UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549







FORM
10-Q





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





For
the quarterly period ended June 30, 2008





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





HEARTLAND,
INC.


(Exact
name of small business registrant as specified in its charter)





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





1501
US Hwy 25E


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 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 August 13, 2008, there were 37,321,084 shares of common
stock, $.0001 par value per share, outstanding.











1








HEARTLAND,
INC.





FORM
10-Q


TABLE
OF CONTENTS





PART
      I. FINANCIAL INFORMATION
              
              3ITEM
      1. FINANCIAL STATEMENTS
              
              3ITEM
      2. MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF
    OPERATION
              
              12ITEM
      3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
      RISKS
              
              18ITEM
      4.  CONTROLS AND PROCEDURES
              
              18ITEM
      4T. CONTROLS AND PROCEDURES
              
              18PART
      II. OTHER INFORMATION
              
              19ITEM
      1. - LEGAL PROCEEDINGS
              
              19ITEM
      1A. RISK FACTORS
              
              19ITEM
      2. - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
      PROCEEDS
              
              19ITEM
      3. - DEFAULTS UPON SENIOR SECURITIES
              
              19ITEM
      4. – SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
              
              19ITEM
      5. - OTHER INFORMATION
              
              20ITEM
      6. - EXHIBITS
              
              20SIGNATURES
              
              21













2
















PART I.  FINANCIAL INFORMATION







ITEM
1. FINANCIAL STATEMENTS




HEARTLAND, INC. AND
SUBSIDIARIES


CONDENSED CONSOLIDATED
BALANCE SHEETS








ASSETS










June
      30,
            
            
            Dec.
      31,2008
            
            
            2007(Unaudited)CURRENT
      ASSETSCash
            
            $
            745,796
            
            
            $
            216,570Accounts
      receivable, net
            
            
            5,128,732
            
            
            
            3,188,591Costs
      and estimated earnings in excess of billings on uncompleted
      contracts
            
            
            168,318
            
            
            
            311,899Inventory
            
            
            1,539,717
            
            
            
            904,409Prepaid
      expenses and other
            
            
            4,020
            
            
            
            1,259Total
      current assets
            
            
            7,586,583
            
            
            
            4,622,728PROPERTY,
      PLANT AND EQUIPMENT, net
            
            
            1,979,801
            
            
            
            701,168OTHER
      ASSETSOther
      assets
            
            
            -
            
            
            
            426,321Total
      other assets
            
            
            -
            
            
            
            426,321Total
      assets
            
            $
            9,566,384
            
            
            $
            5,750,217













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








3





HEARTLAND, INC. AND
SUBSIDIARIES


CONDENSED CONSOLIDATED
BALANCE SHEETS





LIABILITIES AND
STOCKHOLDERS’ EQUITY











June
      30,
            
            
            Dec.
      31,2008
            
            
            2007(Unaudited)CURRENT
      LIABILITIESConvertible
      promissory notes payable
            
            $
            53,450
            
            
            $
            53,450Current
      portion of notes payable
            
            
            44,721
            
            
            
            24,604Current
      portion of notes payable to related parties
            
            
            75,930
            
            
            
            89,156Current
      portion of capital lease
            
            
            -
            
            
            
            8,320Accounts
      payable
            
            
            3,372,938
            
            
            
            2,167,027Obligations
      to related parties
            
            
            12,008
            
            
            
            12,008Accrued
      payroll and related taxes
            
            
            378,521
            
            
            
            292,769Accrued
      interest
            
            
            127,534
            
            
            
            124,847Accrued
      expenses
            
            
            310,618
            
            
            
            587,942Billings
      in excess of costs and estimated earnings on uncompleted
      contracts
            
            
            969,262
            
            
            
            195,432Total
      current liabilities
            
            
            5,344,982
            
            
            
            3,555,555LONG-TERM
      OBLIGATIONSNotes
      payable, less current portion
            
            
            1,045,312
            
            
            
            180,799Notes
      payable to related parties, less current portion
            
            
            367,682
            
            
            
            403,607Capital
      lease, less current portion
            
            
            -
            
            
            
            26,571Total
      long term liabilities
            
            
            1,412,994
            
            
            
            610,977STOCKHOLDERS’
      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;
      37,321,084 and 36,567,105 shares issued andoutstanding
      at June 30, 2008 and December 31, 2007, respectively
            
            
            37,321
            
            
            
            36,566Additional
      paid-in capital – common stock
            
            
            16,182,500
            
            
            
            15,789,790Accumulated
      deficit
            
            
            (14,127,350
            )
            
            
            (14,958,608
            )Total
      stockholders’ equity
            
            
            2,808,408
            
            
            
            1,583,685Total
      Liabilities and Stockholders’ Equity
            
            $
            9,566,384
            
            
            $
            5,750,217











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






4







HEARTLAND, INC. AND
SUBSIDIARIES


CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS





UNAUDITED


Three
      Months Ended
            
            
            Six
      Months EndedJune
      30,
            
            
            June
      30,2008
            
            
            2007
            
            
            2008
            
            
            2007REVENUE
      - SALES
            
            $
            6,199,788
            
            
            $
            3,086,271
            
            
            $
            10,258,584
            
            
            $
            6,487,341COSTS
      AND EXPENSESCost
      of goods sold
            
            
            5,292,264
            
            
            
            2,435,866
            
            
            
            8,570,489
            
            
            
            5,326,584Selling,
      general and administrative expenses
            
            
            458,355
            
            
            
            1,057,599
            
            
            
            817,381
            
            
            
            2,161,625Depreciation
      and amortization
            
            
            32,591
            
            
            
            19,674
            
            
            
            53,922
            
            
            
            36,770Total
      Costs and Expenses
            
            
            5,783,210
            
            
            
            3,513,139
            
            
            
            9,441,792
            
            
            
            7,524,979NET
      OPERATING INCOME (LOSS)
            
            
            416,578
            
            
            
            (426,868
            )
            
            
            816,792
            
            
            
            (1,037,638
            )OTHER
      INCOME (EXPENSE)Other
      income
            
            
            31,571
            
            
            
            12,051
            
            
            
            41,127
            
            
            
            23,170Gain
      (loss) on disposal of property, plant and equipment
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            (19,432
            )Interest
      expense
            
            
            (18,649
            )
            
            
            (46,220
            )
            
            
            (26,662
            )
            
            
            (91,996
            )Total
      Other Income (Expense)
            
            
            12,922
            
            
            
            (34,169
            )
            
            
            14,465
            
            
            
            (88,258
            )INCOME
      (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES
            
            
            429,500
            
            
            
            (461,037
            )
            
            
            831,257
            
            
            
            (1,125,896
            )FEDERAL
      AND STATE INCOME TAXES
            
            
            -
            
            
            
            -
            
            
            
            -
            
            
            
            -INCOME
      (LOSS) FROM CONTINUING OPERATIONS
            
            
            429,500
            
            
            
            (461,037
            )
            
            
            831,257
            
            
            
            (1,125,896
            )











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






5







HEARTLAND, INC. AND
SUBSIDIARIES


CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS – Continued





UNAUDITED





Three
      Months Ended
            
            
            Six
      Months EndedJune
      30,
            
            
            June
      30,2008
            
            
            2007
            
            
            2008
            
            
            2007DISCONTINUED
      OPERATIONS:Income
      from discontinued operations (net of income tax expense of
    $0)
            
            $
            -
            
            
            $
            70,365
            
            
            $
            -
            
            
            $
            82,196Gain
      on disposal of discontinued operations (net of income tax expense of
      $0)
            
            
            -
            
            
            
            131,525
            
            
            
            -
            
            
            
            131,525Total
      discontinued operations
            
            
            -
            
            
            
            201,890
            
            
            
            -
            
            
            
            213,721NET
      INCOME (LOSS)
            
            
            429,500
            
            
            
            (259,147
            )
            
            
            831,257
            
            
            
            (912,175
            )LESS:
      Preferred Dividends
            
            
            (14,813
            )
            
            
            (49,168
            )
            
            
            (29,626
            )
            
            
            (123,437
            )NET
      INCOME (LOSS) AVAILABLE TO COMMON STOCKHOLDERS
            
            $
            414,687
            
            
            $
            (308,315
            )
            
            $
            801,631
            
            
            $
            (1,035,612
            )EARNINGS
      (LOSS) PER COMMON SHAREContinuing
      operations     : Basic
            
            $
            0.012
            
            
            $
            (0.013
            )
            
            $
            0.022
            
            
            $
            (0.033
            ):
      Diluted
            
            $
            0.010
            
            
            $
            (0.013
            )
            
            $
            0.020
            
            
            $
            (0.032
            )Discontinued
      operations :Basic
            
            $
            -
            
            
            $
            0.006
            
            
            $
            -
            
            
            $
            0.006:Diluted
            
            $
            -
            
            
            $
            0.002
            
            
            $
            -
            
            
            $
            0.002Net
      income
      (loss)             :
      Basic
            
            $
            0.012
            
            
            $
            (0.007
            )
            
            $
            0.022
            
            
            $
            (0.027
            ):Diluted
            
            $
            0.010
            
            
            $
            (0.007
            )
            
            $
            0.020
            
            
            $
            (0.026
            )WEIGHTED AVERAGE COMMON SHARES
      OUTSTANDING: Basic
            
            
            37,237,105
            
            
            
            34,742,160
            
            
            
            37,132,409
            
            
            
            34,133,127:
      Diluted
            
            
            39,986,039
            
            
            
            35,723,060
            
            
            
            39,879,796
            
            
            
            35,114,027









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








6





HEARTLAND, INC. AND
SUBSIDIARIES


CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS


UNAUDITED





Six
      Months EndedJune
      30,2008
            
            
            2007CASH
      FLOWS FROM OPERATING ACTIVITIESIncome
      (loss) from continuing operations before income taxes
            
            $
            831,257
            
            
            $
            (1,125,896
            )Adjustments
      to reconcile net income (loss) to cash flows used in operating
      activitiesStock
      issued for services and settlement
            
            
            -
            
            
            
            644,790Loss
      on disposal of property, plant and equipment
            
            
            -
            
            
            
            19,432Depreciation
      and amortization
            
            
            53,922
            
            
            
            42,030Share-based
      compensation
            
            
            103,465
            
            
            
            -Changes
      in assets and liabilities(Increase)
      in accounts receivable
            
            
            (1,940,141
            )
            
            
            (342,738
            )Decrease
      in costs in excess of billings on uncompleted contracts
            
            
            143,581
            
            
            
            170,462(Increase)
      in inventory
            
            
            (635,308
            )
            
            
            (84,260
            )(Increase)
      decrease in prepaids and other
            
            
            (2,761
            )
            
            
            6,418Increase
      (decrease) in accounts payable
            
            
            1,205,911
            
            
            
            (637,274
            )Increase
      in obligations to related parties
            
            
            -
            
            
            
            12,008Increase
      (decrease) increase in accrued payroll taxes
            
            
            85,752
            
            
            
            (179,829
            )Increase
      in accrued interest
            
            
            2,688
            
            
            
            69,624Increase
      in accrued expenses
            
            
            7,340
            
            
            
            154,558Increase
      in billings in excess of costs on uncompleted contracts
            
            
            773,830
            
            
            
            267,909Cash
      provided by (used in) continuing operations before income
      taxes
            
            
            629,536
            
            
            
            (982,766
            )Discontinued
      operationsIncome
      (loss) before income taxes
            
            
            -
            
            
            
            82,196(Decrease)
      increase in net liabilities of entities discontinued
            
            
            -
            
            
            
            131,525Cash
      provided by discontinued operations
            
            
            -
            
            
            
            213,721NET
      CASH PROVIDED BY (USED IN) OPERATINGACTIVITIES
            
            
            629,536
            
            
            
            (769,045
            )CASH
      FLOWS FROM INVESTING ACTIVITIESPayments
      for property, plant and equipment
            
            
            (1,190,898
            )
            
            
            (55,797
            )Payments
      for other assets
            
            
            -
            
            
            
            -NET
      CASH (USED IN) INVESTING ACTIVITIES
            
            
            (1,190,898
            )
            
            
            (55,797
            )







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






7







HEARTLAND, INC. AND
SUBSIDIARIES


CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS (CONTINUED)


UNAUDITED












Six
      Months EndedJune
    30,2008
            
            
            2007CASH
      FLOWS FROM FINANCING ACTIVITIESProceeds
      from (payments on) notes payable
            
            $
            (884,630
            )
            
            $
            (20,184
            )Payments
      on notes payable to related parties
            
            
            (49,151
            )
            
            
            (34,921
            )Payments
      on capital lease
            
            
            (34,891
            )
            
            
            -Payments
      on convertible promissory notes
            
            
            -
            
            
            
            (10,000
            )Proceeds
      from issuance of common stock
            
            
            290,000
            
            
            
            135,000Proceeds
      from issuance of preferred stock
            
            
            -
            
            
            
            562,500NET
      CASH PROVIDED BY FINANING ACTIVITIES
            
            
            1,090,588
            
            
            
            632,395INCREASE
      (DECREASE) IN CASH
            
            
            529,226
            
            
            
            (192,447
            )CASH,
      BEGINNING OF PERIOD
            
            
            216,570
            
            
            
            641,608CASH,
      END OF PERIOD
            
            $
            745,796
            
            
            $
            449,161SUPPLEMENTAL
      DISCLOSURES OF CASH FLOW INFORMATIONInterest
      paid
            
            $
            26,662
            
            
            $
            22,372Taxes
      paid
            
            $
            -
            
            
            $
            -NON
      CASH INVESTING AND FINANCING ACTIVITIESPurchase
      of Mound Technologies facility by settlement of amountdue
      to/from former landlord
            
            $
            141,657
            
            
            $
            -Settlement
      of amount due from former landlord
            
            $
            426,321
            
            
            $
            -Settlement of amount owed former landlord
            
            $
            284,664
            
            
            $
            -Issuance of common stock for payment of obligations to related
      parties
            
            $
            -
            
            
            $
            50,000Preferred
      stock dividend from embedded beneficial conversion feature
            
            $
            -
            
            
            $
            123,437













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






8







HEARTLAND, INC. AND
SUBSIDIARIES


NOTES TO
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


JUNE 30,
2008










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 footnotes 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, 2007 as filed with the Securities and Exchange
Commission on Form 10-KSB.





The
balance sheet at December 31, 2007 has been derived from the audited financial
statement of that date, but does not include all of the information and
footnotes required by accounting principles generally accepted in United States
of America for complete financial statements.








NOTE B
            ACCOUNTING
      POLICIES




During
September 2006, the Financial Accounting Standards Board (“FASB”) issued SFAS
No. 157, Fair Value Measurements, which is effective for fiscal years beginning
after November 15, 2007, with earlier adoption encouraged. SFAS 157 defines fair
value, establishes a framework for measuring fair value in GAAP, and expands
disclosures about fair value measurements. In February 2008, the FASB issued
FASB Staff Position FAS 157-2, Effective Date of FASB Statement No. 157, which
delayed the effective date of SFAS 157 for all non-financial assets and
liabilities, except those that are recognized or disclosed at fair value in the
financial statements on a recurring basis, until January 1,
2009.   The Company adopted SFAS 157 on January 1, 2008, for all
financial assets and liabilities, but the implementation did not have a
significant impact on the Company’s financial position or results of
operations.  The Company has not yet determined the impact the
implementation of SFAS 157 will have on the Company’s non-financial assets and
liabilities which are not recognized or disclosed on a recurring
basis.  However, the Company does not anticipate that the full
adoption of SFAS 157 will significantly impact its consolidated financial
statements.
  During
February 2007, the FASB issued SFAS No. 159, The Fair Value Option for Financial
Assets and Financial Liabilities—Including an Amendment of FASB Statement No.
115, which permits entities to choose to measure many financial instruments and
certain other items at fair value. The objective of SFAS 159 is to improve
financial reporting by providing entities with the opportunity to mitigate
volatility in reported earnings caused by measuring related assets and
liabilities differently without having to apply complex hedge accounting
provisions. The Company adopted SFAS 159 on January 1, 2008, but the
implementation of SFAS 159 did not have a significant impact on the Company's
financial position or results of operations.
 
 During June
2008, the FASB issued EITF Issue No. 07-05, “Determining Whether an Instrument
(or Embedded Feature) Is Indexed to an Entity’s Own Stock” (the final abstract
is not available at this time) which is effective for fiscal years beginning
after December 15, 2008.  The Company has not yet determined the
impact the implementation of EITF 07-05 will have on the Company’s consolidated
financial statements.
 
 During June
2008, the FASB also issued EITF Issue No. 08-04, “Transition Guidance for
Conforming Changes to EITF Issue No. 98-5, ‘Accounting for Convertible
Securities with Beneficial Conversion Features or Contingently Adjustable
Conversion Ratios” (the final abstract is not available at this time) which is
effective for fiscal years beginning after December 15, 2008.  The
Company has not yet determined the impact the implementation of this EITF will
have on the Company’s consolidated financial statements.





NOTE C
            GOING
      CONCERN





As
reflected in the accompanying financial statements, the Company has an
accumulated deficit of $14,127,350.  The Company has reduced certain
administrative costs and has adapted a strategic plan for identifying profitable
companies to acquire. The Company’s ability to eliminate its accumulated deficit
is dependent on its ability to obtain financing for profitable acquisitions and
operate existing holdings efficiently.








NOTE D
            STOCKHOLDERS’
      EQUITY





Preferred
Stock




In
January 2007, the Board of Directors approved the authorization of 5,000,000
shares of Series A Convertible Preferred Stock - par value
$0.001.  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.





As of
June 30, 2008, the Company has 2,370,000 shares of Series A Convertible
Preferred Stock issued and outstanding.  The preferred shares carry a
10% annual stock dividend for the three years they are outstanding prior to
conversion. The preferred dividend in arrears at June 30, 2008 and 2007 was
$75,286 and $15,872, respectively.




Warrants
 
 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).




9




HEARTLAND, INC. AND
SUBSIDIARIES
 NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
 JUNE 30,
2008
 
 
 NOTE D
              STOCKHOLDERS EQUITY
      (Continued)





Options





The
Company has one employee non-statutory stock option agreement. This option was
granted with Board approval to the Company’s Chief Executive Officer and
provides for the option to purchase 1,822,504 shares of common stock at an
exercise price of $0.33 over a pro-rata five year basis. All shares issued under
this option would be restricted and any portion of the option not exercised by
June 26, 2012 will expire.








Common
Stock




The
Company has authorized 100,000,000 shares of common stock, with a par value of
$.001 per share.  As of June 30, 2008, the Company has 37,321,084 shares of
common stock issued and outstanding.




During
the quarter ended March 30, 2008, the Company issued 580,000 shares of common
stock for cash of $290,000.





During
the quarter ending June 30, 2008, the Company authorized the issuance of 185,718
shares of common stock for director compensation. These shares were authorized
as two separate issuances and were based on the closing price of the common
shares on May 31, 2008 and June 30, 2008. The number of shares authorized on May
31, 2008 was 100,002 shares. The number of shares authorized on June 30, 2008
was 85,716. The non-cash compensation represented by these shares was
$60,000.60.








NOTE E
            INVENTORY





Inventory
consists of the following at June 30, 2008:


Raw
      material
              
              $
              1,521,076Work in
      process - manufacturing
              
              
              18,641$
              1,539,717
  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 all of
the operations of the company and no segment information is presented for
2008.  The results of operations and balance sheet items relating to
Karkela for the six months ended June 30, 2007 were:








10








HEARTLAND, INC. AND
SUBSIDIARIES


NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS


JUNE 30,
2008








NOTE F
            DISCONTINUED OPERATIONS (Continued)







Karkela





Revenue
            
            $
            4,388,948Income
      before income taxes
            
            
            82,196Net
      assets (liabilities)
            
            
            204,632








NOTE G
            SUBSEQUENT
EVENT




On July
17, 2008, the Company entered into a Letter of Intent to purchase all the assets
of Lee Oil Company, Inc., Lee’s Food Mart, LLC, and Lee Enterprises, Inc. Terry
Lee, the CEO and Chairman of the Company, is also an owner of the Lee Companies.
Mr. Lee has abstained from any negotiating or structuring of the acquisition.
Form 8-K was filed on July 17, 2008 with the SEC detailing the purchase price
and how the company expects to fund the purchase along with allowing both
parties time to perform due diligence on the proposed acquisition. The parties
currently expect to close on the acquisition prior to September 30,
2008.







NOTE H
            RECLASSIFICATIONS





Certain
amounts in the June 30, 2007 Financial Statements have been reclassified to
conform to the presentation used in the June 30, 2008 Financial
Statements.





NOTE I
            BUILDING
PURCHASE





The
Company finalized the purchase of the property located at 25 Mound Park Drive in
Springboro, OH on April 18, 2008. The gross selling price of the property was
$1,112,983 and was funded through a loan of $900,000 provided through Commercial
Bank of Harrogate, TN., net settlement of amounts due from the former landlord
of $426,321 and amounts due to the former landlord of $284,664 and Company
generated funds making up the remainder. The note was for a term of 60 months, a
fixed interest rate of 7.5%, and consisted of 59 monthly payments of $7,250.00
and one payment due on April 18, 2013 of $794,989.16.  This is the
same property which Mound Technologies currently uses for its operations and had
been renting from a related party for $16,250 per month. The Company’s CEO is
also the CEO of Commercial Bank. Allocation of the purchase price was $271,055
for land and $841,928 allocated to the buildings.









11





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





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





This
Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2008
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-Q for the quarterly period ended June 30, 2008 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 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, 2007, 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,
2007 financial statements, the disclosures are adequate to make the information
presented not misleading.  The results of operations for the three
months ended June 30, 2008 are not necessarily indicative of the operating
results for the full fiscal year.





(A)                 
THE COMPANY





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. On 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 1501 US Hwy 25E, Middlesboro, KY, telephone number (606)
248-7323.  Our Internet address is www.heartlandholdingsinc.com for
the corporate information. Additionally, the Mound Technology division of the
company currently maintains an Internet address at
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 on Form 10-Q and should not be considered part of this
report.





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.








12







(B)
            BUSINESS
      DEVELOPMENT





On November 15, 2003, a change in control of the Company occurred when the
Company went through a reverse merger with PMI Wireless, Inc., a Delaware
corporation with corporate headquarters located in Cordova, Tennessee. The
acquisition, took place on December 1, 2003 for the aggregate consideration of
fifty thousand dollars ($50,000) which was paid to the U.S. Internal Revenue
Service for the Company’s prior obligations, plus assumption of the Company’s
existing debts, for 9,938,466 newly issued common shares of the Company. Under
the said reverse merger, the former Shareholders of PMI Wireless ended up owning
an 84.26% interest in the Company.





On
December 10, 2003, the Company acquired 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 acquired 100% of Monarch Homes, Inc.
(“Monarch”), a Minnesota corporation with its corporate headquarters located in
Ramsey, MN for $5,000,000. The acquisition price consisted of $100,000 in
cash which was paid at closing, a promissory note for $1,900,000 which was
payable on or before February 15, 2005, and six hundred sixty-seven
thousand (667,000) restricted newly issued shares of the Company’s common stock
which was provided at closing.  The Company has since rescinded this
acquisition and no longer owns Monarch.





On
December 30, 2004, the Company acquired 100% of Evans Columbus, LLC
(“Evans”), an Ohio corporation with its corporate headquarters located in
Blacklick, OH for $3,005,000. The acquisition price consisted of $5,000 in
cash at closing, and 600,000 restricted newly issued shares of the
Company’s common stock which was provided at closing.  The Company has
since rescinded this acquisition and no longer owns Evans.





On
December 31, 2004, the Company acquired 100% of Karkela Construction, Inc.
(“Karkela”), a Minnesota corporation with its corporate headquarters located in
St. Louis Park, MN for $3,000,000. The acquisition price consisted
of $100,000 in cash at closing, a short term promissory note payable
of $50,000 on or before January 31, 2005, a promissory note for $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 which was 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.  The Company has since rescinded this
acquisition and no longer owns Karkela.





On June
21, 2006, the Company agreed to accept rescissions of the December, 2004
acquisition agreements from Evans Columbus, LLC effective March 31, 2006 and
from Monarch Homes, Inc. effective June 1, 2006.





On July
29, 2005, the Company entered into a binding Stock Purchase Agreement with
Steven Persinger, an individual, to acquire all the issued and outstanding
shares of common stock of Persinger Equipment, Inc., a Minnesota corporation
(“Persinger”) for $4,735,000.  The Company has abandoned its plans to
acquire Persinger Equipment, Inc. in January 2007.





On
September 12, 2005, the Company entered into a binding Agreement for Purchase
and Sale of Shares with Calvin E. Bergman, Lynn E. Bergman, Jerry L. Bergman,
Barbara A. Vance and Marvin Bergman, individually, to acquire all the issued and
outstanding shares of common stock of Ney Oil Company, an Ohio corporation (“Ney
Oil Company”) for $5,000,000.  The Company abandoned its plans to
acquire Ney Oil Company on January 18, 2007.





On
September 12, 2005, the Company entered into a Letter of Intent with Terry
Robbins, President of Ohio Valley Lumber, to acquire all the issued and
outstanding shares of common stock of NKR, Inc, d.b.a. Ohio Valley Lumber, a
Delaware corporation (“NKR”) for $8,000,000. The Company abandoned its
plans to acquire NKR, Inc. on February 26, 2007.





On
September 21, 2005, the Company entered into a binding Acquisition Agreement
with Terry L. Lee and Gary D. Lee, individually, to acquire all the issued and
outstanding shares of common stock of Lee Oil Company, Inc., a Virginia
corporation, Lee Enterprises, Inc., a Kentucky corporation and Lee’s Food Marts
LLC, a Tennessee Limited Liability Company, (collectively hereinafter "Lee Oil
Company") for $6,000,000.00.  The Company is currently renegotiating
the terms of the acquisition agreement.





On
September 26, 2005, the Company entered into a binding Acquisition Agreement
with Robert Daniel, Karol K. Hart-Bendure, M. Lucille Daniel, and Joe M. Daniel,
individually, to acquire all the issued and outstanding shares of common stock
of Schultz Oil Company, Inc., an Ohio Corporation (“Schultz Oil Company”) for
$3,500,000 consisting of $1,500,000 in cash at closing and 1,000,000 shares of
common stock.  In the event the common stock of the Company does not
have a value of at least $2.00 as of September 26, 2007, the Company is required
to compensate the shareholders for the difference with the issuance of
additional shares.  The Company abandoned its plans to acquire Schultz
Oil Company on January 18, 2007.





On
September 28, 2007, the Company entered into a Letter of Intent  with
Harris Oil Co. Inc. and DHS Development, LLC pursuant to which each agreed to
sell and the Company agreed to purchase certain assets of each on or prior to
December 31, 2007 unless extended.  The Company abandoned its plans to
acquire the assets of Harris Oil Co. Inc. and DHS Development, LLC on March 11,
2008.





On July
17, 2008, the Company entered into a Letter of Intent to purchase all the assets
of Lee Oil Company, Inc., Lee’s Food Mart, LLC, and Lee Enterprises, Inc. Terry
Lee, the CEO and Chairman of the Company, is also an owner of the Lee Companies.
Mr. Lee has abstained from any negotiating or structuring of the acquisition.
Form 8-K was filed on July 17, 2008 with the SEC detailing the purchase price
and how the company expects to fund the purchase along with allowing both
parties time to perform due diligence on the proposed acquisition. The parties
currently expect to close on the acquisition prior to September 30,
2008.




(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 an acquisition in the steel fabrication industry.
Additionally, we have identified acquisition opportunities in gasoline
distribution.







13






We are
headquartered in Middlesboro, Kentucky and currently trade on the OTC Bulletin
Board under the symbol HTLJ. Including the senior management team, we currently
employ 71 people.
 
 Currently,
we operate one major subsidiary Mound Technologies, Inc. of Springboro, OH
acquired in December 2003 (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. Mound is in the
business of steel fabrication (“Steel Fabrication”).





Mound 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. Mound had been previously known as
Mound Steel Corporation, which was started at the same location in
1964.





Mound is
focused on the fabrication of metal products and produces structural steel,
miscellaneous metals, steel stairs, railings, bar joists, metal decks and the
erection thereof. Mound 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.








RESULTS
OF OPERATIONS FOR THE THREE MONTHS  ENDED JUNE 30, 2008 COMPARED TO THE
THREE MONTHS ENDED JUNE 30, 2007.





We are a
company with operations in steel fabrication.  Revenues for the three
months ended June 30, 2008 were $6,199,788 compared to $3,086,271 for
the same period in 2007, which represents an increase of
$3,113,517.  The increase in revenues for the period ending June 30,
2008 as compared to the three months ended June 30, 2007 was partially the
result of increases in the price of the raw materials used in the manufacturing
process and those increases being passed along to the customers. The Company has
been successful in securing a couple of school construction projects that have
progressed a little faster than normally would have been expected and revenue
for those projects under the percentage-of-completion have been recognized as
the work has progressed. The Company has also been able to maintain a high
backlog of projects over the last quarter and this has allowed management to be
more efficient in the use of the resources available. Total operating expenses
were $5,783,210 for the three months ended June 30, 2008 compared to
$3,513,139 for the same period in 2007. Maintaining a better control over
the administrative costs along with the heavy backlog of projects have allowed
the Company to generate a positive operating income of approximately 6.7% in the
current period versus an operating loss of about 13.8% in the same period of
2007. Our costs of goods sold increased from $2,425,866 for the three months
ended June 30, 2007 to $5,292,264 for the three months ended June 30, 2008,
which represented 78.9% as a percentage of sales and 85.3% as a percentage of
sales, respectively. The reason for the increase in cost of good sold as a
percentage of sales can be tied to steel and other various other raw materials
used the fabrication processes having increased dramatically along with
surcharges for materials and miscellaneous supplies that cover increasing
transportation costs. The
company would expect to see these surcharges continue as long as the price of
fuel remains at this elevated level.





Interest
expense for the three months ended June 30, 2008 was $18,649 compared to
$46,220 for the same period in 2007.  This decrease was primarily
due to the conversion of convertible promissory notes and the reduction in an
acquisition note payable upon the discontinued operations of Karkela. The
Company saw an increase in the interest expense in the second quarter from the
first quarter due primarily to the purchase of the Mound property in April and
the interest expense relating to this purchase should remain fairly constant
during the first five years of the loan.





As a
result, Income (Loss) from continuing operations was $429,500 for the three
months ended June 30, 2008, compared to ($461,037) for the same
period in 2007.






14







LIQUIDITY
AND CAPITAL RESOURCES





Net cash
provided from operating activities was $629,536 for the six months ended June
30, 2008.  The Company did obtain new funding in the form of a note
from Commercial Bank in the original amount of $900,000 to purchase the Mound
property. This note along with a net settlement with  the landlord for
monies owed the Company along with company generated funds was used to make the
acquisition.


Total
short-term and long-term debt at June 30, 2008 was $6,757,976 and total
shareholders’ equity was $2,808,408.





Our
business is seasonally working capital intensive and requires 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,
2007 issued a “going concern” qualification to their report dated April 10,
2008.  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, 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 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.





During
the three months ended June 30, 2008, 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 2007 and for the first six months of 2008 that had an
impact on our gross margins and net earnings.  In the remainder of
fiscal 2008, we expect average prices of steel and other commodities to be
higher than the average prices paid in fiscal 2007 and for the first three
months of 2008.  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.








15














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 A to the consolidated
financial statements.  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.





Item
3. Quantitative and Qualitative Disclosures About Market Risks





Not
applicable





Item
4. Controls and Procedures





As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide information required by this Item.





Item
4T. Controls and Procedures





As of the
end of the period covered by this report, our principal executive officer and
principal financial officer carried out an evaluation of the effectiveness of
the design and operation of our disclosure controls and procedures. This
evaluation was carried out under the supervision and with the participation of
the Company’s management, including the Company’s Chief Executive Officer and
Chief Financial Officer  who concluded that the Company’s disclosure
controls and procedures were effective as of the date of the
evaluation.





There
were no changes in internal controls during the quarterly period ended June 30,
2008 that have materially affected, or are reasonably likely to have materially
affected, our internal controls subsequent to the date we carried out our
evaluation.






16







Disclosure
controls and procedures are controls and other procedures that are designed to
provide reasonable assurance that information required to be disclosed in the
Company’s reports filed or submitted under the Securities Exchange Act of 1934
(“Exchange Act”) is recorded, processed, summarized and reported, within the
time periods specified in the Securities and Exchange Commission’s rules and
forms. Disclosure controls and procedures include, without limitation, controls
and procedures designed to provide reasonable assurance that information
required to be disclosed in Company reports filed under the Exchange Act is
accumulated and communicated to management, as appropriate, to allow timely
decisions regarding required disclosure.







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





As a
“smaller reporting company” as defined by Item 10 of Regulation S-K, the Company
is not required to provide information required by this Item.








ITEM  2.  
      Unregistered Sales of Equity Securities and Use
of Proceeds





During
the quarter ended March 30, 2008, the Company issued 580,000 shares of common
stock for cash of $290,000.





During
the quarter ending June 30, 2008, the Company authorized the issuance of 185,718
shares of common stock for director compensation. These shares were authorized
as two separate issuances and were based on the closing price of the common
shares on May 31, 2008 and June 30, 2008. The number of shares authorized on May
31, 2008 was 100,002 shares. The number of shares authorized on June 30, 2008
was 85,716. The non-cash compensation represented by these shares was
$60,000.60.





The
offering and sale was deemed to be exempt under Rule 506 of Regulation D and/or
Section 4(2) of the Securities Act of 1933, as amended. No advertising or
general solicitation was employed in offering the securities. The offerings and
sales were made to a limited number of persons, all of whom were accredited
investors or a limited number of unaccredited investors, business associates of
the Company or executive officers of the Company, and transfer was restricted by
the Company in accordance with the requirements of the Securities Act of 1933.
In addition to representations by the above-referenced persons, the Company has
made independent determinations that all of the above-referenced persons were
accredited or sophisticated investors, and that they were capable of analyzing
the merits and risks of their investment, and that they understood the
speculative nature of their investment. Furthermore, all of the above-referenced
persons were provided with access to our Securities and Exchange Commission
filings.










17







ITEM  3.       
DEFAULTS UPON SENIOR SECURITIES





None








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





None








ITEM  5.       
OTHER INFORMATION





The Company finalized the purchase of
the property located at 25 Mound Park Drive in Springboro, OH on April 18, 2008.
The gross selling price of the property was $1,112,983 and was funded through a
loan of $900,000 provided through Commercial Bank of Harrogate, TN., net
settlement of amounts due from the former landlord of $426,321 and amounts due
to the former landlord of $284,664 and Company generated funds making up the
remainder. The note was for a term of 60 months, a fixed interest rate of 7.5%,
and consisted of 59 monthly payments of $7,250.00 and one payment due on April
18, 2013 of $794,989.16.  This is the same property which Mound
Technologies currently uses for its operations and had been renting from a
related party for $16,250 per month. The Company’s CEO is also the CEO of
Commercial Bank. Allocation of the purchase price was $271,055 for land and
$841,928 allocated to the buildings.








On July
17, 2008, the Company entered into a Letter of Intent to purchase all the assets
of Lee Oil Company, Inc., Lee’s Food Mart, LLC, and Lee Enterprises, Inc. Terry
Lee, the CEO and Chairman of the Company, is also an owner of the Lee Companies.
Mr. Lee has abstained from any negotiating or structuring of the acquisition.
Form 8-K was filed on July 17, 2008 with the SEC detailing the purchase price
and how the company expects to fund the purchase along with allowing both
parties time to perform due diligence on the proposed acquisition. The parties
currently expect to close on the acquisition prior to September 30,
2008.




ITEM  6.       
EXHIBITS AND REPORTS ON FORM 8-K




Exhibit
      31.1
            
            Certification of
      Terry L. Lee, Chief Executive Officer& Chairman of the
  BoardExhibit
      31.2
            
            Certification of
      Mitchell L Cox, CPA, Chief Financial OfficerExhibit
    32.1
            
            Certification of
      Terry L. Lee, Chief Executive Officer& Chairman of the
  BoardExhibit
    32.2
            
            Certification of
      Mitchell L. Cox, CPA, Chief Financial
Officer










18













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:
      August 14, 2008
            
            By:
      /s/ Terry L. LeeTerry
      L. LeeChief
      Executive Officer andChairman
      of the Board(Duly
      Authorized Officer)Date:
      August 14, 2008
            
            By:
      /s/ Mitchell L. Cox, CPAMitchell
      L. CoxChief
      Financial Officer(Principal
      Financialand
      Accounting Officer)












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