##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D. C. 20549
 FORM 10-Q
 (Mark one)
 þ
    
    Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Quarterly Period Ended March 31, 2009
 o
    
    Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Transition Period from                 to
 Commission File Number 001-33893
 GREENHUNTER ENERGY, INC.
  Delaware
    
    20-4864036(State or other jurisdiction of
    
    (IRS employer identification No.)incorporation or organization)
  (Address of principal executive offices)(Zip Code)
  (Registrants telephone number including area code)
  þ 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 1  FINANCIAL STATEMENTSItem 1. Financial StatementsItem 2. Managements Discussion and Analysis of Financial Condition and Results of OperationsItem 3. Quantitative and Qualitative Disclosures About Market RisksItem 4. Controls and ProceduresPART II  OTHER INFORMATIONItem 1. Legal ProceedingsItem 2. Unregistered Sales of Equity Securities and Use of ProceedsItem 6. Exhibits and Reports on Form 8-KSIGNATURESEX-31.1EX-31.2EX-32.1EX-32.2    Table of Contents  
 PART 1  FINANCIAL STATEMENTS
 
 Item 1. Financial Statements
 GREENHUNTER ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
 March 31, 2009
    
    
    December 31, 2008ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    1,214,634
    
    
    $
    676,636Restricted cash
    
    
    1,450,571
    
    
    
    342,653Accounts receivable, net of allowance of $648,994 and $542,965, respectively
    
    
    2,761,586
    
    
    
    4,475,670Inventory
    
    
    1,887,705
    
    
    
    6,137,780Prepaid expenses and other current assets
    
    
    500,464
    
    
    
    943,135Assets held for sale  current
    
    
    
    
    
    
    53,555Total current assets
    
    
    7,814,960
    
    
    
    12,629,429FIXED ASSETS:Land and improvements
    
    
    4,732,095
    
    
    
    5,394,866Buildings
    
    
    3,100,621
    
    
    
    3,100,621Plant and other equipment
    
    
    47,594,300
    
    
    
    45,521,460Accumulated depreciation
    
    
    (3,918,698
    )
    
    
    (2,855,250
    )Construction in progress
    
    
    10,696,899
    
    
    
    11,934,854Net fixed assets
    
    
    62,205,217
    
    
    
    63,096,551OTHER ASSETS:Assets held for sale
    
    
    
    
    
    
    4,887,945Deferred financing costs
    
    
    3,492,415
    
    
    
    3,720,893Other noncurrent assets
    
    
    7,968,922
    
    
    
    9,404,152Total assets
    
    $
    81,481,514
    
    
    $
    93,738,970LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Current portion of notes payable
    
    $
    87,403
    
    
    $
    507,102Current portion of notes payable, nonrecourse
    
    
    42,936,084
    
    
    
    6,761,417Accounts payable
    
    
    12,570,612
    
    
    
    16,020,538Dividends payable
    
    
    
    
    
    
    250,000Accrued liabilities
    
    
    5,743,642
    
    
    
    5,254,965Liabilities associated with assets held for sale
    
    
    
    
    
    
    2,224,447Total current liabilities
    
    
    61,337,741
    
    
    
    31,018,469NON-CURRENT LIABILITIES:Notes payable
    
    
    3,050,235
    
    
    
    3,062,642Notes payable, nonrecourse, less current portion
    
    
    
    
    
    
    36,738,583Redeemable debentures, net of discount of $1,347,357 and $1,485,006, respectively
    
    
    24,988,598
    
    
    
    23,139,057Liabilities associated with assets held for sale, non-current
    
    
    
    
    
    
    74,319Total long-term liabilities
    
    
    28,038,833
    
    
    
    63,014,601COMMITMENTS AND CONTINGENCIESSTOCKHOLDERS DEFICIT:Series A 8% convertible preferred stock, $.001 par value, $1,040 and $1,000
stated value, respectively, 12,100 and 12,500 issued and outstanding,
respectively
    
    
    12,584,000
    
    
    
    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, 21,068,876 and
20,988,876 issued, respectively
    
    
    21,069
    
    
    
    20,989Additional paid-in capital
    
    
    82,205,666
    
    
    
    81,100,216Accumulated deficit
    
    
    (112,225,453
    )
    
    
    (103,478,564
    )Treasury stock, at cost, 44,436 shares
    
    
    (678,538
    )
    
    
    (678,538
    )Noncontrolling interest in consolidated subsidiaries
    
    
    (150,891
    )
    
    
    (107,290
    )Unearned common stock in KSOP, at cost, 15,200 shares
    
    
    (225,913
    )
    
    
    (225,913
    )Total stockholders deficit
    
    
    (7,895,060
    )
    
    
    (294,100
    )Total liabilities and stockholders deficit
    
    $
    81,481,514
    
    
    $
    93,738,970
 See accompanying notes to consolidated financial statements
 -1-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 For the Quarter Ended March 31,2009
    
    
    2008REVENUE:Product sales
    
    $
    2,856,902
    
    
    $
    129,777Terminal revenues
    
    
    167,019
    
    
    
    48,000Processing revenue
    
    
    165,697
    
    
    
    Total revenue
    
    
    3,189,618
    
    
    
    177,777COSTS AND EXPENSES:Cost of sales and services
    
    
    5,419,207
    
    
    
    151,505Reversal of
estimated hurricane repairs and losses
    
    
    (1,494,578
    )
    
    
    Project costs
    
    
    127,033
    
    
    
    74,332Depreciation expense
    
    
    1,063,448
    
    
    
    88,407Selling, general and administrative (including stock option expense
of $691,255 and $5,652,358, respectively)
    
    
    4,197,210
    
    
    
    7,816,981Loss on asset impairments
    
    
    1,651,161
    
    
    
    Total costs and expenses
    
    
    10,963,481
    
    
    
    8,131,225OPERATING LOSS FROM CONTINUING OPERATIONS
    
    
    (7,773,863
    )
    
    
    (7,953,448
    )OTHER INCOME (EXPENSE):Interest and other income
    
    
    36,645
    
    
    
    287,750Interest, accretion and other expense
    
    
    (1,455,038
    )
    
    
    (363,962
    )Total other income (expense)
    
    
    (1,418,393
    )
    
    
    (76,212
    )Net loss from continuing operations before noncontrolling interest
    
    
    (9,192,256
    )
    
    
    (8,029,660
    )Noncontrolling Interest
    
    
    43,601
    
    
    
    Net loss from continuing operations
    
    
    (9,148,655
    )
    
    
    (8,029,660
    )Gain on sale of discontinued operations
    
    
    858,754
    
    
    
    Loss from discontinued operations, net of taxes
    
    
    (209,655
    )
    
    
    Net Loss
    
    
    (8,499,556
    )
    
    
    (8,029,660
    )Preferred stock dividends
    
    
    (247,333
    )
    
    
    (250,000
    )Net loss to common stockholders
    
    $
    (8,746,889
    )
    
    $
    (8,279,660
    )Weighted average shares outstanding, basic and diluted
    
    
    20,935,018
    
    
    
    19,823,254Net loss per share from continuing operations
    
    $
    (0.45
    )
    
    $
    (0.42
    )Net earnings per share from discontinued operations
    
    $
    0.03
    
    
    $
    Net loss per share
    
    $
    (0.42
    )
    
    $
    (0.42
    )
 See accompanying notes to consolidated financial statements
 -2-




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GREENHUNTER ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
FOR THE PERIOD FROM JANUARY 1, 2009 TO MARCH 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, 2009
    
    $
    12,500,000
    
    
    $
    10,575,000
    
    
    $
    20,989
    
    
    $
    81,100,216
    
    
    $
    (107,290
    )
    
    $
    (103,478,564
    )
    
    $
    (678,538
    )
    
    $
    (225,913
    )
    
    $
    (294,100
    )Transfer accumulated preferred dividends to stated value
    
    
    484,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    484,000Issue 42,797 warrants on Series B Debentures issued
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    942
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    942Stock compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    691,255
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    691,255Conversion of 400 preferred shares into 80,000 common shares
    
    
    (400,000
    )
    
    
    
    
    
    
    80
    
    
    
    413,253
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13,333Dividends on preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (247,333
    )
    
    
    
    
    
    
    
    
    
    
    (247,333
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (43,601
    )
    
    
    (8,499,556
    )
    
    
    
    
    
    
    
    
    
    
    (8,543,157
    )BALANCE, March 31, 2009
    
    $
    12,584,000
    
    
    $
    10,575,000
    
    
    $
    21,069
    
    
    $
    82,205,666
    
    
    $
    (150,891
    )
    
    $
    (112,225,453
    )
    
    $
    (678,538
    )
    
    $
    (225,913
    )
    
    $
    (7,895,060
    )
 See accompanying notes to consolidated financial statements
 -3-




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GREENHUNTER ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 MARCH 31,2009
    
    
    2008CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (8,499,556
    )
    
    $
    (8,029,660
    )Adjustments to reconcile net loss to net cash used in
operating activities:Depreciation expense
    
    
    1,063,448
    
    
    
    88,407Noncash stock compensation
    
    
    691,255
    
    
    
    5,652,358Amortization of deferred financing costs
    
    
    365,429
    
    
    
    48,231Non-cash asset impairment
    
    
    1,651,161
    
    
    
    Noncontrolling interest
    
    
    (43,601
    )
    
    
    Gain on sale of assets
    
    
    (858,754
    )
    
    
    Accretion of discount
    
    
    138,591
    
    
    
    10,917Changes in certain assets and liabilities, net of
acquisition effect:Accounts receivable
    
    
    2,079,634
    
    
    
    (21,890
    )Inventory
    
    
    4,250,075
    
    
    
    (53,643
    )Prepaid and other expense
    
    
    439,754
    
    
    
    (1,014,674
    )Accounts payable
    
    
    (4,824,786
    )
    
    
    (800,041
    )Accrued liabilities
    
    
    537,567
    
    
    
    (1,242,590
    )Net cash used in operating activities
    
    
    (3,009,783
    )
    
    
    (5,362,585
    )CASH FLOWS FROM INVESTING ACTIVITIES:Change in restricted cash
    
    
    (1,107,918
    )
    
    
    (16,507,790
    )Proceeds from sale of assets
    
    
    4,486,173
    
    
    
    Additions to fixed assets
    
    
    (357,965
    )
    
    
    (13,276,551
    )Increase in other assets
    
    
    (45,931
    )
    
    
    (2,159,128
    )Net cash used in investing activities
    
    
    2,974,359
    
    
    
    (31,943,469
    )CASH FLOWS FROM FINANCING ACTIVITIES:Loan common stock to KSOP
    
    
    
    
    
    
    (22,420
    )Commissions and fees paid on stock issuance
    
    
    
    
    
    
    (2,429
    )Gross proceeds from redeemable debenture issuance
    
    
    1,711,892
    
    
    
    2,951,140Increase in notes payable
    
    
    
    
    
    
    35,456,497Payment of notes payable
    
    
    (1,001,519
    )
    
    
    (7,248,011
    )Payment of deferred financing costs
    
    
    (136,951
    )
    
    
    (610,189
    )Preferred dividends paid in cash
    
    
    
    
    
    
    (250,000
    )Net cash provided by financing activities
    
    
    573,422
    
    
    
    30,274,588CHANGE IN CASH
    
    
    537,998
    
    
    
    (7,031,466
    )CASH, beginning of period
    
    
    676,636
    
    
    
    18,750,394CASH,end of period
    
    $
    1,214,634
    
    
    $
    11,718,928Cash paid for interest
    
    $
    1,128,708
    
    
    $
    275,712NONCASH TRANSACTIONS:KSOP company match in stock
    
    $
    
    
    
    
    104,233
 See accompanying notes to consolidated financial statements
 -4-




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GREENHUNTER ENERGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS  FOR THE THREE MONTHS ENDED MARCH 31, 2009
 Note 1. Organization and Nature of Operations
    Current Plan of Operations and Ability to Operate as a Going Concern
    -5-




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GREENHUNTER ENERGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)  FOR THE THREE MONTHS ENDED MARCH 31, 2009
     Nature of Operations
     -6-




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GREENHUNTER ENERGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)  FOR THE THREE MONTHS ENDED MARCH 31, 2009
     Note 2. Recently Issued Accounting Standards
 Business Combinations
 Noncontrolling Interests in Consolidated
Financial Statements  an amendment of ARB No. 51
 Disclosures about Derivative Instruments and
Hedging Activities
 -7-




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GREENHUNTER ENERGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)  FOR THE THREE MONTHS ENDED MARCH 31, 2009
  The Hierarchy of Generally Accepted Accounting
Principles
 Determining Whether an Instrument (or Embedded
Feature) Is Indexed to an Entitys Own Stock
 Equity Method Investment Accounting Considerations
 Note 3. Discontinued Operations
  Cash
    
    $
    1,482Trade accounts receivable
    
    
    8,353Prepaid insurance
    
    
    40,220Prepaid permits and fees
    
    
    3,500Total current assets associated with assets held for sale
    
    $
    53,555Plant and equipment held for sale
    
    $
    4,887,945Accounts payable
    
    $
    1,311,841Current portion of capital leases
    
    
    82,316Accrued liabilities
    
    
    830,290Total current liabilities associated with assets held for sale
    
    $
    2,224,447Capital lease
    
    $
    74,319Total non-current liabilities associated with assets held for sale
    
    $
    74,319
 -8-




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GREENHUNTER ENERGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)  FOR THE THREE MONTHS ENDED MARCH 31, 2009
  Sales and other revenues from discontinued operations
    
    $
    Operating expenses from discontinued operations
    
    
    (210,003
    )Other income from discontinued operations
    
    
    348Net loss from discontinued operations
    
    $
    (209,655
    )
  Note 4. Acquisitions and Divestitures
 BioFuels
 Port Sutton Acquisition
   BioMass
 Telogia
 Business Combinations.
 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
    
    $
    
 -9-




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GREENHUNTER ENERGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)  FOR THE THREE MONTHS ENDED MARCH 31, 2009
 Wheatland Wind Acquisition
    Note 5. Inventories
  Finished goods
    
    $
    1,224,000Work in process
    
    
    741,189Raw materials
    
    
    1,454,585Valuation allowance
    
    
    (1,532,069
    )$
    1,887,705
 Note 6. Notes Payable
  Long-Term Debt:Note payable due November 31, 2017, 5.7%
    
    $
    3,137,638Non-recourse construction facility, 4.48% at March 31, 2009
    
    
    32,936,084Non-recourse working capital line of credit, 4.48% at March
31, 2009
    
    
    10,000,00010% Series A Senior Secured Redeemable Debentures, net of
$1,299,405 discount
    
    
    19,734,7429% Series B Senior Secured Redeemable Debentures, net of
$47,952 discount
    
    
    5,253,85671,062,320Less: current portion
    
    
    (43,023,487
    )Total Long-Term Debt
    
    $
    28,038,833
 -10-




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GREENHUNTER ENERGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)  FOR THE THREE MONTHS ENDED MARCH 31, 2009
 Non-recourse Notes Payable
   Non-recourse 10% Series A Senior Secured Redeemable Debentures
  9% Series B Senior Secured Redeemable Debentures
  Note 7. Stockholders Equity
  Preferred
    
    Common
    
    TreasuryStock
    
    Stock
    
    Stock
    
    KSOP
    
    WarrantsDecember 31, 2008
    
    
    23,075
    
    
    
    20,988,876
    
    
    
    44,436
    
    
    
    15,200
    
    
    
    6,208,948Conversion of Series A Preferred Shares
    
    
    (400
    )
    
    
    80,000Issue warrants on 9% Series B Redeemable Debentures issuances
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,797March 31, 2009
    
    
    22,675
    
    
    
    21,068,876
    
    
    
    44,436
    
    
    
    15,200
    
    
    
    6,251,745
 Preferred Stock
   -11-




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GREENHUNTER ENERGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)  FOR THE THREE MONTHS ENDED MARCH 31, 2009
 Common Stock Warrants
  Note 9. Stock-Based Compensation
 Share-based Payment,
   Number
    
    
    Weighted
    
    
    Aggregateof
    
    
    average
    
    
    Intrinsic Value*Shares
    
    
    Exercise Price
    
    
    ($000s)Outstanding  Beginning of Year
    
    
    5,629,500
    
    
    $
    9.88
    
    
    
    Granted
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    Cancelled
    
    
    98,334
    
    
    
    10.31
    
    
    
    Outstanding  End of Period
    
    
    5,531,166
    
    
    $
    9.87
    
    
    
    Exercisable   End of Period
    
    
    4,439,995
    
    
    $
    8.29
    
    
    $
    
 
 *
    
    The Aggregate Intrinsic Value was calculated using the March 31, 2009 stock price
of $1.90. -12-




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GREENHUNTER ENERGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)  FOR THE THREE MONTHS ENDED MARCH 31, 2009
  Number of
    
    Weighted Average
    
    Number ofOptions
    
    Remaining Contractual
    
    ExercisableExercise Price
    
    Outstanding
    
    Life (Years)
    
    Options$
    5.00
    
    
    
    3,247,000
    
    
    
    8.13
    
    
    
    3,247,000$
    7.50
    
    
    
    100,000
    
    
    
    8.52
    
    
    
    33,333$
    10.00
    
    
    
    448,333
    
    
    
    8.68
    
    
    
    171,665$
    10.12
    
    
    
    20,500
    
    
    
    9.53
    
    
    
    $
    12.00
    
    
    
    16,500
    
    
    
    8.75
    
    
    
    5,500$
    13.66
    
    
    
    6,000
    
    
    
    9.26
    
    
    
    3,000$
    17.76
    
    
    
    100,000
    
    
    
    8.87
    
    
    
    50,000$
    18.00
    
    
    
    50,000
    
    
    
    8.95
    
    
    
    16,667$
    18.75
    
    
    
    15,000
    
    
    
    9.23
    
    
    
    $
    18.91
    
    
    
    1,122,833
    
    
    
    8.88
    
    
    
    887,830$
    19.75
    
    
    
    40,000
    
    
    
    9.05
    
    
    
    $
    20.02
    
    
    
    25,000
    
    
    
    9.22
    
    
    
    $
    20.64
    
    
    
    275,000
    
    
    
    9.19
    
    
    
    25,000$
    22.75
    
    
    
    65,000
    
    
    
    9.12
    
    
    
    
 Note 10. Related Party Transactions
  Note 11. Segment Data
     -13-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)  FOR THE THREE MONTHS ENDED MARCH 31, 2009
   For the Three Months Ended March 31, 2009UnallocatedCorporate
    
    
    BioMass
    
    
    Wind Energy
    
    
    BioFuels
    
    
    TOTALTotal Revenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    3,189,618
    
    
    $
    3,189,618Total Operating Costs
    
    
    
    
    
    
    556
    
    
    
    126,477
    
    
    
    3,924,629
    
    
    
    4,051,662Depreciation expense
    
    
    47,840
    
    
    
    
    
    
    
    23,871
    
    
    
    991,737
    
    
    
    1,063,448Loss on asset
impairments
    
    
    1,651,161
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,651,161Selling, general and
administrative
    
    
    2,416,587
    
    
    
    162,976
    
    
    
    283,215
    
    
    
    1,334,432
    
    
    
    4,197,210Operating income
(loss)
    
    
    (4,115,588
    )
    
    
    (163,532
    )
    
    
    (433,563
    )
    
    
    (3,061,180
    )
    
    
    (7,773,863
    )Other income and
expense
    
    
    (785,006
    )
    
    
    7,539
    
    
    
    (75
    )
    
    
    (640,851
    )
    
    
    (1,418,393
    )Net loss
from continuing operations before noncontrolling interest
    
    $
    (4,900,594
    )
    
    $
    (155,993
    )
    
    $
    (433,638
    )
    
    $
    (3,702,031
    )
    
    $
    (9,192,256
    )Total Assets
    
    $
    15,030,417
    
    
    $
    15,769,125
    
    
    $
    1,332,282
    
    
    $
    49,349,690
    
    
    $
    81,481,514Capital Expenditures
    
    $
    2,463
    
    
    $
    (12,825
    )
    
    $
    
    
    
    $
    368,327
    
    
    $
    357,965
 For the Three Months Ended March 31, 2008UnallocatedCorporate
    
    
    BioMass
    
    
    Wind Energy
    
    
    BioFuels
    
    
    TOTALTotal Revenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    177,777
    
    
    $
    177,777Total Operating Costs
    
    
    
    
    
    
    
    
    
    
    74,332
    
    
    
    151,505
    
    
    
    225,837Depreciation expense
    
    
    38,148
    
    
    
    
    
    
    
    9,564
    
    
    
    40,695
    
    
    
    88,407Selling, general and
administrative
    
    
    6,760,060
    
    
    
    123,787
    
    
    
    253,413
    
    
    
    679,721
    
    
    
    7,816,981Operating income (loss)
    
    
    (6,798,208
    )
    
    
    (123,787
    )
    
    
    (337,309
    )
    
    
    (694,144
    )
    
    
    (7,953,448
    )Other income and expense
    
    
    (128,056
    )
    
    
    
    
    
    
    887
    
    
    
    50,957
    
    
    
    (76,212
    )Net loss
from continuing operations before noncontrolling interest
    
    $
    (6,926,264
    )
    
    $
    (123,787
    )
    
    $
    (336,422
    )
    
    $
    (643,187
    )
    
    $
    (8,029,660
    )Total Assets
    
    $
    22,274,217
    
    
    $
    5,117,232
    
    
    $
    578,947
    
    
    $
    61,106,365
    
    
    $
    89,076,761Capital Expenditures
    
    $
    364,273
    
    
    $
    8,445
    
    
    $
    39,133
    
    
    $
    12,864,700
    
    
    $
    13,276,551
 Note 12. Commitments and Contingencies
  -14-




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GREENHUNTER ENERGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)  FOR THE THREE MONTHS ENDED MARCH 31, 2009
  Orion
 et al,
  Bioversel
   Jacob Stern
   Crown Engineering
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##### Table of Contents



GREENHUNTER ENERGY, INC.
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)  FOR THE THREE MONTHS ENDED MARCH 31, 2009
 Gavilon
   Note 13. Subsequent Events
  -16-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2009
 
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 The following discussion and analysis should be read in conjunction with our consolidated
financial statements and the notes associated with them contained in our Form 10-K for the year
ended December 31, 2007 and with the financial statements and accompanying notes included herein.
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
     -17-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2009
  BioMass
  Wind Energy
  Results of Operations
 Three Months Ended March 31, 2009 Compared to Three Months Ended March 31, 2008:
 BioFuels Revenues
  BioFuels Costs of Sales and Services
  -18-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2009
 Wind Energy Project Costs
  Hurricane repairs and losses
  Depreciation Expense
  Loss on Asset Impairments
  Selling, General and Administrative Expense
      Operating Loss
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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2009
    Interest and Other Revenues
  Interest, Accretion and Other Expense
  Discontinued Operations
  Gain on Sale of Discontinued Operations
  Net Loss
  Preferred Stock Dividends
  Net Loss to Shareholders
  Liquidity and Capital Resources
 Cash Flow and Working Capital
  -20-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2009
  Operating Activities
   Financing Activities
  Notes Payable
  9% Series B Senior Secured Redeemable Debentures
  Nonrecourse Term Loan and Working Capital Loan
  Investing Activities and Future Requirements
 Capital Expenditures
  -21-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2009
 Forecast
  BioFuels
  BioMass
  Wind Energy
  Obligations Under Material Contracts
  Consulting Agreement with former owner of Mesquite Lake
  Port Sutton
  Weaknesses and Uncertainties that May Affect our Financial Condition and Ability to Continue
as a Going Concern
  -22-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2009
        -23-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2009
       Critical Accounting Policies and Other
  -24-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2009
   Project Costs
  Fair Value of Financial Instruments
  Revenue recognition
  Stock-Based Compensation
 Share-Based Payments
 Impairments
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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2009
  Asset Retirement Obligations
  Recent Accounting Pronouncements
 Business Combinations
 Noncontrolling Interests in Consolidated
Financial Statements  an amendment of ARB No. 51
 Disclosures about Derivative Instruments and
Hedging Activities
 The Hierarchy of Generally Accepted Accounting
Principles
 -26-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2009
 Determining Whether an Instrument (or Embedded
Feature) Is Indexed to an Entitys Own Stock
 Equity Method Investment Accounting Considerations
 Off-Balance Sheet Arrangements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risks
  Commodity Price Risk
  Interest Rate Risk
  
 Item 4. Controls and Procedures
 Disclosure Controls and Procedures
  -27-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2009
  Changes in Internal Control Over Financial Reporting
  
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
 Orion
 et al,
  Bioversel
   Jacob Stern
   -28-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2009
 Crown Engineering
   Gavilon
   
 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  (c)Total Number ofShares Purchased
    
    (d)as Part of a
    
    Maximum NumberPublicly
    
    of Shares that May(a)
    
    (b)
    
    Announced
    
    Yet be RepurchasedTotal Number of
    
    Average Price Paid
    
    Repurchase
    
    Under the Plan orPeriod
    
    Shares Purchased
    
    per Share
    
    Program
    
    ProgramJanuary 1 through January 31, 2009
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    410,600February 1 through February 28, 2009
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    410,600March 1 through March 31, 2009
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    410,600
 -29-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2009
 
 Item 6. Exhibits and Reports on Form 8-K
 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**
    
    Subscription and Equity Transfer Agreement between GreenHunter Energy, Inc. and MingYang Wind Power Technology Co.
LTD. et al., dated November 28, 200710.12**
    
    Master Turbine Supply Agreement between GreenHunter Energy, Inc. and MingYang Wind Power Technology Co. LTD. et al.,
dated November 28, 200731.1 
    
    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-K, dated March 31, 2008***
    
    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
    
    Filed herewith -30-




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##### Table of Contents



SIGNATURES
  GreenHunter Energy, Inc.Date: May 27, 2009
    
    By:
    
    /s/ Gary C. EvansGary C. EvansChairman, President and Chief Executive OfficerDate: May 27, 2009
    
    By:
    
    /s/ David S. KruegerDavid S. KruegerVice President, and Chief Financial Officer
 -31-