10-Q/A

United States

Securities and Exchange Commission

Washington, D.C. 20549

Form 10-Q/A

(Amendment No. 1)

Quarterly Report under Section 13 or 15(D) of the Securities Exchange Act of 1934

For the quarter ended March 31, 2006

Commission file number 000-32669

Heartland Oil and Gas Corp.

Incorporated in Nevada IRS ID No. 91-1918326

1625 Broadway, Suite 1480

Denver, Colorado 80202

Telephone: (303) 405-8450

The registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

The registrant is a non-accelerated filer (as defined in Rule 12b-2 of the Exchange Act).

The registrant is not a shell company (as defined in Rule 12b-2 of the Exchange Act).

Heartland has 46,737,013 shares of common stock outstanding as of April 24, 2006

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Explanatory Note

We have determined that, in certain cases, we did not comply with accounting principles generally accepted in the United States in the preparation of our 2005 and 2004 financial statements, and accordingly, we have restated the financial statements in our 2005 Annual Report on Form 10-K/A (Amendment No. 2).

As discussed more fully in Note 5, “Restatement of Financial Statements”, to the financial statements in Item 1 of this Form 10-Q/A (Amendment No. 1), the financial statements have been restated to classify our Series B Convertible Redeemable Preferred Stock outside of permanent equity. The restatement is consistent with guidance in Emerging Issues Task Force (“EITF”) No. D-98, Classification and Measurement of Redeemable Securities.

Pursuant to Regulation S-X, Article 10-01(a)(5), footnote disclosure which would substantially duplicate the disclosure contained in the most recent annual report to security holders or latest audited financial statements, such as a statement of significant accounting policies and practices, details of accounts which have not changed significantly in amount or composition since the end of the most recently completed year, and detailed disclosures prescribed by Rule 4-08 of the Regulation may be omitted. Certain disclosures that were previously presented in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2006 are duplications of information previously disclosed in the aforementioned Annual Report on Form 10-K/A (Amendment No. 2) and, consequently, have been omitted from this Form 10-Q/A (Amendment No. 1).

The information contained in the Liquidity and Capital Resources section is as of May 15, 2006. Please see our Quarterly Report for the quarter ended June 30, 2006 for more current information.

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Item 1. Financial Statements.

Heartland Oil and Gas Corp.

Balance Sheet

	March 31, 2006 (Unaudited)			December 31, 2005 (Audited)
	(As Restated See Note 5)
Assets
Current assets:
Cash and cash equivalents	$	855,073		$	2,126,156
Prepaid expense		110,547			145,658
Other current assets		150,891			3,849
Total current assets		1,116,511			2,275,663
Oil and gas property, full cost method
Unproved		1,711,008			1,776,322
Proved		1,245,537			1,316,102
Pipeline and facilities, net of accumulated depreciation of $98,452 and $73,617, respectively		2,579,100			2,332,155
Equity investment in Arabian Heartland International Corp.		4,105,500			4,105,500
Impairment of investment in Arabian Heartland International Corp.		(4,105,500	)		(4,105,500	)
Other property and equipment, net of accumulated depreciation of $103,233 and $85,984, respectively		150,446			160,797
Total Assets	$	6,802,602		$	7,861,039
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	269,798		$	282,297
Long-term liabilities:
Asset retirement obligations		212,753			671,140
Series B Convertible Redeemable Preferred Stock - $0.001 par value, 5,000,000 shares authorized, 3,529,412 shares issued and outstanding at March 31, 2006, and December 31, 2005 (liquidation preference: $6,000,000)		5,599,958			5,599,958
Stockholders’ equity:
Common stock - 0.001 par value, 100,000,000 shares authorized, 46,737,013 shares issued and outstanding at March 31, 2006, and December 31, 2005		46,737			46,737
Additional paid-in capital		46,352,442			46,220,873
Accumulated deficit		(45,679,086	)		(44,959,966	)
		720,093			1,307,644
Total Liabilities And Stockholders’ Equity	$	6,802,602		$	7,861,039

See accompanying notes.

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Heartland Oil and Gas Corp.

Operations Statement

(Unaudited)

	Quarter Ended March 31, 2006			Quarter Ended March 31, 2005
Natural gas sales	$	56,704		$	—
Expense
Lease operating expense		60,177			—
Impairment expense		115,459			9,809,527
General and administrative expense		609,639			685,005
Total operating expense		785,275			10,494,532
Loss From Operations		(728,571	)		(10,494,532	)
Interest income		9,451			47,809
Net Loss	$	(719,120	)	$	(10,446,723	)
Basic And Diluted Net Loss Per Common Share	$	(0.02	)	$	(0.22	)
Basic And Diluted Weighted Average Number Of Common Shares Outstanding		46,737,000			46,737,000

The accompanying notes are an integral part of these statements

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Heartland Oil and Gas Corp.

Cash Flow Statement

(Unaudited)

	Quarter Ended March 31, 2006			Quarter Ended March 31, 2005
Cash Flow From Operating Activity
Net loss	$	(719,120	)	$	(10,446,723	)
Adjustments to reconcile net loss to net cash used in operating activity:
Accretion expense		4,539			7,910
Stock – based compensation		131,569			257,880
Depreciation and amortization		82,084			57,749
Impairment expense		115,459			9,809,527
Increase in other assets		(147,042	)		(161	)
Decrease in prepaid expense		35,111			14,900
Decrease in accounts payable and accrued liabilities		(12,499	)		(309,704	)
Decrease in asset retirement obligation – well plugging costs paid		(502,109	)		—
Net cash used in operating activity		(1,012,008	)		(608,622	)
Cash Flow From Investing Activity
Proceeds from sale of well equipment		139,166			—
Purchase of property and equipment		(6,898	)		(7,031	)
Acquisition and exploration of oil and gas property		(391,343	)		(2,124,248	)
Net cash used in investing activity		(259,075	)		(2,131,279	)
Cash Flow From Financing Activity
Decrease in due to related parties		—			(10,493	)
Net cash used in financing activity		—			(10,493	)
Net decrease in cash		(1,271,083	)		(2,750,394	)
Cash, beginning of period		2,126,156			13,081,221
Cash, end of period	$	855,073		$	10,330,827

The accompanying notes are an integral part of these statements

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Heartland Oil and Gas Corp.

Notes to Financial Statements

Note 1 - Organization, Operations and Significant Accounting Policies

Organization

Heartland Oil and Gas Corp. was incorporated in Nevada on August 11, 2000. Our principal business is exploration and development of oil and gas property in the United States. Through December 31, 2005, we were in the exploration stage and had not generated significant revenue from operations. We first sold natural gas in February 2006 so we are no longer an exploration stage company.

Basis of Presentation

The accompanying consolidated financial statements include the accounts of Heartland Oil and Gas Corp. and its wholly owned entities. We have eliminated all significant intercompany balances and transactions in consolidation.

The accompanying financial statements are unaudited and include, in our opinion, all adjustments, consisting of only normal recurring adjustments, necessary for fair presentation. The financial statements should be read in conjunction with our audited financial statements and the related notes included in our December 31, 2005, Form 10-K/A (Amendment No. 2). The accompanying financial statements are interim financial statements prepared in accordance with accounting principles generally accepted in the United States and are stated in U.S. dollars.

Stock-Based Compensation

Effective January 1, 2006, we account for stock-based compensation based on the fair value of the options at the grant date as provided by FASB Statement 123(R), Stock-Based Compensation. We record compensation expense for all share-based awards granted, and for awards modified, repurchased or cancelled. We will recognize compensation expense for outstanding awards for which the requisite service had not been rendered as of January 1, 2006, over the remaining service period using the compensation cost calculated for pro forma disclosure purposes under FASB Statement 123, adjusted for expected forfeitures. We have adopted Statement 123(R) using a modified prospective application. Prior to January 1, 2006 we recognized employee compensation expense for our stock options plan using the intrinsic value method of accounting. Under the terms of the intrinsic value method, compensation expense was the excess, if any, of the quoted market price of the stock at the grant date, over the amount an employee must pay to acquire the stock. Under our Amended 2005 Stock Option Plan, we may grant up to a maximum of 4,000,000 shares of common stock to key employees and consultants. The options granted under the plan vest over four years except as stated otherwise in the individual grants, and are for a term not exceeding 10 years.

For the period ended March 31, 2006, we expensed the fair value of options granted to non-employees, employees, officers and directors. For the period ended March 31, 2005 we expensed the fair value of options granted to non-employees and disclosed the pro forma fair value of options granted to employees, officers and directors.

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Heartland Oil & Gas Corp.

Notes to Financial Statements

Had we measured compensation cost based on the fair value of the options at the grant date for the quarter ended March 31, 2005, consistent with the method prescribed by Statement 123, our net loss and loss per common share would have been increased to the pro forma amounts indicated below:

	Quarter Ended March 31, 2005
Net loss, as reported	$	(10,446,723	)
Add: Stock-based employee compensation expense included in reported net income, net of related tax effects		257,880
Deduct: Total stock-based employee compensation expense determined under fair-value-based method for all awards, net of related tax effects		(354,924	)
Pro forma net loss	$	(10,543,767	)
Loss per share:
Basic and diluted earnings (loss) per common share
As reported	$	(0.22	)
Pro forma	$	(0.23	)

The Black-Scholes option-pricing model was developed for use in estimating the fair value of traded options that have no vesting restrictions, are fully transferable, and are not subject to trading restrictions or blackout periods. In addition, option valuation models require the input of highly subjective assumptions, including the expected stock price volatility. Because our employee stock options have characteristics significantly different from those of traded options, and because changes in the subjective input assumptions can materially affect the fair value estimate, it is our opinion that the existing models do not necessarily provide a reliable single measure of the fair value of our employee stock options.

Reclassifications

We have reclassified certain data in the financial statements of the prior periods to conform to the current period presentation.

Note 2 - Going Concern

We have incurred significant losses since inception and had no revenue from inception to December 31, 2005. As of March 31, 2006, we have limited financial resources. Our continuation is dependent upon our ability to raise additional capital, to exploit our mineral holdings, and to generate sufficient revenue from our planned operations to enable us to attain and maintain profitable operations. We sold natural gas for the first time in February, 2006.

The issuance of additional equity securities by us could result in significant dilution in the equity interests of our current stockholders. Obtaining commercial loans, assuming those loans would be available, will increase our liabilities and future cash commitments.

We cannot assure that we will be able to obtain further funds required for our continued operations, that additional financing will be available to us when needed or, if available, that we can obtain it on commercially reasonable terms. If we are not able to obtain the additional financing on a timely basis, we may be unable to conduct our operations as planned, and we may not be able to meet our other obligations as they become due. In such event, we would be forced to scale down or perhaps even cease our operations.

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Heartland Oil & Gas Corp.

Notes to Financial Statements

Note 3 - Asset Retirement Obligations

	Quarter Ended March 31, 2006			Year Ended December 31, 2005
Beginning asset retirement obligations	$	671,140		$	562,619
Site reclamation cost paid		(502,109	)		—
Liabilities incurred		39,183			65,758
Accretion		4,539			42,763
Total asset retirement obligations	$	212,753		$	671,140

Note 4 - Related Party Transactions

The amount due to related parties represented non-interest bearing expense reimbursements to directors and officers, which were subsequently paid.

We entered into management consulting agreements dated October 1, 2004, as amended, with a director for the payment of management fees of $7,500CN per month, and with our former President for the payment of $16,666 per month, respectively, each for a term of one year. We also entered into a consulting agreement for services on an hourly basis with our contract CFO. For the three months ending March 31, 2006, he was paid $31,395 for services rendered.

Effective January 1, 2006, we approved the payment of Director’s fees for non-employee Directors at the rate of $200 per hour.

During the three-months ended March 31, 2006 and March 31, 2005, we incurred $59,830 and $84,575, respectively, in management and consulting fees to our directors and officers.

Note 5 - Restatement

We have determined that, in certain cases, we did not comply with accounting principles generally accepted in the United States in the preparation of our 2004 consolidated financial statements, and for the period from inception (August 11, 2000) through December 31, 2005, and, accordingly, we have restated the 2005 annual financial statements in our Annual Report on Form 10-K/A (Amendment No. 2).

Consistent with the restatement of the annual financial statements, the consolidated interim financial statements have been restated to reflect the Company’s Series B Convertible Redeemable Preferred Stock as a separate line item outside of permanent equity. The restatement is consistent with guidance in Emerging Issues Task Force (“EITF”) No. D-98, Classification and Measurement of Redeemable Securities.

Pursuant to Regulation S-X, Article 10-01(a)(5), footnote disclosure which would substantially duplicate the disclosure contained in the most recent annual report to security holders or latest audited financial statements, such as a statement of significant accounting policies and practices, details of accounts which have not changed significantly in amount or composition since the end of the most recently completed fiscal year, and detailed disclosures prescribed by Rule 4-08 of the Regulation may be omitted. Certain disclosures that were previously presented in this Quarterly Report on Form 10-Q for the three months ended March 31, 2006 were duplications of information previously disclosed in the aforementioned Annual Report on Form 10-K/A (Amendment No. 2) and, consequently, have been omitted from this Form 10-Q/A (Amendment No. 1).

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Heartland Oil & Gas Corp.

Notes to Financial Statements

Heartland Oil & Gas Corp.

Balance Sheet

	March 31, 2006
	(As Reported)			(Adjustments)			(As Restated)
Assets
Current assets:
Cash and cash equivalents	$	855,073		$	—		$	855,073
Prepaid expense		110,547			—			110,547
Other current assets		150,891			—			150,891
Total current assets		1,116,511			—			1,116,511
Oil and gas properties, full cost method:
Unproved		1,711,008			—			1,711,008
Proved		1,245,537			—			1,245,537
Pipeline and facilities, net of accumulated depreciation of $98,452 and $73,617, respectively		2,579,100			—			2,579,100
Advances to Arabian Heartland International Corp.		4,105,500			—			4,105,500
Impairment of Arabian Heartland International Corp. advances		(4,105,500	)		—			(4,105,500	)
Property and equipment, net of accumulated depreciation of $103,233 and $85,984, respectively		150,446			—			150,446
Total assets	$	6,802,602		$	—		$	6,802,602
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	269,798		$	—		$	269,798
Long-term liabilities:
Asset retirement obligations		212,753			—			212,753
Series B Convertible Redeemable Preferred Stock - $0.001 par value, 5,000,000 shares authorized, 3,529,412 shares issued and outstanding, at March 31, 2006 and December 31, 2005 (liquidation preference: $6,000,000)		—			5,599,958			5,599,958
Stockholders’ equity:
Preferred stock - $0.001 par value, 5,000,000 shares authorized, 3,529,412 shares issued and outstanding		3,529			(3,529	)		—
Common stock - 0.001 par value, 100,000,000 shares authorized, 46,737,013 shares issued and outstanding		46,737			—			46,737
Additional paid-in capital		51,948,871			(5,596,429	)		46,352,442
Accumulated deficit		(45,679,086	)		—			(45,679,086	)
Total stockholders’ equity		6,320,051			(5,599,958	)		720,093
Total Liabilities And Stockholders’ Equity	$	6,802,602		$	—		$	6,802,602

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Item 6. Exhibits.

Exhibit Number	Description
3.7	Amended and Restated Bylaws, effective March 20,2006 (1)
31.1	Certification of Chief Executive Officer (pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as amended) *
31.2	Certification of Chief Financial Officer (pursuant to Rule 13a-14(a)/15d-14(a) under the Securities Exchange Act of 1934, as amended) *
32.1#	Certification of Chief Executive Officer (pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. Section 1350)) *
32.2#	Certification of Chief Financial Officer (pursuant to Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. Section 1350)) *

* Filed herewith

# This certification “accompanies” the Form 10-Q to which it relates, is not deemed filed with the SEC and is not to be incorporated by reference into any filing of the Company under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

(1) Incorporated by reference to the company’s Form 8-K filed with the Securities and Exchange Commission on March 24, 2006.

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Signatures

Pursuant to the requirements of the Securities Exchange Act of 1934, Heartland has duly caused this report to be signed on its behalf by the undersigned authorized officer.

	HEARTLAND OIL AND GAS CORP.
	(Registrant)
Date: August 16, 2006	/s/ Philip S. Winner
	Philip S. Winner
	Chairman of the Board, Chief Executive Officer and President

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EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer

Pursuant to Section 302 of Sarbanes Oxley Act of 2002

I, Philip S. Winner, President, Chief Executive Officer, and Director certify that:

1. I have reviewed this Amended March 31, 2006 report on Form 10-Q/A of Heartland Oil and Gas Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flow of the registrant as of, and for, the periods presented in this annual report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a - 15(e) and 15d - 15(e)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions abut the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

c) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected or is reasonably likely to materially affect the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information and have identified for the registrant’s auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

	/s/ Philip S. Winner
August 16, 2006	Philip S. Winner President, Chief Executive Officer, and Director

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer

Pursuant to Section 302 of Sarbanes Oxley Act of 2002

I, Robert L. Poley, Chief Financial Officer and Director, certify that:

1. I have reviewed this amended March 31, 2006 report on Form 10-Q/A of Heartland Oil and Gas Corp.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flow of the registrant as of, and for, the periods presented in this annual report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a - 15(e) and 15d - 15(e)) for the registrant and have:

a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions abut the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

c) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected or is reasonably likely to materially affect the registrant’s internal control over financial reporting.

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting to the registrant’s auditors and the audit committee of the registrant’s board of directors:

a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

	/s/ Robert L. Poley
August 16, 2006	Robert L. Poley Chief Financial Officer and Director

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer

Pursuant to Section 906 of Sarbanes Oxley Act of 2002

In Connection with the Amended Quarterly Report of Heartland Oil and Gas Corp. on Form 10-Q/A for the period ending March 31, 2006, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Philip S. Winner, President, Chief Executive Officer and Director of the registrant, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the registrant.

	/s/ Philip S. Winner
August 16, 2006	Philip S. Winner President, Chief Executive Officer, and Director

EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer

Pursuant to Section 906 of Sarbanes Oxley Act of 2002

In Connection with the Amended Quarterly Report of Heartland Oil and Gas Corp. on Form 10-Q/A for the period ending March 31, 2006, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Robert L. Poley, Chief Financial Officer and Director of the registrant, certify, pursuant to 18 U.S.C. 1350, as adopted pursuant to 906 of the Sarbanes-Oxley Act of 2002, that:

1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the registrant.

	/s/ Robert L. Poley
August 16, 2006	Robert L. Poley Chief Financial Officer and Director