primarily a result of increased building activity
      and
      the increase in operating expenses was primarily the result of increases in
      cost
      of goods sold, which was offset by a decrease in selling, general and
      administrative expenses, which decreased to $1,946,307 for the nine months
      ended
      September 30, 2007 from $2,962,819 for the same period in 2006.  As a
      result, the loss from continued operations was $1,055,444 for the nine
      months ended September 30, 2007, compared to $1,827,338 for the
      same period in 2006.





**RESULTS
      OF OPERATIONS FOR THE THREE MONTHS  ENDED SEPTEMBER 30, 2007 COMPARED TO
      THE THREE MONTHS ENDED SEPTEMBER 30, 2006.**





Revenues
      for the three months ended September 30, 2007 were $3,168,965 compared
      to $2,619,088 for the same periods in 2006.  Total operating
      expenses were $3,224,103 for the three months ended September 30, 2007
      compared to $4,304,253 for the same period in 2006.  The
      increases in revenue were primarily a result of increased building
      activity.  The decrease in operating expenses was primarily the result
      of a decrease in selling, general and administrative expenses, which decreased
      to $3,224,103 for the three months ended September 30, 2007 from $4,304,253
      for
      the same period in 2006.  The decrease in selling, general and
      administrative expenses was offset by a slight increase in costs of good
      sold.  As a result, the loss from continued operations was
      $61,073 for the three months ended September 30, 2007, compared
      to $1,662,781 for the same period in 2006.





**LIQUIDITY
      AND CAPITAL RESOURCES**





Net
      cash
      used in operating activities was $881,652 for the nine months ended September
      30, 2007.  This was primarily related to the increases in payment of
      operating expenses.





Total
      liabilities at September 30, 2007 was $4,898,804 and total shareholders’ equity
      was $1,477,464.





Our
      businesses are seasonally working capital intensive and require funding for
      purchases of raw materials used in production, replacement parts inventory,
      capital expenditures, expansion and upgrading of existing facilities, as well
      as
      for financing receivables from customers.  Additionally, our auditors,
      in their opinion on our financial statements for the year ended December 31,
      2006 issued a “going concern” qualification to their report dated April 21,
      2007.  We believe that cash generated from operations, together with
      our bank credit lines, and cash on hand, will provide us with a majority of
      our
      liquidity to meet our operating requirements.  We believe that the
      combination of funds available through future anticipated financing
      arrangements, as discussed below, coupled with forecasted cash flows, will
      be
      sufficient to provide the necessary capital resources for our anticipated
      working capital, capital expenditures, and debt repayments for at least the
      next
      twelve months.





We
      are
      seeking to raise additional capital from private investors and institutional
      money managers in the next few months, but there can be no assurance that we
      will be successful in doing so.  If we are not successful in raising
      any of this additional capital, our current cash resources may not sufficient
      to
      fund our current operations.





We
      may
      experience problems, delays, expenses, and difficulties sometimes encountered
      by
      an enterprise in our stage of development, many of which are beyond our
      control.  For potential acquisitions, these include, but are not
      limited to, unanticipated problems relating to the identifying partner(s),
      obtaining financing, culminating the identified partner due to a number of
      possibilities (prices, dates, terms, etc).  Due to limited experience
      in operating the combined entities for the Company, we may experience production
      and marketing problems, incur additional costs and expenses that may exceed
      current estimates, and competition.








23


Our businesses are seasonally working capital intensive and require funding
      for
      purchases of raw materials used in production, replacement parts inventory,
      capital expenditures, expansion and upgrading of existing facilities, as well
      as
      for financing receivables from customers.  During the nine months
      ended September 30, 2007, the Company has not engaged in:





-
      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 the
                Company.





**Inflation**





We
      are
      subject to the effects of inflation and changing prices.  As
      previously mentioned, we experienced rising prices for steel and other
      commodities during fiscal 2006 and for the first nine months of 2007 that had
      a
      negative impact on our gross margins and net earnings.  In the
      remainder of fiscal 2007, we expect average prices of steel and other
      commodities to be higher than the average prices paid in fiscal 2006 and for
      the
      first nine months of 2007.  We will attempt to mitigate the impact of
      these anticipated increases in steel and other commodity prices and other
      inflationary pressures by actively pursuing internal cost reduction efforts
      and
      introducing price increases.





**Critical
      Accounting Policies and Estimates**





In
      preparing our consolidated financial statements in conformity with accounting
      principles generally accepted in the United States of America, we must make
      decisions that impact the reported amounts of assets, liabilities, revenues
      and
      expenses, and related disclosures.  Such decisions include the
      selection of the appropriate accounting principles to be applied and the
      assumptions on which to base accounting estimates.  In reaching such
      decisions, we apply judgments based on our understanding and analysis of the
      relevant circumstances, historical experience, and actuarial valuations. Actual
      amounts could differ from those estimated at the time the consolidated financial
      statements are prepared.





Our
      significant accounting policies are described in Note B to the Company’s audited
      consolidated financial statements in the Company’s Annual Report for the year
      ended December 31, 2006 as filed with the Securities and Exchange Commission
      on
      Form 10-KSB.  Some of those significant accounting policies require us
      to make difficult subjective or complex judgments or estimates. An accounting
      estimate is considered to be critical if it meets both of the following
      criteria: (i) the estimate requires assumptions about matters that are highly
      uncertain at the time the accounting estimate is made, and (ii) different
      estimates that reasonably could have been used, or changes in the estimate
      that
      are reasonably likely to occur from period to period, would have a material
      impact on the presentation of our financial condition, changes in financial
      condition or results of operations.





Accounts
      Receivable Valuation. We value accounts receivable, net of an allowance for
      doubtful accounts. Each quarter, we estimate our ability to collect outstanding
      receivables that provides a basis for an allowance estimate for doubtful
      accounts. In doing so, we evaluate the age of our receivables, past collection
      history, current financial conditions of key customers, and economic
      conditions.  Based on this evaluation, we establish a reserve for
      specific accounts receivable that we believe are uncollectible, as well as
      an
      estimate of uncollectible receivables not specifically known.  A
      deterioration in the financial condition of any key customer or a significant
      slow down in the economy could have a material negative impact on our ability
      to
      collect a portion or all of the accounts and notes receivable.




**OFF-BALANCE
      SHEET ARRANGEMENTS**





We
      have
      no off-balance sheet arrangements that have or are reasonably likely to have
      a
      current or future material effect on us.







24





**ITEM
      3.      CONTROLS AND PROCEDURES.**





Our
      management, with the participation of our Chief Executive Officer and Chief
      Financial Officer evaluated the effectiveness of our disclosure controls and
      procedures (as defined in Rule 13a-15(e) or Rule 15a-15(e) of the Exchange
      Act)
      as of the end of the period covered by this report as follows:





The
      Company maintains disclosure controls and procedures (as defined in Rule
      13a-15(e) and Rule 15d-15(e) under the Securities Exchange Act of 1934, as
      amended) that are designed to ensure that information required to be disclosed
      in our periodic reports filed under the Exchange Act is recorded, processed,
      summarized and reported within the time periods specified in the SEC's rules
      and
      forms, and that such information is accumulated and communicated to our
      management, including our principal executive/financial officer, to allow timely
      decisions regarding required disclosure.





As
      a
      result of comments raised by the Division of Corporate Finance of the Securities
      and Exchange Commission (the “Commission”) in March 2006 with respect to our
      financial statements for the years ended December 31, 2004 and 2005, we
      determined that our disclosure controls were not effective as of the end of
      the
      period covered by this report as a result of (1) limited resources and manpower
      in the preparation and review of the financial statements in a timely manner
      and  (2) inadequacy of the financial review process as it pertains to
      various account analyses.





We
      are
      re-evaluating these various factors and are continuing to implement additional
      procedures to alleviate these weaknesses.  In connection therewith,
      the Company engaged Mr. Mitchell L. Cox as it Chief Financial
      Officer.





Changes
      in Disclosure Controls and Procedures





Except
      as
      described above, there was no change in our internal control over financial
      reporting (as defined in Rule 13a-15(f) of the Exchange Act) that occurred
      during the fiscal quarter to which this report relates that has materially
      affected, or is reasonably likely to materially affect, our internal control
      over financial reporting.












**PART
      II.  OTHER INFORMATION**








**ITEM  1.     
      LEGAL PROCEEDINGS**





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  2.  
         CHANGES IN SECURITIES AND USE OF PROCEEDS**





None








**ITEM  3.     
      DEFAULTS UPON SENIOR SECURITIES**





None





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





None





**ITEM  5.  OTHER
      INFORMATION**





On
      September 18, 2007, Jerry Gruenbaum resigned as the Chief Financial Officer
      and
      Secretary of the Company.  Mr. Gruenbaum will continue to serve as a
      director of the Company.  In order to fill the vacancies resulting
      from the resignation of Mr. Gruenbaum, the Board of Directors of the Company
      appointed Thomas Miller as the Secretary of the Company and Mitchell L. Cox
      as
      the Chief Financial Officer of the Company.  Mr. Cox will serve as
      Chief Financial Officer on a part time basis and will be paid $1,500 per
      month.





On
      September 28, 2007, the Company entered into a Letter of Intent (the “LOI”) with
      Harris Oil Co. Inc. (“Harris”) and DHS Development, LLC (“DHS” and collectively
      with Harris, the “Harris Sellers”) pursuant to which the Harris Sellers agreed
      to sell and the Company agreed to purchase certain assets of the Harris Sellers
      on or prior to December 31, 2007 unless extended.  The assets to be
      purchased include the following:





·
            all
                equipment, supply contracts and other assets of Harris;·
            three
                convenience store sites of DHS located in Cookeville, TN, Hartsville,
                TN
                and Sparta, TN;





·
            30
                year supply contracts on remaining DHS locations with a right of
                first
                refusal for purchase; and·
            10
                year purchase option on remaining DHS locations if no bona fid third
                party
                offer has been received at an agreed upon appraised
                value.





The
      purchase price for the above assets is $4,100,000.  Harris Sellers
      have agreed to refrain for a period 180 days from the signing of the LOI from
      soliciting, initiating, encouraging, or accepting any proposal relating to
      the
      liquidation, purchase or sale of the Seller’s stock or assets or from
      participating in any negotiations or discussions relating to these
      matters.  Except for the exclusivity and choice of law provisions,
      this LOI is non-binding.





The
      LOI
      calls for the completion of definitive documentation, completion of due
      diligence and the completion of a U.S. GAAP audit (to be paid for by the
      Company) of the assets prior to December 31, 2007.  Final closing is
      subject to approval of the final definitive agreements by the Boards of
      Directors of the Company.  There is no guarantee that the parties will
      reach a final agreement, that the Company will be able to successfully complete
      the audit of the assets or that the transaction will close on the terms set
      forth as agreed in the LOI.





In
      November 2007, in connection with the Company’s default under the terms of the
      acquisition note owed to the former owner of Karkela Construction, Inc. and
      the
      former owner’s intention to foreclose on the related security interest, the
      Company elected to discontinue efforts with respect to Karkela and forfeit
      the
      security interest pledged including 100% of the equity interest of
      Karkela.  As a result, effective July 1, 2007, Karkela’s operations,
      which comprised the construction and property management segment, have been
      discontinued and Karkela is no longer a subsidiary of the Company.





**ITEM  6.  EXHIBITS**





Exhibit
      31.1                                Certification
      of Terry Lee, Chief Executive Officer& Chairman of the Board


Exhibit
      31.2                                Certification
      of Mitchell L. Cox, Chief Financial Officer





Exhibit
      32.1                                Certification
      of Terry Lee, Chief Executive Officer& Chairman of the Board


Exhibit
      32.2                                Certification
      of Mitchell L. Cox, 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, 2007
            
            By:
                /s/ TERRY LEETerry
                LeeChief
                Executive Officer andChairman
                of the Board(Duly
                Authorized Officer)Date:
                November 16, 2007
            
            By:
                /s/ Mitchell L. CoxMitchell
                L. CoxChief
                Financial Officer(Principal
                Financialand
                Accounting Officer)








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