Summary of HEARTLAND, INC.

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

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

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

Overview

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

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

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

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

Results of Operations

Nine months ended September 30, 2009 as compared to the nine months ended September 30, 2008

The main differences between the results of operations from the first three quarters of 2008 to the first three quarters of 2009 can be attributed primarily to the Lee Oil acquisition that took place in the fourth quarter of 2008 and the startup of operations relating to Heartland Steel. A further breakdown is provided in NOTE D - BUSINESS SEGMENTS of the financial statements.

Revenues. Revenues increased for the three months ended September 30, 2009 to $24,874,767 from $5,425,498 for the three months ended September 30, 2008. Revenues increased from $15,684,082 to $67,392,032 for the nine months ended September 30, 2008 and 2009 respectively.

Cost of Goods Sold. Cost of Goods Sold increased for the three and nine months ended September 30, 2009 to $22,204,230 and $59,559,303 from $4,337,807 and $12,908,296 for the three and nine months ended September 30, 2008.

Gross Profit. Gross Profits increased for three months ended September 30, 2009 to $2,670,537 from $1,087,691 for the three months ended September 30, 2008. The gross profit for the nine months ended September 30, 2009 was $7,832,729 and $2,775,786 for the nine months ended September 30, 2008.

Expenses. Expenses increased for three months ended September 30, 2009 to $2,637,282 from $467,083 for the three months ended September 30, 2008. Expenses rose from $1,338,386 to $7,602,252 for the nine months ended September 30, 2008 and 2009 respectively. In addition to the expenses attributed to the Lee Oil acquisition, the current nine month period ending September 30, 2009 includes expenses related to two employment contracts. The chief operating officers of both Mound and HS were issued 750,000 shares of common shares each as an inducement to enter into long-term employment contracts. These shares were valued based on the share price on the date of authorization and expensed accordingly. The total expense recorded was $225,000.

Other (expense) income. The interest expense recorded for the nine months ended September 30, 2009 was $702,774 compared to the $57,669 expense recorded for the nine months ended September 30, 2008. This was primarily attributable to the interest associated with the acquisition of Lee Oil. The interest relating to the construction of the new HS building is being capitalized until the construction is completed. The interest expense related to the new construction will begin in November. See Note E.

Net Income Before income Taxes. Net Income before Income Taxes decreased for the nine months ended September 30, 2009 to a loss of $37,533 from a profit $1,387,719 for the nine months ended September 30, 2008. This decrease is primarily attributable some costs associated with the startup at Heartland Steel including the expensing of the shares associated with the chief operating officers employment contract, additional interest expense associated with the Lee Oil acquisition in the fourth quarter of 2008, and lower gross revenues and profits generated from the Mound operations.

Liquidity and Capital Resources

Sources of Liquidity

As of September 30, 2009, the Company had accumulated deficit of $12,629,220. As of December 31, 2008, the Company had accumulated deficit of $12,599,401.

The Company has used $498,823 in operating activities for the nine months ended September 30, 2009 primarily to fund additional accounts receivable and inventory. We consider this to be normal with the price of oil and steel both rising and would expect a reversal if these prices begin to fall.

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

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

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

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

Due to the current price of our common stock, we do not expect to fund future projects through the issuance of shares but rather will fund such projects through cash on hand and financing, if available.