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-KSB for the year ended December 31, 2007. 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

Revenue and Gross Margin: Revenue generated in the three months ended June 30, 2008 was $566,538 compared to $564,221 for the three months ended June 30, 2007.
Revenues increased from $789,897 in the first six months of last year to $1,010,440 this year, a 28% increase. This increase is due to the signing of a new customer in the late first quarter, 2008. The Company has streamlined its additive purchasing, decreasing its cost of sales from $267,052 or 33% of revenue for the six months ended June 30, 2007, to $208,057 or 21% of revenue for the six months ended June 30, 2008. The Company's gross margin increased from $522,843 for the six months ended June 30, 2007 to $802,383 this year, a 53% increase.

Payroll and Related Expenses: The Company outsourced its terminal employees as of July 1, 2007, therefore, there has been no payroll expense recognized since that time. Payroll expense recognized through June 30, 2007 was $83,777. The employee salaries and expenses are now included in the monthly terminal management fee.

Terminal Management: In July 2007, the Company outsourced its terminal operations. The monthly contract includes employees and benefits, terminal operational expenses, insurance and other ancillary operating expenses. For this reason, the terminal management expense has increased from 2007 to 2008.
Expense for the three months ended June 30, 2008 and 2007 was $106,000 and $47,000, respectively. Expense for the six months ended June 30, 2008 and 2007 was $211,000 and $69,500, respectively.

Legal and Professional Expense: During 2007, the Company experienced significant legal expenses associated with the 17617 Aldine Westfield Road terminal lawsuit settlement. Legal and professional expense was $120,715 and $770,229 for the six months ended June 30, 2008 and 2007 respectively, a decrease of $649,514 or 84%.

Consulting Expense: The Company incurred consulting fees of $222,002 and $875,912 for the six months ended June 30, 2008 and 2007, respectively, a decrease of $653,910 or 75%. The 2007 amount was high due to warrant expense recognized for Mr. Byrd and Mr. Wooley of $258,706 each. (Consulting fees were credited $388,060 in November, 2007 when both Mr. Byrd and Mr. Wooley relinquished 75% of the warrants issued them. See Note 7 for a more detailed explanation).

Interest Expense: Interest expense for the three months ended June 30, 2008 and 2007 was $152,722 and $175,838, respectively. Expense for the six months ended June 30, 2008 and 2007 was $302,961 and $258,722, respectively. This includes interest expense for the $1,500,000 note payable with Mr. Sundlun and interest associated with the capitalized lease for the terminal located at 17617 Aldine Westfield Road, Houston, TX.

Gain (Loss) from Stock Valuation: As of June 30, 2007, the Company had significant stock payable outstanding, due to inadequate authorized capital authorization. As the Company experienced variation in its stock price, the Company recorded changes to the payable valuation at each balance sheet date.
The expense for the three months ended June 30, 2008 and 2007 was $107,570 and $1,145,980, respectively. The Company recorded a six month ended gain on stock valuation of $215,140 at June 30, 2008, compared with an expense to the Company of $1,122,952 for the same period in 2007. All outstanding stock payable has been issued as of June 30, 2008, as detailed in Note 5.

Net Income: As a result of the foregoing, the Company realized income of $77,847 and $487,946 for the three and six months ended June 30, 2008, compared to losses of $2,282,188 and $2,786,958 for the three and six months ended June 30, 2007.

CAPITAL RESOURCES AND LIQUIDITY

As of June 30, 2008, our cash and cash equivalents were $49,085, compared to $91,264 at December 31, 2007. Cash flow has been an ongoing concern for the Company due to the large amount of legacy liabilities that Adino had accumulated in 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.

Management determined that it was in the Company's best interest to settle several legacy, outstanding accounts payable and a demand note with Rule 144 restricted stock, aiding the company's cash flow and freeing up cash for capital improvements. These

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stock issuances are discussed in Note 10 to the financial statements.

For the six months ended June 30, 2008, cash used in operating activities was $28,939, compared to cash provided by operating activities of $180,595 for the six months ended June 30, 2007. The increase in cash provided during 2007 was primarily due to payables settled in the 17617 Aldine Westfield Road lawsuit settlement.

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, 2008, the Company has a working capital deficit of $6,117,015 and a retained deficit of $14,440,756. 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. $3,483,268 of the working capital deficit represents the purchase price for the terminal assets which are currently under a capital lease. The Company believes that the market value of the terminal assets and the current cash flow is adequate to support a longer term financing package to satisfy the working capital deficit. These factors lead the Company to expect that the terminal financing will include additional capital to service and pay down existing obligations. 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 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.