x
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QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
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¨
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TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934
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MONTANA
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82-0369233
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(State
or other jurisdiction of incorporation)
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(IRS
Employer Identification Number)
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2500 CITY WEST BOULEVARD, SUITE 300 HOUSTON, TEXAS
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77042
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(Address
of principal executive offices)
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(Zip
Code)
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Large
accelerated filer
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¨
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Accelerated
filer
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¨
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Non-accelerated
filer
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¨
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Smaller
reporting company
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x
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(Do
not check if smaller reporting company)
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Page No.
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||
PART
I FINANCIAL INFORMATION
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||
Item
1.
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Financial
Statements
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Consolidated
Balance Sheets – June 30, 2010 (Unaudited) and December 31,
2009
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3
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Unaudited
Consolidated Statements of Operations-Three and Six Months Ended June
30, 2010 and 2009
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4
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Unaudited
Consolidated Statement of Changes in Stockholders’ Deficit – Period Ended
June 30, 2010
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5
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Unaudited
Consolidated Statements of Cash Flows - Six Months Ended June 30, 2010 and
2009
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6
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Notes
to Unaudited Consolidated Financial Statements
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7
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Item
2.
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Management’s
Discussion and Analysis of Financial Condition and Results of
Operations
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11
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Item
3.
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Quantitative
and Qualitative Disclosures About Market Risks
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13
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Item
4T.
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Controls
and Procedures
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13
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PART
II OTHER INFORMATION
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||
Item
1.
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Legal
Proceedings
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13
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Item
2.
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Unregistered
Sales of Equity Securities and Use of Proceeds
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14
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Item
3.
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Defaults
Upon Senior Securities
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14
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Item
4.
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Submission
of Matters to a Vote of Security Holders
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14
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Item
5.
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Other
Information
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14
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Item
6.
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Exhibits
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14
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Signatures
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15
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June 30,
2010
(Unaudited)
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December 31,
2009
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|||||||
ASSETS
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||||||||
Cash
in bank
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$ | 225,464 | $ | 502,542 | ||||
Accounts
receivable
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31,454 | 96,734 | ||||||
Prepaid
assets
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260 | 255 | ||||||
Total
current assets
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257,178 | 599,531 | ||||||
Fixed
assets, net of accumulated depreciation of $33,451 and $28,366,
respectively
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27,574 | 32,659 | ||||||
Goodwill
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1,559,240 | 1,559,240 | ||||||
Note
receivable, net of unamortized discount of $82,145 and $114,138,
respectively
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667,855 | 635,862 | ||||||
Interest
receivable
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375,208 | 375,208 | ||||||
Total
non-current assets
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2,629,877 | 2,602,969 | ||||||
TOTAL
ASSETS
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$ | 2,887,055 | $ | 3,202,500 | ||||
LIABILITIES
AND STOCKHOLDERS’ DEFICIT
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||||||||
Accounts
payable
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$ | 478,022 | $ | 511,747 | ||||
Accounts
payable - related party
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33,125 | 42,871 | ||||||
Accrued
liabilities
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301,498 | 330,568 | ||||||
Accrued
liabilities – related party
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824,687 | 1,023,687 | ||||||
Notes
payable – current portion
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288,074 | 291,618 | ||||||
Interest
payable
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585,000 | 510,000 | ||||||
Deferred
gain on sale/leaseback – current portion
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391,272 | 391,272 | ||||||
Total
current liabilities
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2,901,678 | 3,101,763 | ||||||
Deferred
gain on sale/leaseback
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880,383 | 1,076,022 | ||||||
Notes
payable
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1,518,283 | 1,522,483 | ||||||
TOTAL
LIABILITIES
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5,300,344 | 5,700,268 | ||||||
STOCKHOLDERS’
DEFICIT
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||||||||
Preferred
stock, $0.001 par value, 20,000,000 shares authorized, no shares
outstanding
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- | - | ||||||
Capital
stock, $0.001 par value, 500,000,000 shares authorized, 93,760,579
and 93,260,579 shares issued and outstanding at June 30, 2010 and
December 31, 2009, respectively
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93,760 | 93,260 | ||||||
Additional
paid in capital
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13,532,442 | 13,527,242 | ||||||
Retained
deficit
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(16,039,491 | ) | (16,118,270 | ) | ||||
Total
stockholders’ deficit
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(2,413,289 | ) | (2,497,768 | ) | ||||
TOTAL
LIABILITIES AND STOCKHOLDERS’ DEFICIT
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$ | 2,887,055 | $ | 3,202,500 |
Three months ended
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Six months ended
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|||||||||||||||
June 30
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June 30
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June 30
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June 30
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|||||||||||||
2010
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2009
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2010
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2009
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|||||||||||||
REVENUES
AND GROSS MARGINS
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||||||||||||||||
Revenues
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$ | 466,699 | $ | 503,626 | $ | 1,122,666 | $ | 990,987 | ||||||||
OPERATING
EXPENSES
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||||||||||||||||
Cost
of product Sales
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67,916 | 131,399 | 230,115 | 255,494 | ||||||||||||
Terminal
management
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99,990 | 99,000 | 199,980 | 201,000 | ||||||||||||
General
and administrative
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182,442 | 137,857 | 318,628 | 266,789 | ||||||||||||
Legal
and professional
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49,096 | 47,665 | 114,997 | 92,110 | ||||||||||||
Consulting
fees
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183,716 | 280,798 | 315,931 | 472,181 | ||||||||||||
Repairs
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6,151 | - | 6,363 | 183 | ||||||||||||
Depreciation
expense
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2,543 | 2,755 | 5,085 | 7,087 | ||||||||||||
Operating
supplies
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- | 1,449 | - | 3,250 | ||||||||||||
Total
operating expenses
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591,854 | 700,923 | 1,191,099 | 1,298,094 | ||||||||||||
OPERATING
LOSS
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(125,155 | ) | (197,297 | ) | (68,433 | ) | (307,107 | ) | ||||||||
OTHER
INCOME AND EXPENSES
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||||||||||||||||
Interest
income
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16,456 | 16,345 | 32,045 | 32,218 | ||||||||||||
Interest
expense
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(40,208 | ) | (41,542 | ) | (80,472 | ) | (82,437 | ) | ||||||||
Gain
from lawsuit
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97,819 | 97,820 | 195,639 | 203,536 | ||||||||||||
Other
income (expense)
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- | 2,204 | - | 2,204 | ||||||||||||
Total
other income and expense
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74,067 | 74,827 | 147,212 | 155,521 | ||||||||||||
NET
INCOME (LOSS)
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$ | (51,088 | ) | $ | (122,470 | ) | $ | 78,779 | $ | (151,586 | ) | |||||
Net
income (loss) per share, basic
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$ | (0.00 | ) | $ | (0.00 | ) | $ | 0.00 | $ | (0.00 | ) | |||||
Net
income (loss) per share, fully diluted
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(0.00 | ) | (0.00 | ) | 0.00 | (0.00 | ) | |||||||||
Weighted
average shares outstanding
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93,760,579 | 91,386,953 | 93,672,181 | 88,161,131 |
Shares
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Amount
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Additional
Paid in
Capital
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Retained
Deficit
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Total
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||||||||||||||||
Balance
December 31, 2009
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93,260,579
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$
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93,260
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$
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13,527,242
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$
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(16,118,270
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)
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$
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(2,497,768
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)
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|||||||||
Shares
issued for services
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500,000
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500
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5,200
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-
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5,700
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|||||||||||||||
Net
income
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-
|
-
|
-
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78,779
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78,779
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|||||||||||||||
Balance
June 30, 2010
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93,760,579
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$
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93,760
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$
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13,532,442
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$
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(16,039,491
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)
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$
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(2,413,289
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)
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June 30, 2010
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June 30, 2009
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|||||||
CASH
FLOWS FROM OPERATING ACTIVITIES:
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||||||||
Net
income (loss)
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$ | 78,779 | $ | (151,586 | ) | |||
Adjustments
to reconcile net income (loss) to net cash provided by (used in) operating
activities:
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||||||||
Depreciation
and amortization
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5,085 | 7,087 | ||||||
Amortization
of discount on note receivable
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(31,993 | ) | (25,872 | ) | ||||
Stock
based compensation
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5,700 | 52,500 | ||||||
Gain
from lawsuit / sale amortization
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(195,639 | ) | (203,536 | ) | ||||
Shares
issued for services
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- | 19,000 | ||||||
Gain
on asset disposition
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- | (2,204 | ) | |||||
Options
issued for services
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- | 17,186 | ||||||
Change
in operating assets and liabilities:
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||||||||
Accounts
receivable
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65,280 | 31,197 | ||||||
Other
assets
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(5 | ) | 4,634 | |||||
Accounts
payable and accrued liabilities
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(196,541 | ) | 284,505 | |||||
Net
cash provided by (used in) operating activities
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(269,334 | ) | 32,911 | |||||
CASH
FLOWS FROM INVESTING ACTIVITIES:
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||||||||
Purchase
of equipment
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- | (10,264 | ) | |||||
Principal
payments on note receivable
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- | 29,747 | ||||||
Net
cash provided by investing activities
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- | 19,483 | ||||||
CASH
FLOWS FROM FINANCING ACTIVITIES:
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||||||||
Principal
payments on note payable
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(7,744 | ) | (4,504 | ) | ||||
Net
cash used in financing activities
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(7,744 | ) | (4,504 | ) | ||||
Net
change in cash and cash equivalents
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(277,078 | ) | 47,890 | |||||
Cash
and cash equivalents, beginning of period
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502,542 | 30,228 | ||||||
Cash
and cash equivalents, end of period
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$ | 225,464 | $ | 78,118 | ||||
Cash
paid for:
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||||||||
Interest
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$ | 14,754 | $ | 6,832 | ||||
Income
taxes
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$ | - | $ | - |
June 30, 2010
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December 31, 2009
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|||||||
Vehicles
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$
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47,427
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$
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47,427
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||||
Leasehold
Improvements
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10,264
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10,264
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||||||
Office
Equipment
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3,334
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3,334
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||||||
Subtotal
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61,025
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61,025
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||||||
Less:
Accumulated Depreciation
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(33,451
|
)
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(28,366
|
)
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||||
Total
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$
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27,574
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$
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32,659
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June 30, 2010
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December 31, 2009
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|||||||
Sundlun,
net of unamortized discount of $82,145 and $114,138,
respectively
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$ | 667,855 | $ | 635,862 | ||||
Less: current
portion
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- | - | ||||||
Total
long-term notes receivable
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$ | 667,855 | $ | 635,862 |
June 30, 2010
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December 31, 2009
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|||||||
Accrued
accounting and legal fees
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119,000
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119,000
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||||||
Customer
deposits
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110,000
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110,000
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||||||
Property
tax accrual
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41,647
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76,446
|
||||||
Deferred
lease liability
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30,851
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25,122
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||||||
Total
accrued liabilities
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$
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301,498
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$
|
330,568
|
||||
Accrued
salaries-related party
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$
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824,687
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$
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1,023,687
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June 30, 2010
|
December 31, 2009
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|||||||
Note
payable - Stuart Sundlun, bearing interest of 10% per
annum, due August 7, 2011
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$
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1,500,000
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$
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1,500,000
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||||
Note
payable - Bill Gaines, non interest bearing, due on demand
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5,000
|
9,000
|
||||||
Note
payable - Gulf Coast Fuels, bearing interest of $25,000
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275,000
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275,000
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||||||
Note
payable - GMAC, bearing interest of 11.7% per annum with 60
monthly payments
of $895, due May 13, 2013
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26,357
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30,101
|
||||||
Total
notes payable
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$
|
1,806,357
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$
|
1,814,101
|
||||
Less
current portion
|
(288,074
|
)
|
(291,618
|
)
|
||||
Long
term note payable
|
$
|
1,518,283
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$
|
1,522,483
|
Quarter
Ended
|
|
Quarter
Ended
|
|
Six Months
Ended
|
|
Six Months
Ended
|
|
|||||||||||||||||||||||||
June 30, 2010
|
%
|
June 30, 2009
|
%
|
June 30, 2010
|
%
|
June 30, 2009
|
%
|
|||||||||||||||||||||||||
Customer
A
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$ | - | 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 | % | $ | - |
Exhibit
|
||
Number
|
Exhibit
|
|
3.1
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Articles
of Incorporation (as amended January 30, 2008) (incorporated by reference
to our Form 10-K filed on March 18, 2009)
|
|
3.2
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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
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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)
|
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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)
|
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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)
|
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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)
|
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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
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Code
of Business Conduct and Ethics (incorporated by reference to our Form
10-K filed on March 18, 2009)
|
|
31.1
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Certification of Chief Executive Officer pursuant to Rule
15d-14(a) of the Exchange Act
|
|
31.2
|
Certification
of Chief Financial Officer pursuant to Rule 15d-14(a) of the Exchange
Act
|
|
32.1
|
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
2002
|
|
32.2
|
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
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ADINO
ENERGY CORPORATION
|
|
By:
|
/s/ Timothy G. Byrd, Sr.
|
Timothy
G. Byrd, Sr.
|
|
CEO,
CFO and Director
|
|
August
11, 2010
|