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

|                                                           |   |                                 |
|----------------------------------------------------------------|--------|--------------------------------------|
| Maryland                                                       |   | 36-4286069                           |
| (State or Other Jurisdiction of Incorporation or Organization) |   | (I.R.S. Employer Identification No.) |

|                                     |   |       |
|------------------------------------------|--------|------------|
| 1005 N. 19th Street Middlesboro, KY      |   | 40965      |
| (Address of Principal Executive Offices) |   | (Zip Code) |
|                                     |   |       |

|                |   | Name of Each Exchange |
|---------------------|--------|-----------------------|
| Title of Each Class |   | on Which Registered   |
| N/A                 |   | N/A                   |
|                |   |                  |

| Large accelerated filer o | Accelerated filer o | Non-accelerated filer o(Do not check if a smaller reporting company) | Smaller reporting company þ |
|--------------------------------|--------------------------|---------------------------------------------------------------------------|---------------------------------------|

----

|     | HEARTLAND, INC.                                                                       |   |
|----------|---------------------------------------------------------------------------------------|--------|
|     | FORM 10-K                                                                             |   |
|     |                                                                                  |   |
|     | TABLE OF CONTENTS                                                                     |   |
|     |                                                                                  |   |
|     | Part I                                                                                |   |
|     |                                                                                  |   |
| ITEM 1.  | Business                                                                              | 3      |
| ITEM 1A. | Risk Factors                                                                          | 7      |
| ITEM 1B. | Unresolved Staff Comments                                                             | 7      |
| ITEM 2.  | Properties                                                                            | 7      |
| ITEM 3.  | Legal Proceedings                                                                     | 8      |
| ITEM 4.  | Reserved                                                                              | 8      |
|     | Part II                                                                               |   |
|     |                                                                                  |   |
| ITEM 5.  | Market for Registrant's Common Equity, Related Stockholder Matters                    | 8      |
|     |      and Issuer Purchases of Equity Securities               |   |
| ITEM 6.  | Selected Financial Data                                                               | 11     |
| ITEM 7.  | Management's Discussion and Analysis of Financial Condition and Results of Operations | 11     |
| ITEM 7A. | Quantitative and Qualitative Disclosures About Market Risk                            |   |
|     |                                                                                  |   |
| ITEM 8.  | Financial Statements and Supplementary Data                                           | 16     |
| ITEM 9.  | Change in and Disagreements with Accountants on Accounting                            | 18     |
|     |       and Financial Disclosure                          |   |
| ITEM 9A. | Controls and Procedures                                                               | 18     |
|     |                                                                                  |   |
|     | Part III                                                                              |   |
|     |                                                                                  |   |
| ITEM 10. | Directors, Executive Officers, and Corporate Governance                               | 18     |
| ITEM 11. | Executive Compensation                                                                | 21     |
| ITEM 12. | Security Ownership of Certain Beneficial Owners and Management                        | 23     |
| ITEM 13. | Certain Relationships and Related Transactions and Director Independence              | 24     |
| ITEM 14. | Principal Accounting Fees and Services                                                | 24     |
|     |                                                                                  |   |
|     | Part IV                                                                               |   |
|     |                                                                                  |   |
| ITEM 15. | Exhibits and Financial Statement Schedules                                            | 25     |
|     |                                                                                  |   |
|     |                                                                                  |   |

----

| ·   | Mound Technologies, Inc. (“Mound”) is based in Springboro, OH and commenced operations at the same location in 1964 under the name Mound Steel Corporation. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Lee Oil Company, Inc. and its wholly owned subsidiaries Lee Enterprises, Inc., Lee’s Food Marts, LLC, and Premium Homes, Inc, (collectively “Lee Oil”) are based in Middlesboro, KY and commenced operations in 1988. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Heartland Steel, Inc. (“Heartland Steel”) is based in Washington Court House, OH and commenced full operations during the fourth quarter of 2009. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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

| ·   | Heartland Steel – Steel Distribution – Primarily focused on the wholesale distribution of steel products to steel fabricators and contractors. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

|                                                                                                            |   | Number of   |   | Number of    |   | Remaining Lease |   | Remaining Lease |
|-----------------------------------------------------------------------------------------------------------------|--------|-------------|--------|--------------|--------|-----------------|--------|-----------------|
| State                                                                                                           |   | Owned Sites |   | Leased Sites |   | < 3 Years    |   | > 3 Years    |
| Tennessee                                                                                                       |   | 8           |   | 9            |   | 6               |   | 3               |
| Kentucky                                                                                                        |   | 3           |   | 2            |   | 2               |   | 0               |
| Virginia                                                                                                        |   | 2           |   | 2            |   | 1               |   | 1               |
|                                                                                                            |   | 13          |   | 13           |   |            |   |            |
|                                                                                                            |   |        |   |         |   |            |   |            |
| Most of our retail fuel and convenience store leases are net leases requiring us to pay taxes,                  |   |        |
| insurance and maintenance costs. Of the leases that expire in less than three years,                            |   |        |
| we anticipate that we will be able to negotiate acceptable extensions of the leases for those                   |   |        |
| locations that we intend to continue operating. We believe that none of these leases are individually material. |

|                                |   |  HIGH |   |  LOW |
|-------------------------------------|--------|------------|--------|-----------|
|                                |   |       |   |      |
| FISCAL YEAR ENDED DECEMBER 31, 2010 |   |       |   |      |
|                                |   |       |   |      |
| First Quarter                       |   | 0.60       |   | 0.20      |
| Second Quarter                      |   | 0.38       |   | 0.24      |
| Third Quarter                       |   | 0.27       |   | 0.15      |
| Fourth Quarter                      |   | 0.25       |   | 0.11      |
|                                |   |       |   |      |
| FISCAL YEAR ENDED DECEMBER 31, 2009 |   |       |   |      |
|                                |   |       |   |      |
| First Quarter                       |   | 0.50       |   | 0.20      |
| Second Quarter                      |   | 0.56       |   | 0.28      |
| Third Quarter                       |   | 1.16       |   | 0.30      |
| Fourth Quarter                      |   | 1.02       |   | 0.30      |

----

----

| ·   | Deliver, prior to any transaction involving a penny stock, a disclosure schedule prepared by the Securities and Exchange Commission relating to the penny stock market, unless the broker-dealer or the transaction is otherwise exempt; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Disclose commissions payable to the broker-dealer and our registered representatives and current bid and offer quotations for the securities; |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Send monthly statements disclosing recent price information pertaining to the penny stock held in a customer’s account, the account’s value and information regarding the limited market in penny stocks; and |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s written agreement to the transaction, prior to conducting any penny stock transaction in the customer’s account. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                        |   |     |       |
|-----------------------------|--------|----------|------------|
| Description                 |   | Quantity |       |
| Stock Dividends             |   |     | 61,791     |   |
| Preferred Share Conversions |   |     | 1,185,000  |   |
| Board Compensation          |   |     | 142,439    |   |
| Conversion of Debt          |   |     | 11,111,112 |   |
| Employment Incentives       |   |     | 1,250,000  |   |
| Premium Home Purchase       |   |     | 650,000    |   |
|                        |   |     | 14,400,342 |   |

| ·   | None of these issuances involved underwriters, underwriting discounts or commissions; |
|--------------------|---------------------------------------------------------------------------------------|

| ·   | We placed restrictive legends on all certificates issued; |
|--------------------|-----------------------------------------------------------|

| ·   | No sales were made by general solicitation or advertising; |
|--------------------|------------------------------------------------------------|

| ·   | Sales were made only to accredited investors or investors who were sophisticated enough to evaluate the risks of the investment. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------|

----

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

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

| ·   | Heartland Steel – Steel Distribution – Primarily focused on the wholesale distribution of steel products to steel fabricators and contractors. |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

----

|                                                    | Page   |
|---------------------------------------------------------|--------|
|                                                    |   |
| Report of Independent Registered Public Accounting Firm | F-1    |
|                                                    |   |
| Consolidated Balance Sheets                             | F-2    |
|                                                    |   |
| Consolidated Statements of Operations                   | F-4    |
|                                                    |   |
| Consolidated Statements of Cash Flows                   | F-5    |
|                                                    |   |
| Consolidated Statements of Stockholders’ Equity   | F-7    |
|                                                    |   |
| Notes to Consolidated Financial Statements              | F-8    |

----

----

| HEARTLAND, INC. AND SUBSIDIARIES                                                              |
|-----------------------------------------------------------------------------------------------|
| CONSOLIDATED BALANCE SHEETS                                                                   |
|                                                                                          |   |   |   |   |   |   |
| ASSETS                                                                                        |   |   |   |   |   |   |
|                                                                                          |   |   |   |   |   |   |
|                                                                                          |   | December 31, |   |
|                                                                                          |   | 2010 |   |   | 2009 |   |
|                                                                                          |   |   |   |   |   |   |
|                                                                                          |   |   |   |   |   |   |
| CURRENT ASSETS                                                                                |   |   |   |   |   |   |
|    Cash and cash equivalents                                                   |   | $ | 1,089,035 |   |   | $ | 2,404,910 |   |
|    Accounts receivable, net                                                    |   |   | 6,985,546 |   |   |   | 5,787,871 |   |
|    Costs and estimated earnings in excess of billings on uncompleted contracts |   |   | 630,359 |   |   |   | 166,884 |   |
|    Inventory                                                                   |   |   | 4,008,178 |   |   |   | 4,132,358 |   |
|    Prepaid expenses and other                                                  |   |   | 2,000 |   |   |   | 1,000 |   |
|    Deferred income taxes                                                       |   |   | 156,434 |   |   |   | 138,570 |   |
| Total current assets                                                                          |   |   | 12,871,552 |   |   |   | 12,631,593 |   |
|                                                                                          |   |   |   |   |   |   |   |   |
| PROPERTY, PLANT AND EQUIPMENT                                                                 |   |   |   |   |   |   |   |   |
|    Land                                                                        |   |   | 2,719,267 |   |   |   | 2,716,217 |   |
|    Buildings and improvements                                                  |   |   | 7,240,688 |   |   |   | 7,155,712 |   |
|    Plant equipment                                                             |   |   | 878,491 |   |   |   | 873,436 |   |
|    Equipment                                                                   |   |   | 3,572,551 |   |   |   | 3,197,846 |   |
|    Equipment at customers' location                                            |   |   | 1,065,629 |   |   |   | 1,017,380 |   |
|    Office equipment                                                            |   |   | 260,379 |   |   |   | 225,678 |   |
| Total property, plant and equipment                                                           |   |   | 15,737,005 |   |   |   | 15,186,269 |   |
|    Less: Accumulated depreciation                                              |   |   | (3,310,503 | ) |   |   | (1,983,942 | ) |
| Net property, plant and equipment                                                             |   |   | 12,426,502 |   |   |   | 13,202,327 |   |
|                                                                                          |   |   |   |   |   |   |   |   |
| OTHER ASSETS                                                                                  |   |   |   |   |   |   |   |   |
|    Deferred income taxes                                                       |   |   | 957,798 |   |   |   | 356,703 |   |
|    Other assets                                                                |   |   | 48,695 |   |   |   | 68,428 |   |
| Total other assets                                                                            |   |   | 1,006,493 |   |   |   | 425,131 |   |
|                                                                                          |   |   |   |   |   |   |   |   |
| Total assets                                                                                  |   | $ | 26,304,547 |   |   | $ | 26,259,051 |   |
|                                                                                          |   |   |   |   |   |   |   |   |

----

| HEARTLAND, INC. AND SUBSIDIARIES                                                              |
|-----------------------------------------------------------------------------------------------|
| CONSOLIDATED BALANCE SHEETS                                                                   |
|                                                                                          |   |   |   |   |   |   |
| LIABILITIES AND STOCKHOLDERS' EQUITY                                                          |   |   |   |   |   |   |
|                                                                                          |   |   |   |   |   |   |
|                                                                                          |   | December 31, |   |
|                                                                                          |   | 2010 |   |   | 2009 |   |
|                                                                                          |   |   |   |   |   |   |
|                                                                                          |   |   |   |   |   |   |
| CURRENT LIABILITIES                                                                           |   |   |   |   |   |   |
|    Accounts payable                                                            |   | $ | 4,460,294 |   |   | $ | 3,506,792 |   |
|    Accrued expenses                                                            |   |   | 319,591 |   |   |   | 313,367 |   |
|    Lines of credit                                                             |   |   | 1,175,000 |   |   |   | 1,175,000 |   |
|    Current portion of notes payable                                            |   |   | 3,426,368 |   |   |   | 638,792 |   |
|    Current portion of notes payable to related parties                         |   |   | 671,558 |   |   |   | 279,267 |   |
|    Current portion of unearned supplier incentives                             |   |   | 191,187 |   |   |   | 161,387 |   |
|    Billings in excess of costs and estimated earnings on uncompleted contracts |   |   | 136,680 |   |   |   | 201,943 |   |
| Total current liabilities                                                                     |   |   | 10,380,678 |   |   |   | 6,276,548 |   |
|                                                                                          |   |   |   |   |   |   |   |   |
| LONG-TERM LIABILITIES                                                                         |   |   |   |   |   |   |   |   |
|    Notes payable, less current portion                                         |   |   | 2,441,845 |   |   |   | 5,831,105 |   |
|    Notes payable to related parties, less current portion                      |   |   | 6,229,516 |   |   |   | 8,137,819 |   |
|    Unearned supplier incentives, less current portion                          |   |   | 542,921 |   |   |   | 632,207 |   |
| Total long term liabilities                                                                   |   |   | 9,214,282 |   |   |   | 14,601,131 |   |
|                                                                                          |   |   |   |   |   |   |   |   |
| STOCKHOLDERS’ EQUITY                                                                    |   |   |   |   |   |   |   |   |
| Preferred stock $0.001 par value 5,000,000 shares authorized,                                 |   |   |   |   |   |
| 0 and 2,370,000 shares issued and outstanding at December 31, 2010                            |   |
|    and 2009 respectively                                                       |   |   | - |   |   |   | 2,370 |   |
|    Additional paid-in capital – preferred stock                          |   |   | - |   |   |   | 713,567 |   |
|    Common stock, $0.001 par value 100,000,000 shares                           |   |   |   |   |   |   |   |   |
| authorized; 36,353,648 and 21,953,306 shares issued and                                  |   |   |   |   |   |
|    outstanding at December 31, 2010 and 2009, respectively                     |   |   | 36,354 |   |   |   | 21,953 |   |
|    Additional paid-in capital – common stock                             |   |   | 20,536,976 |   |   |   | 17,439,553 |   |
|    Accumulated deficit                                                         |   |   | (13,863,743 | ) |   |   | (12,796,071 | ) |
| Net stockholders’ equity                                                                |   |   | 6,709,587 |   |   |   | 5,381,372 |   |
|                                                                                          |   |   |   |   |   |   |   |   |
| Total Liabilities and Stockholders’ Equity                                              |   | $ | 26,304,547 |   |   | $ | 26,259,051 |   |

----

|                                                                       |   |         |        |   |   |   |
|----------------------------------------------------------------------------|--------|--------------|-------------|--------|--------|--------|
|                                                                       |   | Year Ended   |        |
|                                                                       |   | December 31, |        |
|                                                                       |   | 2010         |        |   | 2009   |   |
| REVENUE - SALES                                                            |   | $            | 99,106,704  |   |   | $      | 91,094,672 |   |
| Revenues - sales to related parties                                        |   |         | 1,134,453   |   |   |   | 1,056,709 |   |
| Cost of goods sold                                                         |   |         | (90,031,105 | )      |   |   | (81,871,293 | ) |
| Gross Profit                                                               |   |         | 10,210,052  |   |   |   | 10,280,088 |   |
| EXPENSES                                                                   |   |         |        |   |   |   |   |   |
|    Selling, general and administrative expenses             |   |         | 9,835,092   |   |   |   | 8,660,504 |   |
|    Depreciation and amortization                            |   |         | 1,371,093   |   |   |   | 1,278,784 |   |
| Total Expenses                                                             |   |         | 11,206,185  |   |   |   | 9,939,288 |   |
| NET OPERATING (LOSS) INCOME                                                |   |         | (996,133    | )      |   |   | 340,800 |   |
| OTHER INCOME (EXPENSE)                                                     |   |         |        |   |   |   |   |   |
|    Other income                                             |   |         | 438,095     |   |   |   | 347,186 |   |
|    (Loss) gain on disposal of property, plant and equipment |   |         | (2,438      | )      |   |   | 189,892 |   |
|    Interest expense                                         |   |         | (537,386    | )      |   |   | (495,146 | ) |
|    Interest expense to related parties                      |   |         | (572,674    | )      |   |   | (414,596 | ) |
| Net Other Expenses                                                         |   |         | (674,403    | )      |   |   | (372,664 | ) |
| LOSS BEFORE INCOME TAXES                                                   |   |         | (1,670,536  | )      |   |   | (31,864 | ) |
| INCOME TAXES                                                               |   |         |        |   |   |   |   |   |
|    Federal income tax benefit (expense), deferred           |   |         | 518,669     |   |   |   | (18,320 | ) |
|    State income tax benefit (expense), current              |   |         | 4,462       |   |   |   | (93,404 | ) |
|    State income tax benefit, deferred                       |   |         | 100,290     |   |   |   | 13,641 |   |
| NET LOSS                                                                   |   |         | (1,047,115  | )      |   |   | (129,947 | ) |
| LESS: Preferred Dividends                                                  |   |         | (20,557     | )      |   |   | (59,250 | ) |
| NET LOSS AVAILABLE TO COMMON STOCKHOLDERS                                  |   | $            | (1,067,672  | )      |   | $      | (189,197 | ) |
|                                                                       |   |         |        |   |   |   |   |   |
| Net Loss per Share:                                                        |   |         |        |   |   |   |   |   |
|    Basic                                                    |   | $            | (0.04       | )      |   | $      | (0.00 | ) |
|    Diluted                                                  |   | $            | (0.04       | )      |   | $      | (0.00 | ) |
| Weighted Average Shares Outstanding:                                       |   |         |        |   |   |   |   |   |
|    Basic                                                    |   |         | 24,214,564  |   |   |   | 22,256,016 |   |
|    Diluted                                                  |   |         | 24,214,564  |   |   |   | 22,256,016 |   |
|                                                                       |   |         |        |   |   |   |   |   |

----

| HEARTLAND, INC. AND SUBSIDIARIES                                                    |   |
|-------------------------------------------------------------------------------------|--------|
| CONSOLIDATED STATEMENTS OF CASH FLOWS                                               |   |
|                                                                                |   |   |   |   |   |   |
|                                                                                |   |   |   |   |   |   |
|                                                                                |   | Year Ended |   |
|                                                                                |   | December 31, |   |
|                                                                                |   | 2010 |   |   | 2009 |   |
|                                                                                |   |   |   |   |   |   |
| CASH FLOWS FROM OPERATING ACTIVITIES                                                |   |   |   |   |   |   |
| Net loss                                                                            |   | $ | (1,047,115 | ) |   | $ | (129,947 | ) |
| Adjustments to reconcile net loss to cash flows used in operating activities        |   |   |   |   |   |
|     Stock issued for services and settlement                    |   |   | 10,023 |   |   |   | 39,990 |   |
|     Loss (gain) on disposal of property, plant and equipment    |   |   | 2,438 |   |   |   | (189,892 | ) |
|     Depreciation and amortization                               |   |   | 1,371,093 |   |   |   | 1,278,784 |   |
|     Share-based compensation                                    |   |   | 365,308 |   |   |   | 300,308 |   |
|     Deferred income taxes                                       |   |   | (618,959 | ) |   |   | 4,679 |   |
| Changes in assets and liabilities                                                   |   |   |   |   |   |   |   |   |
|     Accounts receivable                                         |   |   | (1,197,675 | ) |   |   | (901,993 | ) |
|     Costs in excess of billings on uncompleted contracts        |   |   | (463,475 | ) |   |   | (27,992 | ) |
|     Inventory                                                   |   |   | 501,807 |   |   |   | (1,356,723 | ) |
|     Prepaids and other                                          |   |   | (1,000 | ) |   |   | (1,000 | ) |
|     Accounts payable                                            |   |   | 953,502 |   |   |   | 765,357 |   |
|     Accrued expenses                                            |   |   | 6,224 |   |   |   | (344,512 | ) |
|     Other assets                                                |   |   | 19,733 |   |   |   | (316 | ) |
|     Billings in excess of costs on uncompleted contracts        |   |   | (65,263 | ) |   |   | (291,359 | ) |
|                                                                                |   |   |   |   |   |   |   |   |
| NET CASH USED IN OPERATING ACTIVITIES                                               |   |   | (163,359 | ) |   |   | (854,616 | ) |
|                                                                                |   |   |   |   |   |   |   |   |
|                                                                                |   |   |   |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES                                                |   |   |   |   |   |   |   |   |
|     Proceeds from disposition of property, plant, and equipment |   |   | 5,000 |   |   |   | 260,000 |   |
|     Net payments for property, plant and equipment              |   |   | (602,706 | ) |   |   | (4,294,985 | ) |
|                                                                                |   |   |   |   |   |   |   |   |
| NET CASH USED IN INVESTING ACTIVITIES                                               |   |   | (597,706 | ) |   |   | (4,034,985 | ) |
|                                                                                |   |   |   |   |   |   |   |   |

----

| HEARTLAND, INC. AND SUBSIDIARIES                                                                    |         |
|-----------------------------------------------------------------------------------------------------|--------------|
| CONSOLIDATED STATEMENTS OF CASH FLOWS                                                               |         |
|                                                                                                |         |   |   |   |   |   |
|                                                                                                |         |   |   |   |   |   |
|                                                                                                | Year Ended   |   |
|                                                                                                | December 31, |   |
|                                                                                                |         | 2010 |   |   | 2009 |   |
|                                                                                                |         |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES                                                                |         |   |   |   |   |   |
|     Proceeds from notes payable                                                 |         | $ | 23,979 |   |   | $ | 5,437,939 |   |
|     Payments on notes payable                                                   |         |   | (633,407 | ) |   |   | (2,104,183 | ) |
|     Proceeds from related party notes payable                                   |         |   | 380,500 |   |   |   | - |   |
|     Payments on related party notes payable                                     |         |   | (266,396 | ) |   |   | (132,149 | ) |
|     Unearned supplier incentives                                                |         |   | (59,486 | ) |   |   | (8,788 | ) |
| NET CASH (USED IN) PROVIDED BY FINANING ACTIVITIES                                                  |         |   | (554,810 | ) |   |   | 3,192,819 |   |
|                                                                                                |         |   |   |   |   |   |   |   |
| DECREASE IN CASH AND CASH EQUIVALENTS                                                               |         |   | (1,315,875 | ) |   |   | (1,696,782 | ) |
|                                                                                                |         |   |   |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD                                                      |         |   | 2,404,910 |   |   |   | 4,101,692 |   |
|                                                                                                |         |   |   |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, END OF PERIOD                                                            |         | $ | 1,089,035 |   |   | $ | 2,404,910 |   |
|                                                                                                |         |   |   |   |   |   |   |   |
| SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION                                                   |         |   |   |   |   |
|     Interest paid                                                               |         | $ | 528,071 |   |   | $ | 495,146 |   |
|     Interest paid to related party notes payable                                |         | $ | 573,188 |   |   | $ | 414,596 |   |
|     Taxes refunded (paid)                                                       |         | $ | 4,462 |   |   | $ | (91,153 | ) |
|                                                                                                |         |   |   |   |   |   |   |   |
| NON CASH INVESTING AND FINANCING ACTIVITIES                                                         |         |   |   |   |   |   |   |   |
|     Amortization of deferred compensation as share based compensation           |         | $ | 100,308 |   |   | $ | 100,308 |   |
|     Issuance of common stock in payment of convertible promissory notes and interest |         | $ | - |   |   | $ | 39,990 |   |
|     Issuance of common stock for services and settlement                        |         | $ | 265,000 |   |   | $ | 199,999 |   |
|     Issuance of common stock for dividends                                      |         | $ | 20,557 |   |   | $ | 66,723 |   |
|     Issuance of common stock relating to conversion of related party debt       |         | $ | 2,000,000 |   |   | $ | - |   |
|     Issuance of common stock relating to acquisition of Premium Homes           |         | $ | 10,023 |   |   | $ | - |   |
|                                                                                                |         |   |   |   |   |   |   |   |

----

|                               |   |            |       |   |    |   |   |         |   |   |     |   |   |        |       |   |          |   |   |    |   |   |       |   |
|------------------------------------|--------|-----------------|------------|--------|---------|--------|--------|--------------|--------|--------|----------|--------|--------|-------------|------------|--------|---------------|--------|--------|---------|--------|--------|------------|--------|
|                               |   |            |       |   |    |   |   | Additional   |   |   |     |   |   |        | Additional |   |          |   |   |    |   |   |
|                               |   | Preferred Stock |       |   | Paid-In |   |   | Common Stock |   |   | Paid-In  |   |   | Accumulated |       |   | Stockholders' |   |
|                               |   | Shares          |       |   | Amount  |   |   | Capital      |   |   | Shares   |   |   | Amount      |       |   | Capital       |   |   | Deficit |   |   | Equity     |   |
|                               |   |            |       |   |    |   |   |         |   |   |     |   |   |        |       |   |          |   |   |    |   |   |       |   |
|  Balance at January 1, 2009   |   |            | 2,370,000  |   |    | $      | 2,370  |         |   | $      | 713,567  |   |   |        | 21,379,523 |   |          | $      | 21,380 |    |   | $      | 17,033,105 |   |   | $ | (12,599,401 | ) |   | $ | 5,171,021 |   |
|                               |   |            |       |   |    |   |   |         |   |   |     |   |   |        |       |   |          |   |   |    |   |   |       |   |   |   |   |   |   |   |   |   |
|  Common Stock Issued          |   |            | -          |   |    |   | -      |         |   |   | -        |   |   |        | 30,628     |   |          |   | 30     |    |   |   | 39,960     |   |   |   | - |   |   |   | 39,990 |   |
|                               |   |            |       |   |    |   |   |         |   |   |     |   |   |        |       |   |          |   |   |    |   |   |       |   |   |   |   |   |   |   |   |   |
|  Preferred Stock Dividends    |   |            | -          |   |    |   | -      |         |   |   | -        |   |   |        | 137,548    |   |          |   | 138    |    |   |   | 66,585     |   |   |   | (66,723 | ) |   |   | - |   |
|                               |   |            |       |   |    |   |   |         |   |   |     |   |   |        |       |   |          |   |   |    |   |   |       |   |   |   |   |   |   |   |   |   |
|  Share Based Compensation     |   |            | -          |   |    |   | -      |         |   |   | -        |   |   |        | 405,607    |   |          |   | 405    |    |   |   | 299,903    |   |   |   | - |   |   |   | 300,308 |   |
|                               |   |            |       |   |    |   |   |         |   |   |     |   |   |        |       |   |          |   |   |    |   |   |       |   |   |   |   |   |   |   |   |   |
|  Net Loss                     |   |            | -          |   |    |   | -      |         |   |   | -        |   |   |        | -          |   |          |   | -      |    |   |   | -          |   |   |   | (129,947 | ) |   |   | (129,947 | ) |
|                               |   |            |       |   |    |   |   |         |   |   |     |   |   |        |       |   |          |   |   |    |   |   |       |   |   |   |   |   |   |   |   |   |
|  Balance at December 31, 2009 |   |            | 2,370,000  |   |    | $      | 2,370  |         |   | $      | 713,567  |   |   |        | 21,953,306 |   |          | $      | 21,953 |    |   | $      | 17,439,553 |   |   | $ | (12,796,071 | ) |   | $ | 5,381,372 |   |
|                               |   |            |       |   |    |   |   |         |   |   |     |   |   |        |       |   |          |   |   |    |   |   |       |   |   |   |   |   |   |   |   |   |
|                               |   |            |       |   |    |   |   |         |   |   |     |   |   |        |       |   |          |   |   |    |   |   |       |   |   |   |   |   |   |   |   |   |
|  Common Stock Issued          |   |            | -          |   |    |   | -      |         |   |   | -        |   |   |        | 11,761,112 |   |          |   | 11,761 |    |   |   | 1,998,261  |   |   |   | - |   |   |   | 2,010,022 |   |
|                               |   |            |       |   |    |   |   |         |   |   |     |   |   |        |       |   |          |   |   |    |   |   |       |   |   |   |   |   |   |   |   |   |
|  Preferred Stock Dividends    |   |            | -          |   |    |   | -      |         |   |   | -        |   |   |        | 62,074     |   |          |   | 62     |    |   |   | 20,495     |   |   |   | (20,557 | ) |   |   | - |   |
|                               |   |            |       |   |    |   |   |         |   |   |     |   |   |        |       |   |          |   |   |    |   |   |       |   |   |   |   |   |   |   |   |   |
|  Preferred Stock Conversions  |   |            | (2,370,000 | )      |    |   | (2,370 | )            |   |   | (713,567 | )      |   |        | 1,185,000  |   |          |   | 1,185  |    |   |   | 714,752    |   |   |   | - |   |   |   | - |   |
|                               |   |            |       |   |    |   |   |         |   |   |     |   |   |        |       |   |          |   |   |    |   |   |       |   |   |   |   |   |   |   |   |   |
|  Share Based Compensation     |   |            | -          |   |    |   | -      |         |   |   | -        |   |   |        | 1,392,156  |   |          |   | 1,392  |    |   |   | 363,916    |   |   |   | - |   |   |   | 365,308 |   |
|                               |   |            |       |   |    |   |   |         |   |   |     |   |   |        |       |   |          |   |   |    |   |   |       |   |   |   |   |   |   |   |   |   |
|  Net Loss                     |   |            | -          |   |    |   | -      |         |   |   | -        |   |   |        | -          |   |          |   | -      |    |   |   | -          |   |   |   | (1,047,115 | ) |   |   | (1,047,115 | ) |
|                               |   |            |       |   |    |   |   |         |   |   |     |   |   |        |       |   |          |   |   |    |   |   |       |   |   |   |   |   |   |   |   |   |
|  Balance at December 31, 2010 |   |            | -          |   |    | $      | -      |         |   | $      | -        |   |   |        | 36,353,648 |   |          | $      | 36,353 |    |   | $      | 20,536,977 |   |   | $ | (13,863,743 | ) |   | $ | 6,709,587 |   |
|                               |   |            |       |   |    |   |   |         |   |   |     |   |   |        |       |   |          |   |   |    |   |   |       |   |   |   |   |   |   |   |   |   |
|                               |   |            |       |   |    |   |   |         |   |   |     |   |   |        |       |   |          |   |   |    |   |   |       |   |   |   |   |   |   |   |   |   |

----

|                               | Years                         |
|------------------------------------|-------------------------------|
| Equipment                     | 3  -  10  |
| Buildings & Improvements  | 15  -  40 |

----

----

----

|                                 |   | 2010   |      |   | 2009   |   |
|--------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                 |   |   |      |   |   |   |
| Mound                                |   | $      | 1,156,280 |   |   | $      | 1,202,409 |   |
| Lee:                                 |   |   |      |   |   |   |   |   |
|    Wholesale Fuel     |   |   | 588,203   |   |   |   | 530,794 |   |
|    Retail Fuel        |   |   | 849,526   |   |   |   | 674,232 |   |
|    Groceries          |   |   | 907,238   |   |   |   | 918,983 |   |
|    Manufactured Homes |   |   | 355,386   |   |   |   | - |   |
| HS                                   |   |   | 151,545   |   |   |   | 805,940 |   |
|                                 |   | $      | 4,008,178 |   |   | $      | 4,132,358 |   |

----

|       |                    |    |       |   |     |                                                                                                  |                                                                                       |                                                                                                                                        |
|------------|-------------------------|---------|------------|--------|----------|-------------------------------------------------------------------------------------------------------|--------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------|
|       |                    |    | Expiration |   | Interest |                                                                                                  |                                                                                       |                                                                                                                                        |   |
|       |                    |    | Date       |   | Rate     |                                                                                                  | 2010                                                                                       |                                                                                                                                        | 2009 |
|       |                    |    |       |   |     |                                                                                                  |                                                                                       |                                                                                                                                        |   |
| Bank Notes |                    |    |       |   |     |                                                                                                  |                                                                                       |                                                                                                                                        |
|       |                    |    |       |   |     |                                                                                                  |                                                                                       |                                                                                                                                        |   |
|       | Choice Financial        |    | 10/1/11    |   | 7.75%    |                                                                                                  |          2,977,924                            |                                                                                                                                        |           3,100,486 |
|       |                    |    |       |   |     |                                                                                                  |                                                                                       |                                                                                                                                        |   |
|       | Commercial Bank (1)     | 4/18/11 |       | 6.50%  |     |                 1,984 |                                                                                       |                  7,735                                 |
|       |                    |    |       |   |     |                                                                                                  |                                                                                       |                                                                                                                                        |   |
|       | Commercial Bank (1)(10) | 6/27/28 |       | 6.00%  |     |          1,075,207                                       |                                                                                       |           1,109,296                                                                       |
|       |                    |    |       |   |     |                                                                                                  |                                                                                       |                                                                                                                                        |   |
|       | Commercial Bank (1)     | 6/3/29  |       | 6.25%  |     |             601,883                       |                                                                                       |              616,792                                                       |
|       |                    |    |       |   |     |                                                                                                  |                                                                                       |                                                                                                                                        |   |
|       | Commercial Bank (1)(12) | 1/26/25 |       | 6.00%  |     |             289,614                       |                                                                                       |                        - |
|       |                    |    |       |   |     |                                                                                                  |                                                                                       |                                                                                                                                        |   |
|       | Commercial Bank (1)     | 5/5/15  |       | 7.00%  |     |               27,007            |                                                                                       |                        - |
|       |                    |    |       |   |     |                                                                                                  |                                                                                       |                                                                                                                                        |   |
|       | Citizens Bank (6)       |    | 6/20/13    |   | 6.00%    |                                                                                                  |             153,222            |                                                                                                                                        |              219,575 |
|       |                    |    |       |   |     |                                                                                                  |                                                                                       |                                                                                                                                        |   |
|       | People's Community (2)  | 8/1/23  |       | 3.25%  |     |             775,315                       |                                                                                       |              821,918                                                       |
|       |                    |    |       |   |     |                                                                                                  |                                                                                       |                                                                                                                                        |   |
|       | First Community         |    | 8/7/14     |   | 6.25%    |                                                                                                  |             759,560            |                                                                                                                                        |              793,553 |
|       |                    |    |       |   |     |                                                                                                  |                                                                                       |                                                                                                                                        |   |
|       | Commercial Bank (1)(7)  | 9/1/30  |       | 3.26%  |     |             839,680                       |                                                                                       |              861,538                                                       |
|       |                    |    |       |   |     |                                                                                                  |                                                                                       |                                                                                                                                        |   |
|       | Commerical Bank (1)     | 4/23/13 |       | 8.00%  |     |               15,182            |                                                                                       |                20,677                                            |
|       |                    |    |       |   |     |                                                                                                  |                                                                                       |                                                                                                                                        |   |
|       | Commerical Bank (1)     | 2/8/14  |       | 6.50%  |     |               31,753            |                                                                                       |                40,390                                            |
|       |                    |    |       |   |     |                                                                                                  |                                                                                       |                                                                                                                                        |   |
|       | Commerical Bank (1)     | 1/1/14  |       | 6.00%  |     |               23,357            |                                                                                       |                29,935                                            |
|       |                    |    |       |   |     |                                                                                                  |                                                                                       |                                                                                                                                        |   |
|       | Commerical Bank (1)(7)  | 6/8/29  |       | 3.26%  |     |          2,375,079                                       |                                                                                       |           2,394,133                                                                       |
|       |                    |    |       |   |     |                                                                                                  |                                                                                       |                                                                                                                                        |   |
|       | Commerical Bank (1)     | 3/21/11 |       | 8.00%  |     |               50,000            |                                                                                       |                        - |
|       |                    |    |       |   |     |                                                                                                  |                                                                                       |                                                                                                                                        |   |
|       | PNC                     |    | 2/25/14    |   | 6.25%    |                                                                                                  |               19,466 |                                                                                                                                        |                        - |
|       |                    |    |       |   |     |                                                                                                  |                                                                                       |                                                                                                                                        |   |
|       |                    |    |       |   |     |                                                                                                  |  $    10,016,233                                                  |                                                                                                                                        |  $     10,016,028 |
|       |                    |    |       |   |     |                                                                                                  |                                                                                       |                                                                                                                                        |   |

----

|              |                        |     |       |                                                                            |     |                                                                                                                                        |                                                                                                                            |                                                                                                        |
|-------------------|-----------------------------|----------|------------|---------------------------------------------------------------------------------|----------|---------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------|-------------------------------------------------------------------------------------------------------------|
|              |                        |     | Expiration |                                                                            | Interest |                                                                                                                                        |                                                                                                                            |                                                                                                        |   |
|              |                        |     | Date       |                                                                            | Rate     |                                                                                                                                        | 2010                                                                                                                            |                                                                                                        | 2009 |
| Third Party Notes |                        |     |       |                                                                            |     |                                                                                                                                        |                                                                                                                            |
|              |                        |     |       |                                                                            |     |                                                                                                                                        |                                                                                                                            |                                                                                                        |   |
|              | Lee Holding Company (3)     | 10/1/28  |       | 8.00%                                                                           |     |  $         550,850                                                                        |                                                                                                                            |  $       1,582,391                                                  |
|              |                        |     |       |                                                                            |     |                                                                                                                                        |                                                                                                                            |                                                                                                        |   |
|              | Gary D. Lee (4)             |     | 10/1/28    |                                                                            | 8.00%    |                                                                                                                                        |             550,850                                                 |                                                                                                        |           1,582,391 |
|              |                        |     |       |                                                                            |     |                                                                                                                                        |                                                                                                                            |                                                                                                        |   |
|              | Sam Mars  (6)(8)  | 5/1/12   |       | 7.00%                                                                           |     |               30,722                                                  |                                                                                                                            |                50,651            |
|              |                        |     |       |                                                                            |     |                                                                                                                                        |                                                                                                                            |                                                                                                        |   |
|              | Sam Mars (6)(8)             |     | 6/25/18    |                                                                            | 7.00%    |                                                                                                                                        |             189,360                                                 |                                                                                                        |              207,918 |
|              |                        |     |       |                                                                            |     |                                                                                                                                        |                                                                                                                            |                                                                                                        |   |
|              | Sam Mars (6)(8)             |     | 5/16/20    |                                                                            | 7.00%    |                                                                                                                                        |             229,740                                                 |                                                                                                        |              246,319 |
|              |                        |     |       |                                                                            |     |                                                                                                                                        |                                                                                                                            |                                                                                                        |   |
|              | Mars Properties (6)         | 12/25/12 |       | 6.00%                                                                           |     |             153,897                                                             |                                                                                                                            |              224,212                       |
|              |                        |     |       |                                                                            |     |                                                                                                                                        |                                                                                                                            |                                                                                                        |   |
|              | Shoemaker Dist              |     | 10/1/13    |                                                                            | 6.00%    |                                                                                                                                        |             181,030                                                 |                                                                                                        |              241,206 |
|              |                        |     |       |                                                                            |     |                                                                                                                                        |                                                                                                                            |                                                                                                        |   |
|              | Petro Marketing (9)         | 9/30/15  |       | 4.50%                                                                           |     |             203,723                                                             |                                                                                                                            |              251,304                       |
|              |                        |     |       |                                                                            |     |                                                                                                                                        |                                                                                                                            |                                                                                                        |   |
|              | Helen Miller (5)            |     | 4/15/13    |                                                                            | 0.00%    |                                                                                                                                        |             113,243                                                 |                                                                                                        |              163,069 |
|              |                        |     |       |                                                                            |     |                                                                                                                                        |                                                                                                                            |                                                                                                        |   |
|              | State of Ohio               |     | 4/15/10    |                                                                            | 0.00%    |                                                                                                                                        |                      - |                                                                                                        |                28,706 |
|              |                        |     |       |                                                                            |     |                                                                                                                                        |                                                                                                                            |                                                                                                        |   |
|              | Sector Technologies         | 7/1/14   |       | 6.00%                                                                           |     |             149,505                                                             |                                                                                                                            |              225,214                       |
|              |                        |     |       |                                                                            |     |                                                                                                                                        |                                                                                                                            |                                                                                                        |   |
|              | US Financial Services       | 7/1/11   |       | 24.50%                                                                          |     |                 4,783                                       |                                                                                                                            |                18,185            |
|              |                        |     |       |                                                                            |     |                                                                                                                                        |                                                                                                                            |                                                                                                        |   |
|              | Intech Funding Corp.        | 4/24/13  |       | 4.00%                                                                           |     |               31,842                                                  |                                                                                                                            |                40,361            |
|              |                        |     |       |                                                                            |     |                                                                                                                                        |                                                                                                                            |                                                                                                        |   |
|              | Wells Fargo Financial       | 9/1/12   |       | 22.50%                                                                          |     |                 8,124                                       |                                                                                                                            |                  9,028 |
|              |                        |     |       |                                                                            |     |                                                                                                                                        |                                                                                                                            |                                                                                                        |   |
|              | Lee Holding Company (3)(11) | 8.50%    |       |             355,385 |     |                        - |
|              |                        |     |       |                                                                            |     |                                                                                                                                        |                                                                                                                            |                                                                                                        |   |
|              |                        |     |       |                                                                            |     |                                                                                                                                        |  $      2,753,054                                                                            |                                                                                                        |  $       4,870,955 |

| (1)    Related Party - Terry Lee - CEO of Commercial Bank and CEO of the Company                                                                                                                                                                                                                                                         |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| (2)     Interest Rate is variable and is based on the prime lending rate.                                                                                                                                                                                                                                                           |
| (3)     Related Party – Terry Lee, Managing Partner of Lee Holding Company and CEO of the Company                                                                                                                                                                                                                             |
| (4)     Related Party – Gary Lee, Vice-President of Lee Oil and relative of Terry Lee, CEO of the Company                                                                                                                                                                                                                     |
| (5)     Related Party – Relative of Tom Miller, President of Mound                                                                                                                                                                                                                                                            |
| (6)    Notes are due upon demand. Per terms of each agreement, the date listed as expiration date corresponds to the stipulated amortization period with the notes. All lenders , except Citizens Bank, have waived their right to call the notes until January 1, 2012 and as such, these notes have been classified as long-term debt. |
| (7)    The Company has interest rate swap agreements for these notes (see NOTE F).                                                                                                                                                                                                                                                       |
| (8)    Interest rate is variable, computed as 2% below the prime lending rate. The rate can not drop below 7%.                                                                                                                                                                                                                           |
| (9)    Interest rate is variable, computed as 0.5% below the prime lending rate, adjusted annually.                                                                                                                                                                                                                                      |
| (10) Interest rate is fixed until June 2013 at which time the rate will become variable, computed at 6% above federal discount rate. The rate is adjusted annually after October 2014, can not exceed 15.5% and can not change by more than 2% annually.                                                                                                |
| (11) Floor plan loan for manufactured home sales. Repayment due upon sale of manufactured home inventory.                                                                                                                                                                                                                                               |
| (12) Interest rate is fixed until January 2015 at which time the rate will become variable, computed at 6% above federal discount rate. The rate is adjusted annually after January 2015, can not exceed 15.5% and can not change by more than 2% annually.                                                                                             |

----

|           |   |   |       |   | Due In |   |      |   |   |   |    |   |   |   |    |   |   |   |      |       |   |
|----------------|--------|--------|------------|--------|--------|--------|-----------|--------|--------|--------|---------|--------|--------|--------|---------|--------|--------|--------|-----------|------------|--------|
|           |   |   |       |   | 2011   |   |      | 2012   |   |   | 2013    |   |   | 2014   |    |   | 2015   |   |      | Thereafter |   |
|           |   |   |       |   |   |   |      |   |   |   |    |   |   |   |    |   |   |   |      |       |   |
| Total Debt     |   |   | 12,769,287 |   |   |   | 4,097,926 |   |   |   | 730,529 |   |   |   | 553,750 |   |   |   | 1,096,445 |       |   |   | 347,526 |   |   |   | 5,943,111 |   |
| Less: Current  |   |   | (4,097,926 | )      |   |   |      |   |   |   |    |   |   |   |    |   |   |   |      |       |   |   |   |   |   |   |   |   |
| Long-Term Debt |   |   | 8,671,361  |   |   |   |      |   |   |   |    |   |   |   |    |   |   |   |      |       |   |   |   |   |   |   |   |   |
|           |   |   |       |   |   |   |      |   |   |   |    |   |   |   |    |   |   |   |      |       |   |   |   |   |   |   |   |   |

----

----

| Heartland - Stock Issuances |   |     |       |        |
|-----------------------------|--------|----------|------------|-------------|
| 2010                        |   |     |       |        |
|                        |   |     |       |        |
|                        |   |     |       |        |
| Description                 |   | Quantity |       | Stock Price |
| Stock Dividends             |   |     | 61,791     |        | Average Stock Price $0.33 (1) |
| Preferred Share Conversions |   |     | 1,185,000  |        | Average Stock Price $0.60 (2) |
| Board Compensation          |   |     | 142,439    |        | Average Stock Price $0.28 (3) |
| Conversion of Debt          |   |     | 11,111,112 |        | Conversion Rate $0.18 (4) |
| Employment Incentives       |   |     | 1,250,000  |        | Average Stock Price $0.18 (5) |
| Board Approved Issuance     |   |     | 650,000    |        | Average Stock Price $0.02 (6) |
|                        |   |     | 14,400,342 |        |   |
|                        |   |     |       |        |   |

| (1) Average of all issuances based on common stock price up through individual conversion dates. |
|--------------------------------------------------------------------------------------------------|
| (2) Average of all issuances based on value of preferred shares prior to conversion.             |
| (3) Average of all issuances based on closing price on March 15th and June 15th.                 |
| (4) Per stock for debt agreement and based on closing stock prices during the month of August.   |
| (5) Two issuances both valued at $0.18 per share.                                                |   |   |
| (6) Stock issued relating to book value of Premium Homes acquisition.                            |

| Description                               |   | Quantity |    | Stock Price |
|-------------------------------------------|--------|----------|---------|-------------|
| Stock Dividends                           |   |     | 14,189  |        | Average Stock Price (1) |
| Stock Dividends                           |   |     | 123,359 |        | Average Stock Price (2) |
| Conversion of Debt & Related Interest |   |     | 16,205  |        | Conversion Rate $1.00 (3) |
| Board Compensation                        |   |     | 239,079 |        | Quarterly Closing Price (4) |
| CEO Compensation                          |   |     | 166,528 |        | Average Stock Price - 2009 (2) |
| Board Approved Issuance                   |   |     | 14,423  |        | $0.26(5) |
|                                      |   |     | 573,783 |        |   |

| (1) Average monthly closing price for Jan - Nov 2008 and Dec 15, 2008     |
|---------------------------------------------------------------------------|
| (2) Average monthly closing price for Jan - Nov 2009 and Dec 15, 2009     |
| (3) Set in convertible notes                                              |   |   |   |   |
| (4)Closing price on the 15th of the third month of each quarter.          |
| (5) Issuance of stock for equipment valued at $7,500 on December 14, 2009 |

----

| Grant Date              | June 28, 2007 | January 1, 2009 |
|-------------------------|---------------|-----------------|
| Expected Life           | 5 years       | 5 years         |
| Expected Volatility     | 111.84%       | 45.33%          |
| Risk Free Interest Rate | 2.50%         | 1.75%           |
| Expected Dividends      | --            | --              |

|                                                                     |   | Options Outstanding |      |   | Weighted Average Exercise Price |   |   | Weighted Average Remaining Contractual Term (yrs) |   |   | Fair Value at Grant Date |   |
|--------------------------------------------------------------------------|--------|---------------------|-----------|--------|---------------------------------|--------|--------|---------------------------------------------------|--------|--------|--------------------------|--------|
|                                                                     |   |                |      |   |                            |   |   |                                              |   |   |                     |   |
| Outstanding at January 1, 2009                                           |   |                | 911,252   |   |                            | $      | 0.66   |                                              |   |   | 3.75                     |   |   | $ | 0.26 |   |
| Granted                                                                  |   |                | 250,000   |   |                            |   | 1.00   |                                              |   |   | 5.00                     |   |   |   | 0.27 |   |
| Exercised                                                                |   |                | -         |   |                            |   | -      |                                              |   |   | -                        |   |   |   | - |   |
| Forfeited                                                                |   |                | -         |   |                            |   | -      |                                              |   |   | -                        |   |   |   | - |   |
| Expirations                                                              |   |                | -         |   |                            |   | -      |                                              |   |   | -                        |   |   |   | - |   |
| Oustanding at December 31, 2009                                          |   |                | 1,161,252 |   |                            |   | 0.73   |                                              |   |   | 3.02                     |   |   |   | 0.26 |   |
| Granted                                                                  |   |                | -         |   |                            |   | -      |                                              |   |   | -                        |   |   |   | - |   |
| Exercised                                                                |   |                | -         |   |                            |   | -      |                                              |   |   | -                        |   |   |   | - |   |
| Forfeited                                                                |   |                | -         |   |                            |   | -      |                                              |   |   | -                        |   |   |   | - |   |
| Expirations                                                              |   |                | -         |   |                            |   | -      |                                              |   |   | -                        |   |   |   | - |   |
| Vested and Exercisable at     December 31, 2010 |   |                | 692,318   |   |                            | $      | 0.71   |                                              |   | $      | 1.93                     |   |   | $ | 0.26 |   |
|                                                                     |   |                |      |   |                            |   |   |                                              |   |   |                     |   |   |   |   |   |

----

| Deferred Tax Assets:                      |   |   |      |   |   |   |
|-------------------------------------------|--------|--------|-----------|--------|--------|--------|
|                                      |   | 2010   |      |   | 2009   |   |
| Allowance for bad debts                   |   | $      | 24,031    |   |   | $      | 46,290 |   |
| Unearned supplier incentives              |   |   | 293,643   |   |   |   | 317,438 |   |
| Vacation accrual                          |   |   | -         |   |   |   | 6,119 |   |
| Employee stock options                    |   |   | 132,403   |   |   |   | 92,280 |   |
| Net operating loss carryforwards          |   |   | 1,550,008 |   |   |   | 1,043,136 |   |
| Total Deferred Tax Assets                 |   |   | 2,000,085 |   |   |   | 1,505,263 |   |
|                                      |   |   |      |   |   |   |   |   |
| Deferred Tax Liabilities:                 |   |   |      |   |   |   |   |   |
|                                      |   |   |      |   |   |   |   |   |
| Depreciation                              |   |   | 63,056    |   |   |   | 79,650 |   |
| Purchase price allocation                 |   |   | 822,797   |   |   |   | 930,340 |   |
| Total Deferred Tax Liabilities            |   |   | 885,853   |   |   |   | 1,009,990 |   |
|                                      |   |   |      |   |   |   |   |   |
| Net deferred tax assets                   |   |   | 1,114,232 |   |   |   | 495,273 |   |
| Less: Portion classified as current asset |   |   | (156,434  | )      |   |   | (138,570 | ) |
| Portion classified as long-term asset     |   | $      | 957,798   |   |   | $      | 356,703 |   |
|                                      |   |   |      |   |   |   |   |   |

|                                  |   | 2010   |     |   | 2009   |   |
|---------------------------------------|--------|--------|----------|--------|--------|--------|
| Federal income tax benefit            |   | $      | (567,982 | )      |   | $      | (10,834 | ) |
| Effect of permanent differences       |   |   | 49,313   |   |   |   | 19,522 |   |
| State income taxes, (benefit) expense |   |   | (104,752 | )      |   |   | 91,222 |   |
| Other                                 |   |   | -        |   |   |   | (1,827 | ) |
| Net income tax (benefit) expense      |   | $      | (623,421 | )      |   | $      | 98,083 |   |
|                                  |   |   |     |   |   |   |   |   |

----

| Year       |   | Amount |    |
|------------|--------|--------|---------|
| 2011       |   | $      | 273,760 |   |
| 2012       |   |   | 264,364 |   |
| 2013       |   |   | 147,650 |   |
| 2014       |   |   | 90,000  |   |
| 2015       |   |   | 90,000  |   |
| Thereafter |   |   | 370,000 |   |

|                                        |   | Holding     |       |   | Oil         |   |       | Steel      |   |   | Steel       |   |   |   |       |
|---------------------------------------------|--------|-------------|------------|--------|-------------|--------|------------|------------|--------|--------|-------------|--------|--------|--------|------------|
|                                        |   | Company     |       |   | Distributor |   |       | Fabricator |   |   | Distributor |   |   |   |       |
|                                        |   | (Heartland) |       |   | (Lee)       |   |       | (Mound)    |   |   | (HS)        |   |   | Total  |       |
|                                        |   |        |       |   |        |   |       |       |   |   |        |   |   |   |       |
|  Revenues from External Customers      |   | $           | -          |   |        | $      | 86,178,721 |       |   | $      | 11,625,103  |   |   | $      | 2,437,333  |   |   | $ | 100,241,157 |   |
| Intersegment Revenues                       |   |        | 1,058,378  |   |        |   | -          |       |   |   | -           |   |   |   | 1,062,373  |   |   |   | 2,120,751 |   |
|  Depreciation Expense                  |   |        | 270,780    |   |        |   | 745,734    |       |   |   | 157,539     |   |   |   | 197,040    |   |   |   | 1,371,093 |   |
|  Interest Expense                      |   |        | 525,430    |   |        |   | 280,508    |       |   |   | 57,681      |   |   |   | 246,441    |   |   |   | 1,110,060 |   |
| Income Tax Benefit                          |   |        | 623,421    |   |        |   | -          |       |   |   | -           |   |   |   | -          |   |   |   | 623,421 |   |
| Net (Loss) Income From Operations           |   |        |       |   |        |   |       |       |   |   |        |   |   |   |       |   |   |
|     Before Income Taxes |   |        | (1,359,027 | )      |        |   | 351,433    |       |   |   | 432,462     |   |   |   | (1,095,404 | ) |   |   | (1,670,536 | ) |
|  Total Assets                          |   |        | 2,915,453  |   |        |   | 12,171,723 |       |   |   | 7,511,585   |   |   |   | 3,705,786  |   |   |   | 26,304,547 |   |
|  Capital Expenditures                  |   |        | -          |   |        |   | 292,373    |       |   |   | 147,883     |   |   |   | 162,450    |   |   |   | 602,706 |   |
|                                        |   |        |       |   |        |   |       |       |   |   |        |   |   |   |       |   |   |   |   |   |

----

|                                        |   | Holding     |       |   | Oil         |   |       | Steel      |   |   | Steel       |   |   |   |      |
|---------------------------------------------|--------|-------------|------------|--------|-------------|--------|------------|------------|--------|--------|-------------|--------|--------|--------|-----------|
|                                        |   | Company     |       |   | Distributor |   |       | Fabricator |   |   | Distributor |   |   |   |      |
|                                        |   | (Heartland) |       |   | (Lee)       |   |       | (Mound)    |   |   | (HS)        |   |   | Total  |      |
|                                        |   |        |       |   |        |   |       |       |   |   |        |   |   |   |      |
|  Revenues from External Customers      |   | $           | -          |   |        | $      | 78,116,133 |       |   | $      | 12,740,995  |   |   | $      | 1,294,253 |   |   | $ | 92,151,381 |   |
| Intersegment Revenues                       |   |        | 1,090,941  |   |        |   | -          |       |   |   | -           |   |   |   | 655,191   |   |   |   | 1,746,132 |   |
|  Depreciation Expense                  |   |        | 271,260    |   |        |   | 770,935    |       |   |   | 143,811     |   |   |   | 92,778    |   |   |   | 1,278,784 |   |
|  Interest Expense                      |   |        | 536,244    |   |        |   | 280,674    |       |   |   | 58,345      |   |   |   | 34,479    |   |   |   | 909,742 |   |
| Income Tax Expense                          |   |        | 98,083     |   |        |   | -          |       |   |   | -           |   |   |   | -         |   |   |   | 98,083 |   |
| Net (Loss) Income From Operations           |   |        |       |   |        |   |       |       |   |   |        |   |   |   |      |   |   |
|     Before Income Taxes |   |        | (1,586,351 | )      |        |   | 701,310    |       |   |   | 1,225,104   |   |   |   | (371,928  | ) |   |   | (31,864 | ) |
|  Total Assets                          |   |        | 2,591,731  |   |        |   | 11,932,419 |       |   |   | 7,169,555   |   |   |   | 4,565,346 |   |   |   | 26,259,051 |   |
|  Capital Expenditures                  |   |        | 20,994     |   |        |   | 1,269,201  |       |   |   | 100,218     |   |   |   | 2,904,572 |   |   |   | 4,294,985 |   |
|                                        |   |        |       |   |        |   |       |       |   |   |        |   |   |   |      |   |   |   |   |   |

----

| Name                     |   | Age    |   | With Company Since |   | Director/Position          |
|--------------------------|--------|--------|--------|--------------------|--------|----------------------------|
| Terry L. Lee             |   | 53     |   | 06/2007            |   | CEO, Chairman of the Board |
|                     |   |   |   |               |   |                       |
| Thomas C. Miller         |   | 55     |   | 12/2003            |   | Secretary and Director     |
|                     |   |   |   |               |   |                       |
| Mitchell L. Cox, CPA     |   | 49     |   | 09/2007            |   | Chief Financial Officer    |
|                     |   |   |   |               |   |                       |
| Trent Sommerville(2)     |   | 43     |   | 12/2003            |   | Director                   |
|                     |   |   |   |               |   |                       |
| Randy Frevert            |   | 54     |   | 3/2008             |   | Director                   |
|                     |   |   |   |               |   |                       |
| Dr. Kenneth B. Farris(1) |   | 61     |   | 4/2004             |   | Director                   |
|                     |   |   |   |               |   |                       |

----

----

----

| Summary Compensation Table    |   |
|-------------------------------|--------|
|                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Name & Principal Position | Year   |   | Salary ($) |   |   | Bonus ($) |   |   | Stock Awards($) |   |   | Option Awards ($) |   |   | Non-Equity Incentive Plan Compensation ($) |   |   | Change in Pension Value and Non-Qualified Deferred Compensation Earnings ($) |   |   | All Other Compensation ($) |   |   | Total ($) |   |
| Terry L Lee                   | 2010   |   |   | 193,436 |   |   |   | - |   |   |   | 10,000 |   |   |   | 86,928 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 290,364 |   |
| CEO and Chairman              | 2009   |   |   | 60,000 |   |   |   | - |   |   |   | 100,000 |   |   |   | 86,928 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 246,928 |   |
|                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Tom Miller                    | 2010   |   |   | 140,000 |   |   |   | - |   |   |   | 122,500 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 262,500 |   |
| COO - Mound and Secretary     | 2009   |   |   | 189,060 |   |   |   | - |   |   |   | 20,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 209,060 |   |
|                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Randy Frevert                 | 2010   |   |   | 158,600 |   |   |   | - |   |   |   | 122,500 |   |   |   | 13,380 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 294,480 |   |
| COO - HS and Director         | 2009   |   |   | 160,000 |   |   |   | - |   |   |   | 20,000 |   |   |   | 13,380 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 193,380 |   |

----

| Option Awards | Stock Awards |
|---------------|--------------|
| Name          |         | Number of Securities Underlying Unexercised Options (#) Exercisable |   |   | Number of Securities Underlying Unexercised Options (#) Unexercisable |   | Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |   | Option Exercise Price ($) |   | Option Expiration Date | Number of Shares or Units of Stock Not Vested (#) | Market Value of Shares or Units of Stock Not Vested ($) | Equity Incentive Plan Awards: Number of Unearned Shares or Units Not Vested (#) | Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares or Units Not Vested ($) |
| Terry Lee     |         |   | 592,318 |   |   |   | 318,934 |   |   |   | $ | 0.66 |   | 6/26/2024 | NA | NA | NA | NA |
| Randy Frevert |         |   | 100,000 |   |   |   | 150,000 |   |   |   | $ | 1.00 |   | 12/31/2013 | NA | NA | NA | NA |

| Name          |   | Cash Pd |   |   | Stock  |   |   | Option |   |   | Non-Equity |   |   | Nonqualified |   |   | All Other |   |   | Total  |   |
|---------------|--------|---------|--------|--------|--------|--------|--------|--------|--------|--------|------------|--------|--------|--------------|--------|--------|-----------|--------|--------|--------|--------|
|          |   | ($)     |   |   | Awards |   |   | Awards |   |   | Incentive  |   |   | Deferred     |   |   | ($)       |   |   | ($)    |   |
|          |   |    |   |   | ($)    |   |   | ($)    |   |   | Plan ($)   |   |   | ($)          |   |   |      |   |   |   |   |
| Terry Lee     |   |    | -      |   |   |   | 10,000 |   |   |   | -          |   |   |         | -      |   |      |   | -      |   |   |   | - |   |   |   | 10,000 |   |
| Tom Miller    |   |    | -      |   |   |   | 10,000 |   |   |   | -          |   |   |         | -      |   |      |   | -      |   |   |   | - |   |   |   | 10,000 |   |
| Randy Frevert |   |    | -      |   |   |   | 10,000 |   |   |   | -          |   |   |         | -      |   |      |   | -      |   |   |   | - |   |   |   | 10,000 |   |

----

| Option Information |   | Option 1     |   | Option 2       |
|--------------------|--------|--------------|--------|----------------|
| Date of Option     |   | June 27,2007 |   | January 1,2009 |
| Optionee:          |   | Terry Lee    |   | Randy Frevert  |
| Number of Shares   |   | 911,252      |   | 250,000        |
| Exercise Price     |   | $0.66        |   | $1.00          |

| Title of Class                                              | Name                           |   | Shares    |       |   | Percent |   |
|-------------------------------------------------------------|--------------------------------|--------|-----------|------------|--------|---------|--------|
|                                                        |                           |   |      |       |   |    |   |
|                                                        |                           |   |      |       |   |    |   |
|                                                        |                           |   |      |       |   |    |   |
|  Common Stock                                          | Gary Lee                       |   |      | 0          |   |    |   | * |   |
|                                                        |                           |   |      |       |   |    |   |   |   |
|  Common Stock                                          | Thomas Miller                  |   |      | 0          |   |    |   | * |   |
|                                                        |                           |   |      |       |   |    |   |   |   |
|  Common Stock                                          | Terry L. Lee (2)               |   |      | 19,063,362 |   |    |   | 52.4 | % |
|                                                        |                           |   |      |       |   |    |   |   |   |
|  Common Stock                                          | Randy Frevert                  |   |      | 0          |   |    |   | * |   |
|                                                        |                           |   |      |       |   |    |   |   |   |
|  Common Stock                                          | Mitchell L. Cox                |   |      | 0          |   |    |   | * |   |
| Common Stock                                                | Diversified Companies Inc. (2) |   |      | 19,063,362 |   |    |   | 52.4 | % |
| All Directors and Executive Officers as a group (6 persons) |                           |   | 19,063362 |       |   |    | 52.4   | % |

|  *  Less than 1%  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |   |   |   |   |   |
|---------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|
| (1)                                   | These tables are based upon 36,353,648 shares outstanding as of March 28, 2011 and information derived from our stock records. Unless otherwise indicated in the footnotes to these tables and subject to community property laws where applicable, we believe unless otherwise noted that each of the shareholders named in this table has sole or shared voting and investment power with respect to the shares indicated as beneficially owned. For purposes of this table, a person or group of persons is deemed to have "beneficial ownership" of any shares which such person has the right to acquire within 60 days as of March 28, 2011. For purposes of computing the percentage of outstanding shares held by each person or group of persons named above on March 28, 2011 any security which such person or group of persons has the right to acquire within 60 days after such date is deemed to be outstanding for the purpose of computing the percentage ownership for such person or persons, but is not deemed to be outstanding for the purpose of computing the percentage ownership of any other person. (2)  Mr. Lee serves as the Chairman and CEO of Diversified Companies Inc. (“DCI”) and, as a result the ownership of DCI in the Company is attributed to Mr. Lee.  |

----

----

| FIRM                     |   | FISCAL YEAR 2010 |    |   | FISCAL YEAR 2009 |   |
|--------------------------|--------|------------------|---------|--------|------------------|--------|
| Coulter & Justus, PC |   | $                | 240,000 |   |             | $      | 225,000 |   |

| AUDIT FEES. | Consists of fees billed for professional services rendered for the audit of our consolidated financial statements and review of the interim consolidated financial statements included in quarterly reports and services that are normally provided in connection with statutory and regulatory filings or engagements. |
|-------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| AUDIT-RELATED FEES. | Consists of fees billed for assurance and related services that are reasonably related to the performance of the audit or review of our consolidated financial statements and are not reported under “Audit Fees.” There were no Audit-Related services provided in fiscal 2010 or 2009. |
|---------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| TAX FEES. | Consists of fees billed for professional services for tax compliance, tax advice and tax planning. |
|-----------|----------------------------------------------------------------------------------------------------|

| ALL OTHER FEES. | Consists of fees for products and services other than the services reported above. |
|-----------------|------------------------------------------------------------------------------------|

|   Exhibit Number |   Document Description                                                                 |
|-----------------------|---------------------------------------------------------------------------------------------|
|                  |                                                                                        |
| 31.1                  | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes Oxley Act. |

| 31.2 | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes Oxley Act. |
|------|---------------------------------------------------------------------------------------------|

| 32.1 | Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350 as adopted Pursuant to Section 906 of the Sarbanes Oxley Act of 2002. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------|

| 32.2 | Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350 as adopted Pursuant to Section 906 of the Sarbanes Oxley Act of 2002. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                 | HEARTLAND INC.(Registrant) |                                                          |
|----------------------|----------------------------|---------------------------------------------------------------|
|                 |                       |                                                          |   |
| Date: March 30, 2011 | By:                        | /s/ Terry Lee                                            |   |
|                 |                       | Terry Lee                                                     |   |
|                 |                       | Chief Executive OfficerAnd Chairman of the Board of Directors |   |
|                 |                       | (Principal Executive Officer)                                 |   |

|                 |   |                                                                         |
|----------------------|--------|------------------------------------------------------------------------------|
|                 |   |                                                                         |   |
| Date: March 30, 2011 | By:    | /s/ Mitchell Cox                                                        |   |
|                 |   | Mitchell Cox                                                                 |   |
|                 |   | Chief Financial Officer(Principal Financial Accounting andFinancial Officer) |   |
|                 |   |                                                                         |   |

| SIGNATURE            |   | NAME             |   | TITLE                                            |   | DATE           |
|----------------------|--------|------------------|--------|--------------------------------------------------|--------|----------------|
|                 |   |             |   |                                             |   |           |
| /s/ Terry Lee        |   | Terry Lee        |   | Chief Executive Officer, Chairman & Director |   | March 30, 2011 |
|                 |   |             |   |                                             |   |           |
| /s/ Mitchell Cox     |   | Mitchell Cox     |   | Chief Financial Officer                          |   | March 30, 2011 |
|                 |   |             |   |                                             |   |           |
| /s/ Thomas C. Miller |   | Thomas C. Miller |   | Secretary & Director                         |   | March 30, 2011 |
|                 |   |             |   |                                             |   |           |
| /s/ Randy Frevert    |   | Randy Frevert    |   | Director                                         |   | March 30, 2011 |
|                 |   |             |   |                                             |   |           |