UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


WASHINGTON,
D.C. 20549





FORM
10-Q





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





FOR
THE QUARTERLY PERIOD ENDED MARCH 31, 2010





Or





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





Commission
File #333-74638





ADINO
ENERGY CORPORATION


(Exact
name of registrant as specified in its charter)





MONTANA
            
            82-0369233(State
      or other jurisdiction of incorporation)
            
            (IRS
      Employer Identification Number)2500 CITY WEST BOULEVARD, SUITE 300   HOUSTON, TEXAS
            
            77042(Address
      of principal executive offices)
            
            (Zip
      Code)





(281)
209-9800


(Registrant's
telephone number, including area code)





Securities
registered pursuant to Section 12(g) of the Act:





Common
stock, $0.001 par value per share





Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was required
to file such reports), and (2) has been subject to such filing requirements for
the past 90 days.x  Yes   ̈  No





Indicate
by check mark whether the registrant has submitted electronically and posted on
its corporate Web site, if any, every Interactive Data File required to be
submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this
chapter) during the preceding 12 months (or for such shorter period that the
registrant was required to submit and post such files).  ̈ Yesx No





Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting
company.  See the definitions of “large accelerated filer,”
“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act).





Large
      accelerated filer
             ̈
            Accelerated
      filer
             ̈Non-accelerated
      filer
             ̈
            Smaller
      reporting company
            x(Do
      not check if smaller reporting company)




Indicate
by check mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange Act: Yes  ̈No 
       x





Indicate
the number of shares outstanding of each of the registrant’s classes of common
stock, as of the latest practicable date:  At May 14, 2010, there were
93,760,579 shares of common stock outstanding.







TABLE
OF CONTENTS




Page No.PART
      I FINANCIAL INFORMATIONItem
      1.
                Financial
      StatementsReport
      of Independent Registered Public Accounting FirmConsolidated
      Balance Sheets – March 31, 2010 (Unaudited) and December 31,
      2009
                3Unaudited
      Consolidated Statements of Operations-Three Months Ended March 31,
      2010 and 2009
                4Unaudited
      Consolidated Statement of Changes in Stockholders’ Deficit – Period Ended
      March 31, 2010
                5Unaudited
      Consolidated Statements of Cash Flows - Three Months Ended March 31, 2010
      and 2009
                6Notes
      to Unaudited Consolidated Financial Statements
                7Item
      2.
                Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                10Item
      3.
                Quantitative
      and Qualitative Disclosures About Market Risks
                12Item
      4T.
                Controls
      and Procedures
                12PART
      II OTHER INFORMATIONItem
      1.
                Legal
      Proceedings
                13Item
      2.
                Unregistered
      Sales of Equity Securities and Use of Proceeds
                13Item
      3.
                Defaults
      Upon Senior Securities
                13Item
      4.
                Submission
      of Matters to a Vote of Security Holders
                13Item
      5.
                Other
      Information
                13Item
      6.
                Exhibits
                13Signatures
                
                15


2





ITEM
1. FINANCIAL STATEMENTS





ADINO
ENERGY CORPORATION


Consolidated
Balance Sheets


AS
OF MARCH 31, 2010 AND DECEMBER 31, 2009





March
      31,
                      2010
                      (Unaudited)
                    
                    
                    December 31,
                      2009ASSETSCash
      in bank
                    
                    $
                    327,616
                    
                    
                    $
                    502,542Accounts
      receivable
                    
                    
                    112,490
                    
                    
                    
                    96,734Prepaid
      assets
                    
                    
                    165
                    
                    
                    
                    255Total
      current assets
                    
                    
                    440,271
                    
                    
                    
                    599,531Fixed
      assets, net of accumulated depreciation of $30,909 and $28,366,
      respectively
                    
                    
                    30,116
                    
                    
                    
                    32,659Goodwill
                    
                    
                    1,559,240
                    
                    
                    
                    1,559,240Note
      receivable, net of unamortized discount of $98,566 and $114,138,
      respectively
                    
                    
                    651,434
                    
                    
                    
                    635,862Interest
      receivable
                    
                    
                    375,208
                    
                    
                    
                    375,208Total
      non-current assets
                    
                    
                    2,615,998
                    
                    
                    
                    2,602,969TOTAL
      ASSETS
                    
                    $
                    3,056,269
                    
                    
                    $
                    3,202,500LIABILITIES
      AND STOCKHOLDERS’ DEFICITAccounts
      payable
                    
                    $
                    489,453
                    
                    
                    $
                    511,747Accounts
      payable - related party
                    
                    
                    35,999
                    
                    
                    
                    42,871Accrued
      liabilities
                    
                    
                    278,109
                    
                    
                    
                    330,568Accrued
      liabilities – related party
                    
                    
                    886,687
                    
                    
                    
                    1,023,687Notes
      payable – current portion
                    
                    
                    290,843
                    
                    
                    
                    291,618Interest
      payable
                    
                    
                    547,500
                    
                    
                    
                    510,000Deferred
      gain on sale/leaseback – current portion
                    
                    
                    391,272
                    
                    
                    
                    391,272Total
      current liabilities
                    
                    
                    2,919,863
                    
                    
                    
                    3,101,763Deferred
      gain on sale/leaseback
                    
                    
                    978,203
                    
                    
                    
                    1,076,022Notes
      payable
                    
                    
                    1,520,404
                    
                    
                    
                    1,522,483TOTAL
      LIABILITIES
                    
                    
                    5,418,470
                    
                    
                    
                    5,700,268STOCKHOLDERS’
      DEFICITPreferred
      stock, $0.001 par value, 20,000,000 shares authorized, no shares
      outstanding
                    
                    
                    -
                    
                    
                    
                    -Capital
      stock, $0.001 par value, 500,000,000 shares authorized, 93,760,579
      and 93,260,579 shares issued and outstanding at March 31, 2010 and
      December 31, 2009, respectively
                    
                    
                    93,760
                    
                    
                    
                    93,260Additional
      paid in capital
                    
                    
                    13,532,442
                    
                    
                    
                    13,527,242Retained
      deficit
                    
                    
                    (15,988,403
                    )
                    
                    
                    (16,118,270
                    )Total
      stockholders’ deficit
                    
                    
                    (2,362,201
                    )
                    
                    
                    (2,497,768
                    )TOTAL
      LIABILITIES AND STOCKHOLDERS’ DEFICIT
                    
                    $
                    3,056,269
                    
                    
                    $
                    3,202,500





The
accompanying notes are an integral part of these financial
statements.


3





ADINO
ENERGY CORPORATION


Consolidated
Statements of Operations


FOR
THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009


(Unaudited)





Three
      Months
                      Ended
      March 31,
                      2010
                    
                    
                    Three
      Months
                      Ended
      March 31,
                      2009REVENUESRevenues
                    
                    $
                    655,967
                    
                    
                    $
                    487,361OPERATING
      EXPENSESCost
      of product sales
                    
                    
                    162,199
                    
                    
                    
                    124,095Terminal
      management
                    
                    
                    99,990
                    
                    
                    
                    102,000General
      and administrative
                    
                    
                    136,186
                    
                    
                    
                    128,932Legal
      and professional
                    
                    
                    65,901
                    
                    
                    
                    44,445Consulting
      fees
                    
                    
                    132,215
                    
                    
                    
                    191,383Repairs
                    
                    
                    212
                    
                    
                    
                    183Depreciation
      expense
                    
                    
                    2,542
                    
                    
                    
                    4,332Operating
      supplies
                    
                    
                    -
                    
                    
                    
                    1,801Total
      operating expenses
                    
                    
                    599,245
                    
                    
                    
                    597,171OPERATING
      INCOME (LOSS)
                    
                    
                    56,722
                    
                    
                    
                    (109,810
                    )OTHER
      INCOME AND EXPENSESInterest
      income
                    
                    
                    15,589
                    
                    
                    
                    15,873Interest
      expense
                    
                    
                    (40,264
                    )
                    
                    
                    (40,895
                    )Gain
      from lawsuit / sale
                    
                    
                    97,820
                    
                    
                    
                    105,716Total
      other income and expenses
                    
                    
                    73,145
                    
                    
                    
                    80,694NET
      INCOME (LOSS)
                    
                    $
                    129,867
                    
                    
                    $
                    (29,116
                    )Net
      income (loss) per share, basic and diluted
                    
                    $
                    0.00
                    
                    
                    $
                    (0.00
                    )Weighted
      average shares, basic and diluted
                    
                    
                    93,582,801
                    
                    
                    
                    84,899,468





The
accompanying notes are an integral part of these financial
statements.


4





ADINO
ENERGY CORPORATION


Consolidated
Statement of Changes in Stockholders’ Deficit


FOR
THE PERIOD ENDED MARCH 31, 2010


(Unaudited)





Shares
                
                
                Amount
                
                
                Additional
                  Paid in
                  Capital
                
                
                Retained
                  Deficit
                
                
                TotalBalance
      December 31, 2009
                
                
                93,260,579
                
                
                $
                93,260
                
                
                $
                13,527,242
                
                
                $
                (16,118,270
                )
                
                $
                (2,497,768
                )Shares
      issued for services
                
                
                500,000
                
                
                
                500
                
                
                
                5,200
                
                
                
                -
                
                
                
                5,700Net
      income
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                129,867
                
                
                
                129,867Balance
      March  31, 2010
                
                
                93,760,579
                
                
                $
                93,760
                
                
                $
                13,532,442
                
                
                $
                (15,988,403
                )
                
                $
                (2,362,201
                )





The
accompanying notes are an integral part of these financial
statements.


5





ADINO
ENERGY CORPORATION


Consolidated
Statements of Cash Flows


FOR
THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009


(Unaudited)





March
      31, 2010
                
                
                March
      31, 2009CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income (loss)
                
                $
                129,867
                
                
                $
                (29,116
                )Adjustments
      to reconcile net income (loss) to net cash provided by (used in) operating
      activities:Depreciation
      and amortization
                
                
                2,542
                
                
                
                4,332Amortization
      of discount on note receivable
                
                
                (15,572
                )
                
                
                (12,593
                )Stock
      based compensation
                
                
                5,700
                
                
                
                81,295Gain
      from lawsuit / sale amortization
                
                
                (97,819
                )
                
                
                (105,716
                )Change
      in operating assets and liabilities:Accounts
      receivable
                
                
                (15,756
                )
                
                
                57,692Other
      assets
                
                
                90
                
                
                
                3,027Accounts
      payable and accrued liabilities
                
                
                (181,124
                )
                
                
                76,501Net
      cash provided by (used in) operating activities
                
                
                (172,072
                )
                
                
                75,422CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchase
      of equipment
                
                
                -
                
                
                
                (10,264
                )Principal
      payments on note receivable
                
                
                -
                
                
                
                14,799Net
      cash provided by investing activities
                
                
                -
                
                
                
                4,535CASH
      FLOWS FROM FINANCING ACTIVITIES:Principal
      payments on note payable
                
                
                (2,854
                )
                
                
                (3,338
                )Net
      cash used in financing activities
                
                
                (2,854
                )
                
                
                (3,338
                )Net
      change in cash and cash equivalents
                
                
                (174,926
                )
                
                
                76,619Cash
      and cash equivalents, beginning of period
                
                
                502,542
                
                
                
                30,228Cash
      and cash equivalents, end of period
                
                $
                327,616
                
                
                $
                106,847Cash
      paid for:Interest
                
                $
                -
                
                
                $
                -Income
      taxes
                
                $
                -
                
                
                $
                -Supplemental
      disclosures of non-cash information:Warrants
      exercised for payables
                
                $
                -
                
                
                $
                180,000Stock
      issued for payables
                
                $
                -
                
                
                $
                1,573,298Termination
      of capital lease
                
                $
                -
                
                
                $
                3,572,721Exchange
      of accounts receivable for note receivable
                
                $
                -
                
                
                $
                325,971Discount
      on note receivable
                
                $
                -
                
                
                $
                179,671




The
accompanying notes are an integral part of these financial
statements.


6





ADINO
ENERGY CORPORATION




NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)




NOTE
1 - BASIS OF PRESENTATION




The
accompanying unaudited interim consolidated financial statements of Adino Energy
Corporation (“Adino” or the “Company”) have been prepared in accordance with
accounting principles generally accepted in the United States of America and the
rules of the Securities and Exchange Commission (“SEC”), and should be read in
conjunction with the audited financial statements and notes thereto contained in
Adino Energy Corporation’s Annual Report filed with the SEC on Form 10-K.
 In the opinion of management, all adjustments, consisting of normal
recurring adjustments, necessary for a fair presentation of financial position
and the results of operations for the interim periods presented have been
reflected herein.  The results of operations for interim periods are not
necessarily indicative of the results to be expected for the full year.





NOTE
2-GOING CONCERN




As of
March 31, 2010, the Company has a working capital deficit of $2,479,592 and
total stockholders’ deficit of $2,362,201.  These factors raise
substantial doubt regarding the Company’s ability to continue as a going
concern. The ability of the Company to continue as a going concern depends upon
its ability to obtain funding for its working capital deficit. Of the
outstanding current liabilities at March 31, 2010, $391,272 is a non-cash
deferred gain on the terminal transaction (See Note 3 for a complete explanation
of the deferred settlement gain).  Additionally, $886,687 of the
outstanding current liabilities is due to certain officers and directors for
prior years’ accrued compensation.  These officers and directors have
agreed in writing to postpone payment if necessary, should the Company need
capital it would otherwise pay these individuals.  The Company plans
to satisfy current year and future cash flow requirements through operations and
merger and acquisition opportunities including the expansion of existing
business opportunities.  The Company expects these growth
opportunities to be financed by a combination of equity and debt capital;
however, in the event the Company is unable to obtain additional debt and equity
financing, the Company may not be able to continue its operations.




NOTE
3-LEASE COMMITMENTS




On April
1, 2007,  the Company’s wholly-owned subsidiary, Intercontinental
Fuels, LLC (“IFL”) agreed to lease a fuel storage terminal from 17617 Aldine
Westfield Road, LLC for 18 months at $15,000 per month. The lease contained an
option to purchase the terminal for $3.55 million by September 30, 2008. The
Company evaluated this lease and determined that it qualified as a capital lease
for accounting purposes.  The terminal was capitalized at $3,179,572,
calculated using the present value of monthly rent at $15,000 for the months
April 2007 – September 2008 and the final purchase price of $3.55 million
discounted at IFL’s incremental borrowing rate of 12.75%.  The
terminal was depreciated over its useful life of 15 years resulting in monthly
depreciation expense of $17,664.  As of December 31, 2007, the
carrying value of the capital lease liability was $3,355,984.




Due to
the difficult credit markets, the Company was unable to secure financing for the
Houston terminal facility and assigned its rights under the terminal purchase
option to Lone Star Fuel Storage and Transfer, LLC (“Lone
Star”).  Lone Star purchased the terminal from 17617 Aldine Westfield
Road, LLC on September 30, 2008.  Lone Star then entered into a five
year operating lease with option to purchase with IFL.  The five year
lease has monthly rental payments of $30,000, escalating 3% per
year.  IFL’s purchase option allows for the terminal to be purchased
at any time prior to October 1, 2009 for $7,775,552.  The sale price
escalates $1,000,000 per year after this date, through the lease expiration date
of September 30, 2013.  The Company recognizes the escalating lease
payments on a straight line basis.  As of March 2010, the Company has
not exercised its option to purchase the Houston terminal facility.





The Lone Star lease was
evaluated and was deemed to be an operating lease.





The
transactions that led to the above two leases both resulted in gains to the
Company.  The lawsuit settlement just prior to the lease with 17617
Aldine Westfield Road, LLC resulted in a gain to the Company of
$1,480,383.  The Company amortized over the life of the capital asset,
or 15 years.





At the
expiration of the capital lease, September 30, 2008, the above remaining gain of
$1,332,345 was rolled into the gain on the sale assignment transaction with Lone
Star of $624,047.  The total remaining gain to be amortized as of
September 30, 2008 of $1,956,392 is being amortized over the life of the Lone
Star operating lease, or 60 months.  The operating lease expires as of
September 30, 2013.  This treatment is consistent with sale leaseback
gain recognition rules.


7





NOTE
4 – EQUIPMENT




The
following is a summary of this category:





March
      31, 2010
                  
                  
                  December 31, 2009Vehicles
                  
                  $
                  47,427
                  
                  
                  $
                  47,427Leasehold
      Improvements
                  
                  
                  10,264
                  
                  
                  
                  10,264Office
      Equipment
                  
                  
                  3,334
                  
                  
                  
                  3,334Subtotal
                  
                  
                  61,025
                  
                  
                  
                  61,025Less:
      Accumulated Depreciation
                  
                  
                  (30,909
                  )
                  
                  
                  (28,366
                  )Total
                  
                  $
                  30,116
                  
                  
                  $
                  32,659




The
useful life for material and terminal equipment is 15 years along with the
related leasehold improvements. Office equipment is being depreciated over three
years and vehicles are depreciated over five years.




NOTE
5 - NOTES RECEIVABLE  / INTEREST RECEIVABLE




On
November 6, 2003, Mr. Stuart Sundlun acquired 1,200 units of Intercontinental
Fuels, LLC (IFL) from Adino. Part of the purchase price was a note from Mr.
Sundlun dated November 6, 2003, bearing interest of 10% per annum in the amount
of $750,000. This note is secured by 600 units of IFL being held in attorney
escrow and released pursuant to the sales agreement.  The sales
agreement provided that the unreleased units would revert to Adino if Mr.
Sundlun did not acquire the remaining 600 units.




On August
7, 2006, IFL repurchased the units sold to Mr. Sundlun. The entire amount due
from Mr. Sundlun and payable to Mr. Sundlun is reported at gross (i.e., without
offset) in the Company's financial statements. The right of offset does not
officially exist even though it has been discussed. In accordance with current
guidance, the Company did not net the note receivable against the note payable.
Current guidance states “It is a general principal of accounting that the
offsetting of assets and liabilities in the balance sheet is improper except
where a right of setoff exists.” Although both parties agreed verbally that a
net payment would be acceptable, no formal documentation exists of this verbal
agreement.




In
addition to the above facts, the note holder provided a separate written
confirmation to the Company's auditors at December 31, 2009 of both the note
payable and note receivable balances, respectively.




The
Company's net notes receivable and payable to and from Mr. Sundlun are a net
payable of $750,000.




The 600
units of IFL are no longer held in escrow as the Company purchased all 1,200
units of IFL including the escrow units for $1,500,000 which is the value of the
note payable.




The note
receivable from Mr. Sundlun matured on November 6, 2008.  The Company
extended the note’s maturity date to August 8, 2011 with no additional interest
accrual to occur past November 6, 2008.  Due to the fact that there
will be no interest accrued on the note going forward, the Company recorded a
discount on the note principal of $179,671.  This amount will amortize
until the note’s maturity in August 2011.





Interest
accrued on the Sundlun note receivable was $375,208 at March 31, 2010 and
December 31, 2009.




A
schedule of the balances at March 31, 2010 and December 31, 2009 is as
follows:





March 31, 2010
                  
                  
                  December 31, 2009Sundlun,
      net of unamortized discount
                  
                  $
                  651,434
                  
                  
                  $
                  635,862Less:  current
      portion
                  
                  
                  -
                  
                  
                  
                  -Total
      long-term notes receivable
                  
                  $
                  651,434
                  
                  
                  $
                  635,862




NOTE
6 – CONSOLIDATION OF IFL AND GOODWILL




From the
period of IFL’s inception to 2005, our ownership percentage in IFL was
60%. Our ownership increased to 80% during 2005 when our 20% partner
withdrew from IFL and rescinded its investment. On August 7, 2006, we obtained
the remaining 20% interest in IFL from Stuart Sundlun in consideration for a
note payable as described in Note 8 below. This transaction was accounted for as
a step acquisition. This step acquisition resulted in an additional $1,500,000
of goodwill as the fair value of the net assets acquired was determined by
management to be zero and the consideration given as discussed above was the
$1,500,000 note.




Adino
evaluated the aggregate goodwill for impairment at December 31, 2009 and has
determined that the fair value of the reporting unit exceeds its carrying amount
and hence the goodwill is not impaired.


8





NOTE
7 – ACCRUED LIABILITIES / ACCRUED LIABILITIES –RELATED PARTY




Other
liabilities and accrued expenses consisted of the following as of March 31, 2010
and December 31, 2009:




March 31, 2010
                  
                  
                  December 31, 2009Accrued
      accounting and legal fees
                  
                  
                  118,500
                  
                  
                  
                  119,000Customer
      deposits
                  
                  
                  110,000
                  
                  
                  
                  110,000Property
      tax accrual
                  
                  
                  21,623
                  
                  
                  
                  76,446Deferred
      lease liability
                  
                  
                  27,986
                  
                  
                  
                  25,122Total
      accrued liabilities
                  
                  $
                  278,109
                  
                  
                  $
                  330,568Accrued
      salaries-related party
                  
                  $
                  886,687
                  
                  
                  $
                  1,023,687




Deferred lease
liability:The Lone Star lease is being expensed by the
straight line method as required by current guidance, resulting in
a deferred lease liability that will be extinguished by the lease
termination date of September 30, 2013.




NOTE
8 - NOTES PAYABLE





March
      31, 2010
                
                
                December 31, 2009Note
      payable  - Stuart Sundlun, bearing interest of 10% per annum,
      due August 7, 2011
                
                $
                1,500,000
                
                
                $
                1,500,000Note
      payable - Bill Gaines, non interest bearing, due on demand
                
                
                8,000
                
                
                
                9,000Note
      payable - Gulf Coast Fuels, bearing interest of $25,000
                
                
                275,000
                
                
                
                275,000Note
      payable - GMAC, bearing interest of 11.7% per annum with 60 monthly
      payments of $895, due May 13, 2013
                
                
                28,247
                
                
                
                30,101Total
      notes payable
                
                $
                1,811,247
                
                
                $
                1,814,101Less
      current portion
                
                
                (290,843
                )
                
                
                (291,618
                )Long
      term note payable
                
                $
                1,520,404
                
                
                $
                1,522,483





NOTE
9 – STOCK




COMMON
STOCK




The
Company's common stock has a par value of $0.001. There were 50,000,000 shares
authorized as of December 31, 2007.  At the Company’s January 2008
shareholder meeting, the shareholders voted to increase the authorized common
stock to 500,000,000 shares.  As of December 31, 2009, the Company
had  93,260,579 shares issued and outstanding.




On
February 2, 2010, the Board approved a stock issuance of 250,000 shares of
restricted common stock each to Michael Turchi and Mountaintop Development, Inc.
for services rendered to the Company.  The issuance resulted in an
expense to the Company of $5,700, based on the stock’s market price at the date
of issuance.





As a
result of the above common stock issuances, as of March 31, 2010, there were
93,760,579 shares issued and outstanding.




PREFERRED
STOCK




In 1998,
the Company amended its articles to authorize Preferred Stock. There are
20,000,000 shares authorized of Preferred Stock with a par value of $0.001. The
shares are non-voting and non-redeemable by the Company. The Company further
designated five series of its Preferred Stock: "Series 'A' $12.50 Preferred
Stock" (2,159,193 shares authorized),, "Series "A" $8.00 Preferred Stock,"
(1,079,957 shares authorized), Class “B” Preferred Stock Series 1 (666,660
shares authorized), Class “B” Preferred Stock Series 2 (666,660 shares
authorized), and Class “B” Preferred Stock Series 3 (666,680 shares authorized).
As of March 31, 2010 and December 31, 2009, there are no shares of Preferred
Stock issued and outstanding.




The
Series "A" $12.50 Preferred Stock shall be convertible, in whole or in part, at
any time after the common stock of the Company shall maintain an average bid
price per share of at least $12.50 for ten (10) consecutive trading days. The
conversion ratio is three (3) shares of common stock per share of Series “A”
$12.50 Preferred Stock.




The
Series "A" $8.00 Preferred Stock shall be convertible, in whole or in part, at
any time after the common stock of the Company shall maintain an average bid
price per share of at least $8.00 for ten (10) consecutive trading days. The
conversion ratio is three (3) shares of common stock per share of Series “A”
$8.00 Preferred Stock.


9





The Class
“B” Preferred Stock Series 1 is convertible, in whole or in part, at any time
after the common stock of the Company shall maintain an average bid price per
share of at least $2.00 for ten (10) consecutive trading days. The conversion
ratio is two (2) shares of common stock per share of Class “B” Preferred
Stock.





The Class
“B” Preferred Stock Series 2 is convertible, in whole or in part, at any time
after the common stock of the Company shall maintain an average bid price per
share of at least $3.00 for ten (10) consecutive trading days. The conversion
ratio is two (2) shares of common stock per share of Class “B” Preferred
Stock.





The Class
“B” Preferred Stock Series 3 is convertible, in whole or in part, at any time
after the common stock of the Company shall maintain an average bid price per
share of at least $4.00 for ten (10) consecutive trading days. The conversion
ratio is two (2) shares of common stock per share of Class “B” Preferred
Stock.





The
preferential amount payable with respect to shares of any of the above series of
Preferred Stock in the event of voluntary or involuntary liquidation,
dissolution, or winding-up, shall be an amount equal to $5.00 per share, plus
the amount of any dividends declared and unpaid thereon.





DIVIDENDS





Dividends
are non-cumulative, however, the holders of such series, in preference to the
holders of any common stock, shall be entitled to receive, as and when declared
payable by the Board of Directors from funds legally available for the payment
thereof, dividends in lawful money of the United States of America at the rate
per annum fixed and determined as herein authorized for the shares of such
series, but no more, payable quarterly on the last days of March, June,
September, and December in each year with respect to the quarterly period ending
on the day prior to each such respective dividend payment date. In no event
shall the holders of either series receive dividends of more than percent (1%)
in any fiscal year. Each share of both series shall rank on parity with each
other share of preferred stock, irrespective of series, with respect to
dividends at the respective fixed or maximum rates for such series.





NOTE
10 – CONCENTRATIONS





The
following table sets forth the amount and percentage of revenue from those
customers that accounted for at least 10% of revenues for the three months ended
March 31, 2010 and 2009.


Three
      Months
                                        Ended
      March 31,
                                        2010
                                      
                                      
                                      %
                                      
                                      
                                      Three
      Months
                                        Ended
      March 31,
                                        2009
                                      
                                      
                                      %Customer
      A
                                      
                                      $
                                      13,402
                                      
                                      
                                      
                                      2
                                      
                                      
                                      $
                                      53,550
                                      
                                      
                                      
                                      11Customer
      B
                                      
                                      $
                                      300,000
                                      
                                      
                                      
                                      46
                                      
                                      
                                      $
                                      131,181
                                      
                                      
                                      
                                      27Customer
      C
                                      
                                      $
                                      102,795
                                      
                                      
                                      
                                      16
                                      
                                      
                                      $
                                      153,090
                                      
                                      
                                      
                                      31Customer
      D
                                      
                                      $
                                      61,110
                                      
                                      
                                      
                                      9
                                      
                                      
                                      $
                                      115,786
                                      
                                      
                                      
                                      24Customer
      E
                                      
                                      $
                                      178,419
                                      
                                      
                                      
                                      27
                                      
                                      
                                      
                                      -
                                      
                                      
                                      
                                      -




The
Company had two customers that represented 46% and 27% of outstanding
receivables at March 31, 2010 and two customers that represented 74% and 23% of
outstanding receivables at December 31, 2009.





NOTE
11 – SUBSEQUENT EVENTS





There
were no material subsequent events through the date the financial statements
were issued.




ITEM
2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS





The
following discussion should be read in conjunction with our unaudited
consolidated interim financial statements and related notes thereto included in
this quarterly report and in our audited consolidated financial statements and
Management's Discussion and Analysis of Financial Condition and Results of
Operations ("MD&A") contained in our Form 10-K for the year ended December
31, 2009. Certain statements in the following MD&A are forward looking
statements. Words such as "expects", "anticipates", "estimates" and similar
expressions are intended to identify forward looking statements. Such statements
are subject to risks and uncertainties that could cause actual results to differ
materially from those projected.


10





RESULTS
OF OPERATIONS





The
Company continues to lease the terminal at 17617 Aldine Westfield Road, Houston,
Texas from Lone Star Fuel Storage and Transport, LLC (“Lone
Star”).  Utilizing a fuel storage and throughput model, revenues
continue to remain strong.




Revenue: In the first quarter
of 2010, the Company experienced a revenue increase of $168,606, or 35% over the
first quarter of 2009.  Revenue increased from $487,361 for the
quarter ended March 31, 2009 to $655,967 for the quarter ended March 31,
2010.  The Company’s main revenue source was its wholly owned
subsidiary, IFL.  IFL added 2 new customers in 2009, accounting for
the increased terminal revenue in the latter part of 2009 and early
2010.  The terminal management places emphasis on utilizing the
storage and throughput capacity of the facility to maximize
revenue.





Net Income/Loss: During the
first quarter of 2010, the Company had net income of $129,867, the highest
quarter end net income in recent Company history. We believe that our first
quarter 2010 net income is an important milestone for the Company. In the three
months ended March 31, 2009, the Company posted a net loss of $29,116. Increased
profitability arises from the Company’s streamlined operations, increasing
revenue and the deferred gain arising from the lawsuit settled in 2007 with
17617 Aldine Westfield Road, LLC and the terminal sale to Lone Star. See Note 3
above for a more detailed explanation.





Cost of Product
Sales:  As customers take their fuel from the IFL terminal,
certain fuel additives must be mixed with the diesel to comply with state and
federal regulations.  In an effort to decrease product cost volatility
and improve operational efficiency, IFL contracted with a third party fuel
additive provider for all fuel additives beginning in April
2008.  This allows IFL to realize efficiencies in required additive
purchases.  The Company realized an increase in product sales expense
of $38,104, or 31%, for the period ended March 31, 2010 over 2009, primarily due
to the increased throughput volumes for 2010.   Total expenses of
$162,199 for the period ended March 31, 2010 and $124,095 for the same period in
2009 remained constant at 25% of revenues.




Terminal Management:
The Company has outsourced its terminal operations since July
2007.  The monthly contract includes employee salaries and benefits,
terminal operational expenses, minor repairs, maintenance, insurance and other
ancillary operating expenses.  Terminal management expense for the
quarter ended March 31, 2010 was $99,990, relatively consistent with the expense
incurred in 2009 of $102,000.  Management is encouraged by the
success of this alliance and plans to utilize the terminal management model in
any future acquisitions.




General and
Administrative:The Company’s expense for the three months ended
March 31, 2010 was $136,186 or a 6% increase over the expense of $128,932 for
the same period in 2009.  General and administrative expense is
primarily rent expense paid on the IFL terminal to Lone Star, currently $31,855
per month.




Legal and
Professional:  Legal and professional expense was $65,901 at
March 31, 2010, compared to $44,445 at March 31, 2009, an increase of $21,456 or
48%.  The increase is primarily due to payments made by IFL for legal
services and payments by Adino for its 2009 audit.




Consulting
Expense:The Company’s consulting expenses decreased by
$59,168 or 31% from the first quarter of 2009 to the first quarter of
2010.  The increased expense for 2009 was primarily due to a common
stock award granted to the Board of Directors of $52,500. No such grant was made
in the quarter ended March 31, 2010.





Interest
Income:Interest income remained consistent at $15,589 and
$15,873 for the three months ended March 31, 2010 and 2009,
respectively.  The Company has agreed to an amendment on the $750,000
note receivable with Mr. Sundlun.  This amendment extends the maturity
date of the note to August 2011 at no additional interest past the original
maturity date of November 6, 2008.  Due to the lack of interest
expense, the Company recognized a discount on the note and amortizes that
discount through the note’s maturity date, accounting for the consistent
expense.




Interest
Expense:Interest expense to the Company was $40,264 at March
31 2010 compared to $40,895 at March 31, 2009, remaining
consistent.  Interest expense is for the note to Mr. Sundlun and the
automobile note, only.




Gain from Lawsuit /
Sale:The lawsuit settlement on March 23, 2007 resulted in a
gain to the Company of $1,480,383.  The transaction was deemed to be a
sale/leaseback, and therefore the gain was recognized over the life of the
capitalized asset, 15 years.




On
September 30, 2008, the Company assigned its rights to purchase the IFL terminal
to Lone Star.  As of this date, the unamortized gain from lawsuit was
$1,332,345.  The Company’s transaction with Lone Star resulted in an
additional gain of $624,047.  These amounts, totaling $1,956,392, will
be amortized over the 60 month life of the Lone Star operating
lease.  See Note 3 above for more information regarding these
transactions.


11




CAPITAL
RESOURCES AND LIQUIDITY





As of
March 31, 2010, our cash and cash equivalents were $327,616, compared to
$502,542 at December 31, 2009.  The Company’s liquidity has increased
substantially in the past two quarters due to revenues from a new customer.
Nonetheless, cash flow has been an ongoing concern for the Company due to the
large amount of legacy liabilities that Adino accumulated during the years in
which it was a non-operating entity. These liabilities will likely continue to
be a drag on the Company’s financial statements unless and until Adino obtains
financing that allows us to pay off these liabilities.





Our
working capital deficit at March 31, 2010 was $2,479,592 compared to $2,362,200
at December 31, 2009. The Company believes that the current cash flow and
planned increase in operations are adequate to satisfy the working capital
deficit.  Certain officers and directors have agreed in writing to postpone
payment if necessary should the Company need capital it would otherwise pay
these individuals. Lastly, the Company plans to grow through merger and
acquisition opportunities including the expansion of existing business
opportunities. The Company expects these growth opportunities to be financed
through a combination of equity and debt capital; however, in the event the
Company is unable to obtain additional debt and equity financing, the Company
may not be able to pursue these opportunities or continue its
operations.





For the
three months ended March 31, 2010, cash used by operating activities was
$172,072 compared to cash provided by operating activities of $75,422 for the
three months ended March 31, 2009.  The increased use of cash was
primarily in payment of accrued liabilities and vendor payables.





RISK
FACTORS





The
market price of the Company's common stock has fluctuated significantly since it
began to be publicly traded and may continue to be highly volatile. Factors such
as the ability of the Company to achieve development goals, the ability of the
Company to compete in the petroleum distribution industry, the ability of the
Company to raise additional funds, general market conditions and other factors
affecting the Company's business that are beyond the Company's control may cause
significant fluctuations in the market price of the Company's common stock. Such
market fluctuations could adversely affect the market price for the Company's
common stock.





As of
March 31, 2010, the Company has a working capital deficit of $2,479,592 and
total stockholders’ deficit of $2,362,201.  These factors raise
substantial doubt regarding the Company’s ability to continue as a going
concern. The ability of the Company to continue as a going concern depends upon
its ability to obtain funding for its working capital deficit. Of the
outstanding current liabilities at March 31, 2010, $391,272 is a non-cash
deferred gain on the terminal transaction (See Note 3 for a complete explanation
of the deferred settlement gain).  Additionally, $886,687 of the
outstanding current liabilities is due to certain officers and directors for
prior years’ accrued compensation.  These officers and directors have
agreed in writing to postpone payment if necessary, should the Company need
capital it would otherwise pay these individuals.  The Company plans
to satisfy current year and future cash flow requirements through operations and
merger and acquisition opportunities including the expansion of existing
business opportunities.  The Company expects these growth
opportunities to be financed by a combination of equity and debt capital;
however, in the event the Company is unable to obtain additional debt and equity
financing, the Company may not be able to continue its operations.





ITEM
3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK





As a
smaller reporting company, we are not required to provide the information
required by this Item.





ITEM
4. CONTROLS AND PROCEDURES





Evaluation of disclosure controls
and procedures. We carried out an evaluation, under the supervision and
with the participation of our management, including our principal executive
officer and principal financial officer, of the effectiveness of our disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and
15d-15(e)).  Based upon that evaluation, our principal executive
officer and principal financial officer concluded that, as of the end of the
period covered in this report, our disclosure controls and procedures were
ineffective at ensuring that information required to be disclosed in reports
filed under the Securities Exchange Act of 1934 is recorded, processed,
summarized and reported within the required time periods and is accumulated and
communicated to our management, including our principal executive officer and
principal financial officer, as appropriate to allow timely decisions regarding
required disclosure.





Our
management, including our principal executive officer and principal financial
officer, does not expect that our disclosure controls and procedures or our
internal controls will prevent all error or fraud.  A control system,
no matter how well conceived and operated, can provide only reasonable, not
absolute, assurance that the objectives of the control system are
met.  Further, the design of a control system must reflect the fact
that there are resource constraints and the benefits of controls must be
considered relative to their costs.  Due to the inherent limitations
in all control systems, no evaluation of controls can provide absolute assurance
that all control issues and instances of fraud, if any, have been detected. We
performed additional analysis and other post-closing procedures in an effort to
ensure our consolidated financial statements included in this quarterly report
have been prepared in accordance with generally accepted accounting principles.
Accordingly, management believes that the financial statements included in this
report fairly present in all material respects our financial condition, results
of operations and cash flows for the periods presented.





Changes in internal controls.
There have not been any changes in our internal control over financial reporting
that occurred during the quarter ended March 31, 2010 that have materially
affected or are reasonably likely to materially affect internal control over
financial reporting.


12





PART
II





ITEM
1. LEGAL PROCEEDINGS





On March
15, 2010, IFL was sued by G J Capital Ltd. (“G J Capital”) under Cause No.
2010-16875 in the 129th
Judicial District Court of Harris County, Texas. G J Capital claims to be the
assignee of the note listed in our financial statements as payable to Gulf Coast
Fuels. In the above suit, G J Capital claims that the unpaid principal amount of
the note is $250,000. G J Capital has claimed damages of $250,000 plus interest
for a total amount of approximately $291,000 in damages.





G J
Capital also sued Adino in the above suit, but Adino has not been served with
service of process and therefore has not filed an answer.





After the
period covered by this quarterly report, IFL answered the above suit, generally
denying any liability under the agreement alleged by G J Capital. IFL has also
countersued G J Capital for usury and conspiracy due to the fact that the
interest rate used in the agreement with Gulf Coast Fuels exceeds the maximum
interest rate set by Texas law.





ITEM
2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS





On
February 2, 2010, the Board approved a stock issuance of 250,000 shares of
restricted common stock each to Michael Turchi and Mountaintop Development for
services rendered to the Company. The issuance resulted in an expense to the
Company of $5,700, based on the stock’s market price at the date of issuance.
The Company claims an exemption from registration under the Securities Act based
upon section 4(2) of the Act due to the limited number of
purchasers.





ITEM
3. DEFAULTS UPON SENIOR SECURITIES





None.





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





None.





ITEM
5. OTHER INFORMATION





None.





ITEM
6. EXHIBITS





The
following documents are filed as part of this report:





ExhibitNumber
            
            Exhibit3.1
            
            Articles
      of Incorporation (as amended January 30, 2008) (incorporated by reference
      to our Form 10-K filed on March 18, 2009)3.2
            
            By-laws
      of Golden Maple Mining and Leaching Company, Inc. (now Adino Energy
      Corporation) (incorporated by reference to our Form 10-K filed on March
      18, 2009)10.1
            
            Contract
      with Metropolitan Transit Authority of Harris County,
      Texas (incorporated by reference to our Form 10-K filed on March 18,
      2009)10.2
            
            Lease
      with Lone Star Fuel Storage and Transfer, LLC (incorporated by
      reference to our Form 10-K filed on March 18, 2009)10.3
            
            Resolution
      of the Board of Directors of August 1, 2008 (incorporated by
      reference to our Form 10-K filed on March 18, 2009)10.4
            
            Resolution
      of the Board of Directors of October 29, 2008 (incorporated by
      reference to our Form 10-K filed on March 18, 2009)10.5
            
            Resolution
      of the Board of Directors of February 20, 2009 (incorporated by reference
      to our Form 10-Q filed on  August 7, 200910.6
            
            Resolution
      of the Board of Directors of March 26, 2009 (incorporated by reference to
      our Form 10-Q filed on August 7,
2009




13





10.7
            
            Resolution
      of the Board of Directors of June 30, 2009 (incorporated by reference to
      our Form 10-Q filed on November 10, 2009)10.8
            
            Resolution
      of the Board of Directors of December 30, 2009 (incorporated by reference
      to our Form 10-Q filed on November 10, 2009)14
            
            Code
      of Business Conduct and Ethics (incorporated by reference to our Form
      10-K filed on March 18, 2009)31.1
            
            Certification  of  Chief  Executive  Officer  pursuant  to  Rule
      15d-14(a) of the Exchange Act31.2
            
            Certification
      of Chief Financial Officer pursuant to Rule 15d-14(a) of the Exchange
      Act32.1
            
            Certification
      of Chief Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  200232.2
            
            Certification
      of Chief Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted
      pursuant to Section 906 of the Sarbanes-Oxley Act of
  2002





14




SIGNATURES





Pursuant
to the requirements of the Securities Exchange Act of 1934, the undersigned has
duly caused this Form 10-Q to be signed on its behalf by the undersigned
thereunto duly authorized.





ADINO
      ENERGY CORPORATIONBy:
      /s/ Timothy G. Byrd, Sr.Timothy
      G. Byrd, Sr.CEO,
      CFO and DirectorMay
      14, 2010




15