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 JUNE 30, 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 August 11, 2010, there
were 93,760,579 shares of common stock outstanding.







TABLE
OF CONTENTS




Page No.PART
      I  FINANCIAL INFORMATIONItem
      1.
                Financial
      StatementsConsolidated
      Balance Sheets – June 30, 2010 (Unaudited) and December 31,
      2009
                3Unaudited
      Consolidated Statements of Operations-Three and Six Months Ended June
      30, 2010 and 2009
                4Unaudited
      Consolidated Statement of Changes in Stockholders’ Deficit – Period Ended
      June 30, 2010
                5Unaudited
      Consolidated Statements of Cash Flows - Six Months Ended June 30, 2010 and
      2009
                6Notes
      to Unaudited Consolidated Financial Statements
                7Item
      2.
                Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                11Item
      3.
                Quantitative
      and Qualitative Disclosures About Market Risks
                13Item
      4T.
                Controls
      and Procedures
                13PART
      II  OTHER INFORMATIONItem
      1.
                Legal
      Proceedings
                13Item
      2.
                Unregistered
      Sales of Equity Securities and Use of Proceeds
                14Item
      3.
                Defaults
      Upon Senior Securities
                14Item
      4.
                Submission
      of Matters to a Vote of Security Holders
                14Item
      5.
                Other
      Information
                14Item
      6.
                Exhibits
                14Signatures
                15




2





ITEM
1. FINANCIAL STATEMENTS





ADINO
ENERGY CORPORATION


Consolidated
Balance Sheets


AS
OF JUNE 30, 2010 AND DECEMBER 31, 2009





June 30,
                  2010
                  (Unaudited)
                
                
                December 31,
                  2009ASSETSCash
      in bank
                
                $
                225,464
                
                
                $
                502,542Accounts
      receivable
                
                
                31,454
                
                
                
                96,734Prepaid
      assets
                
                
                260
                
                
                
                255Total
      current assets
                
                
                257,178
                
                
                
                599,531Fixed
      assets, net of accumulated depreciation of $33,451 and $28,366,
      respectively
                
                
                27,574
                
                
                
                32,659Goodwill
                
                
                1,559,240
                
                
                
                1,559,240Note
      receivable, net of unamortized discount of $82,145 and $114,138,
      respectively
                
                
                667,855
                
                
                
                635,862Interest
      receivable
                
                
                375,208
                
                
                
                375,208Total
      non-current assets
                
                
                2,629,877
                
                
                
                2,602,969TOTAL
      ASSETS
                
                $
                2,887,055
                
                
                $
                3,202,500LIABILITIES
      AND STOCKHOLDERS’ DEFICITAccounts
      payable
                
                $
                478,022
                
                
                $
                511,747Accounts
      payable - related party
                
                
                33,125
                
                
                
                42,871Accrued
      liabilities
                
                
                301,498
                
                
                
                330,568Accrued
      liabilities – related party
                
                
                824,687
                
                
                
                1,023,687Notes
      payable – current portion
                
                
                288,074
                
                
                
                291,618Interest
      payable
                
                
                585,000
                
                
                
                510,000Deferred
      gain on sale/leaseback – current portion
                
                
                391,272
                
                
                
                391,272Total
      current liabilities
                
                
                2,901,678
                
                
                
                3,101,763Deferred
      gain on sale/leaseback
                
                
                880,383
                
                
                
                1,076,022Notes
      payable
                
                
                1,518,283
                
                
                
                1,522,483TOTAL
      LIABILITIES
                
                
                5,300,344
                
                
                
                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 June 30, 2010 and
      December 31, 2009, respectively
                
                
                93,760
                
                
                
                93,260Additional
      paid in capital
                
                
                13,532,442
                
                
                
                13,527,242Retained
      deficit
                
                
                (16,039,491
                )
                
                
                (16,118,270
                )Total
      stockholders’ deficit
                
                
                (2,413,289
                )
                
                
                (2,497,768
                )TOTAL
      LIABILITIES AND STOCKHOLDERS’ DEFICIT
                
                $
                2,887,055
                
                
                $
                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 AND SIX MONTHS ENDED JUNE 30, 2010 AND 2009


(Unaudited)





Three months ended
                                
                                
                                Six months endedJune 30
                                
                                
                                June 30
                                
                                
                                June 30
                                
                                
                                June 302010
                                
                                
                                2009
                                
                                
                                2010
                                
                                
                                2009REVENUES
      AND GROSS MARGINSRevenues
                                
                                $
                                466,699
                                
                                
                                $
                                503,626
                                
                                
                                $
                                1,122,666
                                
                                
                                $
                                990,987OPERATING
      EXPENSESCost
      of product Sales
                                
                                
                                67,916
                                
                                
                                
                                131,399
                                
                                
                                
                                230,115
                                
                                
                                
                                255,494Terminal
      management
                                
                                
                                99,990
                                
                                
                                
                                99,000
                                
                                
                                
                                199,980
                                
                                
                                
                                201,000General
      and administrative
                                
                                
                                182,442
                                
                                
                                
                                137,857
                                
                                
                                
                                318,628
                                
                                
                                
                                266,789Legal
      and professional
                                
                                
                                49,096
                                
                                
                                
                                47,665
                                
                                
                                
                                114,997
                                
                                
                                
                                92,110Consulting
      fees
                                
                                
                                183,716
                                
                                
                                
                                280,798
                                
                                
                                
                                315,931
                                
                                
                                
                                472,181Repairs
                                
                                
                                6,151
                                
                                
                                
                                -
                                
                                
                                
                                6,363
                                
                                
                                
                                183Depreciation
      expense
                                
                                
                                2,543
                                
                                
                                
                                2,755
                                
                                
                                
                                5,085
                                
                                
                                
                                7,087Operating
      supplies
                                
                                
                                -
                                
                                
                                
                                1,449
                                
                                
                                
                                -
                                
                                
                                
                                3,250Total
      operating expenses
                                
                                
                                591,854
                                
                                
                                
                                700,923
                                
                                
                                
                                1,191,099
                                
                                
                                
                                1,298,094OPERATING
      LOSS
                                
                                
                                (125,155
                                )
                                
                                
                                (197,297
                                )
                                
                                
                                (68,433
                                )
                                
                                
                                (307,107
                                )OTHER
      INCOME AND EXPENSESInterest
      income
                                
                                
                                16,456
                                
                                
                                
                                16,345
                                
                                
                                
                                32,045
                                
                                
                                
                                32,218Interest
      expense
                                
                                
                                (40,208
                                )
                                
                                
                                (41,542
                                )
                                
                                
                                (80,472
                                )
                                
                                
                                (82,437
                                )Gain
      from lawsuit
                                
                                
                                97,819
                                
                                
                                
                                97,820
                                
                                
                                
                                195,639
                                
                                
                                
                                203,536Other
      income (expense)
                                
                                
                                -
                                
                                
                                
                                2,204
                                
                                
                                
                                -
                                
                                
                                
                                2,204Total
      other income and expense
                                
                                
                                74,067
                                
                                
                                
                                74,827
                                
                                
                                
                                147,212
                                
                                
                                
                                155,521NET
      INCOME (LOSS)
                                
                                $
                                (51,088
                                )
                                
                                $
                                (122,470
                                )
                                
                                $
                                78,779
                                
                                
                                $
                                (151,586
                                )Net
      income (loss) per share, basic
                                
                                $
                                (0.00
                                )
                                
                                $
                                (0.00
                                )
                                
                                $
                                0.00
                                
                                
                                $
                                (0.00
                                )Net
      income (loss) per share, fully diluted
                                
                                
                                (0.00
                                )
                                
                                
                                (0.00
                                )
                                
                                
                                0.00
                                
                                
                                
                                (0.00
                                )Weighted
      average shares outstanding
                                
                                
                                93,760,579
                                
                                
                                
                                91,386,953
                                
                                
                                
                                93,672,181
                                
                                
                                
                                88,161,131





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 JUNE 30, 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
                
                
                -
                
                
                
                -
                
                
                
                -
                
                
                
                78,779
                
                
                
                78,779Balance
      June 30, 2010
                
                
                93,760,579
                
                
                $
                93,760
                
                
                $
                13,532,442
                
                
                $
                (16,039,491
                )
                
                $
                (2,413,289
                )





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


5





ADINO
ENERGY CORPORATION


Consolidated
Statements of Cash Flows


FOR
THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009


(Unaudited)





June 30, 2010
                    
                    
                    June 30, 2009CASH
      FLOWS FROM OPERATING ACTIVITIES:Net
      income (loss)
                    
                    $
                    78,779
                    
                    
                    $
                    (151,586
                    )Adjustments
      to reconcile net income (loss) to net cash provided by (used in) operating
      activities:Depreciation
      and amortization
                    
                    
                    5,085
                    
                    
                    
                    7,087Amortization
      of discount on note receivable
                    
                    
                    (31,993
                    )
                    
                    
                    (25,872
                    )Stock
      based compensation
                    
                    
                    5,700
                    
                    
                    
                    52,500Gain
      from lawsuit / sale amortization
                    
                    
                    (195,639
                    )
                    
                    
                    (203,536
                    )Shares
      issued for services
                    
                    
                    -
                    
                    
                    
                    19,000Gain
      on asset disposition
                    
                    
                    -
                    
                    
                    
                    (2,204
                    )Options
      issued for services
                    
                    
                    -
                    
                    
                    
                    17,186Change
      in operating assets and liabilities:Accounts
      receivable
                    
                    
                    65,280
                    
                    
                    
                    31,197Other
      assets
                    
                    
                    (5
                    )
                    
                    
                    4,634Accounts
      payable and accrued liabilities
                    
                    
                    (196,541
                    )
                    
                    
                    284,505Net
      cash provided by (used in) operating activities
                    
                    
                    (269,334
                    )
                    
                    
                    32,911CASH
      FLOWS FROM INVESTING ACTIVITIES:Purchase
      of equipment
                    
                    
                    -
                    
                    
                    
                    (10,264
                    )Principal
      payments on note receivable
                    
                    
                    -
                    
                    
                    
                    29,747Net
      cash provided by investing activities
                    
                    
                    -
                    
                    
                    
                    19,483CASH
      FLOWS FROM FINANCING ACTIVITIES:Principal
      payments on note payable
                    
                    
                    (7,744
                    )
                    
                    
                    (4,504
                    )Net
      cash used in financing activities
                    
                    
                    (7,744
                    )
                    
                    
                    (4,504
                    )Net
      change in cash and cash equivalents
                    
                    
                    (277,078
                    )
                    
                    
                    47,890Cash
      and cash equivalents, beginning of period
                    
                    
                    502,542
                    
                    
                    
                    30,228Cash
      and cash equivalents, end of period
                    
                    $
                    225,464
                    
                    
                    $
                    78,118Cash
      paid for:Interest
                    
                    $
                    14,754
                    
                    
                    $
                    6,832Income
      taxes
                    
                    $
                    -
                    
                    
                    $
                    -





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
June 30, 2010, the Company has a working capital deficit of $2,644,500 and total
stockholders’ deficit of $2,413,289.  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 June 30, 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, $824,687 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 June 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 this amount 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:





June 30, 2010
                  
                  
                  December 31, 2009Vehicles
                  
                  $
                  47,427
                  
                  
                  $
                  47,427Leasehold
      Improvements
                  
                  
                  10,264
                  
                  
                  
                  10,264Office
      Equipment
                  
                  
                  3,334
                  
                  
                  
                  3,334Subtotal
                  
                  
                  61,025
                  
                  
                  
                  61,025Less:
      Accumulated Depreciation
                  
                  
                  (33,451
                  )
                  
                  
                  (28,366
                  )Total
                  
                  $
                  27,574
                  
                  
                  $
                  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 was 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 June 30, 2010 and
December 31, 2009.





A
schedule of the balances at June 30, 2010 and December 31, 2009 is as
follows:





June 30, 2010
                  
                  
                  December 31, 2009Sundlun,
      net of unamortized discount of $82,145 and $114,138,
      respectively
                  
                  $
                  667,855
                  
                  
                  $
                  635,862Less:  current
      portion
                  
                  
                  -
                  
                  
                  
                  -Total
      long-term notes receivable
                  
                  $
                  667,855
                  
                  
                  $
                  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.


8





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.





NOTE
7 – ACCRUED LIABILITIES / ACCRUED LIABILITIES –RELATED PARTY





Other
liabilities and accrued expenses consisted of the following as of June 30, 2010
and December 31, 2009:




June 30, 2010
                  
                  
                  December 31, 2009Accrued
      accounting and legal fees
                  
                  
                  119,000
                  
                  
                  
                  119,000Customer
      deposits
                  
                  
                  110,000
                  
                  
                  
                  110,000Property
      tax accrual
                  
                  
                  41,647
                  
                  
                  
                  76,446Deferred
      lease liability
                  
                  
                  30,851
                  
                  
                  
                  25,122Total
      accrued liabilities
                  
                  $
                  301,498
                  
                  
                  $
                  330,568Accrued
      salaries-related party
                  
                  $
                  824,687
                  
                  
                  $
                  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





June 30, 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
                
                
                5,000
                
                
                
                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
                
                
                26,357
                
                
                
                30,101Total
      notes payable
                
                $
                1,806,357
                
                
                $
                1,814,101Less
      current portion
                
                
                (288,074
                )
                
                
                (291,618
                )Long
      term note payable
                
                $
                1,518,283
                
                
                $
                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 June 30, 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 June 30, 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.




9




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.





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 quarter and six
months ended June 30, 2010 and 2009.





Quarter
                            Ended
                          
                          
                          
                          
                          
                          Quarter
                            Ended
                          
                          
                          
                          
                          
                          Six Months
                            Ended
                          
                          
                          
                          
                          
                          Six Months
                            EndedJune 30, 2010
                          
                          
                          %
                          
                          
                          June 30, 2009
                          
                          
                          %
                          
                          
                          June 30, 2010
                          
                          
                          %
                          
                          
                          June 30, 2009
                          
                          
                          %Customer
      A
                          
                          $
                          -
                          
                          
                          
                          0
                          %
                          
                          $
                          53,550
                          
                          
                          
                          11
                          %
                          
                          $
                          13,402
                          
                          
                          
                          1
                          %
                          
                          $
                          107,100
                          
                          
                          
                          11
                          %Customer
      B
                          
                          $
                          354,000
                          
                          
                          
                          76
                          %
                          
                          $
                          128,016
                          
                          
                          
                          25
                          %
                          
                          $
                          654,000
                          
                          
                          
                          58
                          %
                          
                          $
                          259,197
                          
                          
                          
                          26
                          %Customer
      C
                          
                          $
                          39,847
                          
                          
                          
                          8
                          %
                          
                          $
                          172,859
                          
                          
                          
                          34
                          %
                          
                          $
                          142,642
                          
                          
                          
                          13
                          %
                          
                          $
                          325,949
                          
                          
                          
                          33
                          %Customer
      D
                          
                          $
                          -
                          
                          
                          
                          0
                          %
                          
                          $
                          115,516
                          
                          
                          
                          23
                          %
                          
                          $
                          61,110
                          
                          
                          
                          5
                          %
                          
                          $
                          231,302
                          
                          
                          
                          23
                          %Customer
      E
                          
                          $
                          72,623
                          
                          
                          
                          16
                          %
                          
                          $
                          -
                          
                          
                          
                          0
                          %
                          
                          $
                          251,042
                          
                          
                          
                          22
                          %
                          
                          $
                          -




10





The
Company had one customer that represented 95% of outstanding receivables at June
30, 2010 and two customers that represented 74% and 23% of outstanding
receivables at December 31, 2009.





NOTE
11 - LEGAL





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 and effected service on Adino in April
2010.




Adino and
IFL have answered the above suit, generally denying any liability under the
agreement alleged by G J Capital. Adino and IFL have 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.




The Gulf
Coast Fuels note that is the subject of this lawsuit has already been accrued as
a liability, and therefore, does not require any further accrual as a contingent
liability.




NOTE
12 – 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.





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: The Company’s
revenues for the quarter ended June 30, 2010 were $466,699, a decrease of
$36,927 from the quarter ended June 30, 2009 of $503,626. Revenues were
$1,122,666 and $990,987 for the six months ended June 30, 2010 and 2009,
respectively. 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.  In May
2010, IFL management negotiated a long term contract with a regional fuel
supplier to be the primary customer of the Houston terminal. The new arrangement
allows for consistent revenues over the long term.





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 through April 2010.  The new
Houston terminal customer contract begun in May, 2010 does not require that IFL
provide additive services. Therefore, the Company realized a decrease in product
sales expense of $63,483, or 48%, for the quarter ended June 30, 2010 over
2009.   Cost of product sales totaled $67,916 for the quarter
ended June 30 2010, compared to $131,399 for the same period in 2009. Year to
date expense was $230,115 and $255,494 for the six months ended June 30, 2010
and 2009, respectively.





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
quarters ended June 30, 2010 and 2009 was $99,990 and $99,000, respectively.
Year to date expense at June 30, 2010 was $199,980, relatively consistent with
the expense incurred in 2009 of $201,000.  Management is
encouraged by the success of this alliance and plans to utilize the terminal
management model in any future acquisitions.


11





General and
Administrative:The Company’s expense for the three months ended
June 30, 2010 was $182,442 or a 32% increase over the expense of $137,857 for
the same period in 2009. Expenses for the six months ended June 30, 2010 and
2009 were $318,628 and $266,789, respectively, an increase of 19%. General and
administrative expense is primarily rent expense paid on the IFL terminal to
Lone Star, currently $31,855 per month. The Company had increased second quarter
expenses due to additional filing fees and expenses of approximately
$36,000.




Legal and
Professional:  Legal and professional expense was $114,997 and
$92,110 for the six months ended June 30, 2010 and 2009, respectively, an
increase of $22,887 or 25%. Expense for the comparative second quarters for the
years were consistent. The increase is primarily due to payments made by IFL for
legal services and payments by Adino for its 2009 audit made during the first
quarter of 2010.





Consulting
Expense:The Company’s consulting expenses were $183,716 and
$280,798 for the quarters ended June 30, 2010 and 2009, respectively, a decrease
of $97,082 or 35%. Year to date expenses for 2010 and 2009 were $315,931 and
472,181, respectively, a decrease of $156,250 or 33%.  The increased
expense for 2009 was primarily due to a common stock award granted to the Board
of Directors of $52,500 and additional compensation of $148,907 granted to the
officers and controller of the Company. No such awards or bonuses were awarded
in 2010. Additionally, in anticipation of future growth, IFL has contracted with
several consultants to formalize the Company’s business plan and marketing
presentation package, resulting in additional expense in 2010 of approximately
$51,000.





Interest
Income:Interest income remained consistent at $32,045 and
$32,218 for the six months ended June 30, 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 $80,472 at June
30 2010 compared to $82,437 at June 30, 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.





Net Income/Loss: The Company
had a net loss of $51,088 and $122,470 for the quarters ended June 30, 2010 and
2009, respectively. Year to date resulted in net income of $78,779 for the six
months ended June 30, 2010 compared to a net loss of $151,586 for the same
period in 2009. The 2010 second quarter loss is primarily attributed to fees
paid to consultants during the second quarter of 2010. The Company believes the
planning and actions of the consultants will benefit the Company in the future.
Increased profitability from 2009 to 2010 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.





CAPITAL
RESOURCES AND LIQUIDITY





As of
June 30, 2010, our cash and cash equivalents were $225,464, 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 June 30, 2010 was $2,644,500 compared to $2,502,232
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
six months ended June 30, 2010, cash used by operating activities was $269,334
compared to cash provided by operating activities of $32,911 for the six months
ended June 30, 2009.  The increased use of cash was primarily in
payment of accrued liabilities and vendor payables.


12





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
June 30, 2010, the Company has a working capital deficit of $2,644,500 and total
stockholders’ deficit of $2,413,289.  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 June 30, 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, $824,687 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 June 30, 2010 that have materially
affected or are reasonably likely to materially affect internal control over
financial reporting.





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 and effected service on Adino in April
2010.




Adino and
IFL have answered the above suit, generally denying any liability under the
agreement alleged by G J Capital. Adino and IFL have 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.




13




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





None.





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, 2009)10.6
            
            Resolution
      of the Board of Directors of March 26, 2009 (incorporated by reference to
      our Form 10-Q filed on August 7, 2009)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 DirectorAugust
      11, 2010




15