##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
  þ
    
    Annual Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the fiscal year ended December 31, 2010
 o
    
    Transition Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to .
 Commission File No. 001-33893
 GREENHUNTER ENERGY, INC.
  Delaware
    
    20-4864036(State or other jurisdiction of 
incorporation or organization)
    
    (I.R.S. Employer
Identification No.)
 (Address of principal executive offices) (zip code)
   Title of each class
    
    Name of each exchange on which registeredCommon Stock ($.001 par value)
    
    NYSE Amex
  o o
 o o
 o o
 o o
 o
  Large accelerated filer o   
    Accelerated filer o
    Non-accelerated filer o
    Smaller reporting company þ(Do not check if a smaller reporting company)
 o o




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Table of Contents
 Item 1. Business
    
    
    1Item 2. Properties
    
    
    28Item 3. Legal Proceedings
    
    
    28Item 4. Submission of Matters to a Vote of Security Holders
    
    
    28Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
    
    
    29Item 6. Selected Financial Data
    
    
    29Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    30Item 8. Financial Statements and Supplementary Data
    
    
    39Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
    
    
    39Item 9A(T). Controls and Procedures
    
    
    39Item 9B. Other Information
    
    
    40Item 10. Directors, Executive Officers and Corporate Governance
    
    
    41Item 11. Executive Compensation
    
    
    44Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
    
    
    46Item 13. Certain Relationships and Related Transactions, and Director Independence Transactions with Related Persons
    
    
    47Item 14. Principal Accounting Fees and Services
    
    
    47Item 15. Exhibits and Financial Statement Schedules
    
    
    F-1EX-31.1EX-31.2EX-32.1EX-32.2




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Item 1. Business
 Some of the information contained in this Description of Business may contain forward-looking
statements. Such statements can be identified by the use of forward-looking words such as may,
will, anticipate, expect, estimate, continue or other such words. These types of
statements discuss future expectations or contain projections or estimates. When considering such
forward-looking statements, investors should consider the risk factors set forth in the Risk
Factors section of this report. These risk factors and other unidentified factors could cause
actual results to differ materially from those contained in any forward-looking statement.
 Website Access to Reports
 www.greenhunterenergy.com
 Incorporation and Organization
    Business
    1




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Biomass
     GreenHunter Mesquite Lake, LLC
  The facility
   2




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Attributes of the facility
  

GreenHunter Mesquite Lake has entered into the power purchase agreement with the Imperial
Irrigation District, which we refer to as the district, to provide up to 27 MWs of net
output;

the project will provide base load renewable power as opposed to intermittent power
provided by other forms of renewable power projects;

GreenHunter Mesquite Lake has entered into an interconnection agreement with the district
with respect to Phase I of the facility;

the project qualifies for the Production Tax Credit under the American Recovery and
Reinvestment Act of 2009, which we refer to as the Recovery Act, but in lieu of the tax
credit, the Company anticipates applying for the 1603 Program Grant under the Recovery Act as
described more fully below;

the project has acquired the necessary permits for its construction;

GreenHunter Mesquite Lake has entered into three construction contracts for
construction of the project. These include the boiler contract, the fuel yard contract and a portion
of the general construction contract which include a fixed price for the work to be performed and
the equipment to be provided thereunder; and

the facility has been designed to use multiple biomass fuel sources at a large variance of
heat rates.
 Objective and Strategy
  

find an optimal biomass fuel mix that will maximize profitability of the facility; and

execute long term supply contracts with local biomass producers.
  3




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Rehabilitation and Build-Out of Facility
  Preconstruction Asset Maintenance
  Rehabilitation Work
  Reconfigure Boiler Trains for Biomass
  4




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Build-Out to 28MW
  IID 92 KV Switchyard
  Construction of the Facility
     Permits and Approvals
 Air Permit
   5




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Water rights
   Conditional use permit
    
    
    the property owner must continuously comply with the requirements of the Air Pollution
Control District.
    
    the facility must be 100 percent reliant on woody biomass as a fuel source.
    
    the applicant is required to obtain and submit documentation of :
 o
    
    the method of water supply and sewage disposal required and approved by the County;o
    
    fire flows and fire protection facilities, as required and approved by the County;o
    
    drainage water disposal plan;o
    
    a survey by qualified biologist of any special status plant and
wildlife species to ensure that no special status wildlife and/or plant species
have occupied the property;o
    
    work stop order in the event archaeological, cultural, or
paleontological resources are discovered until a qualified archaeologist has been
contacted to evaluate the find and mitigate impacts, if necessary, prior to
resumption of work; ando
    
    a stormwater plan, after which a building or grading permit for the
biomass facility may be issued.
  Environmental and Regulatory Factors
  6




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Fuel Supply and Sources
 Biomass
    Biofuel Supply Agreements
  Interconnection Agreement
  1603 Program Grant
  7




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The district
     8




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Wind
   Wind Energy Basics
 wind turbine
 rotor
 lift drag
 wind plant wind farm
   Current GreenHunter Energy Wind Projects
   9




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Competition
 Solar Energy
     Geothermal Energy
     Clean water technology
  10




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11




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Biofuels
    Research and Development
  Employees
  12




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Item 1A. Risk Factors
 An investment in our securities involves many risks. You should carefully consider the following
risks and all of the other information contained in this Form 10-K before making an investment
decision. Additional risks related to us and our securities may be included in  our other filings with the SEC pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, which we
refer to as the Exchange Act. In evaluating our company, the factors described below should be
considered carefully. The occurrence of one or more of these events could significantly and
adversely affect our business, prospects, financial condition, results of operations and cash
flows.
 Risks Associated with our Business
 We have a limited operating history, and our business may not be as successful as we envision.
   We have yet to attain profitable operations and we will need additional financing to fund our activities.
  Our lack of diversification beyond the renewable energy industry may increase our risk.
  We may not be able to effectively manage our acquisition and construction costs.
  13




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We have significant debt that could adversely affect our financial health and prevent us from fulfilling our obligations.
  
    
    make it more difficult for us to satisfy our obligations;
    
    increase our vulnerability to general adverse economic and industry conditions;
    
    require us to dedicate a portion of our cash flow from operations to payments
on our indebtedness, thereby reducing the availability of our cash flow to
fund working capital, capital expenditures and other general corporate
expenditures;
    
    force us to sell assets or seek additional capital to service our
indebtedness, which we may be unable to do at all or on terms favorable to us;
    
    limit our flexibility in planning for, or reacting to, changes in our business
and the industry in which we operate;
    
    place us at a disadvantage compared to our competitors that have less debt;
    
    and limit our ability to borrow additional funds.
 We are dependent upon our key personnel.
  We may not be able to meet our capital requirements.
   14




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Risks Related to the Renewable Energy Industry
 We have not currently identified specific future investments or acquisitions within the renewable
energy industry and thus cannot evaluate their associated merits or risks.
  The abundant competition and rapidly changing technology in the renewable energy industry may
impair our success.
  Changes to the currently favorable regulations and legislation within the renewable energy industry
may adversely impact our future revenues.
  15




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The pricing of renewable energy may fluctuate due to the level of production of renewable energy.
  Construction and development delays or cost over-runs may adversely affect our business.
  16




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We would be liable for violations of environmental laws related to our ownership or operation of
our facilities.
  Risks Relating to the Biomass Industry
 The inherent volatility in the market price of electricity could impact our profitability.
  Any inability or delay in updating or obtaining required licenses and permits could hinder
development and adversely affect profitability.
  Our inability to enter interconnection agreements would restrict our ability to sell electricity.
  Fixed payments under the power purchase agreement
  Reliance on the district as GreenHunter Mesquite Lakes primary revenue source
  17




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Transmission capability limitations
  Failure by GreenHunter Mesquite Lake to perform its obligations under the power purchase agreement
  GreenHunter Mesquite Lake may not be able to effectively manage its construction costs
  Risks relating to anticipated 1603 Program Grant under the American Recovery and Reinvestment Act
  Regulatory risks and other matters affecting the electric power industry
    18




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Environmental risks
     Seismic risks and earthquake insurance
    19




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Other events of force majeure
  Reliance on supply contracts
  Other operating risks
  Competition
  20




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General economic conditions
  Construction risks
    Delay or unavailability of project funding
  Unavailability of biomass
  21




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The inherent volatility in the market price of electricity could impact revenue
  Other risks relating to the district
  
    
    effects of compliance with rapidly changing environmental, safety, licensing,
regulatory and legislative requirements;
    
    changes resulting from conservation and demand side management programs on the timing
and use of electric energy;
    
    effects on reliability of the power supply with the increased usage of renewables;
    
    changes resulting from a national energy policy;
    
    effects of competition from other electric utilities (including increased competition
resulting from mergers, acquisitions and strategic alliances of competing electric and
natural gas utilities and from competitive transmitting of less expensive electricity from
much greater distances over an interconnected system) and new methods of, and new
facilities for, producing low-cost electricity;
    
    the repeal of certain federal statutes that would have the effect of increasing the
competitiveness of many investor-owned utilities;
    
    increased competition from independent power producers and marketers, brokers and
federal power marketing agencies;
    
    self-generation or distributed generation (such as microturbines and fuel cells) by
industrial and commercial customers and others;
    
    issues relating to the ability to issue tax-exempt obligations, including restrictions
on the ability to sell to nongovernmental entities electricity from generation projects and
transmission line service from transmission projects financed with outstanding tax-exempt
obligations;
    
    effects of inflation on the operating and maintenance costs of an electric utility and
its facilities;
    
    changes from projected future load requirements;
    
    increases in costs and uncertain availability of capital;
    
    shifts in the availability and relative costs of different fuels (including the cost of
natural gas);
    
    sudden and dramatic increases in the price of energy purchased on the open market that
may occur in times
 22




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of high peak demand in an area of the country experiencing such high peak demand, such as
has occurred in California;
    
    inadequate risk management procedures and practices with respect to, among other
things, the purchase and sale of energy and transmission capacity;
    
    other legislative changes, voter initiatives, referenda and statewide propositions;
    
    effects of changes in the economy, population and demand of customers in the Districts
service area;
    
    effects of possible manipulation of the electric markets; and
    
    natural disasters or other physical calamities, including but not limited to,
earthquakes
  Interconnection Agreements
  Risks Relating to the Wind Energy Industry
   
    
    the limited time period over which the site-specific wind data were collected;
    
    the potential lack of close correlation between site-specific wind data and the longer-term regional wind data;
    
    inaccurate assumptions related to wake losses and wind shear;
    
    the limitations in the accuracy with which anemometers measure wind speed;
    
    the inherent variability of wind speeds;
    
    the lack of independent verification of the turbine power curve provided by the manufacturer;
    
    the potential impact of climatic factors, including icing and soiling of wind turbines;
 23




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
    
    the potential impact of topographical variations, turbine placement and local conditions, including vegetation;
    
    the power delivery schedule being subject to uncertainty;
    
    the inherent uncertainty associated with the use of models, in particular future-oriented models; and
    
    the potential for electricity losses to occur before delivery.
  The inherent volatility in the market price of electricity could impact our profitability.
  Any inability or delay in updating or obtaining required licenses and permits could hinder
development and adversely affect profitability.
  Our inability to enter interconnection agreements would restrict our ability to sell electricity.
  The wind energy industry is highly dependent on tax incentives.
   24




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Risks Relating to the Ownership of our Securities
 Our common stock only has been publicly traded since January 2, 2008, and the price of our common
stock has fluctuated substantially since then and may fluctuate substantially in the future.
  
    
    changing conditions in fuel markets;
    
    changes in financial estimates by securities analysts;
    
    changes in market valuations of comparable companies;
    
    additions or departures of key personnel;
    
    future sales of our stock;
    
    tax and other regulatory developments;
    
    our ability to develop and complete facilities, and to
introduce and market the energy created by such facilities
to economically viable production volumes in a timely
manner; and
    
    other factors discussed in the Risk Factors section and
elsewhere in this prospectus and in any prospectus
supplement.
  If we issue additional shares in the future, it will result in dilution to our existing
stockholders.
  We may issue shares of our capital stock or debt securities to complete a business combination or
acquire assets, which would dilute the equity interest of our stockholders and could cause a change
in control of our ownership.
  25




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
    
    significantly dilute the equity interest of current stockholders in our Company;
    
    subordinate the rights of holders of common stock if preferred stock is issued
with rights senior to those afforded to holders of our common stock;
    
    cause a change in control if a substantial number of our shares of common stock
are issued, which may affect, among other things, our ability to use our net
operating loss carry forwards, if any, and possibly result in the resignation
or removal of some or all of our present officers and directors; and
    
    adversely affect prevailing market prices for our common stock.
  
    
    default and foreclosure on our assets if our operating
revenues after a business combination or asset purchase
are insufficient to pay our debt obligations;
    
    acceleration of our obligations to repay the indebtedness,
even if we have made all principal and interest payments
when due, if the debt security contains covenants that
require the maintenance of certain financial ratios or
reserves, or change of control provisions, and any such
covenant is breached without a waiver or renegotiation of
that covenant;
    
    our immediate payment of all principal and accrued
interest, if any, if the debt security is payable on
demand; and
    
    our inability to obtain additional financing, if
necessary, if the debt security contains covenants
restricting our ability to obtain additional financing
while such security is outstanding.
 Our ability to successfully effect a business combination and to be successful afterwards will be
dependent upon the efforts of our key personnel, and others hired to manage the acquired business
and whom we would have only a limited ability to evaluate.
  Our officers and directors allocation of their time to other business interests could have a
negative impact.
  Because of our limited resources and the significant competition for business combination
opportunities, we may not be able to consummate attractive business combinations.
  26




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We may be unable to obtain additional financing, if required, to complete a business combination,
asset purchase or to fund the operations and growth of the target business, which could compel us
to restructure the transaction or abandon a particular business combination or asset purchase.
  In the event we cannot comply with the requirements of the Sarbanes-Oxley Act of 2002 or we acquire
a business that is unable to satisfy regulatory requirements relating to internal controls, or if
our internal controls over financial reporting are not effective, our business and our stock price
could suffer.
  Our outstanding options, warrants and convertible preferred stock may have an adverse effect on the
market price of common stock and make it more difficult to effect a business combination.
  27




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We do not intend to pay dividends on our common stock and thus stockholders must look solely to
appreciation of our common stock to realize a gain on their investments.
  
 Item 2. Properties
   
 Item 3. Legal Proceedings
 Bioversel, Inc. f/k/a
Bioversel Trading, Inc., Plaintiff, vs. GreenHunter BioFuels, Inc. and
GreenHunter Energy, Inc., Defendants, in the District Court of Harris County, Texas,
55 th Judicial District .
  Arbitration Case No. 70 198 Y 1024 10; Timothy Aden, et al. v. GreenHunter Energy, Inc., et
al. pending before the American Arbitration Association
   
 Item 4. Submission of Matters to a Vote of Security Holders
  28




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Item 5. Market for Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
  AverageDailyTradingVolumeHigh
    
    Low
    
    (Shares)2010First Quarter
    
    $
    1.69
    
    
    $
    1.10
    
    
    
    84,219Second Quarter
    
    $
    1.47
    
    
    $
    .90
    
    
    
    40,209Third Quarter
    
    $
    .96
    
    
    $
    .51
    
    
    
    24,089Fourth Quarter
    
    $
    1.47
    
    
    $
    .65
    
    
    
    43,4172009First Quarter
    
    $
    5.25
    
    
    $
    1.16
    
    
    
    30,429Second Quarter
    
    $
    4.32
    
    
    $
    0.91
    
    
    
    292,592Third Quarter
    
    $
    3.18
    
    
    $
    1.40
    
    
    
    295,976Fourth Quarter
    
    $
    2.08
    
    
    $
    0.99
    
    
    
    108,000
   Equity Compensation Plan InformationNumber of securitiesremaining available forfuture issuance underNumber of securities to
    
    Weighted-average
    
    equitybe issued upon exercise
    
    exercise price of
    
    compensation plansof outstanding options,
    
    outstanding options,
    
    (excluding securitiesPlan Category
    
    warrants and rights
    
    warrants and rights
    
    reflected in column (a))(a)
    
    (b)
    
    (c)Equity
compensation plans
approved by
security holders
    
    
    3,621,334
    
    
    
    $7.75
    
    
    
    3,378,666Equity compensation
plans not approved
by security holders
    
    
    3,455,166
    
    
    
    $5.28
    
    
    
    Total
    
    
    7,076,500
    
    
    
    $5.95
    
    
    
    3,378,666
 
 Item 6. Selected Financial Data
  29




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Item 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion and analysis provides information which management believes is
relevant to an assessment and understanding of our financial condition and results of operations.
The discussion contains forward-looking statements that involve risks and uncertainties (see
Forward-Looking Statements above). Actual events or results may differ materially from those
indicated in such forward-looking statements. The discussion should be read in conjunction with the
financial statements and accompanying notes included herewith. The discussion should not be
construed to imply that the results contained herein will necessarily continue into the future or
that any conclusion reached herein will necessarily be indicative of actual operating results in
the future. Such discussion represents only the best present assessment by our management. The
discussion contains forward-looking statements that involve risks and uncertainties (see
Forward-Looking Statements above). Actual events or results may differ materially from those
indicated in such forward-looking statements.
 Overview
   Current Plan of Operations and Ability to Operate as a Going Concern
    30




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BioMass
    Wind Energy
  Solar Energy
  31




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Results of Operations
 Year Ended December 31, 2010 Compared to Year Ended December 31, 2009:
 Wind Energy Project Costs
  Biomass Project Costs
  Hurricane repairs and losses
  Depreciation Expense
  Loss on Asset Impairments
  General and Administrative Expense
    32




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Operating Loss
     Interest and Other Revenues
  Interest, Accretion and Other Expense
  Unrealized loss on convertible securities
  Discontinued Operations
  Preferred Stock Dividends
  33




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Net Income (Loss) to Common Shareholders
  Liquidity and Capital Resources
 Cash Flow and Working Capital
  Operating Activities
   Financing Activities
  Notes Payable
  34




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Nonrecourse10% Series A Senior Secured Redeemable Debentures
  Note Payable to Related Party
  Investing Activities and Future Requirements
 Capital Expenditures
  Forecast
  BioMass
  Wind Energy
  Obligations Under Material Contracts
    35




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Critical Accounting Policies and Other
   Property, Plant and Equipment
  Automobiles
    
    5 yearsComputer and office equipment
    
    5 to 7 yearsPlant equipment
    
    7 to 30 yearsLand improvements
    
    15 yearsBuildings
    
    31 years
 Deferred Financing Costs
  Impairments
   36




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Stock-Based Compensation
  Income Taxes
 Income Taxes
  .
 Income or Loss Per Common Share
   Recently Issued Accounting Standards
 Improving Disclosures about Fair Value Measurements
 37




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Contractual Obligations and Commercial Commitments
  Payments Due by Period (in thousands)Less than
    
    
    
    
    
    
    
    
    
    
    AfterTotal
    
    
    1 year
    
    
    1-3 Years
    
    
    4-5 Years
    
    
    5 YearsContractual Obligations:Fixed-rate long-term debt(a)
    
    $
    2,983,046
    
    
    $
    92,322
    
    
    $
    319,290
    
    
    $
    245,634
    
    
    $
    2,325,800Fixed-rate interest payments(a)
    
    
    1,058,967
    
    
    
    170,047
    
    
    
    475,529
    
    
    
    284,245
    
    
    
    129,145Note due to related party
    
    
    766,957
    
    
    
    766,957
    
    
    
    
    
    
    
    
    
    
    
    9% Series B Secured Redeemable Debentures(b)
    
    
    6,685,879
    
    
    
    477,163
    
    
    
    6,208,717
    
    
    
    
    
    
    
    Total Contractual Obligations
    
    $
    11,494,849
    
    
    $
    1,506,489
    
    
    $
    7,003,536
    
    
    $
    529,879
    
    
    $
    2,454,945
 
 (a)
    
    Assumes 5.7% interest over the life of the note with principal payments,
amortized on 25 year schedule, beginning January 20, 2009 and the remainder of
the balance of the loan ballooning November 30, 2017.(b)
    
    Assumes 9% interest payments over their 5 year term. Off-Balance Sheet Arrangements
  38




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Item 8. Financial Statements and Supplementary Data
  
 Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure
  
 Item 9A(T). Controls and Procedures
 Evaluation of Disclosure Controls and Procedures.
  Changes in Internal Control over Financial Reporting.
  Managements Report on Internal Control over Financial Reporting.
    39




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Item 9B. Other Information
  40




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Item 10. Directors, Executive Officers and Corporate Governance
  Name
    
    Age
    
    Positions and Offices HeldGary C. Evans
    
    
    53
    
    
    Chairman and Chief Executive OfficerRonald D. Ormand
    
    
    52
    
    
    DirectorRonald H. Walker
    
    
    73
    
    
    DirectorJonathan D. Hoopes
    
    
    43
    
    
    Director, President and Chief Operating OfficerMorgan F. Johnston
    
    
    50
    
    
    Senior Vice President, General Counsel, and
SecretaryDavid S. Krueger
    
    
    61
    
    
    Vice President and Chief Financial Officer
 Gary C. Evans  Chairman and Chief Executive Officer
  Ronald D. Ormand  Director
  Ronald H. Walker  Director
  41




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Jonathan D. Hoopes  Director, President and Chief Operating Officer
  Morgan F. Johnston  Senior Vice President, General Counsel, and Secretary
   David S. Krueger  Vice President and Chief Financial Officer
   42




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Corporate Governance.
     Code of Conduct and Ethics
  
    
    ethical handling of actual or apparent conflicts of interest;
    
    full fair and accurate and timely disclosure in filings with
the Securities and Exchange Commission and other public
disclosures;
    
    compliance with the law and other regulations;
    
    protection of the Companys assets;
    
    insider trading policies; and
    
    prompt internal reporting of violations of the codes.
  43




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Item 11. Executive Compensation
 Summary Compensation Table
  All OtherName and Principal
    
    
    
    
    
    Salary
    
    Bonus
    
    Stock Awards
    
    Option Awards
    
    Compensation
    
    TotalPosition
    
    Year
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    ($)Gary C. Evans 
    
    
    2010
    
    
    
    145,361
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    9,000
    
    
    
    154,361Chairman and CEO*
    
    
    2009
    
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    125,028
    **
    
    
    12,000
    
    
    
    337,028Jonathan D. Hoopes 
    
    
    2010
    
    
    
    173,076
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    173,076President and COO
    
    
    2009
    
    
    
    59,615
    
    
    
    
    
    
    
    38,309
    ***
    
    
    25,872
    **
    
    
    50,000
    
    
    
    173,796David S. Krueger 
    
    
    2010
    
    
    
    138,462
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,230
    
    
    
    144,692Vice President and CFO
    
    
    2009
    
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    37,508
    **
    
    
    9,000
    
    
    
    246,508Morgan F. Johnston 
    
    
    2010
    
    
    
    138,462
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,230
    
    
    
    144,692Sr. VP,
General Counsel and Secretary
    
    
    2009
    
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    37,508
    **
    
    
    9,000
    
    
    
    246,508
 
 *
    
    Mr. Evans acted as the Companys President and CEO
during the first nine months of 2009. On October 1,
2009, Mr. Jonathan D. Hoopes was hired as the Companys
President and COO. Mr. Hoopes received $50,000 as a
relocation expense.**
    
    Mr. Evans received a stock option grant for 1,000,000
shares, vesting over a three year period at an exercise
price of $1.96 on August 26, 2009. Mr. Hoopes received a
stock option grant for 500,000 shares, vesting both over
time and achieving specific performance goals at an
exercise price of $1.41 on December 11, 2009. Mr.
Krueger received a stock option grant for 300,000
shares, vesting over a three year period at an exercise
price of $1.96 on August 26, 2009. Mr. Johnston received
a stock option grant for 300,000 shares, vesting over a
three year period at an exercise price of $1.96 on
August 26, 2009.***
    
    Mr. Hoopes received a restricted stock grant for 100,000
shares, vesting both over time and achieving specific
performance goals on October 1, 2009. 44




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##### Table of Contents



Outstanding Equity Awards at Fiscal Year-End
  Number of Securities
    
    Number of Securitiesunderlying unexercised
    
    underlying unexercised
    
    ExerciseName
    
    options exercisable
    
    options unexercisable
    
    Price ($/sh)
    
    Expiration DateGary C. Evans, CEO
    
    
    333,333
    
    
    
    666,667
    
    
    
    1.96
    
    
    August 26, 2019352,000
    
    
    
    
    
    
    
    18.91
    
    
    February 13, 2018Jonathan D. Hoopes, President and COO
    
    
    100,000
    
    
    
    400,000
    
    
    
    1.41
    
    
    December 11, 2019David S. Krueger , Vice President
    
    
    100,000
    
    
    
    200,000
    
    
    
    1.96
    
    
    August 26, 2019and CFO
    
    
    110,000
    
    
    
    
    
    
    
    18.91
    
    
    February 13, 2018550,000
    
    
    
    
    
    
    
    5.00
    *
    
    May 5, 2017Morgan F. Johnston, Sr. Vice
    
    
    100,000
    
    
    
    200,000
    
    
    
    1.96
    
    
    August 26, 2019President, General Counsel and
    
    
    110,000
    
    
    
    
    
    
    
    18.91
    
    
    February 13, 2018Secretary
    
    
    500,000
    
    
    
    
    
    
    
    5.00
    *
    
    May 5, 2017
 
 *
    
    There was no public market for our common shares on the
date of grant of the option. Accordingly, the amounts set
out in this column are based upon the fair market value
per common share as estimated by us as at the date of
grant of the option, which was $5.00. Director Compensation
  Fees Earned or Paidin Cash
    
    Stock Awards
    
    Option Awards
    
    TotalName
    
    ($)
    
    ($)
    
    ($)
    
    ($)Ronald D. Ormand*
    
    
    
    
    
    
    50,000
    
    
    
    
    
    
    
    50,000Ronald H. Walker*
    
    
    
    
    
    
    50,000
    
    
    
    
    
    
    
    50,000
 
 *
    
    The Board of Directors has deferred any cash compensation
payments for acting as a Board member until the Companys
performance has improved. However, Board members are
receiving restricted stock payments in lieu of their
annual retainer payment.  45




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##### Table of Contents



Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
   Name of Beneficial
    
    Amount and Nature ofTitle of Class
    
    Owner
    
    Beneficial Ownership(1)
    
    Percent of Class(11)Common Stock
    
    Gary C. Evans
    
    
    16,373,110
    (2)
    
    
    67.0Common Stock
    
    Ronald D. Ormand
    
    
    33,333
    (3)
    
    
    *Common Stock
    
    Ronald H. Walker
    
    
    133,333
    (4)
    
    
    *Common Stock
    
    Jonathan D. Hoopes
    
    
    100,150
    (5)
    
    
    *Common Stock
    
    Morgan F. Johnston
    
    
    714,393
    (6)
    
    
    3.1Common Stock
    
    David S. Krueger
    
    
    764,869
    (7)
    
    
    3.2Common Stock
    
    Investment Hunter, LLC
    
    
    15,675,401
    (8)
    
    
    66.0Common Stock
    
    West Coast Opportunity Fund, LLC
    
    
    2,457,142
    (9)
    
    
    9.9Common Stock
    
    Southern Ute Growth Fund
    
    
    1,875,000
    (10)
    
    
    8.4Common Stock
    
    All officers and directors as a group (6 persons named above)
    
    
    18,119,188
    
    
    
    69.0
 
 *
    
    Less than 1%.(1)
    
    Beneficial Ownership is determined in accordance with the rules of the Securities and
Exchange Commission and generally includes voting or investment power with respect to
securities. Each of the beneficial owners listed below has direct ownership of and sole voting
power and investment power with respect to the shares of GreenHunters common stock.(2)
    
    Includes 14,160,000 shares and 1,515,401 common stock purchase warrants held directly by
Investment Hunter, LLC, and 352,000 common stock purchase options at an exercise price of
$18.91 per share and 333,333 common stock purchase options at an exercise price of $1.96. Also
includes 1,800 shares held by Mr. Evans as custodian for his children. Gary C. Evans owns 100%
of the capital stock of Investment Hunter, LLC.(3)
    
    Consists of 33,333 common stock purchase options at an exercise price of $0.97 per share.(4)
    
    Consists of 100,000 common stock purchase options at an exercise price of $10.00 per share
and 33,333 common stock purchase options at an exercise price of $1.96 per share.(5)
    
    Includes 100,000 common stock purchase options at an exercise price of $1.41 per share.(6)
    
    Includes 500,000 common stock purchase options at an exercise price of $5.00 per share,
110,000 common stock purchase options at an exercise price of $18.91 per share, 100,000 common
stock purchase options at an exercise price of $1.96 per share and 399 common stock purchase
warrants at an exercise price of $27.50 per share.(7)
    
    Includes 550,000 common stock purchase options at an exercise price of $5.00 per share,
110,000 common stock purchase options at an exercise price of $18.91 per share, 100,000 common
stock purchase options at an exercise price of $1.96 per share and 442 common stock purchase
warrants at an exercise price of $27.50 per share.(8)
    
    Includes 1,515,401 common stock purchase warrants at an exercise price of $27.50 per share.(9)
    
    Consists of 6,750 shares of Series A Preferred Stock convertible into 1,350,000 shares of
common stock and 10,575 shares of Series B Preferred Stock convertible into 1,410,000 shares
of common stock and 1,823,500 shares of common stock exercisable pursuant to common stock
purchase warrants. By agreement, West Coast Opportunity Fund, LLC cannot convert or exercise
any securities that cause it to own 10% or more of the common stock of the Company. Paul J.
Orfalea, Lance W. Helfert and R. Atticus Lowe have shared voting and investment control over
the securities held by West Coast Opportunity Fund, LLC. The address for West Coast
Opportunity Fund, LLC is 2151 Alessandro Drive, Suite 1000, Ventura, California 93001.(10)
    
    Includes 625,000 common stock purchase warrants at an exercise price of $27.50 per share.
The address for Southern Ute Growth Fund is 14933 Highway 172, Ignacio, CO 81137.(11)
    
    A total of 22,116,464 shares of GreenHunter Energys Common Stock are considered to be
outstanding pursuant to SEC Rule 13d-3(d)(1). For each Beneficial Owner below, any options
exercisable or securities convertible into common within 60 days have been included in the
denominator. 46




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##### Table of Contents



Item 13. Certain Relationships and Related Transactions, and Director Independence Transactions
with Related Persons
     
    
    the nature of the relationships among the parties;
    
    the materiality of the transaction to the company;
    
    the related persons interest in the transaction; and
    
    the benefit of the transaction to the related person and to
the company.
  
 Item 14. Principal Accounting Fees and Services
 For the Year Ended December 31,2010
    
    2009
    
    2008Audit (a)
    
    $
    148,560
    
    
    $
    121,190
    
    
    $
    177,382Tax preparation fees
    
    
    
    
    
    
    
    
    
    
    26,133All other fees (b)
    
    
    
    
    
    
    4,000
    
    
    
    11,976TOTAL
    
    $
    148,560
    
    
    $
    125,190
    
    
    $
    215,491
 
 (a)
    
    Includes fees paid to Hein & Associates for our annual audit and quarterly reviews and services in
connection with our filing of registration statements.(b)
    
    Includes fees paid to Hein & Associates for the agreed upon procedures related to an EPA report for BioFuels.  47




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##### Table of Contents



Part IV
 
 Item 15. Exhibits and Financial Statement Schedules
  PageAudited Consolidated Financial Statements of GreenHunter Energy, Inc.Independent Auditors Report
    
    
    F-2Balance Sheets at December 31, 2010 and 2009
    
    
    F-3Statements of Operations for the years ended December 31, 2010 and 2009
    
    
    F-4Statements of Changes in Stockholders and Members Equity (Deficit) for
the years ended December 31, 2010 and 2009
    
    
    F-5Statements of Cash Flows for the years ended December 31, 2010 and 2009
    
    
    F-6Notes to Financial Statements
    
    
    F-7
 F-1




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    HEIN & ASSOCIATES LLP
 F-2




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##### Table of Contents



GREENHUNTER ENERGY, INC.
 
 CONSOLIDATED BALANCE SHEETS
 (Development Stage Company)
 December 31, 2010
    
    
    December 31, 2009ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    181,471
    
    
    $
    6,914,381Related party accounts receivable
    
    
    4,783
    
    
    
    77,495Deposits and other current assets
    
    
    88,014
    
    
    
    53,686Prepaid expenses and other current assets
    
    
    182,079
    
    
    
    153,631Assets held for sale  current
    
    
    
    
    
    
    2,743,247Total current assets
    
    
    456,347
    
    
    
    9,942,440FIXED ASSETS:Land and improvements
    
    
    3,243,687
    
    
    
    3,243,687Buildings
    
    
    3,100,621
    
    
    
    3,100,621Plant and other equipment
    
    
    2,626,140
    
    
    
    2,921,202Accumulated depreciation
    
    
    (566,525
    )
    
    
    (516,837
    )Construction in progress
    
    
    12,846,608
    
    
    
    10,750,089Net fixed assets
    
    
    21,250,531
    
    
    
    19,498,762OTHER ASSETS:Assets held for sale  long term
    
    
    
    
    
    
    38,701,662Deferred financing costs, net of amortization of $193,335 and $101,668,
Respectively
    
    
    264,998
    
    
    
    375,415Other noncurrent assets
    
    
    1,446,136
    
    
    
    300,000Total assets
    
    $
    23,418,012
    
    
    $
    68,818,279LIABILITIES AND STOCKHOLDERS EQUITY (DEFICIT)CURRENT LIABILITIES:Current portion of notes payable
    
    $
    943,560
    
    
    $
    169,541Accounts payable
    
    
    2,098,328
    
    
    
    1,710,503Dividends payable
    
    
    172,056
    
    
    
    156,060Accrued liabilities
    
    
    3,498,207
    
    
    
    7,379,973Convertible securities
    
    
    1,001,622
    
    
    
    Liabilities associated with assets held for sale
    
    
    
    
    
    
    45,902,379Total current liabilities
    
    
    7,713,773
    
    
    
    55,318,456NON-CURRENT LIABILITIES:Notes payable, less current portion
    
    
    2,886,947
    
    
    
    2,983,045Redeemable debentures, net of discount of $29,558 and $40,069, respectively
    
    
    5,272,249
    
    
    
    5,261,739Debentures secured by assets of discontinued operations, net of discount of $0
and 1,007,039, respectively
    
    
    
    
    
    
    20,027,109Total long-term liabilities
    
    
    8,159,196
    
    
    
    28,271,893COMMITMENTS AND CONTINGENCIES (Notes 6 and 12)STOCKHOLDERS EQUITY (DEFICIT):Series A 8% convertible preferred stock, $.001 par value, $1,220 and $1,125
stated value, respectively, 6,750 issued and outstanding
    
    
    8,232,234
    
    
    
    7,592,389Series B convertible preferred stock, $.001 par value, $1,000 stated value,
10,575 issued and outstanding
    
    
    10,575,000
    
    
    
    10,575,000Common stock, $.001 par value, 90,000,000 authorized shares, 22,138,876
issued
    
    
    22,139
    
    
    
    22,139Additional paid-in capital
    
    
    88,968,889
    
    
    
    87,273,376Accumulated deficit prior to re-entering development stage
    
    
    (126,670,716
    )
    
    
    (119,672,776
    )Accumulated earnings during development stage
    
    
    26,979,695
    
    
    
    Treasury stock, at cost, 22,412 shares
    
    
    (336,285
    )
    
    
    (336,285
    )Unearned common stock in KSOP, at cost, 15,200 shares
    
    
    (225,913
    )
    
    
    (225,913
    )Total stockholders equity (deficit)
    
    
    7,545,043
    
    
    
    (14,772,070
    )Total liabilities and stockholders equity (deficit)
    
    $
    23,418,012
    
    
    $
    68,818,279
 See accompanying notes to consolidated financial statements
 F-3




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##### Table of Contents



GREENHUNTER ENERGY, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 (Development Stage Company)
 From Re-enteringDevelopment StageJuly 1, 2010 throughFor the Year Ended December 31,
    
    
    December 31,2010
    
    
    2009
    
    
    2010COSTS AND EXPENSES:Hurricane repairs and losses (insurance proceeds)
    
    $
    
    
    
    $
    (449,941
    )
    
    $
    Project costs
    
    
    (10,630
    )
    
    
    105,445
    
    
    
    (14,695
    )Depreciation expense
    
    
    189,758
    
    
    
    228,696
    
    
    
    95,253Selling, general and administrative
    
    
    5,080,768
    
    
    
    6,614,154
    
    
    
    3,267,330Loss on asset impairments
    
    
    160,824
    
    
    
    1,868,911
    
    
    
    Total costs and expenses
    
    
    5,420,720
    
    
    
    8,367,265
    
    
    
    3,347,888OPERATING LOSS FROM CONTINUING OPERATIONS
    
    
    (5,420,720
    )
    
    
    (8,367,265
    )
    
    
    (3,347,888
    )OTHER INCOME (EXPENSE):Interest and other income
    
    
    2,994,283
    
    
    
    2,083,911
    
    
    
    858,505Interest, accretion and other expense
    
    
    (56,506
    )
    
    
    (768,932
    )
    
    
    1,522,790Unrealized loss on convertible securities
    
    
    (1,001,622
    )
    
    
    
    
    
    
    (1,001,622
    )Total other income
    
    
    1,936,155
    
    
    
    1,314,979
    
    
    
    1,379,673Loss from continuing operations
    
    
    (3,484,565
    )
    
    
    (7,052,286
    )
    
    
    (1,968,215
    )Gain (Loss) on sale or disposal of discontinued operations
    
    
    33,055,388
    
    
    
    (563,388
    )
    
    
    33,055,388Loss from discontinued operations, net of taxes
    
    
    (8,933,227
    )
    
    
    (7,802,756
    )
    
    
    (3,771,559
    )Net Income (Loss)
    
    
    20,637,596
    
    
    
    (15,418,430
    )
    
    
    27,315,614Preferred stock dividends
    
    
    (655,841
    )
    
    
    (775,782
    )
    
    
    (335,919
    )Net income (loss) to common stockholders
    
    $
    19,981,755
    
    
    $
    (16,194,212
    )
    
    $
    26,979,695Weighted average shares outstanding, basic and diluted
    
    
    22,428,950
    
    
    
    21,612,172
    
    
    
    22,516,928Net loss per share from continuing operations
    
    $
    (0.18
    )
    
    $
    (0.36
    )
    
    $
    (0.10
    )Net earnings (loss) per share from discontinued operations
    
    $
    1.08
    
    
    $
    (0.39
    )
    
    $
    1.30Net earnings (loss) per share
    
    $
    0.89
    
    
    $
    (0.75
    )
    
    $
    1.20
 See accompanying notes to consolidated financial statements
 F-4




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##### Table of Contents



CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS EQUITY
 FOR THE PERIOD FROM JANUARY 1, 2009 TO DECEMBER 31, 2010
 (Development Stage Company)
 Additional
    
    
    
    
    
    
    Accumulated Deficit
    
    
    Accumulated Deficit During
    
    
    
    
    
    
    Unearned
    
    
    TotalSeries A
    
    
    Series B
    
    
    Common
    
    
    Paid in
    
    
    Noncontrolling
    
    
    Prior to Re-entering
    
    
    Development Stage July 1,
    
    
    Treasury
    
    
    Shares in
    
    
    StockholdersPreferred Stock
    
    
    Preferred Stock
    
    
    Stock
    
    
    Capital
    
    
    Interest
    
    
    Development Stage
    
    
    2010 - December 31, 2010
    
    
    Stock
    
    
    KSOP
    
    
    Equity (Deficit)BALANCE, January 1, 2009
    
    $
    12,500,000
    
    
    $
    10,575,000
    
    
    $
    20,989
    
    
    $
    81,100,216
    
    
    $
    (107,290
    )
    
    $
    (103,478,564
    )
    
    $
    
    
    
    $
    (678,538
    )
    
    $
    (225,913
    )
    
    $
    (294,100
    )Transfer accumulated preferred dividends
to stated value
    
    
    856,389
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    856,389Issue 42,797 warrants on Series B
Debentures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    942
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    942Stock compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    701,728
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    701,728Conversion of 5,750 preferred shares into
1,150,000 common shares
    
    
    (5,764,000
    )
    
    
    
    
    
    
    1,150
    
    
    
    5,776,183
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,333Issue 22,024 treasury shares for services
provided
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (305,693
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    342,253
    
    
    
    
    
    
    
    36,560Dividends on preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (775,782
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (775,782
    )Abandonment of Haining City interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,635
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,635Abandonment of Wheatland interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75,655
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    75,655Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,418,430
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (15,418,430
    )BALANCE, December 31, 2009
    
    $
    7,592,389
    
    
    $
    10,575,000
    
    
    $
    22,139
    
    
    $
    87,273,376
    
    
    $
    
    
    
    $
    (119,672,776
    )
    
    $
    
    
    
    $
    (336,285
    )
    
    $
    (225,913
    )
    
    $
    (14,772,070
    )Transfer accumulated preferred dividends
to stated value
    
    
    639,845
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    639,845Share based payments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,626,402
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,626,402Issued 100,000 warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69,111
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69,111Dividends on preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (319,922
    )
    
    
    (335,919
    )
    
    
    
    
    
    
    
    
    
    
    (655,841
    )Net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,678,018
    )
    
    
    27,315,614
    
    
    
    
    
    
    
    
    
    
    
    20,637,596BALANCE, December 31, 2010
    
    $
    8,232,234
    
    
    $
    10,575,000
    
    
    $
    22,139
    
    
    $
    88,968,889
    
    
    $
    
    
    
    $
    (126,670,716
    )
    
    $
    26,979,695
    
    
    $
    (336,285
    )
    
    $
    (225,913
    )
    
    $
    7,545,043
 See accompanying notes to consolidated financial statements
 F-5




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##### Table of Contents



GREENHUNTER ENERGY, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 (Development Stage Company)
 From Re-enteringDevelopmentStage July 1,2010 throughFor the Year Ended December 31,
    
    
    December 31,2010
    
    
    2009
    
    
    2010CASH FLOWS FROM OPERATING ACTIVITIES:Net income (loss)
    
    $
    20,637,596
    
    
    $
    (15,418,430
    )
    
    $
    27,315,614Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:Depreciation expense
    
    
    1,769,740
    
    
    
    4,270,444
    
    
    
    95,253Noncash stock compensation
    
    
    1,626,402
    
    
    
    701,728
    
    
    
    925,851Issue warrants on letter of guarantee
    
    
    69,111
    
    
    
    
    
    
    
    Amortization of deferred financing costs
    
    
    1,777,818
    
    
    
    1,279,284
    
    
    
    551,541Non-cash asset impairment
    
    
    160,824
    
    
    
    5,046,090
    
    
    
    Noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    Gain on sale or disposal of assets
    
    
    (33,055,388
    )
    
    
    (1,267,564
    )
    
    
    (33,055,388
    )Accretion of discount
    
    
    367,846
    
    
    
    438,841
    
    
    
    167,680Loss from change in fair value of convertible securities
    
    
    1,001,622
    
    
    
    
    
    
    
    1,001,622Forgiveness of trade payable
    
    
    
    
    
    
    (2,757,311
    )
    
    
    Changes in certain assets and liabilities:Accounts receivable
    
    
    29,547
    
    
    
    4,348,297
    
    
    
    908Inventory
    
    
    179,322
    
    
    
    5,958,458
    
    
    
    Prepaid and other expense
    
    
    431,421
    
    
    
    228,704
    
    
    
    (32,101
    )Accounts payable
    
    
    (5,707,290
    )
    
    
    (5,004,795
    )
    
    
    1,803,031Accrued liabilities
    
    
    4,730,591
    
    
    
    2,509,081
    
    
    
    1,262,850Deposits
    
    
    110
    
    
    
    
    
    
    
    110Net cash provided by (used in) operating activities
    
    
    (5,980,728
    )
    
    
    332,827
    
    
    
    36,971CASH FLOWS FROM INVESTING ACTIVITIES:Change in restricted cash
    
    
    2,018,765
    
    
    
    (1,676,064
    )
    
    
    48Proceeds from sale of assets
    
    
    9,775
    
    
    
    13,425,994
    
    
    
    Additions to fixed assets
    
    
    (2,104,573
    )
    
    
    (790,362
    )
    
    
    (1,799,148
    )Increase in other assets
    
    
    (1,146,136
    )
    
    
    (348,270
    )
    
    
    50,000Net cash provided by (used in) investing activities
    
    
    (1,222,169
    )
    
    
    10,611,298
    
    
    
    (1,749,100
    )CASH FLOWS FROM FINANCING ACTIVITIES:Gross proceeds from redeemable debenture issuance
    
    
    
    
    
    
    1,711,892
    
    
    
    Increase in notes payable
    
    
    1,020,840
    
    
    
    298,323
    
    
    
    964,992Payment of notes payable
    
    
    (275,051
    )
    
    
    (6,541,144
    )
    
    
    (123,201
    )Payment of deferred financing costs
    
    
    (275,802
    )
    
    
    (175,451
    )
    
    
    (275,802
    )Net cash provided by (used in) financing activities
    
    
    469,987
    
    
    
    (4,706,380
    )
    
    
    565,989CHANGE IN CASH
    
    
    (6,732,910
    )
    
    
    6,237,745
    
    
    
    (1,146,140
    )CASH, beginning of period
    
    
    6,914,381
    
    
    
    676,636
    
    
    
    1,327,611CASH,end of period
    
    $
    181,471
    
    
    $
    6,914,381
    
    
    $
    181,471Cash paid for interest
    
    $
    1,550,048
    
    
    $
    2,994,959
    
    
    $
    820,672NONCASH TRANSACTIONS:Issued treasury shares for payment of services
    
    $
    
    
    
    $
    36,560
    
    
    $
    
 See accompanying notes to consolidated financial statements
 F-6




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##### Table of Contents



NOTE 1. Organization And Nature Of Operations
   Current Plan of Operations and Ability to Operate as a Going Concern
     F-7




---



##### Table of Contents



Development Stage Company
  Nature of Operations
      F-8




---



##### Table of Contents



Note 2. Principles of Consolidation and Basis of Presentation
  Note 3. Summary of Significant Accounting Policies
 Use of Estimates
  Reclassifications
  Cash and Cash Equivalents
  Property, Plant and Equipment
  Automobiles
    
    5 yearsComputer and office equipment
    
    5 to 7 yearsPlant equipment
    
    7 to 30 yearsLand improvements
    
    15 yearsBuildings
    
    31 years
 F-9




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##### Table of Contents



Deferred Financing Costs
  Other Non-Current Assets
  2010
    
    
    2009Power Purchase Agreement
    
    $
    1,396
    
    
    $
    300Deposits and other non-current assets
    
    
    50
    
    
    
    Total
    
    $
    1,446
    
    
    $
    300
 Impairments
  Asset Retirement Obligations
  F-10




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##### Table of Contents



Repairs and Maintenance
  Revenue recognition
  Stock-Based Compensation
  Income Taxes
 Income Taxes
  F-11




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##### Table of Contents



.
 Fair Value of Financial Instruments
  
    
    Level 1  Quoted prices (unadjusted) for identical assets or liabilities in active markets
    
    Level 2  Quoted prices for similar assets or liabilities in active markets; quoted
prices for identical or similar assets or liabilities in markets that are not active; and
model-derived valuations whose inputs or significant value drivers are observable
    
    Level 3  Significant inputs to the valuation model are unobservable
  
 Level 1
    
    
    Level 2
    
    
    Level 3Convertible securities
    
    $
    
    
    
    $
    
    
    
    $
    1,001,622Total liabilities at fair value
    
    $
    
    
    
    $
    
    
    
    $
    1,001,622
 
 Level 1
    
    
    Level 2
    
    
    Level 3Convertible
securities
    
    $
    
    
    
    $
    
    
    
    $
    Total liabilities at fair value
    
    $
    
    
    
    $
    
    
    
    $
    
   F-12




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##### Table of Contents



Income or Loss Per Common Share
     December 31,2010
    
    2009Stock options
    
    
    7,076,500
    
    
    
    7,399,832Unvested and unissued
stock awards
    
    
    462,628
    
    
    
    100,000Warrants
    
    
    5,443,911
    
    
    
    6,251,745Convertible debentures
    
    
    5,686,310
    
    
    
    20,789,706Preferred Stock
    
    
    3,056,447
    
    
    
    2,928,478
 Note 4. Recently Issued Accounting Standards
  F-13




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##### Table of Contents



Note 5. Discontinued Operations
   2010
    
    
    2009Sales and other revenues from discontinued operations
    
    $
    319,170
    
    
    $
    5,791,533Operating expenses from discontinued operations
    
    
    (4,449,138
    )
    
    
    (10,402,491
    )Other income from discontinued operations
    
    
    (4,903,259
    )
    
    
    (3,626,544
    )Net loss from discontinued operations
    
    $
    (9,033,227
    )
    
    $
    (8,237,502
    )
   2010
    
    
    2009Sales and other revenues from discontinued operations
    
    $
    
    
    
    $
    Operating expenses from discontinued operations
    
    
    
    
    
    
    (215,832
    )Other income from discontinued operations
    
    
    100,000
    
    
    
    725,348Net income from discontinued operations
    
    $
    100,000
    
    
    $
    509,516
   2009Sales and other revenues from discontinued operations
    
    $
    Operating expenses from discontinued operations
    
    
    (61,080
    )Other income from discontinued operations
    
    
    12,474Net loss from discontinued operations
    
    $
    (48,606
    )
  F-14




---



##### Table of Contents



2009Sales and other revenues from discontinued operations
    
    $
    Operating expenses from discontinued operations
    
    
    (87,211
    )Other income from discontinued operations
    
    
    61,047Net loss from discontinued operations
    
    $
    (26,164
    )
 Note 6. Acquisitions and Divestitures
 BioFuels Project
  Port Sutton Acquisition and Divestiture
  Telogia
  Ming Yang
  Wheatland Wind Power Project
  Ocotillo Wind Project
  F-15




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##### Table of Contents



NOTE 7. NOTES PAYABLE
  2010
    
    
    2009Note payable due June 17, 2010, 7.0%
    
    $
    
    
    
    $
    79,820Note payable due November 31, 2017, 5.7%
    
    
    2,982,051
    
    
    
    3,072,766Note payable to related party due April 30, 2011, 10%
    
    
    766,957
    
    
    
    Notes payable due between February 15, 2011 and July
1, 2011, rates from 5.75% to 9.9%
    
    
    81,499
    
    
    
    10% Series A Senior Secured Redeemable Debentures,
net of $0 and $1,007,039 discount, respectively
    
    
    
    
    
    
    20,027,1099% Series B Senior Secured Redeemable Debentures,
net of $40,069 and $49,628 discount, respectively
    
    
    5,272,249
    
    
    
    5,261,7399,102,756
    
    
    
    28,441,433Less: current portion
    
    
    (943,560
    )
    
    
    (169,541
    )Total Long-Term Debt
    
    $
    8,159,196
    
    
    $
    28,271,893
  2011
    
    $
    943,5602012
    
    
    100,0492013
    
    
    3,612,0962014
    
    
    1,824,672Thereafter
    
    
    2,622,379$
    9,102,756
 Notes Payable
   10% Series A Senior Secured Redeemable Debentures
   F-16




---



##### Table of Contents



9% Series B Senior Secured Redeemable Debentures
  Note Payable to Related Party
  NOTE 8. INCOME TAXES
   F-17




---



##### Table of Contents



2010
    
    
    2009(in thousands)Statutory tax expense (benefit)
    
    $
    (1,185
    )
    
    $
    (2,398
    )Change in valuation allowanceNet operating loss
    
    
    823
    
    
    
    2,234Effect of permanent differences and otherInterest expense disallowed for tax
    
    
    
    
    
    
    162Effect of other permanent differences
    
    
    21
    
    
    
    2Unrealized
losses on convertible securities
    
    $
    341
    
    
    
    Total Tax Expense
    
    $
    
    
    
    $
    
  2010
    
    2009(in thousands)Deferred tax assets:Net operating loss carryover
    
    $
    17,706
    
    
    $
    15,602Capital loss carryover
    
    
    77
    
    
    
    77Charitable contributions carryover
    
    
    4
    
    
    
    4Share based compensation
    
    
    5,516
    
    
    
    5,024Property and equipment
    
    
    527
    
    
    
    2,300Deferred tax liabilities:Property, equipment
    
    
    
    
    
    
    Net deferred tax assets
    
    
    23,830
    
    
    
    23,007Less valuation allowances
    
    
    (23,830
    )
    
    
    (23,007
    )Net deferred tax
    
    $
    
    
    
    $
    
 Accounting for Uncertainty in Income Taxes, an
Interpretation of FASB Statement No. 109
    F-18




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##### Table of Contents



Note 9. Stockholders Equity
  Preferred
    
    
    Common
    
    
    TreasuryStock
    
    
    Stock
    
    
    Stock
    
    
    KSOP
    
    
    WarrantsJanuary 1, 2009
    
    
    23,075
    
    
    
    20,988,876
    
    
    
    44,436
    
    
    
    15,200
    
    
    
    6,208,948Conversion of Series A Preferred Shares
    
    
    (5,750
    )
    
    
    1,150,000
    
    
    
    
    
    
    
    
    
    
    
    Issue warrants on 9% Series B Redeemable Debentures issuances
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,797Issue treasury shares for services provided
    
    
    
    
    
    
    
    
    
    
    (22,024
    )
    
    
    
    
    
    
    December 31, 2009
    
    
    17,325
    
    
    
    22,138,876
    
    
    
    22,412
    
    
    
    15,200
    
    
    
    6,251,745Issued 100,000 warrants upon receipt of letter of guaranty
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,000
    )Warrants expired
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (907,834
    )December 31, 2010
    
    
    17,325
    
    
    
    22,138,876
    
    
    
    22,412
    
    
    
    15,200
    
    
    
    5,443,911
 Preferred Stock
 Series A Preferred
    F-19




---



##### Table of Contents



Series B Preferred
    Common Stock
    F-20




---



##### Table of Contents



Treasury Stock
   Common Stock Warrants
       F-21




---



##### Table of Contents



2010
    
    
    2009Weighted
    
    
    
    
    
    
    WeightedAverage Exercise
    
    
    
    
    
    
    Average ExerciseShares
    
    
    Price
    
    
    Shares
    
    
    PriceOutstanding  Beginning of Year
    
    
    6,251,745
    
    
    $
    23.98
    
    
    
    6,208,948
    
    
    $
    10.52Granted
    
    
    100,000
    
    
    $
    1.34
    
    
    
    42,797
    
    
    $
    30.00Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    $
    Cancelled
    
    
    (907,834
    )
    
    $
    16.16
    
    
    
    
    
    
    $
    Outstanding  End of Year
    
    
    5,443,911
    
    
    $
    24.87
    
    
    
    6,251,745
    
    
    $
    23.98Exercisable  End of Year
    
    
    5,443,911
    
    
    $
    24.87
    
    
    
    6,251,745
    
    
    $
    23.98
 Note 10. Convertible Securities
 Determining Whether an Instrument (or Embedded Feature) Is Indexed to an Entitys Own
Stock Derivatives and Hedging
  F-22




---



##### Table of Contents



Note 11. Stock-Based Compensation
 s
 Common Stock Options
     F-23




---



##### Table of Contents



2009Number of options issued
    
    
    2,661,000Weighted average stock price
    
    $
    1.81Weighted average exercise price
    
    $
    1.52Weighted average expected life of options(a)
    
    
    5.00Weighted average expected volatility (b)
    
    
    67.2
    %Weighted average risk-free interest rate
    
    
    2.4
    %Expected annual dividend per share
    
    
    Weighted average fair value of each option
    
    $
    1.05
 
 (a)
    
    As determined by the simplified method under Staff Accounting Bulletin
107. The options have a life of ten years.(b)
    
    The expected volatility of our common stock was estimated using an
average of volatilities of publicly traded companies in similar energy
businesses. F-24




---



##### Table of Contents



2010
    
    2009Weighted
    
    
    
    
    
    
    
    
    
    WeightedAverage
    
    Aggregate Intrinsic
    
    
    
    
    
    Average
    
    Aggregate IntrinsicShares
    
    Exercise Price
    
    Value*
    
    Shares
    
    Exercise Price
    
    Value*Outstanding  Beginning of Year
    
    
    7,399,832
    
    
    $
    5.93
    
    
    $
    
    
    
    
    5,629,500
    
    
    $
    9.88
    
    
    $
    Granted
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    2,661,000
    
    
    $
    1.52
    
    
    
    97,000Exercised
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    
    
    
    $
    
    
    
    
    Cancelled
    
    
    (323,332
    )
    
    $
    9.28
    
    
    
    
    
    
    
    (890,668
    )
    
    $
    14.40
    
    
    
    Outstanding  End of Year
    
    
    7,076,500
    
    
    $
    5.95
    
    
    
    
    
    
    
    7,399,832
    
    
    $
    5.93
    
    
    
    97,000Exercisable  End of Year
    
    
    5,257,497
    
    
    $
    7.65
    
    
    
    
    
    
    
    4,499,663
    
    
    $
    8.38
    
    
    
    
 
 *
    
    The Aggregate Intrinsic Value was calculated using the December 31, 2010 and
2009 stock price of $0.81 and $1.15.  WeightedAverageNumber of
    
    
    Number of
    
    
    RemainingExercise
    
    Options
    
    
    Exercisable
    
    
    ContractualPrice
    
    Outstanding
    
    
    Options
    
    
    Life (Years)$0.97
    
    
    100,000
    
    
    
    33,333
    
    
    
    8.68$1.41
    
    
    500,000
    
    
    
    
    
    
    
    9.21$1.96
    
    
    1,725,000
    
    
    
    574,999
    
    
    
    8.91$5.00
    
    
    3,247,000
    
    
    
    3,247,000
    
    
    
    6.63$7.50
    
    
    33,333
    
    
    
    33,333
    
    
    
    7.01$10.00
    
    
    243,333
    
    
    
    243,333
    
    
    
    7.16$10.12
    
    
    2,500
    
    
    
    1,666
    
    
    
    8.03$12.00
    
    
    6,500
    
    
    
    6,500
    
    
    
    7.24$13.66
    
    
    3,000
    
    
    
    3,000
    
    
    
    7.76$17.76
    
    
    40,000
    
    
    
    40,000
    
    
    
    7.37$18.00
    
    
    16,667
    
    
    
    16,667
    
    
    
    7.45$18.91
    
    
    1,099,167
    
    
    
    997,666
    
    
    
    7.38$19.75
    
    
    13,333
    
    
    
    13,333
    
    
    
    7.55$20.64
    
    
    25,000
    
    
    
    25,000
    
    
    
    7.69$22.75
    
    
    21,667
    
    
    
    21,667
    
    
    
    7.32
 Share Awards
   F-25




---



##### Table of Contents



2010
    
    
    2009Weighted Average
    
    
    
    
    
    
    Weighted AverageNumber of
    
    
    Grant Date Fair
    
    
    Number of
    
    
    Grant Date FairShares
    
    
    Value per Share
    
    
    Shares
    
    
    Value per ShareUnvested  Beginning of Year
    
    
    100,000
    
    
    $
    1.87
    
    
    
    
    
    
    
    Granted
    
    
    170,600
    
    
    $
    1.10
    
    
    
    100,000
    
    
    $
    1.87Cancelled
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Vested
    
    
    (195,600
    )
    
    $
    1.22
    
    
    
    
    
    
    
    Unvested  End of Period
    
    
    75,000
    
    
    $
    1.87
    
    
    
    100,000
    
    
    $
    1.87
 Note 12. Commitments and Contingencies
     F-26




---



##### Table of Contents



Bioversel
   Crown Engineering
    Timothy Aden
  F-27




---



##### Table of Contents



Note 13. Related Party Transactions
      F-28




---



##### Table of Contents



Note 14. Quarterly Financial Data
  Quarter Ended
    
    TotalMarch 31
    
    June 30
    
    September 30
    
    December 31
    
    Year2010Operating loss
    
    $
    (1,200,166
    )
    
    $
    (872,666
    )
    
    $
    (1,766,333
    )
    
    $
    (1,581,555
    )
    
    $
    (5,420,720
    )Net income (loss) attributable to common shareholders
    
    
    (2,700,582
    )
    
    
    (4,297,358
    )
    
    
    (2,749,306
    )
    
    
    29,729,001
    
    
    
    19,981,755Basic and diluted earnings (loss) per common share
    
    $
    (0.12
    )
    
    $
    (0.19
    )
    
    $
    (0.12
    )
    
    $
    1.32
    
    
    $
    0.89Weighted average shares
    
    
    22,101,861
    
    
    
    22,373,261
    
    
    
    22,500,492
    
    
    
    22,533,363
    
    
    
    22,428,9502009Operating loss
    
    $
    (4,446,274
    )
    
    $
    (220,806
    )
    
    $
    (1,245,932
    )
    
    $
    (2,454,253
    )
    
    $
    (8,367,265
    )Net income (loss) attributable to common shareholders
    
    
    (8,746,889
    )
    
    
    4,449,187
    
    
    
    (3,522,968
    )
    
    
    (8,373,542
    )
    
    
    (16,194,212
    )Basic and diluted earnings (loss) per common share
    
    $
    (0.42
    )
    
    $
    0.21
    
    
    $
    (0.16
    )
    
    $
    (0.38
    )
    
    $
    (0.75
    )Weighted average shares
    
    
    20,935,018
    
    
    
    21,296,822
    
    
    
    22,097,434
    
    
    
    22,101,264
    
    
    
    21,612,172
 Note 15. Segment Data
      F-29




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##### Table of Contents



2010UnallocatedCorporate
    
    
    BioMass
    
    
    Wind Energy
    
    
    TOTALTotal operating costs (recoveries)
    
    
    
    
    
    
    
    
    
    
    (10,630
    )
    
    
    (10,630
    )Depreciation expense
    
    
    189,758
    
    
    
    
    
    
    
    
    
    
    
    189,758Loss on asset impairments
    
    
    
    
    
    
    
    
    
    
    160,824
    
    
    
    160,824Selling, general and administrative
    
    
    4,466,508
    
    
    
    597,325
    
    
    
    16,936
    
    
    
    5,080,769Operating income (loss)
    
    
    (4,656,266
    )
    
    
    (597,325
    )
    
    
    (167,130
    )
    
    
    (5,420,721
    )Other income and (expense)
    
    
    (619,373
    )
    
    
    2,305,527
    
    
    
    250,002
    
    
    
    1,936,156Income (loss) from continuing operations
    
    $
    (5,275,639
    )
    
    $
    1,708,202
    
    
    $
    82,872
    
    
    $
    (3,484,565
    )Total Assets
    
    $
    5,038,025
    
    
    $
    18,358,457
    
    
    $
    21,530
    
    
    $
    23,418,012Capital Expenditures
    
    $
    634,293
    
    
    $
    1,470,232
    
    
    $
    
    
    
    $
    2,104,525
 2009UnallocatedCorporate
    
    
    BioMass
    
    
    Wind Energy
    
    
    TOTALTotal operating costs (recoveries)
    
    
    (449,941
    )
    
    
    38,309
    
    
    
    67,136
    
    
    
    (344,496
    )Depreciation expense
    
    
    182,405
    
    
    
    
    
    
    
    46,291
    
    
    
    228,696Loss on asset impairments
    
    
    1,651,161
    
    
    
    
    
    
    
    217,750
    
    
    
    1,868,911Selling, general and administrative
    
    
    4,835,147
    
    
    
    1,139,979
    
    
    
    639,028
    
    
    
    6,614,154Operating loss
    
    
    (6,218,772
    )
    
    
    (1,178,288
    )
    
    
    (970,205
    )
    
    
    (8,367,265
    )Other income and (expense)
    
    
    2,030,461
    
    
    
    7,878
    
    
    
    (723,360
    )
    
    
    1,314,979Loss from continuing operations
    
    $
    (4,188,311
    )
    
    $
    (1,170,410
    )
    
    $
    (1,693,565
    )
    
    $
    (7,052,286
    )Total Assets
    
    $
    12,753,524
    
    
    $
    15,704,951
    
    
    $
    229,484
    
    
    $
    28,687,959Capital Expenditures
    
    $
    6,748
    
    
    $
    40,865
    
    
    $
    
    
    
    $
    47,613
 Note
16. Subsequent Events (Unaudited)
   F-30




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##### Table of Contents



ExhibitNumber
    
    Exhibit Title3.1*
    
    Certificate of Incorporation3.2*
    
    Amendment to the Certificate of Incorporation3.3*
    
    Bylaws4.1***
    
    Amended and Restated Certificate of Designations of 2007 Series A 8% Convertible Preferred Stock4.2***
    
    Form of Warrant Agreement by and between GreenHunter Energy, Inc. and West Coast Opportunity Fund, LLC4.3*
    
    Form of Warrant Agreement by and between GreenHunter Energy, Inc. and certain accredited investors4.4***
    
    Certificate of Designations of 2008 Series B Convertible Preferred Stock10.1*
    
    Stock Purchase Agreement dated February 2007 among Channel Refining Corporation, GreenHunter Energy,
Inc. and certain selling shareholders10.2*
    
    Amendment No. 1 to Stock Purchase Agreement dated February 2007 among Channel Refining Corporation,
GreenHunter Energy, Inc. and certain selling shareholders10.3*
    
    Purchase and Sale Agreement, dated May 14, 2007 between GreenHunter Energy, Inc. and Chateau Energy,
Inc. regarding acquisition of power purchase agreement10.4*
    
    Purchase and Sale Agreement, dated May 14, 2007 between GreenHunter Energy, Inc. and Chateau Energy,
Inc. regarding acquisition of Mesquite Lake Resource Recovery Facility10.5*
    
    Consulting Agreement dated May 14, 2007 between GreenHunter Energy, Inc. and Chateau Energy, Inc.10.6*
    
    Registration rights agreement, dated March 9, 2007 between GreenHunter Energy, Inc. and certain
institutional investors10.7*
    
    Registration rights agreement, dated April 13, 2007 between GreenHunter Energy, Inc. and certain
selling shareholders10.8*
    
    Investor rights agreement, dated May 14, 2007 between GreenHunter Energy, Inc. and Chateau Energy, Inc.10.9*
    
    Form of subordinated promissory note of GreenHunter BioFuels, Inc.10.10**
    
    Second Amended and Restated Credit Agreement dated as of March 7, 2008 among GreenHunter BioFuels
Inc., WestLB AG New York Branch as the administrative agent, WestLB New York Branch as the LC Issuing
Bank and the Lenders Party to the Amended and Restated Credit Agreement from time to time10.11****
    
    First Amendment to Second Amended and Restated Credit Agreement dated as of March 7, 2008 among
GreenHunter BioFuels Inc., WestLB AG New York Branch as the administrative agent, WestLB New York
Branch as the LC Issuing Bank and the Lenders Party to the Amended and Restated Credit Agreement from
time to time10.12
    
    Second amendment to Second Amended and Restated Credit Agreement dated as of March 7, 2008 among
GreenHunter BioFuels Inc., WestLB AG New York Branch as the administrative agent, WestLB New York
Branch as the LC Issuing Bank and the Lenders Party to the Amended and Restated Credit Agreement from
time to time10.13*****
    
    Third amendment to Second Amended and Restated Credit Agreement dated as of March 7, 2008 among
GreenHunter BioFuels Inc., WestLB AG New York Branch as the administrative agent, WestLB New York
Branch as the LC Issuing Bank and the Lenders Party to the Amended and Restated Credit Agreement from
time to time21.1
    
    List of Subsidiaries31.1 
    
    Certifications of the Chief Executive Officer.31.2 
    
    Certifications of the Chief Financial Officer.32.1 
    
    Certifications of the Chief Executive Officer provided pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2 
    
    Certifications of the Chief Financial Officer provided pursuant to 18 U.S.C. Section 1350 as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Incorporated by reference to the Companys Form 10,
dated October 19, 2007**
    
    Incorporated by reference to the Companys Form 10-Q, dated May 15, 2008***
    
    Incorporated by reference to the Companys Form 8-K, dated August 21, 2008****
    
    Incorporated by reference to the Companys Form 8-K, dated June 25, 2009*****
    
    Incorporated by reference to the Companys Form 8-K, dated March 30, 2010
    
    Filed herewith F-31




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##### Table of Contents



SIGNATURES
  GreenHunter Energy, Inc.Date: March 31, 2010
    By:
    /s/ Gary C. EvansChief Executive Officer  Signature
    
    Title
    
    Date/s/ Gary C. Evans

Gary C. Evans
    
    Chairman and
Chief Executive Officer
    
    March 31, 2011/s/ Jonathan D. Hoopes

Jonathan D. Hoopes
    
    President and COO
    
    March 31, 2011/s/ Morgan F. Johnston

Morgan F. Johnston
    
    Sr. Vice President, General Counsel
and Secretary
    
    March 31, 2011/s/ David S. Krueger

David S. Krueger
    
    Vice President and
Chief Financial Officer
    
    March 31, 2011/s/ Ronald D. Ormand

Ronald D. Ormand
    
    Director
    
    March 31, 2011/s/ Ronald H. Walker

Ronald H. Walker
    
    Director
    
    March 31, 2011
 F-32




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##### Table of Contents



Exhibit Index
 ExhibitNumber
    
    Exhibit Title3.1*
    
    Certificate of Incorporation3.2*
    
    Amendment to the Certificate of Incorporation3.3*
    
    Bylaws4.1***
    
    Amended and Restated Certificate of Designations of 2007 Series A 8% Convertible
Preferred Stock4.2***
    
    Form of Warrant Agreement by and between GreenHunter Energy, Inc. and West Coast
Opportunity Fund, LLC4.3*
    
    Form of Warrant Agreement by and between GreenHunter Energy, Inc. and certain accredited
investors4.4***
    
    Certificate of Designations of 2008 Series B Convertible Preferred Stock10.1*
    
    Stock Purchase Agreement dated February 2007 among Channel Refining Corporation,
GreenHunter Energy, Inc. and certain selling shareholders10.2*
    
    Amendment No. 1 to Stock Purchase Agreement dated February 2007 among Channel Refining
Corporation, GreenHunter Energy, Inc. and certain selling shareholders10.3*
    
    Purchase and Sale Agreement, dated May 14, 2007 between GreenHunter Energy, Inc. and
Chateau Energy, Inc. regarding acquisition of power purchase agreement10.4*
    
    Purchase and Sale Agreement, dated May 14, 2007 between GreenHunter Energy, Inc. and
Chateau Energy, Inc. regarding acquisition of Mesquite Lake Resource Recovery Facility10.5*
    
    Consulting Agreement dated May 14, 2007 between GreenHunter Energy, Inc. and Chateau
Energy, Inc.10.6*
    
    Registration rights agreement, dated March 9, 2007 between GreenHunter Energy, Inc. and
certain institutional investors10.7*
    
    Registration rights agreement, dated April 13, 2007 between GreenHunter Energy, Inc. and
certain selling shareholders10.8*
    
    Investor rights agreement, dated May 14, 2007 between GreenHunter Energy, Inc. and
Chateau Energy, Inc.10.9*
    
    Form of subordinated promissory note of GreenHunter BioFuels, Inc.10.10**
    
    Second Amended and Restated Credit Agreement dated as of March 7, 2008 among GreenHunter
BioFuels Inc., WestLB AG New York Branch as the administrative agent, WestLB New York
Branch as the LC Issuing Bank and the Lenders Party to the Amended and Restated Credit
Agreement from time to time10.11****
    
    First Amendment to Second Amended and Restated Credit Agreement dated as of March 7, 2008
among GreenHunter BioFuels Inc., WestLB AG New York Branch as the administrative agent,
WestLB New York Branch as the LC Issuing Bank and the Lenders Party to the Amended and
Restated Credit Agreement from time to time10.12
    
    Second amendment to Second Amended and Restated Credit Agreement dated as of March 7,
2008 among GreenHunter BioFuels Inc., WestLB AG New York Branch as the administrative
agent, WestLB New York Branch as the LC Issuing Bank and the Lenders Party to the Amended
and Restated Credit Agreement from time to time10.13*****
    
    Third amendment to Second Amended and Restated Credit Agreement dated as of March 7, 2008
among GreenHunter BioFuels Inc., WestLB AG New York Branch as the administrative agent,
WestLB New York Branch as the LC Issuing Bank and the Lenders Party to the Amended and
Restated Credit Agreement from time to time31.1 
    
    Certifications of the Chief Executive Officer.31.2 
    
    Certifications of the Chief Financial Officer.32.1 
    
    Certifications of the Chief Executive Officer provided pursuant to 18 U.S.C. Section 1350
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2 
    
    Certifications of the Chief Financial Officer provided pursuant to 18 U.S.C. Section 1350
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*
    
    Incorporated by reference to the Companys Form 10, dated October 19, 2007**
    
    Incorporated by reference to the Companys Form 10-Q, dated May 15, 2008***
    
    Incorporated by reference to the Companys Form 8-K, dated August 21, 2008****
    
    Incorporated by reference to the Companys Form 8-K, dated June 25, 2009*****
    
    Incorporated by reference to the Companys Form 8-K, dated March 30, 2010
    
    Filed herewith