**UNITED      STATES**

**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

**FORM      10-KSB**

|   | **x                ANNUAL REPORT PURSUANT TO                SECTION 13 OR 15(d)                OF** |
|--------|-----------------------------------------------------------------------------------------------------|

|   | **THE                SECURITIES EXCHANGE ACT OF                1934** |
|--------|-----------------------------------------------------------------------|

**FOR      FISCAL YEAR ENDED DECEMBER 31, 2006**

|   | **HEARTLAND,                  INC.**                            |   |
|--------|-----------------------------------------------------------------|--------|
|   | (Name                  of small business issuer in its charter) |   |

| **Maryland**                                                                                |   | **36-4286069**                                         |
|---------------------------------------------------------------------------------------------|--------|--------------------------------------------------------|
| (State                or other jurisdictionof                incorporation or organization) |   | (I.R.S.                Employer Identification Number) |

|  |  **982A                  Airport Road******Destin,                  Florida 32541**** |   |
|--|--------------------------------------------------------------------------------------------|--------|
|  |  (Address                  of principal executive offices) (Zip Code)                 |        |

|  | **850.837.0025**                                          |   |
|--|-----------------------------------------------------------|--------|
|  |  (Issuer’s                      telephone no.) |        |

----

**HEARTLAND,      INC.**

**FORM      10-KSB**

**TABLE      OF CONTENTS**

| **Item                #** |   | **Description**                                                                                                                                              |   | **                        Page Numbers** |
|---------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------|
|                      |   |                                                                                                                                                         |   |                                                                             |   |
|                      |   | PART                I                                                                                                                                        |   |                                                                             |   |
|                      |   |                                                                                                                                                         |   |                                                                             |   |
| ITEM                1.    |   | Business                of the Company                                                                                                                       |   |                  1                                                          |   |
|                      |   |                                                                                                                                                         |   |                                                                             |   |
| ITEM                2.    |   | Properties                                                                                                                                                   |   |                  6                                                          |   |
|                      |   |                                                                                                                                                         |   |                                                                             |   |
| ITEM                3.    |   | Legal                Proceedings                                                                                                                             |   |                  6                                                          |   |
|                      |   |                                                                                                                                                         |   |                                                                             |   |
| ITEM                4.    |   | Submissions                of Matters to a Vote of Security                Holders                                                                           |   |                  6                                                          |   |
|                      |   |                                                                                                                                                         |   |                                                                             |   |
|                      |   | PART                II                                                                                                                                       |   |                                                                             |   |
|                      |   |                                                                                                                                                         |   |                                                                             |   |
| ITEM                5.    |   | Market                for Registrant’s Common Equity, Related Stockholder                Matters, and Issuer Purchases of Equity Securities            |   |                  7                                                          |   |
|                      |   |                                                                                                                                                         |   |                                                                             |   |
| ITEM                6.    |   | Management’s                Discussion and Analysis of Financial Condition                and Results of Operations                                    |   | 10                                                                               |   |
|                      |   |                                                                                                                                                         |   |                                                                             |   |
| ITEM                7.    |   | Financial                Statements and Supplementary                Data                                                                                    |   | 13                                                                               |   |
|                      |   |                                                                                                                                                         |   |                                                                             |   |
| ITEM                8.    |   | Changes                in and Disagreements with Accountants on Accounting                and Financial Disclosure                                           |   | 32                                                                               |   |
|                      |   |                                                                                                                                                         |   |                                                                             |   |
| ITEM                8A.   |   | Controls                and Procedures                                                                                                                       |   | 32                                                                               |   |
|                      |   |                                                                                                                                                         |   |                                                                             |   |
| ITEM                8B.   |   | Other                Information                                                                                                                             |   | 33                                                                               |   |
|                      |   |                                                                                                                                                         |   |                                                                             |   |
|                      |   | PART                III                                                                                                                                      |   |                                                                             |   |
|                      |   |                                                                                                                                                         |   |                                                                             |   |
| ITEM                9.    |   | Directors,                Executive Officers, Promoters and Control                Persons: Compliance with Section 16(A) of the Exchange                Act |   | 33                                                                               |   |
|                      |   |                                                                                                                                                         |   |                                                                             |   |
| ITEM                10.   |   | Executive                Compensation                                                                                                                        |   | 34                                                                               |   |
|                      |   |                                                                                                                                                         |   |                                                                             |   |
| ITEM                11.   |   | Security                Ownership of Certain Beneficial Owners and                Management.                                                                |   | 35                                                                               |   |
|                      |   |                                                                                                                                                         |   |                                                                             |   |
| ITEM                12.   |   | Certain                Relationships and Related                Transactions                                                                                 |   | 36                                                                               |   |
|                      |   |                                                                                                                                                         |   |                                                                             |   |
| ITEM                13.   |   | Exhibits                and Reports on Form 8-K                                                                                                              |   | 37                                                                               |   |
|                      |   |                                                                                                                                                         |   |                                                                             |   |
| ITEM                14.   |   | Principal                Accountant Fees and Services                                                                                                        |   | 37                                                                               |   |
|                      |   |                                                                                                                                                         |   |                                                                             |   |
|                      |   | Signatures                                                                                                                                                   |   | 38                                                                               |   |

----

**PART      I**

**ITEM      1           DESCRIPTION      OF BUSINESS**

**INTRODUCTION**

**(A)           THE      COMPANY**

----

**(B)           BUSINESS      DEVELOPMENT**

----

**Subsequent      Events**

**(C)           BUSINESS**

**STEEL      FABRICATION**

----

**Competition      and Other Factors**

**Raw      Materials**

----

**UNFAIR      TRADE PRACTICES AND TRADE REMEDIES**

**SECTION      201 TARIFFS**

**ENVIRONMENTAL      MATTERS**

**CONSTRUCTION**

**Karkala      Construction, Inc.**

----

**Competition      and Other Factors**

**GENERAL**

**Employees**

----

**Customers**

**ITEM      2           DESCRIPTION      OF PROPERTY**

| **Months** |   | **Monthly                      Payment** |
|------------|--------|------------------------------------------|
|       |   |                                     |   |
| 1-12       |   | $                                        | 3,272 |   |
|       |   |                                     |   |   |
| 13-24      |   | $                                        | 3,403 |   |
|       |   |                                     |   |   |
| 25-36      |   | $                                        | 3,573 |   |
|       |   |                                     |   |   |
| 37-48      |   | $                                        | 3,752 |   |
|       |   |                                     |   |   |
| 49-60      |   | $                                        | 3,938 |   |
|       |   |                                     |   |   |
| 61-63      |   | $                                        | 4,136 |   |

**ITEM      3            LEGAL      PROCEEDINGS**

----

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

**PART      II**

**ITEM        5          **MARKET        FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS, AND ISSUER        PURCHASES OF EQUITY SECURITIES****

|                                                   |   | **HIGH** |   | **LOW** |   |
|--------------------------------------------------------|--------|----------|--------|---------|--------|
|                                                   |   |     |   |    |   |
| **FISCAL                YEAR ENDED DECEMBER 31, 2006** |   |     |   |    |   |
|                                                   |   |     |   |    |   |
| First                Quarter                           |   | 0.82     |   | 0.33    |   |
| Second                Quarter                          |   | 0.50     |   | 0.50    |   |
| Third                Quarter                           |   | 0.25     |   | 0.25    |   |
| Fourth                Quarter                          |   | 0.40     |   | 0.40    |   |
|                                                   |   |     |   |    |   |
| **FISCAL                YEAR ENDED DECEMBER 31, 2005** |   |     |   |    |   |
|                                                   |   |     |   |    |   |
| First                Quarter                           |   | 1.00     |   | 0.30    |   |
| Second                Quarter                          |   | 0.90     |   | 0.90    |   |
| Third                Quarter                           |   | 0.65     |   | 0.65    |   |
| Fourth                Quarter                          |   | 1.60     |   | 1.60    |   |
|                                                   |   |     |   |    |   |

**Preferred      Stock**

----

**Transfer      Agent**

**Warrants**

**Options**

**Penny      Stock Considerations**

|   | * | Deliver,                prior to any transaction involving a penny stock, a disclosure schedule                prepared by the Securities and Exchange Commissions 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. |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Dividends**

----

**Recent      Sales of Unregistered Securities**

----

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

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

|   | * | The                opportunity to obtain any additional information, to the extent we                possessed such information, necessary to verify the accuracy of the                information to which the investors were given                access. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**ITEM      6          MANAGEMENT'S      DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS**

**Overview**

----

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

----

**Subsequent      Events**

**RESULTS      OF OPERATIONS FOR THE FISCAL YEARS ENDED DECEMBER 31, 2006 AND      2005**

**OVERVIEW**

----

|                                                                                                                          |   | **12-31-2006** |             | **12-31-2005** |   |
|-------------------------------------------------------------------------------------------------------------------------------|--------|----------------|------------------|----------------|--------|
|                                                                                                                          |   |           |             |           |   |  **Restated** |   |
| Revenues                - Sales                                                                                               |   | $              | 20,224,267       |           | $      | 16,392,662 |   |
| Cost                and expenses                                                                                              |   |           |             |           |   |   |   |
|                   Cost of good sold                                                                                 |   |           | 17,194,150       |           |   | 15,085,572 |   |
|                   Selling, general and administrative expense                                                       |   |           | 5,447,485        |           |   | 4,303,093 |   |
|    Adjustment                of value of securities issued in connection with 2004                acquisitions |   |           |             |           |   |  1,792,000 |   |
|                   Depreciation and amortization                                                                     |   |           | 65,785           |           |   | 75,169 |   |
|                                                                                                                          |   |           |             |           |   |   |   |
|                      Total Costs and Expenses                                                        |   |           | 22,707,420       |           |   | 21,255,834 |   |
|                                                                                                                          |   |           |             |           |   |   |   |
| Net                Operating Loss                                                                                             |   |           | (2,483,153       | )              |   | (4,863,172 | ) |
| Net                Other Income (Expenses)                                                                                    |   |           | (300,611         | )              |   | (499,389 | ) |
|                                                                                                                          |   |           |             |           |   |   |   |
| Loss                From Continued Operations Before Income Taxes                                                             |   |           | (2,783,764       | )              |   | (5,362,561 | ) |
| Federal                and State Income Tax Benefit                                                                           |   |           | --               |           |   | 58,754 |   |
|  Loss              From Continued Operations                                                                             |   |           |  (2,783,764 | )              |   |  (5,303,807 | ) |
|  Discontinued              Operations                                                                                    |   |           | 6,886,897        |           |   | (8,231,282 | ) |
| Net                Income (Loss)                                                                                              |   | $              | 4,103,133        |           | $      | (13,535,089 | ) |

**SALES**

**INCOME      BEFORE INCOME TAXES AND EXTRAORDINARY ITEM**

**INTEREST      EXPENSE**

**LIQUIDITY      AND CAPITAL RESOURCES**

----

|   | * | Trading                activities in non-exchange traded contracts;                or |
|--------|---|---------------------------------------------------------------------------------------|

|   | * | Transactions                with persons or entities that benefit from their non-independent                relationship with the Company. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------|

**Inflation**

**Critical      Accounting Policies and Estimates**

----

**ITEM      7.          FINANCIAL      STATEMENTS**

----

**CONTENTS**

|                                                                           |   |                  |   |
|--------------------------------------------------------------------------------|--------|-----------------------|--------|
| Report                of Independent Registered Public Accounting Firm         | Page   | 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 (Deficit) |   | F  9        |   |
|                                                                           |   |                  |   |
| Notes                to Consolidated Financial Statements                      |   |  F  11 |   |
|                                                                           |   |                  |   |

----

**MEYLER      & COMPANY, LLC**

**CERTIFIED      PUBLIC ACCOUNTANTS**

**ONE      ARIN PARK**

**1715      HIGHWAY 35**

**MIDDLETOWN,      NJ 07748**

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**CONSOLIDATED      BALANCE SHEETS**

**ASSETS**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | **December                31,** |          |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|---------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | **2006**                        |          | **2005** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                            |          |  **(Restated)** |   |
| **CURRENT                ASSETS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                            |          |   |   |   |   |
| Cash                                                                                                           |   | $                               | 641,608       |   | $ | 232,902 |   |
|                  Accounts              receivable net of allowance for doubtful accounts of $196,376 and              $219,663, respectively                                                                                                                                                                                                                                                                                                                                                                                   |   |                            | 3,601,477     |   |   | 2,946,562 |   |
| Costs                in excess of billings on uncompleted contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                            | 643,687       |   |   | 332,396 |   |
| Inventory                                                                                                      |   |                            | 858,191       |   |   | 686,511 |   |
| Prepaid                expenses and other                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                            | 18,309        |   |   | 167,688 |   |
| Total                current                assets                                                                                                     |   |                            | 5,754,272     |   |   | 4,366,059 |   |
| PROPERTY,                PLANT AND EQUIPMENT, net of accumulated depreciation of $584,309                and                $521,735, respectively                                                                                                                                                                                                                                                                                                                                                                                            |   |                            |  944,370 |   |   |  963,537 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                            |          |   |   |   |   |
| **OTHER                ASSETS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                            |          |   |   |   |   |
| Goodwill                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                            | 1,291,390     |   |   | 1,291,390 |   |
| Other                intangible assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                            | 16,876        |   |   | 19,688 |   |
| Acquisition                deposits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                            | --            |   |   |  50,000 |   |
| Other                Assets                                                                                    |   |                            | 62,239        |   |   | 19,896 |   |
|                      Total other assets                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                            | 1,370,505     |   |   | 1,380,974 |   |
| Total                assets                                                                                                                            |   | $                               | 8,069,147     |   | $ | 6,710,570 |   |

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**CONSOLIDATED      BALANCE SHEETS**

**LIABILITIES      AND STOCKHOLDERS’ EQUITY (DEFICIT)**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | **December                31,** |         |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------|--------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | **2006**                        |         | **2005** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                            |         |  **(Restated)** |   |
| **CURRENT                LIABILITIES**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                            |         |   |   |   |   |
| Convertible                promissory notes payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | $                               | 63,450       |   | $ | 1,680,700 |   |
| Current                portion of notes                payable                                                                                    |   |                            | 39,471       |   |   | 37,349 |   |
| Current                portion of notes payable to related parties                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                            | 87,903       |   |   |  66,787 |   |
| Accounts                payable                                                                                                                   |   |                            | 2,951,930    |   |   | 2,326,055 |   |
| Acquisition                notes payable to related parties                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |                            | 1,350,000    |   |   | 1,350,000 |   |
| Obligations                to related                parties                                                                                      |   |                            | 50,000       |   |   | -- |   |
|                      Accrued payroll and related taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                            | 699,917      |   |   | 602,201 |   |
| Accrued                interest                                                                                                                   |   |                            | 388,778      |   |   | 260,377 |   |
| Accrued                expenses                                                                                                                   |   |                            | 251,967      |   |   | 289,885 |   |
| Billings                in excess of costs on uncompleted contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                            | 376,372      |   |   | 521,952 |   |
| Net                liabilities of entities                discontinued                                                                            |   |                            | --           |   |   | 546,896 |   |
| Total                Current                Liabilities                                                                                                                         |   |                            | 6,259,788    |   |   | 7,682,202 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                            |         |   |   |   |   |
| **LONG-TERM                OBLIGATIONS**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                            |         |   |   |   |   |
| Notes                payable, less current                portion                                                                                 |   |                            | 428,501      |   |   | 467,321 |   |
| Notes                payable to related parties, less current portion                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                            | 475,005      |   |   |  545,158 |   |
| Total                Long Term                Liabilities                                                                                                                       |   |                            | 903,506      |   |   | 1,012,479 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                            |         |   |   |   |   |
| **STOCKHOLDERS’                EQUITY (DEFICIT)**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                            |         |   |   |   |   |
|                      Preferred              stock $0.001 par value 5,000,000 shares authorized, none issued and              outstanding                                                                                                                                                                                                                                                                                                                                                              |   |                            |         |   |   |   |   |
|                      Common              stock, $0.001 par value 100,000,000 shares authorized; issued and              outstanding 32,303,105 and 23,746,024 shares at December 31, 2006 and              2005, respectively                                                                                                                                                                                                                                                                         |   |                            |  32,303 |   |   |  23,746 |   |
| Additional                paid-in                capital                                                                                          |   |                            | 14,832,175   |   |   | 16,053,901 |   |
| Accumulated                deficit                                                                                                                |   |                            | (13,958,625  | ) |   | (18,061,758 | ) |
| Total                Stockholders’ Equity                (Deficit)                                                                                                        |   |                            | 905,853      |   |   | (1,984,111 | ) |
| Total                Liabilities and Stockholders’ Equity (Deficit)                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | $                               | 8,069,147    |   | $ | 6,710,570 |   |

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENTS OF OPERATIONS**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | **For                the Year Ended December 31,** |       |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   | **2006**                                           |       | **2005** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                               |       | **  (Restated)** |   |
| REVENUE                -                SALES                                                                                                                       |   | $                                                  | 20,224,267 |   | $ | 16,392,662 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                               |       |   |   |   |   |
| COSTS                AND EXPENSES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                               |       |   |   |   |   |
| Cost                of goods                sold                                                                                                                                   |   |                                               | 17,194,150 |   |   | 15,085,572 |   |
| Selling,                general and administrative                expenses                                                                                                         |   |                                               | 5,447,485  |   |   | 4,303,093 |   |
|                    Adjustment of value of securities issued in connection                with 2004 acquisitions                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                               | --         |   |   |  1,792,000 |   |
| Depreciation                and                amortization                                                                                                                        |   |                                               | 65,785     |   |   | 75,169 |   |
| Total                Costs and                Expenses                                                                                                                                                                     |   |                                               | 22,707,420 |   |   | 21,255,834 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                               |       |   |   |   |   |
| NET                OPERATING                LOSS                                                                                                                    |   |                                               | (2,483,153 | ) |   | (4,863,172 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                               |       |   |   |   |   |
| OTHER                INCOME (EXPENSE)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                               |       |   |   |   |   |
| Rental                income                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                               | 71,436     |   |   | 101,204 |   |
| Other                income                                                                                                                                                        |   |                                               | 51,342     |   |   | 24,885 |   |
| Loss                on disposal of property, plant and                equipment                                                                                                                        |   |                                               | (3,540     | ) |   | (100,634 | ) |
| Interest                expense                                                                                                                                                    |   |                                               | (419,849   | ) |   | (524,844 | ) |
| Total                Other Income                (Expense)                                                                                                                                                                 |   |                                               | (300,611   | ) |   | (499,389 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                               |       |   |   |   |   |
| LOSS                FROM CONTINUING OPERATIONS BEFORE INCOME                TAXES                                                                                   |   |                                               | (2,783,764 | ) |   | (5,362,561 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                               |       |   |   |   |   |
| FEDERAL                AND STATE INCOME TAX BENEFIT                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                               | --         |   |   |  58,,754 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                               |       |   |   |   |   |
|  LOSS              FROM CONTINUING OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                               | (2,783,764 | ) |   | (5,303,807 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                               |       |   |   |   |   |
|  DISCONTINUED              OPERATIONS                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                               |       |   |   |   |   |
|                        Income (loss) from discontinued operations (less applicable income              tax              expense of $0)                                                                                                                                                                                                                                                                                                                                                                                                           |   |                                               | 792        |   |   | (5,875,880 | ) |
|                        Gain on disposal of discontinued operations (less applicable income              tax              expense of $0)                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                               | 4,004,060  |   |   | --  |   |
|                        Loss from discontinued operations of VIEs (less applicable income tax              expense of $0)                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                               | (12,692    | ) |   | (2,355,402 | ) |
|                        Gain on disposal of discontinued operations of VIEs (less applicable              income tax expense of $0)                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                               | 2,894,737  |   |   | --  |   |
|                                     Total discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                               | 6,886,897  |   |   | (8,231,282 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                               |       |   |   |   |   |
| NET                INCOME (LOSS)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | $                                                  | 4,013,133  |   | $ | (13,535,089 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                               |       |   |   |   |   |
| EARNINGS (LOSS)                PER COMMON SHARE                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                               |       |   |   |   |   |
|                          Continuing operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                               |       |   |   |   |   |
|                           Basic and diluted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | $                                                  | (0.11      | ) | $ | (0.25 | ) |
|                           Net income (loss)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                               |       |   |   |   |   |
|                    Basic              and diluted                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                               |  0.16 |   |   | (0.64 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                               |       |   |   |   |   |
| WEIGHTED                AVERAGE COMMON SHARES OUTSTANDING                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                               |       |   |   |   |   |
|       Basic                and diluted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                               | 24,923,495 |   |   | 21,158,951 |   |

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENT OF CASH FLOWS**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | **For                the Year Ended December 31** |             |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------|------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |  **2006**                                    |             |  **2005** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                              |                  |   | **  (Restated)** |   |
| CASH                FLOWS FROM OPERATING ACTIVITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                              |             |   |   |   |   |
|                    Continuing operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                              |             |   |   |   |   |
|                      Loss before income                taxes                                                                                        |   | $                                                 | (2,783,764       | ) | $ | (5,303,807 | ) |
|                     Adjustments to reconcile net loss to cash flows used                in operating activities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                              |             |   |   |   |   |
| Stock                issued for services                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                              | 2,982,278        |   |   | 1,652,985 |   |
| Adjustment                of value of securities issued in connection with                2004 acquisitions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                              | --               |   |   |  1,792,000 |   |
| Loss                on disposal of property, plant and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                              | 3,540            |   |   | 100,634 |   |
| Depreciation                and                amortization                                                                                                                                                          |   |                                              | 65,785           |   |   | 75,169 |   |
| Acquisition                deposits                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                              | 50,000           |   |   |  -- |   |
|             Deferred              income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                              | --          |   |   |  (79,763 | ) |
|                     Changes in assets and liabilities:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                              |             |   |   |   |   |
| Increase                in accounts                receivable                                                                                                                                                        |   |                                              | (654,915         | ) |   | (132,652 | ) |
| Increase                in costs in excess of billings on uncompleted contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                              | (302,291         | ) |   | (144,775 | ) |
| (Increase) in                inventory                                                                                                                                                                          |   |                                              | (171,680         | ) |   | (177,214 | ) |
| (Increase)                in prepaids and                other                                                                                                                                                       |   |                                              | 149,379          |   |   | (92,660 | ) |
| (Increase)                in other                assets                                                                                                                                                             |   |                                              | (42,343          | ) |   | -- |   |
| Increase in                accounts                payable                                                                                                                                                      |   |                                              | 625,875          |   |   | 49,991 |   |
| (Decrease)                increase in accrued payroll                taxes                                                                                                                                           |   |                                              | 97,716           |   |   | (91,429 | ) |
| Increase                in accrued                interest                                                                                                                                                           |   |                                              | 307,839          |   |   | 243,567 |   |
| (Decrease)                in accrued                expenses                                                                                                                                                         |   |                                              | (37,918          | ) |   | (159,752 | ) |
| Increase                (decrease) in billings in excess of costs on uncompleted                contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                              | (145,580         | ) |   | 386,573 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                              |             |   |   |   |   |
|                          Cash provided by (used in) continuing operations before income              taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                              | 143,921          |   |   | (1,899,133 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                              |             |   |   |   |   |
|                    Discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                              |             |   |   |   |   |
|             Income              (loss) before income taxes                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |                                              |  6,886,897  |   |   |  (8,231,282 | ) |
|             (Decrease)              increase in net liabilities of entities discontinued                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                              |  (546,896   | ) |   |  8,597,844 |   |
|             Gain              on rescission of acquisitions                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                              |  (6,335,000 | ) |   |  -- |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                              |             |   |   |   |   |
|                           Cash provided by discontinued operations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |                                              |  5,001      |   |   |  366,562 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                              |             |   |   |   |   |
|                                   NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                              |  148,922    |   |   |  1,532,571 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                              |             |   |   |   |   |
| CASH                FLOWS FROM INVESTING ACTIVITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |                                              |             |   |   |   |   |
| Proceeds                from disposition of property, plant and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                              | --               |   |   | 21,000 |   |
| Payments                for property, plant and equipment                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                              | (47,346          | ) |   |  (49,614 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                              |             |   |   |   |   |
| NET                CASH (USED IN) INVESTING ACTIVITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                              | (47,346          | ) |   | (28,614 | ) |

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENT OF CASH FLOWS (CONTINUED)**

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | **For                the Year Ended December 31** |      |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------|-----------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |  **2006**                                    |      |  **2005** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                              |      |   **(Restated)** |   |
| CASH                FLOWS FROM FINANCING ACTIVITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                              |      |   |   |   |   |
|                          Proceeds              from issuance of promissory convertible notes              payable                                                                                                                                                                                                                                                                                                                                                                                                  |   | $                                                 | --   |   | $ |  734,150 |   |
| Payment                on convertible promissory notes payable                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |                                              | (166,985  | ) |   |  -- |   |
| Payment                on acquisition note payable to related party                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                              | --        |   |   | (50,000 | )  |
| Payments                on notes                payable                                                                                                        |   |                                              | (36,698   | ) |   | (35,269 | ) |
| Payments                on notes payable to related                parties                                                                                     |   |                                              | (49,037   | ) |   |  (53,867 | ) |
| Payments                on obligations to related parties                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                                              | --        |   |   | (150,000 | ) |
|                          Payments              on obligations to related party                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                              | 50,000    |   |   | --  |   |
| Proceeds                from issuance of common stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                                              | 509,850   |   |   | 1,035,731 |   |
| NET                CASH FLOWS PROVIDED BY FINANCING ACTIVITIES                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |                                              | 307,130   |   |   | 1,480,745 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                              |      |   |   |   |   |
| INCREASE                IN                CASH                                                                                             |   |                                              | 408,706   |   |   | (80,440 | ) |
| CASH,                BEGINNING OF                PERIOD                                                                                    |   |                                              | 232,90251 |   |   | 313,342 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                              |      |   |   |   |   |
| CASH,                END OF                PERIOD                                                                                          |   | $                                                 | 641,608   |   | $ | 232,902 |   |

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENT OF CASH FLOWS (CONTINUED)**

|                                                                                                                                            |   | **For                the Year Ended December 31,** |      |
|-------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|-----------|
|                                                                                                                                            |   | **2006**                                           |      | **2005** |   |
|                                                                                                                                            |   |                                               |      |  **(Restated)** |   |
| SUPPLEMENTAL                DISCLOSURES OF CASH FLOW INFORMATION                                                                                |   |                                               |      |   |   |   |   |
| Interest                paid                                                                                                                    |   | $                                                  | 112,010   |   | $ | 409,743 |   |
| Taxes                paid                                                                                                                       |   |                                               | --        |   |   |  76,930 |   |
|                                                                                                                                            |   |                                               |      |   |   |   |   |
| NON-CASH                INVESTING AND FINANCING ACTIVITIES                                                                                      |   |                                               |      |   |   |   |   |
| Disposal                of property, plant and equipment with related note payable                                                              |   |                                               | --        |   |   |  150,000 |   |
| Issuance                of common stock for services                                                                                            |   |                                               | 2,982,278 |   |   | 1,652,985 |   |
| Issuance                of common stock for acquisition deposit                                                                                 |   |                                               | --        |   |   |  50,000 |   |
| Issuance                of common stock in payment of accounts payable                                                                          |   |                                               | --        |   |   |  77,190 |   |
| Issuance                of common stock in payment of convertible promissory notes                payable                                       |   |                                               | 1,450,265 |   |   |  80,000 |   |
| Issuance                of common stock in payment of accrued interest                                                                          |   |                                               | 179,438   |   |   |  2,076 |   |
| Obligations                to related parties reclassified to notes payable to related parties                on                signing of note |   |                                               | --        |   |   |  470,907 |   |
| Accrued                interest reclassified to notes payable to related parties                                                                |   |                                               | --        |   |   |  205,907 |   |

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)**

**For      the Year Ended December 31, 2006 and 2005 (Restated)**

|                                                                                                                                               |   |                                            |       |   | **Additional**                   |   |     |              |   |   |              |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|------------|--------|----------------------------------|--------|----------|-------------------|--------|--------|-------------------|---------|
|                                                                                                                                               |   |   **Common                    Stock** |       |   | **Paid                    - In** |   |     | **Accumulated**   |   |   |              |    |
|                                                                                                                                               |   | **Shares**                                      |       |   | **Capital**                      |   |     |  **Capital** |   |   |  **Deficit** |    |   | **Total** |   |
|                                                                                                                                               |   |                                            |       |   |                             |   |     |              |   |   |              |    |   |   |   |
| Balance,                    December 31, 2004                                                                                                      |   |                                            | 18,244,801 |   |                             | $      | 18,244   |              |   | $      | 13,161,421        |    |   | $ | (4,526,669 | ) |   | $ | (8,652,996 | ) |
|                                                                                                                                               |   |                                            |       |   |                             |   |     |              |   |   |              |    |   |   |   |   |   |   |   |   |
| Issuance                    of common stock to Executive Officer at $0.46 per share                                                                |   |                                            | 1,500,000  |   |                             |   | 1,500    |              |   |   | 688,500           |    |   |   | --  |   |   |   | 690,000 |   |
| Issuance                    of common stock for cash at $0.50 to $1.00 per share                                                                   |   |                                            | 1,696,236  |   |                             |   | 1,696    |              |   |   | 1,034,035         |    |   |   | --  |   |   |   | 1,035,731 |   |
| Issuance                    of common stock for conversion of convertible notes at $0.50                    and $1.00 per                    share |   |                                            | 100,000    |   |                             |   | 100      |              |   |   | 79,900            |    |   |   | --  |   |   |   | 80,000 |   |
|  Issuance                  of common stock for settlement of accounts payable obligation                  at $1.03 per share             |   |                                            | 75,000     |   |                             |   | 75       |              |   |   | 77,115            |    |   |   | --  |   |   |   | 77,190 |   |
|  Issuance                  of common stock for services rendered to the Company at $0.50 to                  $1.00 per share             |   |                                            | 875,770    |   |                             |   | 876      |              |   |   | 650,452           |    |   |   | --  |   |   |   | 651,328 |   |
|  Issuance                  of common stock for deposit on potential acquisition                  at $0.50 per share                 |   |                                            | 100,000    |   |                             |   | 100      |              |   |   | 49,900            |    |   |   | --  |   |   |   | 50,000 |   |
|  Issuance                  of common stock as contingent consideration for 2004 acquisition                  at                  par          |   |                                            | 683,000    |   |                             |   | 683      |              |   |   | (683              | )  |   |   | --  |   |   |   | --  |   |
|  Issuance                  of common stock to settle various legal disputes at $0.50 to $1.00                  per share                 |   |                                            | 467,064    |   |                             |   | 467      |              |   |   | 311,190           |    |   |   | --  |   |   |   | 311,657 |   |
|  Issuance                  of common stock for interest payment at $0.50 per share                                                       |   |                                            | 4,153      |   |                             |   | 5        |              |   |   | 2,071             |    |   |   | --  |   |   |   | 2,076 |   |
|  Net                  loss for year ended December 31, 2005                                                                                   |   |                                            | --    |   |                             |   | --  |              |   |   | --           |    |   |   | (13,535,089 | ) |   |   | (13,535,089 | ) |
|                                                                                                                                               |   |                                            |       |   |                             |   |     |              |   |   |              |    |   |   |   |   |   |   |   |   |
|  Balance,                  December 31, 2005                                                                                                  |   |                                            | 23,746,024 |   |                             | $      | 23,736   |              |   | $      | 16,053,901        |    |   | $ | (18,061,758 | )  |   |   | (1,984,111 | )  |

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**CONSOLIDATED      STATEMENT OF STOCKHOLDERS’ EQUITY (DEFICIT)**

|                                                                                                                                     |   |                                              |       |   | **Additional**                     |   |     |              |   |   |              |    |
|------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------|------------|--------|------------------------------------|--------|----------|-------------------|--------|--------|-------------------|---------|
|                                                                                                                                     |   |   **Common                      Stock** |       |   | **Paid                      - In** |   |     | **Accumulated**   |   |   |              |    |
|                                                                                                                                     |   | **Shares**                                        |       |   | **Capital**                        |   |     |  **Capital** |   |   |  **Deficit** |    |   | **Total** |   |
|                                                                                                                                     |   |                                              |       |   |                               |   |     |              |   |   |              |    |   |   |   |
| Balance,                      December 31, 2005                                                                                          |   |                                              | 23,746,024 |   |                               | $      | 23,736   |              |   | $      | 16,053,901        |    |   | $ | (18,061,758 | ) |   | $ | (1,984,111 | ) |
|                                                                                                                                     |   |                                              |       |   |                               |   |     |              |   |   |              |    |   |   |   |   |   |   |   |   |
| Issuance                      of common stock for conversion of convertible notes at $0.50 per                      share           |   |                                              | 2,900,000  |   |                               |   | 2,901    |              |   |   | 1,447,364         |    |   |   | --  |   |   |   | 1,450,265 |   |
| Issuance                      of common stock for cash at $0.17 to $0.38 per share                                                       |   |                                              | 1,666,940  |   |                               |   | 1,667    |              |   |   | 508,183           |    |   |   | --  |   |   |   | 509,850 |   |
| Issuance                      of common stock for services rendered to the Company at $0.25 to                      $0.75 per share |   |                                              | 5,230,735  |   |                               |   | 5,231    |              |   |   | 2,977,047         |    |   |   | --  |   |   |   | 2,982,278 |   |
|  Issuance                    of common stock for payments of interest on convertible                    notes                       |   |                                              | 358,876    |   |                               |   | 359      |              |   |   | 179,079           |    |   |   | --  |   |   |   | 179,438 |   |
|  Common                    stock cancelled upon rescission of certain acquisitions                                                  |   |                                              | (1,600,000 | )      |                               |   | (1,600   | )            |   |   | (6,333,400        | )  |   |   | --  |   |   |   | (6,335,000 | )  |
|  Net                    income for year ended December 31, 2006                                                                     |   |                                              | --    |   |                               |   | --  |              |   |   | --           |    |   |   | 4,103,133 |   |   |   | 4,103,133 |   |
|                                                                                                                                     |   |                                              |       |   |                               |   |     |              |   |   |              |    |   |   |   |   |   |   |   |   |
|  Balance,                    December 31, 2006                                                                                      |   |                                              | 32,303,105 |   |                               | $      | 32,304   |              |   | $      | 14,832,174        |    |   | $ | (13,958,625 | )  |   |   | 905,853 |   |

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006**

**NOTE      A - RESTATEMENTS**

|   | **2005** |
|--------|----------|

**NOTE        B - PRINCIPLES OF CONSOLIDATION AND NATURE OF        BUSINESS**

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006**

|   | **NOTE                B - PRINCIPLES OF CONSOLIDATION AND NATURE OF BUSINESS                (CONTINUED)** |
|--------|-----------------------------------------------------------------------------------------------------------|

**Going      Concern Uncertainty and Management’s Plans**

**NOTE      C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Use      of Estimates**

**Cash      and Cash Equivalents**

**Net      Income (Loss) Per Common Share**

**Business      Combinations**

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006**

**NOTE      C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)**

**Goodwill and Other Intangible Assets**

**Property,      Plant and Equipment and Depreciation**

**Stock-Based      Compensation**

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006**

**NOTE      C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)**

**Accounts      Receivable**

**Allowance      for Doubtful Accounts**

**Inventories**

**Fair      Values of Financial Instruments**

**Revenue      Recognition**

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006**

**Revenue      Recognition (Continued)**

**Impairment      of Long-Lived Assets**

**Reclassificaiton**

**Recent      Accounting Pronouncements**

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006**

**NOTE      C - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)**

**Recent      Accounting Pronouncements (Continued)**

*The Fair Value Option for        Financial Assets and Financial Liabilities*

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006**

**NOTE      D - ACQUISITIONS**

**2004**

**2005**

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006**

**NOTE      D - ACQUISITIONS (CONTINUED)**

|                                                                  |                                 |   | Persinger  |      |   | Schultz    |       |   | OhioValleyLumber |      |   | NeyOil     |       |   | LeeOil     |   |
|-----------------------------------------------------------------------|--------------------------------------|--------|------------|-----------|--------|------------|------------|--------|------------------|-----------|--------|------------|------------|--------|------------|--------|
|                                                                  | (November                      2005) |   |       |      |   |       |       |   |             |      |   |       |       |
|                                                                  |                                 |   |       |      |   |       |       |   |             |      |   |       |       |
| Total                      current                      assets        |                                 | $      | 2,804,940  |      | $      | 1,185,690  |       | $      | 6,421,756        |      | $      | 2,850,748  |       | $      | 5,878,247  |   |
| Property                      plant and equipment, net                |                                 |   | 38,718     |      |   | 646,573    |       |   | 4,928,787        |      |   | 2,794,917  |       |   | 5,347,498  |   |
| Other                      assets                                     |                                 |   | 212,737    |      |   | 329,811    |       |   | 1,685,815        |      |   | 554,362    |       |   | 44,467     |   |
| Total                      Assets                                     |                                 | $      | 3,056,395  |      | $      | 2,162,074  |       | $      | 13,036,358       |      | $      | 6,200,027  |       | $      | 11,270,212 |   |
|                                                                  |                                 |   |       |      |   |       |       |   |             |      |   |       |       |   |       |   |
| Total                      Current Liabilities                        |                                 | $      | 1,896,118  |      | $      | 722,763    |       | $      | 7,107,710        |      | $      | 2,287,674  |       | $      | 2,743,822  |   |
| Total                      Long-Term                      Liabilities |                                 |   | 361,930    |      |   | 1,062,114  |       |   | 3,655,382        |      |   | 1,889,873  |       |   | 4,819,059  |   |
|                                                                  |                                 |   |       |      |   |       |       |   |             |      |   |       |       |   |       |   |
| Stockholders’                      equity                       |                                 |   |       |      |   |       |       |   |             |      |   |       |       |   |       |   |
| Common                      stock                                     |                                 |   | 40,000     |      |   | 22,831     |       |   | 1,933            |      |   | 120,000    |       |   | 1,000      |   |
| Additional                      paid-in capital                       |                                 |   | 105,000    |      |   |       |       |   | 1,577,627        |      |   |       |       |   | 57,708     |   |
| Treasury                      stock                                   |                                 |   | (600,000   | )         |   |       |       |   |             |      |   |       |       |   |       |   |
| Accumulated                      earnings                             |                                 |   | 1,253,347  |      |   | 354,366    |       |   | 693,706          |      |   | 1,902,480  |       |   | 3,648,623  |   |
|                                                                  |                                 |   |       |      |   |       |       |   |             |      |   |       |       |   |       |   |
| Total                      Stockholders’ Equity                 |                                 |   | 798,347    |      |   | 377,197    |       |   | 2,273,266        |      |   | 2,022,480  |       |   | 3,707,331  |   |
|                                                                  |                                 |   |       |      |   |       |       |   |             |      |   |       |       |   |       |   |
| Total                      Liabilities and Stockholders’ Equity | $3,056,395                           |   | $          | 2,162,074 |   | $          | 13,036,358 |   | $                | 6,200,027 |   | $          | 11,270,212 |   |
|                                                                  |                                 |   |       |      |   |       |       |   |             |      |   |       |       |   |       |   |
| Sales                                                                 |                                 | $      | 11,988,474 |      | $      | 17,268,691 |       | $      | 14,298,809       |      | $      | 54,480,538 |       | $      | 79,092,224 |   |
| Total                      costs and expenses                         |                                 |   | 11,850,756 |      |   | 17,144,723 |       |   | 13,478,620       |      |   | 54,410,701 |       |   | 78,357,415 |   |
| Net                      operating income                             |                                 |   | 137,718    |      |   | 123,968    |       |   | 820,189          |      |   | 69,837     |       |   | 734,809    |   |
| Other                      income (expenses)                          |                                 |   | 38,151     |      |   | (64,601    | )          |   | (521,354         | )         |   | 293,284    |       |   | (15,784    | )      |
| Income                      before taxes                              |                                 |   | 175,869    |      |   | 59,367     |       |   | 298,835          |      |   | 363,121    |       |   | 719,025    |   |
| Federal                      and State income taxes                   |                                 |   | 64,557     |      |   |       |       |   | 54,384           |      |   | 21,000     |       |   | 129,355    |   |
| Net                      income                                       |                                 | $      | 111,312    |      | $      | 59,367     |       | $      | 244,451          |      | $      | 342,121    |       | $      | 589,670    |   |

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006**

**NOTE      E - VARIABLE INTEREST ENTITIES**

**NOTE      F - INVENTORY**

| Inventory                    consists of the following at December 31, |   |     |    |     |   |
|------------------------------------------------------------------------|--------|----------|---------|----------|--------|
|                                                                   |   | **2006** |    | **2005** |   |
|                                                                   |   |     |    |     |   |
| Raw                    material                                        |   | $        | 824,824 |     | $      | 665,510 |   |
| Work                    in process - manufacturing                     |   |     | 30,421  |     |   | 21,001 |   |
| Finished                    goods                                      |   |     | 2,946   |     |   | -- |   |
|                                                                   |   | $        | 858,191 |     | $      | 686,511 |   |

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006**

**NOTE      G – UNCOMPLETED CONTRACTS**

| Cost,                      estimated earnings, and billing on umcompleted contracts are                      summarized as                      follows:                                                                                                                                                                                                                                                                                                                                                                            |   |                                                |      |     |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|-----------|----------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |    December                      31, |      |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | **2006**                                            |      | **2005** |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                |      |     |   |
| Cost                      incurred on uncompleted contracts                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | $                                                   | 8,022,887 |     | $      | 4,591,447 |   |
| Estimated                      earnings                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                | 1,103,364 |     |   | 472,952 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                | 9,126,251 |     |   | 5,064,399 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                | 8,867,936 |     |   | 5,253,955 |   |
|  Billing                    to date                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   | $                                                   | 258,315   |     | $      | (189,556 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                |      |     |   |   |   |
|  Included                    in balance sheet as follows:                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                                |      |     |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                |      |     |   |   |   |
|  Costs                    and estimated earnings in excess of billings                    on uncompleted contracts                                                                                                                                                                                                                                                                                                                                                                                                   |   | $                                                   | 634,687   |     | $      | 332,396 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                                                |      |     |   |   |   |
|  Billings                    in excess of costs and estimated earnings                    on uncompleted                    contracts                                                               |   | $                                                   | (376,272  | )        | $      | (521,952 | ) |

**NOTE      H - PROPERTY, PLANT, AND EQUIPMENT**

| Property,                        plant, and equipment consists of the following at December                        31, |
|------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                   |   | **2006** |   | **2005** |   | **Years                        of Average Useful Life** |   |
|                                                                                                                   |   |   |   |   |   |   |   |   |   |
| Land                                                                                                                   |   | $ | 73,400 |   | $ | 73,400 |   |   |   |
| Leasehold                        improvements                                                                          |   |   | 103,420 |   |   | 87,715 |   | 5 |   |
| Buildings                                                                                                              |   |   | 762,600 |   |   | 762,600 |   | 30 |   |
| Furniture                        and fixtures                                                                          |   |   | 188,022 |   |   | 172,149 |   | 10 |   |
| Machinery                        and equipment                                                                         |   |   | 324,874 |   |   | 315,045 |   | 10-15 |   |
| Automotive                        equipment                                                                            |   |   | 76,363 |   |   | 74,363 |   | 7 |   |
|                                                                                                                   |   |   | 1,528,,679 |   |   | 1,485,272 |   |   |   |
| Less:                        accumulated depreciation                                                                  |   |   | 584,309 |   |   | 521,735 |   |   |   |
|                                                                                                                   |   | $ | 944,370 |   | $ | 963,537 |   |   |   |

**NOTE      I – OTHER INTANGABLE ASSETS**

| Other                      intangible assets consist of the following at December 31,  |   |     |   |     |   |
|----------------------------------------------------------------------------------------|--------|----------|--------|----------|--------|
|                                                                                   |   | **2006** |   | **2005** |   |
|                                                                                   |   |     |   |     |   |
| Customer                      list                                                |   | $        | 22,500 |     | $      | 22,500 |   |
| Accumulated                      amortization and impairment                      loss |   |     | (5,624 | )        |   | (2,812 | ) |
|  Other                    intangible assets                                       |   | $        | 16,876 |     | $      | 19,688 |   |

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006**

**NOTE      J - BANK LINES OF CREDIT (CONTINUED)**

**NOTE      K - CONVERTIBLE PROMISSORY NOTES PAYABLE**

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006**

| Notes                      payable consist of the following:                                                                                                                                                                                                                                                                                        |   |                                                               |     |   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------|----------|--------|--------|
|                                                                                                                                                                                                                                                                                                                                                |   | **     December                      31** |     |
|                                                                                                                                                                                                                                                                                                                                                |   |                                                               | **2005** |   |   | **2004** |   |
| Notes                      payable to banks due February 2010 and March                      2010, payable in 72 monthly installments of $734 and $284                      including  interest at 6.17% and 6.27%, respectively. The notes                      are collateralized by transportation equipment.                          |   | $                                                                  | 45,060   |   | $      | 46,507 |   |
|                                                                                                                                                                                                                                                                                                                                                |   |                                                               |     |   |   |   |   |
| Mortgage                      notes payable to a bank due March 2017 and May 2017, payable                      in 180                      monthly installments of $2,260 and $2,739 including interest                      at 7.50% and                      7.25%, respectively. The notes are collateralized by                      buildings |   |                                                               | 423,035  |   |   |  459,115 |   |
|                                                                                                                                                                                                                                                                                                                                                |   |                                                               | 467,972  |   |   | 504,670 |   |
| Less:                      current portion                                                                                                                                                                                                                                                                                                          |   |                                                               | 39,471   |   |   | 37,349 |   |
|                                                                                                                                                                                                                                                                                                                                                |   |                                                               |     |   |   |   |   |
| Long-term                      portion                                                                                                                                                                                                                                                                                                              |   | $                                                                  | 428,501  |   | $      | 467,321 |   |

| Year       |   | Amount |         |
|------------|--------|--------|--------------|
|       |   |   |         |
| 2007       |   | $      | 39,471       |   |
| 2008       |   |   | 42,301       |   |
| 2009       |   |   | 46,837       |   |
| 2010       |   |   | 37,901       |   |
|  2011 |   |   | 39,086  |   |
| Thereafter |   |   | 262,376      |   |
| Total      |   | $      | 467,972      |   |

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006**

**NOTE      M - RELATED PARTY TRANSACTIONS**

**Obligations      to Related Parties**

| **Notes                      payable consist of the following:**                                                                                                                                                                                                                                                                                                                                                                  |   |   |     |   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|----------|--------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   | **2005** |   |   | **2004** |   |
| During                      2005, obligations to a related party and                      accrued rent in the amounts of $45,907 and $205,907, respectively                      were                      converted to a note payable.  The note is payable in 120 monthly                      installments in the amount of $2,796 and bears interest at                      the rate of                      6.00% |   | $      | 227,405  |   | $      | 246,549 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |     |   |   |   |   |
| During                      2005, obligations to related party in the amount of $425,000                      was converted                      to a note payable.  The note is payable in 90 monthly                      installments in the amount of $4,152 and is non-interest                      bearing                                                                                                       |   |   | 335,503  |   |   | 365,396 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |     |   |   |   |   |
|  Total                                                                                                                                                                                                                                                                                                                                                                                                                       |   |   | 562,908  |   |   | 611,945 |   |
| Less:                      current maturities                                                                                                                                                                                                                                                                                                                                                                                     |   |   | 87,903   |   |   | 66,787 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                              |   |   |     |   |   |   |   |
| Long-term                      portion                                                                                                                                                                                                                                                                                                                                                                                            |   | $      | 475,005  |   | $      | 545,158 |   |

| Year       |   | Amount |    |
|------------|--------|--------|---------|
|       |   |   |    |
| 2007       |   | $      | 87,903  |   |
| 2008       |   |   | 71,406  |   |
| 2009       |   |   | 72,737  |   |
| 2010       |   |   | 74,150  |   |
|  2011 |   |   | 75,650  |   |
| Thereafter |   |   | 181,062 |   |
| Total      |   | $      | 562,908 |   |

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006**

**NOTE      M - RELATED PARTY TRANSACTIONS (CONTINUED**

**NOTE      N - STOCKHOLDERS’ EQUITY (DEFICIT)**

**2006**

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006**

**NOTE      N - STOCKHOLDERS’ EQUITY (DEFICIT) (CONTINUED)**

**2005**

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006**

|                                                      |   | **2006** |   | **2005** |   |
|-----------------------------------------------------------|--------|----------|--------|----------|--------|
| Current:                                                  |   |     |   |     |   |
| Federal                                                   |   | $        | --     |     | $      | 13,836 |   |
| State                                                     |   |     | --     |     |   |  7,173 |   |
| Total                      Current Expense                |   |     | --     |     |   |  21,009 |   |
| Deferred:                                                 |   |     |   |     |   |   |   |
| Federal                                                   |   |     | --     |     |   |  (68,854 | ) |
| State                                                     |   |     | --     |     |   |  (10,909 | ) |
| Total                      Deferred Benefit:              |   |     | --     |     |   |  (79,763 | ) |
|                                                      |   |     |   |     |   |   |   |
| Federal                      and State income tax benefit |   | $        | --     |     | $      |  (58,754 | ) |

|                                                                  |   | **2006** |       | **2005** |   |
|-----------------------------------------------------------------------|--------|----------|------------|----------|--------|
|                                                                  |   |     |       |     |   |
| Allowance                      for doubtful accounts                  |   | $        | 78,550     |     | $      | 87,865 |   |
| Deferred                      revenues                                |   |     | (441,346   | )        |   | (189,181 | ) |
|  Vacation                    accrual                        |   |     | 6,149      |     |   | 5,514 |   |
| Net                        operating losses                      |   |     | 1,785,000  |     |   | 1,608,400 |   |
|                                                                  |   |     |       |     |   |   |   |
| Net                      deferred tax assets                     |   |     | 1,428,353  |     |   | 1,512,598 |   |
| Less:  Valuation                      allowance   |   |     | (1,428,353 | )        |   | (1,512,598 | ) |
| Net                                                                   |   | $        |  --   |     | $      | -- |   |

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006**

| **Year                          ended December 31, 2006:**                           |   | **Parent                          Company**                                                                                                                                                                                                                                                                                                    |       | **Steel                          Fabrication** |       |   | **Construction** |   |      | **Total** |      |
|--------------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|------------------------------------------------|------------|--------|------------------|--------|-----------|-----------|-----------|
| Revenues                                                                             |   |  $                                                                           -- |       | $                                              | 11,921,907 |   |             | $      | 8,302,360 |      |      | $ | 20,224,267 |   |
| NET                          INCOME (LOSS)                                           |   |                                                                                                                                                                                                                                                                                                                                           | (3,933,215 | )                                              |       |   | 1,069,278        |   |      |      | 80,173    |   |   |   | (2,783,764 | ) |
| Total                          Assets                                                |   |                                                                                                                                                                                                                                                                                                                                           | 10,081     |                                           |       |   | 4,730,507        |   |      |      | 3,328,559 |   |   |   | 8,069,147 |   |
| OTHER                          SIGNIFICANT ITEMS                                     |   |                                                                                                                                                                                                                                                                                                                                           |       |                                           |       |   |             |   |      |      |      |   |   |   |   |   |
|                              Depreciation  and amortization |   |                                                                                                                                                                                                                                                                                                                                           | --         |                                           |       |   | 39,528           |   |      |      | 26,257    |   |   |   | 65,785 |   |
| Interest                                                                             |   |                                                                                                                                                                                                                                                                                                                                           | 300,253    |                                           |       |   | 86,698           |   |      |      | 32,898    |   |   |   | 419,849 |   |
| Expenditures                          for assets                                     |   |                                                                                                                                                                                                                                                                                                                                           | --         |                                           |       |   | 43,336           |   |      |      | 3,010     |   |   |   | 47,346 |   |

| **Year                          ended December 31, 2005:** |   | **Parent                          Company**                                                                                                                                                                                                                                 |       |   | **Steel                          Fabrication** |      |      | **Construction** |                                                                                                                                                                                                                   |   | **Total**  |   |
|------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------|--------|------------------------------------------------|-----------|-----------|------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------|--------|
| Revenues                                                   |   |  $                                                               -- |       |   | $                                              | 7,764,997 |      |             |  $                                                     8,627,665 |   |       | $      | 16,392,662 |   |
| NET                          INCOME (LOSS)                 |   |                                                                                                                                                                                                                                                                        | (3,828,741 | )      |                                           |      | 608,956   |             |                                                                                                                                                                                                                   |   | (2,084,022 | )      |   |   | (5,303,807 | ) |
| Total                          Assets                      |   |                                                                                                                                                                                                                                                                        | 82,504     |   |                                           |      | 2,718,196 |             |                                                                                                                                                                                                                   |   | 3,909,870  |   |   |   | 6,710,570 |   |
| OTHER                          SIGNIFICANT ITEMS           |   |                                                                                                                                                                                                                                                                        |       |   |                                           |      |      |             |                                                                                                                                                                                                                   |   |       |   |   |   |   |   |
| Depreciation                          and amortization     |   |                                                                                                                                                                                                                                                                        | 398   |   |                                           |      | 33,407    |             |                                                                                                                                                                                                                   |   | 41,364     |   |   |   | 75,169 |   |
| Interest                                                   |   |                                                                                                                                                                                                                                                                        | 483,707    |   |                                           |      | 6,661     |             |                                                                                                                                                                                                                   |   | 34,476     |   |   |   | 524,844 |   |
| Expenditures                          for assets           |   |                                                                                                                                                                                                                                                                        | --    |   |                                           |      | ---       |             |                                                                                                                                                                                                                   |   | 49,614     |   |   |   | 49,614 |   |

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006**

**NOTE      Q - COMMITMENTS AND CONTINGENCIES**

**Leases**

**Issuance      of Common Stock**

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006**

|  2006 | Evans | Monarch | PAR | Wyncrest | Mundus |
|------------|-------|---------|-----|----------|--------|

| Revenue | $2,416,738 | $ | 1,844,709 | $ | -- | $ | -- | $ | -- |
|---------|------------|---|-----------|---|----|---|----|---|----|

| Pre                tax profit (loss) | 792 | -- | (12,692) | -- | -- |
|--------------------------------------|-----|----|----------|----|----|

|   | Net                assets |
|--------|---------------------------|

|   (liabilities) | -- | -- | -- | -- | -- |
|---------------------------|----|----|----|----|----|

| 2005 | Evans | Monarch | PAR | Wyncrest | Mundus |
|------|-------|---------|-----|----------|--------|

| Revenue | $9,384,126 | $ | 14,897,825 | $ | -- | $ | -- | $ | -- |
|---------|------------|---|------------|---|----|---|----|---|----|

| Pre                tax profit (loss) | (2,359,569) | (3,440,629)(161,779) | (325,751) | (2,107,872) |
|--------------------------------------|-------------|----------------------|-----------|-------------|

|   | Net                assets |
|--------|---------------------------|

|  (liabilities) | (2,353,438) | 1,703,055 | 291,635 | (668,203) | 480,055 |
|---------------------|-------------|-----------|---------|-----------|---------|

----

**HEARTLAND,      INC. AND SUBSIDIARIES**

**NOTES      TO CONSOLIDATED FINANCIAL STATEMENTS**

**December      31, 2006**

**NOTE      T – SUBSEQUENT EVENTS**

|   | (1) | On                January 10, 2007, the Company abandoned its intent to acquire Persinger                Equipment, Inc., Ney Oil Company  and Schultz Oil                Company.  See Note D,                2005. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | On                February 26, 2007, the Company notified NKR, Inc. that the Letter                of                Intent to acquire NKR, Inc. entered into on September 12, 2005, has                been                terminated.  See Note D,                2005. |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | In                April 2007, the Company entered into an agreement to purchase the                property                where the Mound Facilities are located from the current owner who                is a                stockholder of the Company. In consideration of the purchase, the                Company                will assume all the outstanding debts secured by the property including                any liens for real estate taxes and                assessments. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (4) | In                February 2007, the company issued 1,965,000 shares of its common                stock                valued at approximately $666,000 to individuals for services, including                650,000 shares valued at approximately $211,000 issued to members                of its                Board of Directors. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

**ITEM        8.           **CHANGES        IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL        DISCLOSURE****

**Item      8A.          CONTROL AND      PROCEDURES**

|   | * | subscribe                to accounting journals and have the Company’s accounting personnel attend                accounting seminars; and |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------|

|   | engage                additional accounting personnel to assist in the preparation of the                Company’s financial statements. |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------|

**Item      8B.          OTHER      INFORMATION**

----

**PART      III**

**ITEM        9.          **DIRECTORS,        EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS: COMPLIANCE WITH SECTION        16(A)        OF THE EXCHANGE ACT****

| **Name**                                        |   | **Age** |   | **With                Company****Since** |   | **Director/Position**                                                                                         |   |
|-------------------------------------------------|--------|---------|--------|------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------|--------|
| Trent                Sommerville                |   | 39      |   | 12/2003                                  |   | Chief                Executive Officer, Chairman                of the Board, and                Director     |   |
|                                            |   |    |   |                                     |   |                                                                                                          |   |
| Thomas                C. Miller                 |   | 51      |   | 12/2003                                  |   | Chief                Operating Officer and                Director                                            |   |
|                                            |   |    |   |                                     |   |                                                                                                          |   |
| Jerry                Gruenbaum                  |   | 51      |   | 01/2001                                  |   | Chief                Financial Officer, Secretary,                General Counsel and                Director |   |
|                                            |   |    |   |                                     |   |                                                                                                          |   |
| Kenneth                B.                Farris |   | 46      |   | 01/2004                                  |   | Director                                                                                                      |   |

**MR.      TRENT SOMMERVILLE - CHIEF EXECUTIVE OFFICER AND CHAIRMAN OF THE      BOARD**

**MR.      THOMAS C. MILLER - CHIEF OPERATING OFFICER AND DIRECTOR**

----

**JERRY      GRUENBAUM –CHIEF FINANCIAL OFFICER, CORPRATE SECRETARY, GENERAL COUNSEL AND      DIRECTOR**

**DR.      KENNETH B. FARRIS – DIRECTOR**

**FAMILY      RELATIONSHIPS**

**BOARD      COMMITTEES**

**LEGAL      PROCEEDINGS**

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**Compliance      with Section 16(a) of the Exchange Act**

**CODE      OF ETHICS**

**ITEM      10.        EXECUTIVE      COMPENSATION**

**SUMMARY      COMPENSATION TABLE**

| **Name/                Position**                                           |   | **Year** |   | **Salary** |    | **Bonus** |   | **Stock** |   | **Other** |    | **Total** |   |
|-----------------------------------------------------------------------------|--------|----------|--------|------------|---------|-----------|--------|-----------|--------|-----------|---------|-----------|--------|
| Trent                Sommerville - CEO                and Chairman          |   | 2006     |   | $          | 200,000 |      | $      | 0         |   | $         |    |      | $      | 0 |   | $ | 200,000 |   |
|                                                                             |   | 2005     |   | $          | 205,000 |      | $      | 0         |   | $         | 690,000 |      | $      | 0 |   | $ | 895,000 |   |
|                                                                        |   | 2004     |   | $          | 164,976 |      | $      | 0         |   | $         | 0       |      | $      | 0 |   | $ | 164,976 |   |
| Jerry                Gruenbaum - CFO,                Secretary and Director |   | 2006     |   | $          | 120,000 |      | $      | 0         |   | $         |    |      | $      | 0 |   | $ | 120,000 |   |
|                                                                        |   | 2005     |   | $          | 25,000  |      | $      | 0         |   | $         | 0       |      | $      | 0 |   | $ | 25,000 |   |
|                                                                        |   | 2004     |   | $          | 109,500 |      | $      | 0         |   | $         | 25,000  |      | $      | 0 |   | $ | 134,500 |   |
| Thomas                C. Miller - COO                and Director           |   | 2006     |   | $          | 71,220  |      | $      |  0   |   | $         |  0 |      | $      |  0 |   | $ |  71,220 |   |
|                                                                             |   | 2005     |   | $          | 71,220  |      | $      |  0   |   | $         |  0 |      | $      |  0 |   | $ |  71,220 |   |
|                                                                        |   | 2004     |   | $          | 71,220  |      | $      |  0   |   | $         |  0 |      | $      |  0 |   | $ |  71,220 |   |

**COMPENSATION      AGREEMENTS**

**BOARD      COMPENSATION**

**STOCK      OPTION PLAN**

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**WARRANTS**

**ITEM      11.          SECURITY      OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT**

**SECURITY      OWNERSHIP OF BENEFICIAL OWNERS**

| **Title                of Class** |   | **Name**                                      |   | **Shares** |   | **Percent** |   |
|-----------------------------------|--------|-----------------------------------------------|--------|------------|--------|-------------|--------|
|  Common                Stock |   | John                E. Gracik                 |   | 1,763,696  |   | 4.86        | %      |
|                              |   |                                          |   |       |   |        |   |
|                              |   | John                Zavoral                   |   | 1,125,000  |   | 3.10        | %      |
|                              |   |                                          |   |       |   |        |   |
|                              |   | First                Union Venture Group, LLC |   | 1,900,000  | (2)    | 5.23        | %      |

**SECURITY      OWNERSHIP OF MANAGEMENT**

| **Title                of Class**                                          |   | **Name**                         |   | **Shares** |   | **Percent** |   |
|----------------------------------------------------------------------------|--------|----------------------------------|--------|------------|--------|-------------|--------|
|                                                                       |   |                             |   |       |   |        |   |
| Common                Stock                                                |   | Trent                Sommerville |   | 4,840,100  |   | 13.33       | %      |
|                                                                       |   |                             |   |       |   |        |   |
|                                                                       |   | Jerry                Gruenbaum   |   | 1,400,000  | (3)    | 3.85        | %      |
|                                                                       |   |                             |   |       |   |        |   |
|                                                                       |   | Kenneth                B. Farris |   | 563,636    |   | 1.55        | %      |
|                                                                       |   |                             |   |       |   |        |   |
|                                                                       |   | Thomas                Miller     |   | 1,200,000  |   | 3.30        | %      |
|                                                                       |   |                             |   |       |   |        |   |
| All                Directors and Executive Officers as a group (5 persons) |   | 8,003,736                        |   | 22.04      | %      |
|                                                                       |   |                             |   |       |   |        |   |

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| (1) | These                tables are based upon 36,321,104 shares outstanding as of April 17,                2007 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 April 17, 2007. For purposes                of                computing the percentage of outstanding shares held by each person                or                group of persons named above on March 20, 2007 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) | First                Union Venture Group, LLC is owned one half by Atty. Jerry Gruenbaum,                Secretary, General Counsel and Director of the Company and one half                by                another individual who is not related to Atty. Gruenbaum or under                his                control. In addition Jerry Gruenbaum owns 900,000 shares in his own                name. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Jerry                Gruenbaum holds 500,000 shares as a result of a 50% interest in First                Union Venture Group, LLC. and 900,000 directly in his own                name. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**ITEM      12.           CERTAIN      RELATIONSHIPS AND RELATED TRANSACTIONS.**

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**ITEM      13.          EXHIBITS AND      REPORTS ON FORM 8-K**

| **Exhibit                Number** | **Document                Description** |
|-----------------------------------|-----------------------------------------|

| 3.1 | Certificate                of Incorporation of Origin Investment Group, Inc. as filed with the                Maryland Secretary of State on April 6, 1999, incorporated by reference                to                the Company’s Registration Statement on Form 10-KSB filed with the                Securities and Exchange Commission on August 16,                1999. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.2 | Amended                Certificate of Incorporation of International Wireless, Inc. as filed                with                the Maryland Secretary of State on June 12, 2003, incorporated by                reference to the Company’s Current Report on Form 8-K filed with the                Securities and Exchange Commission on June 12,                2003. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.3 | Amended                Certificate of Incorporation of International Wireless, Inc. to change                name to Heartland, Inc. as filed with the Maryland Secretary of State                on                June 12, 2003, incorporated by reference to the Company’s Current Report                on Form 8-K filed with the Securities and Exchange Commission on                June 15,                2004. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 3.4 | Bylaws                of Origin Investment Group, Inc., incorporated by reference to the                Company’s Registration Statement on Form 10-SB filed with the Securities                and Exchange Commission on August 16,                1999. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.1 | Acquisition                Agreement between Evans Columbus, LLS (“Evans”) and Heartland to acquire                Evans dated December 30, 2004, incorporated by reference to the Company’s                Current Report on Form 8-K filed with the Securities and Exchange                Commission on January 4, 2005. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.2 | Acquisition                Agreement between Karkela Construction, Inc. (“Karkela”) and Heartland to                acquire Karkela dated December 31, 2004, incorporated by reference                to the                Company’s Current Report on Form 8-K filed with the Securities and                Exchange Commission on January 6,                2005. |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.3 | Acquisition                Agreement between Monarch Homes, Inc. (“Monarch”) and Heartland to acquire                Monarch dated December 30, 2004, incorporated by reference to the                Company’s Current Report on Form 8-K filed with the Securities and                Exchange Commission on January 4,                2005. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.4 | Acquisition                Agreement between Persinger’s Equipment, Inc. (“Persinger”) and Heartland                to acquire Persinger dated July 14, 2005, incorporated by reference                to the                Company’s Current Report on Form 8-K filed with the Securities and                Exchange Commission on August 3,                2005. |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.5 | Acquisition                Agreement between Lee Oil Company, Inc. (“Lee Oil”) and Heartland to                acquire Lee Oil dated August 3, 2005, incorporated by reference to                the                Company’s Current Report on Form 8-K filed with the Securities and                Exchange Commission on September 22,                2005. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.6 | Acquisition                Agreement between Ney Oil Company (“Ney Oil”) and Heartland to acquire                Persinger dated September 12, 2005, incorporated by reference to                the                Company’s Current Report on Form 8-K filed with the Securities and                Exchange Commission on September 22,                2005. |
|------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.7 | Acquisition                Agreement between Shultz Oil Company, Inc. (“Schultz”) and Heartland to                acquire Schultz dated September 21, 2005, incorporated by reference                to the                Company’s Current Report on Form 8-K filed with the Securities and                Exchange Commission on September 27,                2005. |
|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| 10.8 | Letter                of Intent between NKR, Inc. d.b.a. Ohio Valley Lumber (“Ohio Valley                Lumber”) and Heartland to acquire Ohio Valley Lumber dated September 12,                2005, incorporated by reference to the Company’s Current Report on Form                8-K filed with the Securities and Exchange Commission on September                27,                2005. |
|------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 31.1 | Certification                of Chief Executive Officer and the Principal Financial Officer pursuant                to                Section 302 of the Sarbanes Oxley                Act. |
|------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

**ITEM      14.            PRINCIPAL      ACCOUNTANT FEES AND SERVICES**

| FIRM                                     |   | FISCAL                YEAR 2006 |   | FISCAL                YEAR 2005 |
|------------------------------------------|--------|---------------------------------|--------|---------------------------------|
|                                     |   |                            |   |                            |
| Meyler                & Company, LLC |   | $190,000                        |   | $                100,000        |

**TOTAL      FEES**

| **FIRM**                                 |   | **FISCAL                YEAR 2006** |   | **FISCAL                YEAR 2005** |
|------------------------------------------|--------|-------------------------------------|--------|-------------------------------------|
|                                     |   |                                |   |                                |
| Meyler                & Company, LLC |   | $190,000.00                         |   | $                100,000.00         |

| AUDITFEES. | 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 2005 or                2004. |
|------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| 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. |
|--------------------------------|------------------------------------------------------------------------------------------------------------------|

**POLICY      ON AUDIT COMMITTEE PRE-APPROVAL OF AUDIT AND PERMISSIBLE NON-AUDIT SERVICES      OF      INDEPENDENT AUDITORS**

**SIGNATURES**

| Date:                April 17, 2007 | By:                /s/ Trent Sommerville |
|-------------------------------------|------------------------------------------|

| Date:                April 17, 2007 | By:                /s/ Jerry Gruenbaum |
|-------------------------------------|----------------------------------------|

| **SIGNATURE**                        |   | **NAME**                         |   | **TITLE**                                                        |   | **DATE**                      |
|--------------------------------------|--------|----------------------------------|--------|------------------------------------------------------------------|--------|-------------------------------|
|                                 |   |                             |   |                                                             |   |                          |
| /s/                Trent Sommerville |   | Trent                Sommerville |   | Chief                Executive Officer, Chairman & Director  |   | April                17, 2007 |
|                                 |   |                             |   |                                                             |   |                          |
| /s/                Jerry Gruenbaum   |   | Jerry                Gruenbaum   |   | Chief                Financial Officer, Secretary & Director |   | April                17, 2007 |
|                                 |   |                             |   |                                                             |   |                          |
| /s/                Thomas C. Miller  |   | Thomas                C. Miller  |   | Chief                Operating Officer & Director            |   | April                17, 2007 |
|                                 |   |                             |   |                                                             |   |                          |
| /s/                Kenneth B. Farris |   | Kenneth                B. Farris |   | Director                                                         |   | April                17, 2007 |

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