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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 FORM 10-K
 (Mark one)
 þ
    
    Annual Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the fiscal year ended
December 31, 2009
 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.)
  
   Title of
each class
    
    Name of each exchange on which registeredCommon Stock ($.001 par value)
    
    NYSE Amex
  o þ
 o þ
 þ o
 o o
 o
  Large Accelerated Filer o
Accelerated Filer o
Non-Accelerated Filer o(Do not check if a smaller reporting company)
Smaller Reporting Company þ
 o þ




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TABLE OF CONTENTS
 PART IItem 1.
    
    Business
    
    
    1Item 1A
    
    Risk Factors
    
    
    18Item 2.
    
    Properties
    
    
    35Item 3.
    
    Legal Proceedings
    
    
    36Item 4.
    
    Submission of Matters to a vote of Security Holders
    
    
    36PART IIItem 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
    
    
    38Item 6.
    
    Selected Financial Data
    
    
    38Item 7.
    
    Managements Discussion and Analysis of Financial Condition and Results of
Operations
    
    
    39Item 7A
    
    Quantitative and Qualitative Disclosures About Market Risks
    
    
    53Item 8
    
    Financial Statements and Supplementary Data
    
    
    54Item 9.
    
    Changes In and Disagreements with Accountants on Accounting and Financial
Disclosure
    
    
    54Item 9A(T).
    
    Controls and Procedures
    
    
    54Item 9B.
    
    Other Information
    
    
    55PART IIIItem 10.
    
    Directors, Executive Officers and Corporate Governance
    
    
    55Item 11.
    
    Executive Compensation
    
    
    60Item 12.
    
    Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters
    
    
    62Item 13.
    
    Certain Relationships and Related Transactions, and Director
Independence
    
    
    63Item 14.
    
    Principal Accounting Fees and Services
    
    
    63PART IVItem 15.
    
    Exhibits and Financial Statement Schedules
    
    
    64EX-10.12EX-21.1EX-31.1EX-31.2EX-32.1EX-32.2




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Part I
 
 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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Biofuels
     
    
    Beneficial government initiatives and incentives.Initiatives and incentives at the
federal, state and local government levels enhance the economics and market demand for
biodiesel production. These initiatives include tax credits as well as mandates for
increased use of biodiesel and biodiesel blends.
    
    Environmental benefits.Biodiesel is biodegradable, nontoxic and essentially free
of sulfur and aromatics. Additionally, biodiesel reduces tailpipe exhaust emissions,
greenhouse gas emissions and sulfur dioxide emissions (acid rain) and minimizes black
smoke and smog-causing particulate matter.
    
    Easy integration into existing infrastructure.As discussed above, biodiesel can be
used in diesel engines with no modifications as B100 or mixed with petroleum diesel,
such as the B20 and B5 blends. A blended biodiesel may enhance petroleum diesel because
it has the ability to extend engine life and decrease operating expenses due to the
increase in engine lubricity.
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
    
    Increased energy security.U.S. domestic oil production has continuously declined
while demand has grown since the mid-1980s, increasing dramatically our nations import
requirements of crude oil from third world countries. Use of biodiesel, which can be
produced with a variety of feedstocks from both domestic and worldwide sources, can
help reduce dependence on imported oil. Many of these feedstocks are normally unfit for
human consumption.
    
    Imbalance of supply and demand.We believe that the biodiesel industry lacks
sufficient capacity for production of high quality B100 to meet anticipated demand for
biodiesel as well as current biodiesel specifications mandated by the U.S. government.
ASTM D-6751-08 requires a new Cold Soak Filtration test standard which will create
problems for biodiesel producers who use animal fats and palm oil feedstock and lack
distillation technologies that exist at our state-of-the-art refinery.
 Biodiesel basics
     Traditional Biodiesel Production Process
  3




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Triglycerides
  Transesterification
    4




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Glycerin
  Methanol
  Biodiesel Quality Standards
     
    
    ASTM D975-08a, Specification for Diesel Fuel Oils  used for on- and off-road diesel
applications; revised to include requirements for up to 5 percent biodiesel.
    
    ASTM D396-08b, Specification for Fuel Oils  used for home heating and boiler
applications; revised to include requirements for up to 5 percent biodiesel.
    
    ASTM D7467-08, Specification for Diesel Fuel Oil, Biodiesel Blend (B6 to 20)  a
completely new specification that covers finished fuel blends of between 6 (B6) and 20
(B20) percent biodiesel for on- and off-road diesel engine use.
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Feedstocks
    6




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Government Initiatives
 Tax Incentives.
 Use Mandates.
 
    
    15 billion gallons of the ultimate 36 billion gallon requirement by 2022 will come
from conventional biofuels and includes biodiesel;
    
    21 billion gallons of the overall 36 billion gallons mandate are to be advanced
biofuels (defined as cellulosic ethanol, ethanol derived from sugar or starch, biogas,
biomass-based diesel, butanol or other alcohols and other fuel derived from cellulosic
biomass) by 2022;
    
    16 billion gallons of the advanced biofuels, under the same timeframe, are to
come from cellulosic biofuel; and
    
    1 billion gallons by 2012 are required to be from biomass-based diesel.
 Benefits of Biodiesel
  7




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
    
    Biodiesel reduces by as much as 65% the emission of particulates, which are
small particles of solid combustion products. This can reduce cancer risks by up to 94%
according to testing sponsored by the Department of Energy.
    
    Biodiesel does produce the same or slightly more (up to 7% more) nitrogen oxide
(NOx) emissions than petrodiesel, but these emissions can be reduced through the use
of catalytic converters. As biodiesel contains no nitrogen, the increase in NOx
emissions may be due to the higher cetane rating of biodiesel as well as higher oxygen
content, which allows it to convert nitrogen from the atmosphere into NOx more rapidly.
Properly designed and tuned engines may eliminate this increase.
    
    Biodiesel has higher cetane rating than petrodiesel, and therefore ignites more
rapidly when injected into the engine. It also has the highest energy content (B100) of
any alternative fuel in its pure form.
    
    Biodiesel is twice as biodegradable as petroleum oils and is non-toxic. Tests
sponsored by the United States Department of Agriculture confirm biodiesel is less
toxic than table salt and biodegrades as quickly as sugar.
    
    In the United States, biodiesel is the only alternative fuel to have
successfully completed the Health Effects Testing requirements (Tier I and Tier II) of
the Clean Air Act (1990).
  
    
    Today, diesel engines can run most biodiesel blends with no modifications.
    
    Biodiesel does not need investments into new infrastructure. It can use the
current distribution and retail infrastructure.
    
    Biodiesel can be blended in any percentage with petrodiesel .
    
    Biodiesel has the highest energy content (BTU) of any alternative fuel .
    
    Harmful emissions (carbon monoxide, particulate matter and hydrocarbons) are
reduced by more than 50% compared with petrodiesel.
    
    Biodiesel is the only alternative fuel to pass Tier 1 and Tier 2 health effects
testing required by the Clean Air Act.
    
    Biodiesel has a positive energy balance.
  Market Acceptance of Biodiesel
   
    
    600 major fleets use biodiesel commercially.
    
    More than 1,250 retail filling stations offer biodiesel to the public.
    
    Our federal government has established a renewable fuel standard for biodiesel
use in the United States of 1 billion gallons by 2012.
  
    
    Asia Pacific will overtake North America by 2010
    
    As economies mature, demand typically shifts from industrial use to
transportation sectors
    
    U.S. is gasoline focused regarding fuels whereas Asia is diesel-focused (gas
oil)
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
    
    Biodiesel will have far greater impact on road diesel balances than ethanol
will have on gasoline balances
 GreenHunter BioFuels, Inc. (formerly Channel Refining Corporation) Acquisition
   
    
    Feedstock can be delivered by either barge, truck, rail or ship (across the Channel)
    
    Distribution of finished product can be either shipped by barge, delivered
through an on-site truck terminal or possibly loaded onto bulk rail transport
    
    An existing dock is capable of unloading 30 thousand barrels at any one time
   
    
    638 thousand barrels of product storage
    
    Adequate water and power supplies
    
    Sophisticated chemical processing instrumentation and controls
    
    Additional processing equipment for market inefficiencies
    
    Ample expansion area for increased production capacity
    
    Ample open acreage for additional storage capacity
 GreenHunter Strategy for the GreenHunter BioFuels Plant
  
    
    Converted the existing facility to a 105 million gallons per year (mmgy) biodiesel
refinery capable of utilizing multiple vegetable oil feedstocks and animal fats
    
    Installed tankage for 638 thousand barrels of bulk storage capacity to provide the
ability to acquire feedstock and sell finished product at opportune times, as well as to
run terminal services as a secondary business unit when we are not using the storage for
our own product
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
    
    Maintained an approximate $0.50 per installed capital cost per gallon. Management
believes the current market for competitors ranges from $1.10  $1.25 per installed gallon
    
    Maintained cost control by self-performing as the general contractor in this project;
construction of the refinery is complete with additional components substantially complete
    
    Produced biodiesel to ASTM specifications to allow us to take advantage of the
following federal/state tax incentives: Federal Biodiesel Excise Tax Credit of $1.00/gallon
for straight agri-biodiesel or $.01/percentage point of agri-biodiesel in a petroleum based
diesel blend
    
    Processed contaminated methanol into a commercial grade methanol product through use of
a 45,000 bbl/month (capacity) methanol processing tower located on the site. This tower is
unique in that methanol represents approximately 8-10% of the cost of goods sold in the
manufacturing and refining of biodiesel. We would only utilize approximately 20% of the
methanol towers total capacity. Therefore, it has the ability to contribute to lower
operating costs by allowing us to purchase contaminated methanol and re-process it to a
99.85% methanol which can be used in the refining process at 40-50% below the cost of pure
methanol. In addition, we will have additional methanol capacity to further process and
sell to other biodiesel producers or support additional company-owned refineries in the
future. Very few other biodiesel producers in the U.S. have their own on-site methanol
distillation tower
    Competitive Strengths
  
    
    We have substantially all of the necessary infrastructure in place
    
    The transportation infrastructure of barge, rail and truck provides maximum flexibility
to receive and ship products at the most economic cost
    
    The ability to be both a producer and a terminal operator/blender provides
opportunistic advantages for feedstock acquisition and finished product sales
    
    Our management team has substantial experience in the oil and gas industry and have
historically
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been the lower-cost producers during their prior careers
    
    The refinery location has transportation infrastructure that is unique in the biodiesel
industry:
 a.
    
    Ability to bring in by barge or ship all raw materials either domestically or
internationally,b.
    
    Rail service for raw materials and finished product shipping on-site, andc.
    
    Major interstate within 5 miles.
  a.
    
    Located in one of the largest U.S. cities (Houston) which also has one of
the highest rates of diesel fuel use per capita in the United States;b.
    
    Provides the ability to ship finished product by barge to either domestic or
international destinations; andc.
    
    Provides the ability to economically access interstate pipelines to
transport finished product to major northeast U.S. markets.
 Sustainable Competitive Strategy
   Current Economic Conditions and Plant Status
   11




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Biomass
     Mesquite Lake Resource Recovery Plant Acquisition
   12




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
    
    Mesquite Lake has executed an interconnect agreement with Imperial Irrigation
District
    
    The projects proximity to manure sourced from cattle yards in the Imperial Valley is
excellent
    
    The project qualifies for the Federal Production Tax Credit
    
    The facility should be able to use multiple biomass fuel sources at a large variance
of heat rates
    
    The project will provide base load renewable power as opposed to intermittent power
provided by other forms of renewable power projects
 GreenHunter Energy Strategy for the Mesquite Lake Plant
  
    
    Find an optimal biomass fuel mix that will maximize profitability of the plant
    
    Execute long term supply contracts with local biomass producers
    
    Begin to produce our own biomass, investigate the possibility of planting a certain
type of tree that will ultimately make the facility a closed-loop biomass facility
    
    Evaluate the feasibility of building an energy campus that includes solar power,
wind, a biodiesel refinery and possibly an ethanol plant around the existing site location
   13




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Wind Energy
   Wind Energy Basics
 wind turbine
 rotor
 14




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lift drag
 wind plant wind farm
   Current GreenHunter Energy Wind Projects
   Divestment of Equity Interest in MingYang
   California
 Ocotillo Wind Project, Imperial County
 
    
    6,280 acres under lease with the Bureau of Land Management
    
    Seeking monitoring and testing ROW
    
    Potential for 150 MW
 15




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Texas
 Hilltop Wind Project, Palo Pinto County
 
    
    1 Meteorological tower installed in June 2008 at 60 meter hub height
    
    1,200 acres under lease
    
    Potential for 36 MW
 Snow Hill, Morris and Titus Counties
 
    
    1 Meteorological tower installed in June 2008 at 60 meter hub height
    
    Small tract leased for meteorological tower installation
    
    Potential for 80 MW
 Wyoming
 Wheatland Wind Project
 
    
    3 Meteorological towers installed in October 2008
    
    Right-of-Way grant from BLM for 19,400 acres
    
    Potential for 3-500 MW
    
    GreenHunter is a minority owner
 Competition
  Solar Energy
    16




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Geothermal Energy
     Research and Development
  Employees
  17




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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 prospectus before making an investment
decision. Additional risks related to us and our securities may be included in the applicable
prospectus supplement related to an offering and 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.
  18




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We may not be able to effectively manage our acquisition and construction costs.
  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.
  19




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We may not be able to meet our capital requirements.
    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.
  20




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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.
   The pricing of renewable energy may fluctuate significantly due to the price of oil and gas.
  21




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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.
  We would be liable for violations of environmental laws related to our ownership or operation of
our facilities.
  22




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Risks Related to the Biodiesel Industry
 The biodiesel industry is highly dependent on a mix of legislation and regulation (including
tax incentives) and any changes in legislation or regulation could harm our business, results of
operations and financial condition.
    23




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Our operations are subject to various regulatory schemes, including environmental regulations, and
failure to comply with such regulations could harm our business, results of operations and
financial condition.
   Our results of operations, financial condition and business outlook are highly dependent on
commodity prices, which are subject to significant volatility and uncertainty, and the availability
of supplies.
  24




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Cold weather can cause biodiesel, particularly biodiesel produced from animal fats, oils and
greases, to gel sooner than petroleum-based diesel, which has resulted in price discounts for
biodiesel produced from animal fats, oils and greases.
  25




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The U.S. biodiesel industry is highly dependent upon a myriad of federal and state legislation and
regulation and any changes in legislation or regulation could materially and adversely affect our
results of operations and financial position.
   26




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Competition due to advances in alternative fuels may lessen the demand for biodiesel and negatively
impact our profitability.
  Adverse public opinions concerning the biodiesel industry in general could harm our business.
  
    
    public perception of the food versus fuel debate;
    
    public perception that biodiesel is produced from waste vegetable oil or other
lower-quality feedstocks, thereby resulting in lower quality fuel;
    
    public perception that the use of biodiesel will require excessive engine
modifications, or that engines running biodiesel will not reliably start in cold
conditions;
    
    actual or perceived problems with biodiesel quality or performance; and
    
    concern that using biodiesel will void engine warranties.
  We need to negotiate extension of credit terms with our Lender.
  27




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Risks Relating to the Wind Energy Industry
 One of our business segments depends on the availability of wind, which may not meet our
expectations if weather patterns vary greatly.
  
    
    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;
    
    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.
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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.
   Risks Relating to the Biomass Industry
 The inherent volatility in the market price of electricity could impact our profitability.
  29




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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 biomass energy industry is highly dependent on tax incentives.
 Production Tax Credit
   30




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Bonus Depreciation .
 No Assurance of Continued Tax Incentives
 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;
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
    
    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.
  
    
    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.
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
    
    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.
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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.
  We are subject to credit market risk.
  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.
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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.
  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
    35




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Item 3. Legal Proceedings
 Bioversel, Inc. f/k/a Bioversel Trading, Inc., Plaintiff, vs. GreenHunter BioFuels, Inc.,
Defendant, in the District Court of Harris County, Texas, 55 th Judicial District .
  Jacob Stern & Sons, Inc., Plaintiff vs. GreenHunter BioFuels, Inc., Defendant, in the District
Court of Harris County, Texas, 334 th Judicial District.
  Crown Engineering & Construction, Plaintiff vs. GreenHunter Energy, Inc., Defendant, Superior
Court, County of Imperial, El Centro District, CA., Case # ECU05117.
  
 Item 4. Submission of Matters to a vote of Security Holders
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Gary C. Evans, Class III
    Ronald H. Walker, Class I
    Ronald Ormand, Class II
         37




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Part II
 
 Item 5.
    
    Market for Registrants Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities
  AverageDailyTradingVolumeHigh
    
    
    Low
    
    
    (Shares)2008First Quarter
    
    $
    20.50
    
    
    $
    12.00
    
    
    
    3,640Second Quarter
    
    $
    25.45
    
    
    $
    11.81
    
    
    
    26,642Third Quarter
    
    $
    19.25
    
    
    $
    11.55
    
    
    
    39,256Fourth Quarter
    
    $
    14.30
    
    
    $
    3.28
    
    
    
    36,2872009First 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
    
    
    2,000,000
    
    
    $
    6.17
    
    
    
    Equity compensation plans not approved by
security holders
    
    
    5,989,500
    
    
    $
    8.02
    
    
    
    Total
    
    
    7,989,500
    
    
    $
    7.56
    
    
    
    
 
 Item 6. Selected Financial Data
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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
   BioFuels
    39




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##### Table of Contents



BioMass
  Wind Energy
  Results of Operations
 Year Ended December 31, 2009 Compared to Year Ended December 31, 2008:
 BioFuels Revenues
  BioFuels Costs of Sales and Services
  40




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##### Table of Contents



Wind Energy Project Costs
  Biomass Project Costs
  Hurricane repairs and losses
  Depreciation Expense
  Loss on Asset Impairments
  General and Administrative Expense
   41




---



##### Table of Contents



Operating Loss
      Interest and Other Revenues
  Interest, Accretion and Other Expense
  Discontinued Operations
  42




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##### Table of Contents



Preferred Stock Dividends
  Deemed Preferred Stock Dividends
   Net Loss to Common Shareholders
  Results of Operations
 Year Ended December 31, 2008 Compared to Year Ended December 31, 2007:
  BioFuels Revenues
  BioFuels Costs of Sales and Services
  Wind Energy Project Costs
  43




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##### Table of Contents



Biomass Project Costs
  Hurricane repairs and losses
  Depreciation Expense
  Loss on Asset Impairments
  General and Administrative Expense
      44




---



##### Table of Contents



Operating Loss
      Interest and Other Revenues
  Interest, Accretion and Other Expense
  Discontinued Operations
  Net Loss
  Net Loss to Common Shareholders
  45




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##### Table of Contents



Liquidity and Capital Resources
 Current Plan of Operations and Ability to Operate as a Going Concern
      Cash Flow and Working Capital
  Operating Activities
   Financing Activities
  Notes Payable
    46




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##### Table of Contents



9% Series B Senior Secured Redeemable Debentures
  Nonrecourse Term Loan and Working Capital Loan
  Investing Activities and Future Requirements
 Capital Expenditures
  Forecast
  BioFuels
  47




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##### Table of Contents



BioMass
  Wind Energy
   Obligations Under Material Contracts
  Consulting Agreement with former owner of Mesquite Lake
  Port Sutton
  Mesquite Lake Power Purchase Agreement
  48




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##### Table of Contents



Critical Accounting Policies and Other
   Restricted Cash
  Inventories
  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
  49




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##### Table of Contents



Revenue recognition
  Stock-Based Compensation
  50




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##### Table of Contents



Income Taxes
 Income Taxes
  .
 Income or Loss Per Common Share
   Recent Accounting Pronouncements
 Business Combinations Consolidation
 Derivatives and Hedging
 51




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##### Table of Contents



Derivatives and Hedging
 Subsequent Events
 Consolidation Improvements to Financial Reporting by Enterprises
Involved with Variable Interest Entities.
 Generally Accepted Accounting Principles
 Measuring Liabilities
at Fair Value, Fair Value Measurements and Disclosures
 52




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##### Table of Contents



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)
    
    $
    3,072,766
    
    
    $
    89,720
    
    
    $
    298,832
    
    
    $
    232,253
    
    
    $
    2,451,961Fixed-rate interest payments(a)
    
    
    1,219,236
    
    
    
    160,269
    
    
    
    493,417
    
    
    
    297,627
    
    
    
    267,923Nonrecourse Variable-rate long-term debt(b)
    
    
    37,679,833
    
    
    
    37,679,833
    
    
    
    
    
    
    
    
    
    
    
    10% Series A Secured Redeemable Debentures(c)
    
    
    29,243,966
    
    
    
    3,680,978
    
    
    
    25,562,988
    
    
    
    
    
    
    
    Consulting agreement(e)
    
    
    1,274,000
    
    
    
    784,000
    
    
    
    490,000
    
    
    
    
    
    
    
    9% Series B Secured Redeemable Debentures(d)
    
    
    7,202,806
    
    
    
    516,926
    
    
    
    4,965,380
    
    
    
    1,720,499
    
    
    
    Total Contractual Obligations
    
    $
    79,692,607
    
    
    $
    42,911,727
    
    
    $
    31,810,617
    
    
    $
    2,250,379
    
    
    $
    2,719,884
 
 (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 quarterly payments at 5.0% interest.(c)
    
    Assumes 10% interest payments over their 5 year term.(d)
    
    Assumes 9% interest payments over their 5 year term.(e)
    
    Payments under consulting agreements have been suspended. Off-Balance Sheet Arrangements
  
 Item 7A. Quantitative and Qualitative Disclosures About Market Risks
  Commodity Price Risk
  53




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##### Table of Contents



Foreign Currency Exchange Risk
  Interest Rate Risk
  
 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.
  54




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##### Table of Contents



Managements Report on Internal Control over Financial Reporting.
     
 Item 9B. Other Information
  
 Part III
 
 Item 10. Directors, Executive Officers and Corporate Governance
  Name
    
    Age
    
    Positions and Offices HeldGary C. Evans
    
    
    52
    
    
    Chairman and Chief Executive OfficerRonald D. Ormand
    
    
    51
    
    
    DirectorRonald H. Walker
    
    
    72
    
    
    DirectorJonathan D. Hoopes
    
    
    42
    
    
    Director, President and Chief Operating OfficerMorgan F. Johnston
    
    
    49
    
    
    Senior Vice President, General Counsel, and
SecretaryDavid S. Krueger
    
    
    60
    
    
    Vice President and Chief Financial Officer
 55




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##### Table of Contents



Gary C. Evans  Chairman and Chief Executive Officer
    Ronald D. Ormand  Director
  Ronald H. Walker  Director
  56




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##### Table of Contents



Jonathan D. Hoopes  Director, President and Chief Operating Officer
  Morgan F. Johnston  Senior Vice President, General Counsel, and Secretary
  57




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##### Table of Contents



David S. Krueger  Vice President and Chief Financial Officer
   Corporate Governance.
    58




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##### Table of Contents



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.
  59




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##### Table of Contents



Item 11. Executive Compensation
 Summary Compensation Table
  All OtherName and Principal
    
    
    
    
    
    Salary
    
    Bonus
    
    Stock Awards
    
    Option Awards
    
    Compensation
    
    TotalPosition
    
    Year
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    ($)
    
    ($)Gary C. Evans   President
    
    
    2009
    
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    125,028
    **
    
    
    12,000
    
    
    
    3,847,870and CEO*
    
    
    2008
    
    
    
    199,230
    
    
    
    200,000
    
    
    
    200,000
    
    
    
    3,236,640
    ***
    
    
    12,000Jonathan D. Hoopes 
    
    
    2009
    
    
    
    59,615
    
    
    
    
    
    
    
    38,309
    ****
    
    
    25,872
    **
    
    
    50,000
    
    
    
    173,796President and COO*David S. Krueger  Vice
    
    
    2009
    
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    37,508
    **
    
    
    9,000
    
    
    
    246,508President and CFO
    
    
    2008
    
    
    
    199,230
    
    
    
    150,000
    
    
    
    150,000
    
    
    
    1,011,450
    ***
    
    
    9,000
    
    
    
    1,519,680Morgan F. Johnston   Sr.
    
    
    2009
    
    
    
    200,000
    
    
    
    
    
    
    
    
    
    
    
    37,508
    **
    
    
    9,000
    
    
    
    246,508Vice President, General
    
    
    2008
    
    
    
    199,230
    
    
    
    175,000
    
    
    
    175,000
    
    
    
    1,011,450
    ***
    
    
    9,000
    
    
    
    1,569,680Counsel and Secretary *
 
 *
    
    Mr. Evans acted as the Companys President and CEO during all of 2008 and 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. Evans received a stock option grant for 880,000 shares, vesting both over time and
achieving specific performance goals at an exercise price of $18.91 on February 13, 2008. As
of December 31, 2008, 352,000 options have been forfeited. Mr. Krueger received a stock
option grant for 275,000 shares, vesting both over time and achieving specific performance
goals at an exercise price of $18.91 on February 13, 2008. As of December 31, 2008, 110,000
options have been forfeited. Mr. Johnston received a stock option grant for 275,000 shares,
vesting both over time and achieving specific performance goals at an exercise price of $18.91
on February 13, 2008. As of December 31, 2008, 110,000 options have been forfeited.****
    
    Mr. Hoopes received a restricted stock grant for 100,000 shares, vesting both over time and
achieving specific performance goals on October 1, 2009. 60




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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
    
    
    
    
    
    
    1,000,000
    
    
    
    1.96
    
    
    August 26, 2019293,334
    
    
    
    234,666
    
    
    
    18.91
    
    
    February 13, 2018Jonathan D. Hoopes, President and COO
    
    
    
    
    
    
    500,000
    
    
    
    1.41
    
    
    December 11, 2019David S. Krueger , Vice President
    
    
    
    
    
    
    300,000
    
    
    
    1.96
    
    
    August 26, 2019and CFO
    
    
    91,666
    
    
    
    73,334
    
    
    
    18.91
    
    
    February 13, 2018550,000
    
    
    
    
    
    
    
    5.00
    *
    
    May 5,  2017Morgan F. Johnston, Sr. Vice
    
    
    
    
    
    
    300,000
    
    
    
    1.96
    
    
    August 26, 2019President, General Counsel and
    
    
    91,666
    
    
    
    73,334
    
    
    
    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
    
    
    *
    
    
    
    
    
    
    
    10,131
    
    
    
    10,131Ronald H. Walker
    
    
    *
    
    
    
    
    
    
    
    12,502
    
    
    
    12,502Renato T. Bertani**
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    James R. Sasser**
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    Robert Zahradnik**
    
    
    *
    
    
    
    
    
    
    
    
    
    
    
    
 
 *
    
    The Board of Directors has deferred any compensation payments for acting as a
Board member until the Companys performance has improved.**
    
    Mr. Robert Zahradnik resigned from the Board of Directors on March 18,
2009. Mr. James R. Sasser resigned from the Board of Directors on April
3, 2009. Mr. Bertani resigned from the Board of Directors on June 3,
2009.  61




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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(9)Common Stock
    
    Gary C. Evans
    
    
    15,981,111
    (2)
    
    
    67.0Common Stock
    
    Ronald D. Ormand
    
    
    0
    
    
    
    *Common Stock
    
    Ronald H. Walker
    
    
    66,667
    (3)
    
    
    *Common Stock
    
    Jonathan D. Hoopes
    
    
    150
    
    
    
    *Common Stock
    
    Morgan F. Johnston
    
    
    596,059
    (4)
    
    
    2.6Common Stock
    
    David S. Krueger
    
    
    646,535
    (5)
    
    
    2.8Common Stock
    
    Investment Hunter, LLC
    
    
    15,675,401
    (6)
    
    
    66.0Common Stock
    
    West Coast Opportunity Fund, LLC
    
    
    2,457,142
    (7)
    
    
    9.9Common Stock
    
    Southern Ute Growth Fund
    
    
    1,875,000
    (8)
    
    
    8.4Common Stock
    
    All officers and directors as a group (6 persons named above)
    
    
    17,290,522
    
    
    
    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 293,334 common stock purchase options at an exercise price of
$18.91 per share. 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 66,667 common stock purchase options at an exercise price of $10.00 per share.4
    
    Includes 500,000 common stock purchase options at an exercise price of $5.00 per share,
91,666 common stock purchase options at an exercise price of $18.91 per share and 399 common
stock purchase warrants at an exercise price of $27.50 per share.5
    
    Includes 550,000 common stock purchase options at an exercise price of $5.00 per share,
91,666 common stock purchase options at an exercise price of $18.91 per share and 442 common
stock purchase warrants at an exercise price of $27.50 per share.6
    
    Includes 1,515,401 common stock purchase warrants at an exercise price of $27.50 per share.7
    
    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.8
    
    Includes 625,000 common stock purchase warrants at an exercise price of $27.50 per share.9
    
    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. 62




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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 31,2009
    
    
    2008
    
    
    2007Audit (a)
    
    $
    121,190
    
    
    $
    177,382
    
    
    $
    74,501Tax preparation fees
    
    
    
    
    
    
    26,133
    
    
    
    10,576All other fees (b)
    
    
    4,000
    
    
    
    11,976
    
    
    
    45,078TOTAL
    
    $
    125,190
    
    
    $
    215,491
    
    
    $
    130,155
 
 (a)
    
    Includes fees paid to Hein & Associates for our annual audit and quarterly
reviews and services in connection with our filing of registration statements. 63




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##### Table of Contents



(b)
    
    Includes fees paid to Hein & Associates for the agreed upon
procedures related to an EPA report for BioFuels.  
 Part IV
 
 Item 15. Exhibits and Financial Statement Schedules
  PageAudited Consolidated Financial Statements of GreenHunter Energy, Inc.Independent Auditors Report
    
    
    F-1Balance Sheets at December 31, 2009 and 2008
    
    
    F-2Statements of Operations for the years ended December 31, 2009, 2008 and 2007
    
    
    F-3Statements of Changes in Stockholders and Members Equity (Deficit) for the
years ended December 31, 2009, 2008 and 2007
    
    
    F-4Statements of Cash Flows for the years ended December 31, 2009, 2008 and 2007
    
    
    F-5Notes to Financial Statements
    
    
    F-6
 64




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
     HEIN & ASSOCIATES LLP
 
 F-1




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##### Table of Contents



GREENHUNTER ENERGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
 December 31, 2009
    
    
    December 31, 2008ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    6,915,514
    
    
    $
    676,636Restricted cash
    
    
    2,018,717
    
    
    
    342,653Accounts receivable, net of allowance of $282,585 and $542,965, respectively
    
    
    127,373
    
    
    
    4,475,670Inventory
    
    
    179,322
    
    
    
    6,137,780Deposits and other current assets
    
    
    57,186
    
    
    
    Prepaid expenses and other current assets
    
    
    644,328
    
    
    
    943,135Assets held for sale  current
    
    
    
    
    
    
    53,555Total current assets
    
    
    9,942,440
    
    
    
    12,629,429FIXED ASSETS:Land and improvements
    
    
    4,732,095
    
    
    
    5,394,866Buildings
    
    
    3,100,621
    
    
    
    3,100,621Plant and other equipment
    
    
    44,477,263
    
    
    
    45,521,460Accumulated depreciation
    
    
    (7,101,399
    )
    
    
    (2,855,250
    )Construction in progress
    
    
    10,750,089
    
    
    
    11,934,854Net fixed assets
    
    
    55,958,669
    
    
    
    63,096,551OTHER ASSETS:Assets held for sale
    
    
    
    
    
    
    4,887,945Deferred financing costs
    
    
    2,617,060
    
    
    
    3,720,893Other noncurrent assets
    
    
    300,110
    
    
    
    9,404,152Total assets
    
    $
    68,818,279
    
    
    $
    93,738,970LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Current portion of notes payable
    
    $
    169,541
    
    
    $
    507,102Current portion of notes payable, nonrecourse
    
    
    37,679,834
    
    
    
    6,761,417Accounts payable
    
    
    9,596,732
    
    
    
    16,020,538Dividends payable
    
    
    156,060
    
    
    
    250,000Accrued liabilities
    
    
    7,716,289
    
    
    
    5,254,965Liabilities associated with assets held for sale
    
    
    
    
    
    
    2,224,447Total current liabilities
    
    
    55,318,456
    
    
    
    31,018,469NON-CURRENT LIABILITIES:Notes payable
    
    
    2,983,045
    
    
    
    3,062,642Notes payable, nonrecourse, less current portion
    
    
    
    
    
    
    36,738,583Redeemable debentures, net of discount of $1,047,108 and $1,485,006,
respectively
    
    
    25,288,848
    
    
    
    23,139,057Liabilities associated with assets held for sale, non-current
    
    
    
    
    
    
    74,319Total long-term liabilities
    
    
    28,271,893
    
    
    
    63,014,601COMMITMENTS AND CONTINGENCIES (Notes 6 and 12)STOCKHOLDERS DEFICIT:Series A 8% convertible preferred stock, $.001 par value, $1,125 and $1,000
stated value, respectively, 6,750 and 12,500 issued and outstanding,
respectively
    
    
    7,592,389
    
    
    
    12,500,000Series B convertible preferred stock, $.001 par value, $1,000 stated value,
10,575 issued and outstanding
    
    
    10,575,000
    
    
    
    10,575,000Common stock, $.001par value, 90,000,000 authorized shares, 22,138,876 and
20,988,876 issued, respectively
    
    
    22,139
    
    
    
    20,989Additional paid-in capital
    
    
    87,273,376
    
    
    
    81,100,216Accumulated deficit
    
    
    (119,672,776
    )
    
    
    (103,478,564
    )Treasury stock, at cost, 22,412 and 44,436 shares, respectively
    
    
    (336,285
    )
    
    
    (678,538
    )Unearned common stock in KSOP, at cost, 15,200 shares
    
    
    (225,913
    )
    
    
    (225,913
    )Total GreenHunter Energy, Inc. stockholders equity
    
    
    (14,772,070
    )
    
    
    (186,810
    )Noncontrolling interest in consolidated subsidiaries
    
    
    
    
    
    
    (107,290
    )Total stockholders deficit
    
    
    (14,772,070
    )
    
    
    (294,100
    )Total liabilities and stockholders deficit
    
    $
    68,818,279
    
    
    $
    93,738,970
 F-2




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##### Table of Contents



GREENHUNTER ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 For the Year EndedDecember 31,2009
    
    
    2008
    
    
    2007REVENUE:Product sales
    
    $
    4,932,510
    
    
    $
    4,628,108
    
    
    $
    957,174Terminal revenues
    
    
    693,326
    
    
    
    373,473
    
    
    
    Processing revenue
    
    
    165,697
    
    
    
    Total revenue
    
    
    5,791,533
    
    
    
    5,001,581
    
    
    
    1,052,743COSTS AND EXPENSES:Cost of sales and services
    
    
    8,665,846
    
    
    
    14,150,681
    
    
    
    758,799Hurricane repairs and losses (insurance proceeds)
    
    
    (10,887,690
    )
    
    
    5,631,158
    
    
    
    Project costs
    
    
    105,445
    
    
    
    502,263
    
    
    
    276,505Depreciation expense
    
    
    4,270,444
    
    
    
    2,703,104
    
    
    
    118,627Selling, general and administrative
    
    
    11,569,622
    
    
    
    22,089,936
    
    
    
    11,783,113Loss on asset impairments
    
    
    5,046,090
    
    
    
    21,768,886
    
    
    
    Total costs and expenses
    
    
    18,769,757
    
    
    
    67,106,459
    
    
    
    12,937,044OPERATING LOSS FROM CONTINUING OPERATIONS
    
    
    (12,978,224
    )
    
    
    (62,104,878
    )
    
    
    (11,884,301
    )OTHER INCOME (EXPENSE):Interest and other income
    
    
    4,743,451
    
    
    
    644,156
    
    
    
    373,027Interest, accretion and other expense
    
    
    (7,055,014
    )
    
    
    (4,010,684
    )
    
    
    (523,068
    )Total other income (expense)
    
    
    (2,311,563
    )
    
    
    (3,366,528
    )
    
    
    (150,041
    )Loss from continuing operations
    
    
    (15,289,788
    )
    
    
    (65,471,406
    )
    
    
    (12,034,342
    )Loss on sale of discontinued operations
    
    
    (563,388
    )
    
    
    
    
    
    
    Gain (loss) from discontinued operations, net of taxes
    
    
    434,746
    
    
    
    (744,365
    )
    
    
    Net Loss
    
    
    (15,418,430
    )
    
    
    (66,534,744
    )
    
    
    (12,034,342
    )Less: Net loss attributable to noncontrolling interest
    
    
    
    
    
    
    
    
    
    
    Net loss attributable to GreenHunter Energy, Inc.
    
    
    (15,418,430
    )
    
    
    (66,534,744
    )
    
    
    (12,034,342
    )Preferred stock dividends
    
    
    (775,782
    )
    
    
    (1,000,000
    )
    
    
    (707,671
    )Deemed preferred stock dividends
    
    
    
    
    
    
    (15,188,219
    )
    
    
    (950,000
    )Net loss to common stockholders
    
    $
    
    
    
    $
    (82,403,990
    )
    
    $
    (13,692,013
    )Weighted average shares outstanding, basic and diluted
    
    
    21,612,172
    
    
    
    20,216,032
    
    
    
    17,082,684Net loss per share from continuing operations
    
    $
    (0.77
    )
    
    $
    (4.05
    )
    
    $
    (0.80
    )Net earnings (loss) per share from discontinued operations
    
    $
    0.02
    
    
    $
    (0.03
    )
    
    $
    Net loss per share
    
    $
    (0.75
    )
    
    $
    (4.08
    )
    
    $
    (0.80
    )
 F-3




---



##### Table of Contents



CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
FOR THE PERIOD FROM JANUARY 1, 2007 TO DECEMBER 31, 2009
 Additional
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Unearned
    
    
    TotalSeries A
    
    
    Series B
    
    
    Common
    
    
    Paid in
    
    
    Noncontrolling
    
    
    Accumulated
    
    
    Treasury
    
    
    Shares in
    
    
    EquityPreferred Stock
    
    
    Preferred Stock
    
    
    Stock
    
    
    Capital
    
    
    Interest
    
    
    Deficit
    
    
    Stock
    
    
    KSOP
    
    
    (Deficit)BALANCE, January 1, 2007
    
    $
    
    
    
    $
    
    
    
    $
    15,000
    
    
    $
    1,549,163
    
    
    $
    
    
    
    $
    (4,199,360
    )
    
    $
    
    
    
    $
    
    
    
    $
    (2,635,197
    )Issue 12,500 preferred shares in private placement
    
    
    12,500,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    12,500,000Issue 450,000 common shares to acquire GreenHunter BioFuels, Inc.
    
    
    
    
    
    
    
    
    
    
    450
    
    
    
    2,078,550
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,079,000Issue 500,000 common shares to acquire power purchase agreement
    
    
    
    
    
    
    
    
    
    
    500
    
    
    
    2,309,500
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,310,000Issue 300,000 common shares for fees on biomass plant acquisition
    
    
    
    
    
    
    
    
    
    
    300
    
    
    
    1,385,700
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,386,000Issue 2,807,834 common stock warrants in private placement of
preferred and common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,717,308
    
    
    
    
    
    
    
    (950,000
    )
    
    
    
    
    
    
    
    
    
    
    2,767,308Issue 4,131,500 common stock options to employees
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,321,321
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    6,321,321Issue 3,509,118 common shares in private placement
    
    
    
    
    
    
    
    
    
    
    3,509
    
    
    
    27,942,210
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    27,945,719Commission and fees paid on private placement of common shares
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,532,044
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,532,044
    )Cash dividends on preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (707,671
    )
    
    
    
    
    
    
    
    
    
    
    (707,671
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,034,342
    )
    
    
    
    
    
    
    
    
    
    
    (12,034,342
    )BALANCE,December 31, 2007
    
    
    12,500,000
    
    
    
    
    
    
    
    19,759
    
    
    
    43,771,708
    
    
    
    
    
    
    
    (17,891,373
    )
    
    
    
    
    
    
    
    
    
    
    38,400,094Registration fees on stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,045
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (3,045
    )Issue 117,998 shares for note payable exchange
    
    
    
    
    
    
    
    
    
    
    118
    
    
    
    1,874,871
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,874,989Issue 841,363 warrants on the 10% Series A Redeemable Debentures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,677,622
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,677,622Issue 89,747 warrants on the 9% Series B Redeemable Debentures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,610
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    51,610Issue 594,011 shares upon note conversion
    
    
    
    
    
    
    
    
    
    
    594
    
    
    
    3,135,781
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,136,375Issue 426,750 shares on warrant exercises
    
    
    
    
    
    
    
    
    
    
    427
    
    
    
    2,360,116
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,360,543Issue 10,575 Series B Preferred Shares in private placement
    
    
    
    
    
    
    10,575,000
    
    
    
    
    
    
    
    14,564,550
    
    
    
    
    
    
    
    (14,589,550
    )
    
    
    
    
    
    
    
    
    
    
    10,550,000Issue 162,250 warrants for stock option exercise inducment
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    207,599
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    207,599Employer match of 5,512 shares to KSOP
    
    
    
    
    
    
    
    
    
    
    6
    
    
    
    104,226
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    104,232Issue 58,246 shares for Port Sutton lease option acquisition
    
    
    
    
    
    
    
    
    
    
    58
    
    
    
    366,892
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    366,950Issue share-based payment for Port Sutton lease option acquisition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    884,211
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    884,211Issue 44,964 treasury shares for Wheatland acquisition
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (356,785
    )
    
    
    
    
    
    
    
    
    
    
    671,983
    
    
    
    
    
    
    
    315,198Loan of 15,200 shares to KSOP
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (225,913
    )
    
    
    (225,913
    )Purchase 89,400 shares for treasury
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,350,521
    )
    
    
    
    
    
    
    (1,350,521
    )Stock compensation
    
    
    
    
    
    
    
    
    
    
    27
    
    
    
    8,678,990
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    8,679,017Issue 2,470,004 warrants for stock dividend to common and preferred
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,781,870
    
    
    
    
    
    
    
    (3,781,870
    )
    
    
    
    
    
    
    
    
    
    
    Dividends on preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,000,000
    )
    
    
    
    
    
    
    
    
    
    
    (1,000,000
    )Haining City interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31,635
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (31,635
    )Wheatland interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (75,655
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (75,655
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (66,215,771
    )
    
    
    
    
    
    
    
    
    
    
    (66,215,771
    )BALANCE,December 31, 2008
    
    
    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
    )
 F-4




---



##### Table of Contents



GREENHUNTER ENERGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 YEAR ENDED DECEMBER 31,2009
    
    
    2008
    
    
    2007CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (15,418,430
    )
    
    $
    (66,215,771
    )
    
    $
    (12,034,342
    )Adjustments to reconcile net loss to net cash used
in operating activities:Depreciation expense
    
    
    4,270,444
    
    
    
    2,713,142
    
    
    
    118,627Stock based compensation
    
    
    701,728
    
    
    
    8,196,453
    
    
    
    6,321,321Amortization of deferred financing costs
    
    
    1,279,284
    
    
    
    706,062
    
    
    
    Non-cash asset impairment
    
    
    5,046,090
    
    
    
    22,068,886
    
    
    
    Hurricane property losses
    
    
    
    
    
    
    3,351,299Noncontrolling interest
    
    
    
    
    
    
    (107,290
    )
    
    
    Gain on sale of assets
    
    
    (1,267,564
    )
    
    
    (99,923
    )
    
    
    Accretion of discount
    
    
    438,841
    
    
    
    255,143
    
    
    
    77,809Forgiveness of trade payable
    
    
    (2,757,311
    )
    
    
    
    
    
    
    Changes in certain assets and liabilities:Accounts receivable
    
    
    4,348,297
    
    
    
    (4,365,299
    )
    
    
    (54,153
    )Inventory
    
    
    5,958,458
    
    
    
    (8,417,217
    )
    
    
    129,615Prepaid and other expense
    
    
    228,704
    
    
    
    (1,095,799
    )
    
    
    (252,511
    )Accounts payable
    
    
    (5,004,795
    )
    
    
    14,997,453
    
    
    
    1,571,373Accrued liabilities
    
    
    2,510,214
    
    
    
    (1,086,453
    )
    
    
    1,878,635Net cash provided by (used in) operating activities
    
    
    333,960
    
    
    
    (29,099,314
    )
    
    
    (2,243,626
    )CASH FLOWS FROM INVESTING ACTIVITIES:Change in restricted cash
    
    
    (1,676,064
    )
    
    
    (342,653
    )
    
    
    Acquisition of Telogia
    
    
    
    
    
    
    (2,500,000
    )
    
    
    Acquisition of CRC, net of cash acquired
    
    
    
    
    
    
    
    
    
    
    (6,648,071
    )Acquisition of Mesquite Lake
    
    
    
    
    
    
    
    
    
    
    (1,426,566
    )Proceeds from sale of assets
    
    
    13,425,994
    
    
    
    112,763
    
    
    
    40,000Additions to fixed assets
    
    
    (790,362
    )
    
    
    (52,905,892
    )
    
    
    (19,256,314
    )Increase in other assets
    
    
    (348,270
    )
    
    
    (1,682,308
    )
    
    
    (1,543,375
    )Net cash used in investing activities
    
    
    10,611,298
    
    
    
    (57,318,090
    )
    
    
    (28,834,326
    )CASH FLOWS FROM FINANCING ACTIVITIES:Gross proceeds from stock and warrant issuance
    
    
    
    
    
    
    2,568,126
    
    
    
    42,713,016Net proceeds from Series B preferred stock issuance
    
    
    
    
    
    
    10,550,000Loan common stock to KSOP
    
    
    
    
    
    
    (225,913
    )Commissions and fees paid on stock issuance
    
    
    
    
    
    
    (3,045
    )
    
    
    (1,532,033
    )Gross proceeds from redeemable debenture issuance
    
    
    1,711,892
    
    
    
    17,295,773
    
    
    
    7,328,290Purchase treasury shares
    
    
    
    
    
    
    (1,350,521
    )Increase in notes payable
    
    
    298,323
    
    
    
    50,673,639
    
    
    
    4,826,406Payment of notes payable
    
    
    (6,541,144
    )
    
    
    (8,444,137
    )
    
    
    (205,000
    )Payment of buyout obligation
    
    
    
    
    
    
    
    
    
    
    (180,000
    )Increase in convertible notes payable
    
    
    
    
    
    
    
    
    
    
    285,126Payment of advance from previous affiliate
    
    
    
    
    
    
    
    
    
    
    (35,459
    )Payment of deferred financing costs
    
    
    (175,451
    )
    
    
    (1,970,276
    )
    
    
    (2,729,115
    )Preferred dividends paid in cash
    
    
    
    
    
    
    (750,000
    )
    
    
    (707,671
    )Net cash provided by (used in) financing activities
    
    
    (4,706,380
    )
    
    
    68,343,646
    
    
    
    49,763,560CHANGE IN CASH
    
    
    6,238,878
    
    
    
    (18,073,758
    )
    
    
    18,685,608CASH, beginning of period
    
    
    676,636
    
    
    
    18,750,394
    
    
    
    64,786CASH,end of period
    
    $
    6,915,514
    
    
    
    676,636
    
    
    
    18,750,394`Cash paid for interest
    
    $
    2,994,959
    
    
    
    4,513,302
    
    
    
    199,514NONCASH TRANSACTIONS:KSOP company match in stock
    
    
    
    
    
    
    104,232
    
    
    
    Lease option acquisitioned for stock
    
    
    
    
    
    
    366,950
    
    
    
    Membership interest acquired for treasury shares
    
    
    
    
    
    
    315,198
    
    
    
    Bonus paid in stock
    
    
    
    
    
    
    482,564
    
    
    
    Noncash common dividends
    
    
    
    
    
    
    3,183,350
    
    
    
    Noncash preferred dividends
    
    
    
    
    
    
    15,188,219
    
    
    $
    950,000Property acquired for stock
    
    
    
    
    
    
    
    
    
    
    3,465,000Property acquired for notes payable, net of discount
    
    
    
    
    
    
    
    
    
    
    1,639,738Power purchase agreement acquired for stock
    
    
    
    
    
    
    
    
    
    
    2,310,000Commissions paid in common stock
    
    
    
    
    
    
    
    
    
    
    500,000
 F-5




---



##### Table of Contents



NOTE 1. Organization And Nature Of Operations
   Current Plan of Operations and Ability to Operate as a Going Concern
    F-6




---



##### Table of Contents



Nature of Operations
     F-7




---



##### 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
  Restricted Cash
  F-8




---



##### Table of Contents



Accounts Receivable
  Inventories
  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
  F-9




---



##### Table of Contents



Other Non-Current Assets
  2009
    
    
    2008Power Purchase Agreement
    
    $
    300
    
    
    $
    Investment in Ming Yang, at
cost
    
    
    
    
    
    
    7,016Transmission service deposits
    
    
    
    
    
    
    222Wheatland right of way
    
    
    
    
    
    
    735Port Sutton lease option
    
    
    
    
    
    
    1,431Total
    
    $
    300
    
    
    $
    9,404
  Noncontrolling Interest
  Impairments
  Asset Retirement Obligations
  F-10




---



##### Table of Contents



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




---



##### Table of Contents



.
 Income or Loss Per Common Share
   Note 4. Recently Issued Accounting Standards
 Business Combinations Consolidation
 Derivatives and Hedging
 Derivatives and Hedging
 F-12




---



##### Table of Contents



Subsequent Events
 Consolidation Improvements to Financial Reporting by Enterprises
Involved with Variable Interest Entities.
 Generally Accepted Accounting Principles
 Measuring Liabilities
at Fair Value, Fair Value Measurements and Disclosures
 Note 5. Discontinued Operations
   F-13




---



##### Table of Contents



2009
    
    2008Sales and other revenues from discontinued operations
    
    $
    
    
    
    $
    Operating expenses from discontinued operations
    
    
    (215,832
    )
    
    
    (536,545
    )Other income from discontinued operations
    
    
    725,348
    
    
    
    3,863Net loss from discontinued operations
    
    $
    509,516
    
    
    $
    (532,682
    )
   2009
    
    2008Sales and other revenues from discontinued operations
    
    $
    
    
    
    $
    Operating expenses from discontinued operations
    
    
    (61,080
    )
    
    
    (210,894
    )Other income from discontinued operations
    
    
    12,474
    
    
    
    31,634Net loss from discontinued operations
    
    $
    (48,606
    )
    
    $
    (179,260
    )
   2009
    
    2008Sales and other revenues from discontinued operations
    
    $
    
    
    
    $
    Operating expenses from discontinued operations
    
    
    (87,211
    )
    
    
    (103,079
    )Other income from discontinued operations
    
    
    61,047
    
    
    
    75,656Net loss from discontinued operations
    
    $
    (26,164
    )
    
    $
    (32,423
    )
 Note 6. Acquisitions and Divestitures
 BioFuels
 Business
Combinations
 F-14




---



##### Table of Contents



Total Purchase Price:Fair value of 450,000 shares of GreenHunter common stock
    
    $
    2,079,000Cash consideration
    
    
    6,772,342Fair value of 117,998 shares of GreenHunter
common stock exchanged for notes payable
originally issued at acquisition
    
    
    1,875,000Total
    
    $
    10,726,342Net Preliminary Purchase Price Allocation:Net purchase price
    
    $
    10,726,342Historical net assets acquired
    
    
    (419,146
    )Excess purchase price
    
    
    10,307,196Adjustment of land to fair market value
    
    
    (1,656,924
    )Adjustment of inventory to fair market value
    
    
    (136,361
    )Adjustment of equipment and infrastructure to fair market value
    
    
    (8,452,341
    )Amortization of discount on notes payable to
interest expense
    
    
    (61,570
    )Excess purchase price
    
    $
    Historical net assets acquired were as follows:Current assets
    
    $
    162,746Property, plant and equipment, net
    
    
    981,915Current liabilities
    
    
    (576,765
    )Liabilities owed to GreenHunter
    
    
    (148,750
    )Historical net assets acquired
    
    $
    419,146
  Port Sutton Acquisition
    F-15




---



##### Table of Contents



Biomass
 Mesquite Lake
    Land
    
    $
    2,526,029Machinery and Equipment
    
    
    98,582Power Purchase Agreement
    
    
    1,652,704Permits and Fees
    
    
    643,685Total Purchase Price
    
    $
    4,921,000
  Telogia
 Business Combinations.
 F-16




---



##### Table of Contents



Total Purchase Price:Cash consideration
    
    $
    1,900,000Debt assumed in transaction
    
    
    170,459Cancellation of seller promissory note
    
    
    600,000Total
    
    $
    2,670,459Net Purchase Price Allocation:Net purchase price
    
    $
    2,670,459Land, Property, and Equipment
    
    
    (2,670,459
    )Excess purchase price
    
    $
    
  Wind Energy
 Ming Yang
     Wheatland Wind Acquisition
   F-17




---



##### Table of Contents



Ocotillo Wind Project
  Pro Forma Financial Information
  
 Year EndedDecember 31,2007Total operating revenues
    
    $
    1,597,637Operating costs and expenses
    
    
    7,519,711Employee stock option expense
    
    
    6,321,321Total operating costs and expenses
    
    
    13,841,032Operating loss
    
    
    (12,243,395
    )Other income and (expense)
    
    
    (121,116
    )Net loss
    
    
    (12,364,511
    )Dividends on preferred stock
    
    
    (1,949,671
    )Net loss to common stockholders
    
    $
    (14,314,182
    )Net loss per common share, basic and diluted
    
    $
    (0.77
    )
 Note 7. Inventories
  2009
    
    
    2008Finished goods
    
    $
    
    
    
    $
    3,262,873Work in process
    
    
    
    
    
    
    520,571Raw materials
    
    
    179,322
    
    
    
    2,354,336$
    179,322
    
    
    $
    6,137,780
 F-18




---



##### Table of Contents



NOTE 8. NOTES PAYABLE
  2009
    
    
    2008Note payable due June 17, 2010, 7.0%
    
    $
    79,820
    
    
    $
    Note payable due February 2, 2010, 6.1%
    
    
    79,820
    
    
    
    Note payable due November 31, 2017, 5.7%
    
    
    3,072,766
    
    
    
    3,147,927Note payable due March 15, 2009, 3.84%
    
    
    
    
    
    
    421,817Non-recourse construction facility, 4.26%
and 4.47% at December 31, 2009 and 2008,
respectively
    
    
    28,633,780
    
    
    
    33,500,000Working capital line of credit, 4.26% and
4.47% at December 31, 2009 and 2008,
respectively
    
    
    9,046,054
    
    
    
    10,000,00010% Series A Senior Secured Redeemable
Debentures, net of $1,007,039 and
$1,435,378 discount, respectively
    
    
    20,027,109
    
    
    
    19,598,7709% Series B Senior Secured Redeemable
Debentures, net of $40,069 and $49,628
discount, respectively
    
    
    5,261,739
    
    
    
    3,540,28766,121,267
    
    
    
    70,208,801Less: current portion
    
    
    (37,849,374
    )
    
    
    (7,268,519
    )Total Long-Term Debt
    
    $
    28,271,893
    
    
    $
    62,940,282
  2010
    
    $
    37,849,3742011
    
    
    92,3222012
    
    
    100,0492013
    
    
    7,437,534Thereafter
    
    
    20,641,988$
    66,121,267
 Notes Payable
   F-19




---



##### Table of Contents



Notes Payable  Nonrecourse
   F-20




---



##### Table of Contents



Subordinated Convertible Note Payable to Related Party
  10% Series A Senior Secured Redeemable Debentures
    9% Series B Senior Secured Redeemable Debentures
  F-21




---



##### Table of Contents



NOTE 9. INCOME TAXES
   2009
    
    2008
    
    2007(in thousands)Statutory tax expense (benefit)
    
    $
    (5,242
    )
    
    $
    (22,513
    )
    
    $
    (4,092
    )Change in valuation allowance
    
    
    4,245
    
    
    
    21,753
    
    
    
    4,076Interest expense disallowed for tax
    
    
    995
    
    
    
    745
    
    
    
    Effect of other permanent differences
    
    
    2
    
    
    
    15
    
    
    
    16Total Tax Expense
    
    $
    
    
    
    $
    
    
    
    $
    
  2009
    
    2008(in thousands)Deferred tax assets:Domestic net operating loss
    
    $
    25,560
    
    
    $
    15,802Capital loss carryforward
    
    
    77
    
    
    
    61Stock options
    
    
    4,193
    
    
    
    3,954Property, equipment & project costs
    
    
    
    
    
    
    4,605Deferred tax liability:Property, equipment & project costs
    
    
    (1,467
    )
    
    
    Net deferred tax assets
    
    
    28,363
    
    
    
    24,422Less valuation allowances
    
    
    (28,363
    )
    
    
    (24,422
    )Net deferred tax
    
    $
    
    
    
    $
    
 Accounting for Uncertainty in Income Taxes, an
Interpretation of FASB Statement No. 109
 F-22




---



##### Table of Contents



Note 10. Stockholders Equity
  F-23




---



##### Table of Contents



Preferred
    
    
    Common
    
    
    TreasuryStock
    
    
    Stock
    
    
    Stock
    
    
    KSOP
    
    
    WarrantsDecember 31, 2006
    
    
    
    
    
    
    15,000,055
    
    
    
    
    
    
    
    
    
    
    
    -Issue preferred shares in private placement
    
    
    12,500Issue common shares to acquire GreenHunter BioFuels, Inc.
    
    
    
    
    
    
    450,000Issue common shares to acquire power purchase agreement
    
    
    
    
    
    
    500,000Issue common shares for fees on biomass plant acquisition
    
    
    
    
    
    
    300,000Issue common shares in private placement
    
    
    
    
    
    
    3,448,168Issue common shares for commissions on investments and private
placements of common stock
    
    
    
    
    
    
    60,950Issue common stock warrants in private placement of preferred and
common stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,807,834December 31, 2007
    
    
    12,500
    
    
    
    19,759,173
    
    
    
    
    
    
    
    
    
    
    
    2,807,834Issue 117,998 shares for note payable exchange
    
    
    
    
    
    
    117,998Issue 841,363 warrants on the 10% Series A Redeemable Debentures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    841,363Issue 89,747 warrants on the 9% Series B Redeemable Debentures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    89,747Issue 594,011 shares upon note conversion
    
    
    
    
    
    
    594,011Issue 173,750 shares on warrant exercises
    
    
    
    
    
    
    173,750
    
    
    
    
    
    
    
    
    
    
    
    (173,750
    )Issue 253,000 on option exercises
    
    
    
    
    
    
    253,000Cancellation of 1,410,000 warrants surrendered
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,410,000
    )Issue 1,410,000 warrants on series B preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,410,000Issue 10,575 Series B Preferred Shares in private placement
    
    
    10,575Issue 173,750 warrants for stock option exercise inducement
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    173,750Employer match of 5,512 shares to KSOP
    
    
    
    
    
    
    5,512Issue 58,246 shares for Port Sutton lease option acquisition
    
    
    
    
    
    
    58,246Issue 27,186 shares for executive compensation
    
    
    
    
    
    
    27,186Issue 44,964 treasury shares for Wheatland acquisition
    
    
    
    
    
    
    
    
    
    
    (44,964
    )Loan of 15,200 shares to KSOP
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,200Purchase 89,400 shares for treasury
    
    
    
    
    
    
    
    
    
    
    89,400Issue 2,470,004 warrants for stock dividend to common and preferred
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,470,004December 31, 2008
    
    
    23,075
    
    
    
    20,988,876
    
    
    
    44,436
    
    
    
    15,200
    
    
    
    6,208,948Conversion of Series A Preferred Shares
    
    
    (5,750
    )
    
    
    1,150,000Issue warrants on 9% Series B Redeemable Debentures issuances
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,797Issue 22,024 treasury shares for services provided
    
    
    
    
    
    
    
    
    
    
    (22,024
    )December 31, 2009
    
    
    17,325
    
    
    
    22,138,876
    
    
    
    22,412
    
    
    
    15,200
    
    
    
    8,721,749
 Preferred Stock
 Series A Preferred
    F-24




---



##### Table of Contents



Series B Preferred
    Common Stock
   F-25




---



##### Table of Contents



Treasury Stock
  F-26




---



##### Table of Contents



Common Stock Warrants
    Risk Free Interest Rate
    
    
    4.01
    %Expected Life (a)
    
    2 yearsExpected volatility (b)
    
    
    52
    %Dividend yield
    
    
    Weighted average fair value of each warrant
    
    $
    0.76
 
 (a)
    
    The warrants have a life of five years, but we expect to be able to force the
exercise of the warrants in two years.(b)
    
    The expected volatility of our common stock was estimated using an average of
volatilities of publicly traded companies in similar renewable energy businesses.   Risk Free Interest Rate
    
    
    3.2
    %Expected Life
    
    3 years
 F-27




---



##### Table of Contents



Expected volatility (a)
    
    
    58
    %Dividend yield
    
    
    Weighted average fair value of each warrant
    
    $
    2.72
 
 (a)
    
    The expected volatility of our common stock was estimated using an average of
volatilities of publicly traded companies in similar renewable energy businesses.     Risk-Free Interest Rate
    
    
    1.63
    %Expected Life
    
    3 yearsExpected Volatility(a)
    
    
    54.21
    %Dividend Yield
    
    
    Weighted-average fair value per warrant
    
    $
    0.59
 
 (a)
    
    The expected volatility of our common stock was estimated leased on an average of
volatilities of publicly traded companies in similar renewable energy businesses.   F-28




---



##### Table of Contents



2009
    
    
    2008
    
    
    2007Weighted
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    WeightedAverage
    
    
    
    
    
    
    Average
    
    
    
    
    
    
    AverageNumber of
    
    
    Exercise
    
    
    Number of
    
    
    Exercise
    
    
    Number of
    
    
    ExerciseWarrants
    
    
    Price
    
    
    Warrants
    
    
    Price
    
    
    Warrants
    
    
    PriceOutstanding  Beginning of Year
    
    
    6,208,948
    
    
    $
    10.52
    
    
    
    2,807,834
    
    
    $
    10.52
    
    
    
    
    
    
    $
    Granted
    
    
    42,797
    
    
    
    30.00
    
    
    
    4,984,864
    
    
    
    26.28
    
    
    
    2,807,834
    
    
    
    10.52Exercised
    
    
    
    
    
    
    
    
    
    
    (173,750
    )
    
    
    7.50
    
    
    
    
    
    
    
    Cancelled
    
    
    
    
    
    
    
    
    
    
    (1,410,000
    )
    
    
    7.50
    
    
    
    
    
    
    
    Outstanding  End of Year
    
    
    6,251,745
    
    
    $
    23.98
    
    
    
    6,208,948
    
    
    $
    23.94
    
    
    
    2,807,834
    
    
    $
    10.52Exercisable  End of Year
    
    
    6,251,745
    
    
    $
    23.98
    
    
    
    6,208,948
    
    
    $
    23.94
    
    
    
    2,807,834
    
    
    $
    10.52
 Note 11. Stock-Based Compensation
 s
 Common Stock Options
     F-29




---



##### Table of Contents



2009
    
    2008
    
    2007Number of options issued
    
    
    2,661,000
    
    
    
    3,290,000
    
    
    
    4,031,500Weighted average stock price
    
    $
    1.81
    
    
    $
    18.99
    
    
    $
    5.38Weighted average exercise price
    
    $
    1.52
    
    
    $
    18.44
    
    
    $
    5.60Weighted average expected life of options(a)
    
    
    5.00
    
    
    
    5.53
    
    
    
    5.13Weighted average expected volatility (b)
    
    
    67.2
    %
    
    
    30.1
    %
    
    
    37.7
    %Weighted average risk-free interest rate
    
    
    2.4
    %
    
    
    2.9
    %
    
    
    4.8
    %Expected annual dividend per share
    
    
    
    
    
    
    
    
    
    
    Weighted average fair value of each option
    
    $
    1.05
    
    
    $
    6.65
    
    
    $
    2.17
 
 (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-30




---



##### Table of Contents



The following is a summary of stock option activity during the years ended December 31, 2009, 2008
and 2007. There were no stock options issued prior to January 1, 2007.*
    
    The Aggregate Intrinsic Value was calculated using the December 31, 2009,
2008, 2007 stock price of $1.15, $4.92, and $10.64. 2009
    
    
    2008
    
    
    2007Weighted
    
    
    
    
    
    
    
    
    
    
    Weighted
    
    
    
    
    
    
    
    
    
    
    WeightedAverage
    
    
    Aggregate
    
    
    
    
    
    
    Average
    
    
    Aggregate
    
    
    
    
    
    
    Average
    
    
    AggregateExercise
    
    
    Intrinsic
    
    
    
    
    
    
    Exercise
    
    
    Intrinsic
    
    
    
    
    
    
    Exercise
    
    
    IntrinsicShares
    
    
    Price
    
    
    Value*
    
    
    Shares
    
    
    Price
    
    
    Value*
    
    
    Shares
    
    
    Price
    
    
    Value*Outstanding  Beginning of Year
    
    
    5,629,500
    
    
    $
    9.88
    
    
    
    
    
    
    
    4,031,500
    
    
    $
    5.60Granted
    
    
    2,661,000
    
    
    $
    1.52
    
    
    
    97,000
    
    
    
    3,290,000
    
    
    $
    18.44
    
    
    
    
    
    
    
    4,031,500
    
    
    $
    5.60Exercised
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (253,000
    )
    
    $
    5.00
    
    
    
    2,719,900Cancelled
    
    
    (890,668
    )
    
    $
    14.40
    
    
    
    
    
    
    
    (1,439,000
    )
    
    $
    18.34Outstanding  End of Year
    
    
    7,399,832
    
    
    $
    5.93
    
    
    
    97,000
    
    
    
    5,629,500
    
    
    $
    9.88
    
    
    
    
    
    
    
    4,031,500
    
    
    $
    5.60
    
    
    
    20,318,760Exercisable  End of Year
    
    
    4,499,663
    
    
    $
    8.38
    
    
    
    
    
    
    
    3,906,498
    
    
    $
    7.00
    
    
    
    
    
    
    
    3,500,000
    
    
    $
    5.00
    
    
    
    20,302,160
  Weighted AverageRemainingNumber of Options
    
    Number of
    
    Contractual LifeExercise Price
    
    Outstanding
    
    Exercisable Options
    
    (Years)$0.97
    
    
    100,000
    
    
    
    
    
    
    
    9.43$1.41
    
    
    500,000
    
    
    
    
    
    
    
    9.95$1.96
    
    
    1,960,000
    
    
    
    
    
    
    
    9.66$5.00
    
    
    3,247,000
    
    
    
    3,247,000
    
    
    
    7.38$7.50
    
    
    33,333
    
    
    
    33,333
    
    
    
    7.76$10.00
    
    
    248,333
    
    
    
    205,000
    
    
    
    7.91$10.12
    
    
    2,500
    
    
    
    833
    
    
    
    8.78$12.00
    
    
    6,500
    
    
    
    6,000
    
    
    
    7.99$13.66
    
    
    3,000
    
    
    
    3,000
    
    
    
    8.50$17.76
    
    
    40,000
    
    
    
    40,000
    
    
    
    8.12$18.00
    
    
    16,667
    
    
    
    16,667
    
    
    
    8.20$18.91
    
    
    1,107,499
    
    
    
    887,830
    
    
    
    8.13$19.75
    
    
    13,333
    
    
    
    13,333
    
    
    
    8.30$20.02
    
    
    25,000
    
    
    
    
    
    
    
    8.46$20.64
    
    
    75,000
    
    
    
    25,000
    
    
    
    8.44$22.75
    
    
    21,667
    
    
    
    21,667
    
    
    
    8.36
 Restricted Shares
  Note 12. Commitments and Contingencies
  F-31




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##### Table of Contents



Orion
 et al,
  Bioversel
  F-32




---



##### Table of Contents



Jacob Stern
   Crown Engineering
  Gavilon
  Steel Painters
  Note 13. Related Party Transactions
    F-33




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##### Table of Contents



Note 14. Quarterly Financial Data
  2009First
    
    Second
    
    Third
    
    Fourth
    
    Total YearSales
    
    $
    3,189,618
    
    
    $
    1,717,475
    
    
    $
    403,686
    
    
    $
    480,754
    
    
    $
    5,791,533Operating income (loss)
    
    $
    (7,773,863
    )
    
    $
    6,455,402
    
    
    $
    (3,382,270
    )
    
    $
    (8,277,513
    )
    
    $
    (12,978,244
    )Net income (loss) to
common stockholders
    
    $
    (8,746,889
    )
    
    $
    4,449,187
    
    
    $
    (3,522,968
    )
    
    $
    (8,373,542
    )
    
    $
    (16,194,212
    )Net income (loss) per 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
 2008First
    
    Second
    
    Third
    
    Fourth
    
    Total YearSales
    
    $
    177,777
    
    
    $
    468,108
    
    
    $
    331,487
    
    
    $
    4,024,209
    
    
    $
    5,001,581Operating loss
    
    $
    ( 7,953,449
    )
    
    $
    ( 6,638,030
    )
    
    $
    ( 10,647,264
    )
    
    $
    ( 37,185,108
    )
    
    $
    ( 62,423,851
    )Net loss to common
stockholders
    
    $
    ( 8,279,660
    )
    
    $
    ( 7,322,647
    )
    
    $
    ( 26,663,596
    )
    
    $
    ( 40,138,087
    )
    
    $
    ( 82,403,990
    )Net loss per share
    
    $
    (0.42
    )
    
    $
    (0.37
    )
    
    $
    (1.32
    )
    
    $
    (1.92
    )
    
    $
    (4.08
    )Weighted average shares
    
    
    19,823,254
    
    
    
    19,885,486
    
    
    
    20,202,531
    
    
    
    20,906,545
    
    
    
    20,216,032
 2007First
    
    Second
    
    Third
    
    Fourth
    
    Total YearSales
    
    $
    
    
    
    $
    554,254
    
    
    $
    157,773
    
    
    $
    340,716
    
    
    $
    1,052,743Operating loss
    
    $
    ( 462,729
    )
    
    $
    ( 6,911,193
    )
    
    $
    (98,546
    )
    
    $
    ( 4,411,833
    )
    
    $
    ( 11,884,301
    )Net loss to common
stockholders
    
    $
    ( 721,902
    )
    
    $
    ( 7,881,811
    )
    
    $
    ( 1,284,500
    )
    
    $
    ( 3,803,800
    )
    
    $
    ( 13,692,013
    )Net loss per share
    
    $
    (0.05
    )
    
    $
    (0.46
    )
    
    $
    (0.07
    )
    
    $
    (0.21
    )
    
    $
    (0.80
    )Weighted average shares
    
    
    15,111,166
    
    
    
    17,268,736
    
    
    
    17,750,055
    
    
    
    18,159,940
    
    
    
    17,082,684
 Note 15. Segment Data
     F-34




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##### Table of Contents



2009UnallocatedCorporate
    
    
    BioMass
    
    
    Wind Energy
    
    
    BioFuels
    
    
    TOTALTotal Revenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    5,791,533
    
    
    $
    5,791,533Total Operating Costs
(recoveries)
    
    
    (449,941
    )
    
    
    38,309
    
    
    
    67,136
    
    
    
    (1,771,903
    )
    
    
    (2,116,399
    )Depreciation expense
    
    
    182,405
    
    
    
    
    
    
    
    46,291
    
    
    
    4,041,748
    
    
    
    4,270,444Loss on asset impairments
    
    
    1,651,161
    
    
    
    
    
    
    
    
    
    
    
    3,177,179
    
    
    
    4,828,340Selling, general and
administrative
    
    
    5,384,799
    
    
    
    1,139,979
    
    
    
    639,028
    
    
    
    4,405,816
    
    
    
    11,569,622Operating income (loss)
    
    
    (6,768,424
    )
    
    
    (1,178,288
    )
    
    
    (752,455
    )
    
    
    (4,061,307
    )
    
    
    (12,760,474
    )Other income and (expense)
    
    
    (858,093
    )
    
    
    7,878
    
    
    
    (941,111
    )
    
    
    (737,988
    )
    
    
    (2,529,314
    )Income (loss) from continuing
operations
    
    $
    (7,626,517
    )
    
    $
    (1,170,410
    )
    
    $
    (1,693,566
    )
    
    $
    (4,799,295
    )
    
    $
    (15,289,788
    )Total Assets
    
    $
    12,753,524
    
    
    $
    15,704,951
    
    
    $
    229,484
    
    
    $
    40,130,320
    
    
    $
    68,818,279Capital Expenditures
    
    $
    6,748
    
    
    $
    40,865
    
    
    $
    
    
    
    $
    742,749
    
    
    $
    790,362
 2008UnallocatedCorporate
    
    
    BioPower
    
    
    Wind Energy
    
    
    BioFuels
    
    
    TOTALTotal Revenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    5,001,581
    
    
    $
    5,001,581Total Operating Costs
    
    
    558,165
    
    
    
    237,527
    
    
    
    264,736
    
    
    
    19,223,674
    
    
    
    20,284,102Depreciation expense
    
    
    175,852
    
    
    
    
    
    
    
    51,717
    
    
    
    2,475,535
    
    
    
    2,703,104Loss on asset impairments
    
    
    
    
    
    
    2,629,256
    
    
    
    
    
    
    
    19,139,630
    
    
    
    21,768,886Selling, general and
administrative
    
    
    15,928,197
    
    
    
    623,658
    
    
    
    1,179,600
    
    
    
    4,650,912
    
    
    
    22,382,367Operating loss
    
    
    (16,662,214
    )
    
    
    (3,490,441
    )
    
    
    (1,496,053
    )
    
    
    (40,488,170
    )
    
    
    (62,136,878
    )Other income and expense
    
    
    (1,993,634
    )
    
    
    5,175
    
    
    
    29,836
    
    
    
    (1,407,905
    )
    
    
    (3,366,528
    )Net loss from continuing
operations
    
    $
    (18,655,848
    )
    
    $
    (3,485,266
    )
    
    $
    (1,466,217
    )
    
    $
    (41,896,075
    )
    
    $
    (65,503,406
    )Total Assets
    
    $
    15,993,774
    
    
    $
    20,683,669
    
    
    $
    1,393,779
    
    
    $
    55,667,733
    
    
    $
    93,738,955Capital Expenditures
    
    $
    552,521
    
    
    $
    17,221,513
    
    
    $
    326,775
    
    
    $
    37,305,082
    
    
    $
    55,405,891
 F-35




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##### Table of Contents



2007UnallocatedCorporate
    
    
    Biomass
    
    
    Wind Energy
    
    
    BioFuels
    
    
    TOTALTotal Revenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    1,052,743
    
    
    
    1,052,743Total Operating Costs
    
    
    
    
    
    
    
    
    
    
    276,505
    
    
    
    758,799
    
    
    
    1,035,304Depreciation expense
    
    
    11,535
    
    
    
    
    
    
    
    32,128
    
    
    
    74,964
    
    
    
    118,627Selling, general and
administrative
    
    
    10,655,019
    
    
    
    98,000
    
    
    
    388,761
    
    
    
    641,333
    
    
    
    11,783,113Operating income (loss)
    
    
    (10,666,554
    )
    
    
    (98,000
    )
    
    
    (697,394
    )
    
    
    (422,353
    )
    
    
    (11,884,301
    )Other income and expense
    
    
    (120,374
    )
    
    
    
    
    
    
    53,498
    
    
    
    (83,165
    )
    
    
    (150,041
    )Net Income (Loss) from
continuing operations
    
    $
    (10,786,928
    )
    
    $
    (98,000
    )
    
    $
    (643,896
    )
    
    $
    (505,518
    )
    
    
    (12,034,342
    )Total Assets
    
    $
    27,126,618
    
    
    $
    5,103,566
    
    
    $
    593,264
    
    
    $
    26,673,837
    
    
    
    59,497,285Capital Expenditures
    
    $
    4,796,448
    
    
    $
    1,426,566
    
    
    $
    5,431
    
    
    $
    21,102,506
    
    
    
    27,330,951
 Note 16. Subsequent Events
   F-36




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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 65




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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
    
    Chairman and
    
    March 31, 2010Gary C. Evans
    
    Chief Executive Officer/s/ Jonathan D. Hoopes
    
    President and COO
    
    March 31, 2010Jonathan D. Hoopes/s/ Morgan F. Johnston
    
    Sr. Vice President, General Counsel
    
    March 31, 2010Morgan F. Johnston
    
    and Secretary/s/ David S. Krueger
    
    Vice President and
    
    March 31, 2010David S. Krueger
    
    Chief Financial Officer/s/ Ronald D. Ormand
    
    Director
    
    March 31, 2010Ronald D. Ormand/s/ Ronald H. Walker
    
    Director
    
    March 31, 2010Ronald H. Walker
 66