##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 Washington, D. C. 20549
 FORM 10-Q
  þ
    
    Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the Quarterly Period Ended March 31, 2010
 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 
incorporation or organization)
    
    (IRS employer identification No.)
 
 
  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 6. ExhibitsSIGNATURESEX-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, 2010
    
    
    December 31, 2009ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    2,921,430
    
    
    
    6,915,514Restricted cash
    
    
    79,665
    
    
    
    2,018,717Accounts receivable, net of allowance of $202,585 and $648,994, respectively
    
    
    72,917
    
    
    
    127,373Inventory
    
    
    
    
    
    
    179,322Prepaid expenses and other current assets
    
    
    428,675
    
    
    
    701,514Total current assets
    
    
    3,502,687
    
    
    
    9,942,440FIXED ASSETS:Land and improvements
    
    
    4,614,324
    
    
    
    4,732,095Buildings
    
    
    3,100,621
    
    
    
    3,100,621Plant and other equipment
    
    
    44,289,676
    
    
    
    44,477,263Accumulated depreciation
    
    
    (7,957,019
    )
    
    
    (7,101,399
    )Construction in progress
    
    
    10,920,614
    
    
    
    10,750,089Net fixed assets
    
    
    54,968,216
    
    
    
    55,958,669OTHER ASSETS:Power purchase agreement
    
    
    1,396,136
    
    
    
    300,000Deferred financing costs
    
    
    2,361,576
    
    
    
    2,617,060Other noncurrent assets
    
    
    100,110
    
    
    
    110Total assets
    
    $
    62,328,725
    
    
    
    68,818,279LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Current portion of notes payable
    
    $
    117,040
    
    
    
    169,541Current portion of notes payable, nonrecourse
    
    
    37,679,834
    
    
    
    37,679,834Accounts payable
    
    
    2,351,921
    
    
    
    9,596,732Dividends payable
    
    
    
    
    
    
    156,060Accrued liabilities
    
    
    10,240,644
    
    
    
    7,716,289Total current liabilities
    
    
    50,389,439
    
    
    
    55,318,456NON-CURRENT LIABILITIES:Notes payable
    
    
    2,959,212
    
    
    
    2,983,045Nonrecourse redeemable debentures, net of discount of $947,025 and
$1,047,108, respectively
    
    
    25,388,931
    
    
    
    25,288,848Total long-term liabilities
    
    
    28,348,143
    
    
    
    28,271,893COMMITMENTS AND CONTINGENCIES (Note 11)STOCKHOLDERS DEFICIT:Series A 8% convertible preferred stock, $.001 par value, $1,171 and $1,125
stated value, respectively, 6,750 issued and outstanding
    
    
    7,904,508
    
    
    
    7,592,389Series B convertible preferred stock, $.001 par value, $1,000 stated value,
10,575 issued and outstanding
    
    
    10,575,000
    
    
    
    10,575,000Common stock, $.001par value, 90,000,000 authorized shares, 22,138,876 and
21,068,876 issued, respectively
    
    
    22,139
    
    
    
    22,139Additional paid-in capital
    
    
    88,025,052
    
    
    
    87,273,376Accumulated deficit
    
    
    (122,373,358
    )
    
    
    (119,672,776
    )Treasury stock, at cost, 22,412
    
    
    (336,285
    )
    
    
    (336,285
    )Unearned common stock in KSOP, at cost, 15,200 shares
    
    
    (225,913
    )
    
    
    (225,913
    )Total stockholders deficit
    
    
    (16,408,857
    )
    
    
    (14,772,070
    )Total liabilities and stockholders deficit
    
    $
    62,328,725
    
    
    
    68,818,279
 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 31,2010
    
    
    2009REVENUE:Product sales
    
    $
    143,844
    
    
    $
    2,856,902Terminal revenues
    
    
    99,550
    
    
    
    167,019Processing revenues
    
    
    
    
    
    
    165,697Total revenue
    
    
    243,394
    
    
    
    3,189,618COSTS AND EXPENSES:Cost of sales and services
    
    
    453,158
    
    
    
    5,419,207Hurricane repairs and losses (insurance proceeds)
    
    
    (11,120
    )
    
    
    (1,494,578
    )Project costs
    
    
    4,065
    
    
    
    35,641Depreciation expense
    
    
    995,690
    
    
    
    1,058,002Selling, general and administrative (including
share-based compensation expenses of $682,565 and
$691,255, respectively)
    
    
    2,034,838
    
    
    
    4,197,210Loss on asset impairments
    
    
    160,824
    
    
    
    1,651,161Total costs and expenses
    
    
    3,637,455
    
    
    
    10,866,643OPERATING LOSS
    
    
    (3,394,061
    )
    
    
    (7,677,025
    )OTHER INCOME (EXPENSE):Interest and other income
    
    
    2,356,138
    
    
    
    36,645Interest, accretion and other expense
    
    
    (1,506,599
    )
    
    
    (1,455,038
    )Total other income (expense)
    
    
    849,539
    
    
    
    (1,418,393
    )Loss from continuing operations
    
    
    (2,544,522
    )
    
    
    (9,095,418
    )Gain on sale of discontinued operations
    
    
    
    
    
    
    858,754Loss from discontinued operations, net of taxes
    
    
    
    
    
    
    (262,892
    )Net loss
    
    
    (2,544,522
    )
    
    
    (8,499,556
    )Preferred stock dividends
    
    
    (156,060
    )
    
    
    (247,333
    )Net loss to common stockholders
    
    $
    (2,700,582
    )
    
    $
    (8,746,889
    )Weighted average shares outstanding, basic and diluted
    
    
    22,101,861
    
    
    
    20,935,018BASIC AND DILUTED EARNINGS (LOSS) PER SHARE:Net loss per share from continuing operations
    
    $
    (0.12
    )
    
    $
    (0.45
    )Net earnings per share from discontinued operations
    
    $
    
    
    
    $
    0.03Net loss per share
    
    $
    (0.12
    )
    
    $
    (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, 2010 TO MARCH 31, 2010
 Additional
    
    
    
    
    
    
    
    
    
    
    Unearned
    
    
    TotalSeries A
    
    
    Series B
    
    
    Common
    
    
    Paid in
    
    
    Accumulated
    
    
    Treasury
    
    
    Shares in
    
    
    EquityPreferred Stock
    
    
    Preferred Stock
    
    
    Stock
    
    
    Capital
    
    
    Deficit
    
    
    Stock
    
    
    KSOP
    
    
    (Deficit)BALANCE, January 1, 2010
    
    $
    7,592,389
    
    
    $
    10,575,000
    
    
    $
    22,139
    
    
    $
    87,273,376
    
    
    $
    (119,672,776
    )
    
    $
    (336,285
    )
    
    $
    (225,913
    )
    
    $
    (14,772,070
    )Transfer accumulated preferred dividends
    
    
    312,119
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    312,119Share based payments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    682,565
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    682,565Issued 100,000 warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69,111
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    69,111Dividends on preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (156,060
    )
    
    
    
    
    
    
    
    
    
    
    (156,060
    )Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,544,522
    )
    
    
    
    
    
    
    
    
    
    
    (2,544,522
    )BALANCE, March 31, 2010
    
    $
    7,904,508
    
    
    $
    10,575,000
    
    
    $
    22,139
    
    
    $
    88,025,052
    
    
    $
    (122,373,358
    )
    
    $
    (336,285
    )
    
    $
    (225,913
    )
    
    $
    (16,408,857
    )
 See accompanying notes to consolidated financial statements
 -3-




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GREENHUNTER ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 For the Quarter Ended March 31,2010
    
    
    2009CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (2,544,522
    )
    
    $
    (8,499,556
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation expense
    
    
    995,690
    
    
    
    1,058,002Share-based payments
    
    
    682,565
    
    
    
    691,255Issue warrants on letter of guarantee
    
    
    69,111
    
    
    
    Amortization of deferred financing costs
    
    
    255,484
    
    
    
    365,429Loss on asset impairments
    
    
    160,824
    
    
    
    1,651,161Noncontrolling interest
    
    
    
    
    
    
    (43,601
    )Gain on sale of assets
    
    
    
    
    
    
    (858,754
    )Accretion of discount
    
    
    100,083
    
    
    
    138,591Changes in certain assets and liabilities:Accounts receivable
    
    
    54,456
    
    
    
    2,079,634Inventory
    
    
    179,322
    
    
    
    4,250,075Prepaid and other expense
    
    
    272,839
    
    
    
    439,754Accounts payable
    
    
    (7,244,811
    )
    
    
    (4,824,786
    )Accrued liabilities
    
    
    2,524,355
    
    
    
    537,567Net cash used in operating activities
    
    
    (4,494,604
    )
    
    
    (3,015,229
    )CASH FLOWS FROM INVESTING ACTIVITIES:Change in restricted cash
    
    
    1,939,052
    
    
    
    (1,107,918
    )Proceeds from sale of assets
    
    
    9,500
    
    
    
    4,486,173Additions to fixed assets
    
    
    (175,562
    )
    
    
    (357,965
    )Increase in other assets
    
    
    (1,196,136
    )
    
    
    (45,931
    )Net cash provided by investing activities
    
    
    576,854
    
    
    
    2,974,359CASH FLOWS FROM FINANCING ACTIVITIES:Gross proceeds from redeemable debenture issuance
    
    
    
    
    
    
    1,711,892Payment of notes payable
    
    
    (76,334
    )
    
    
    (1,001,519
    )Payment of deferred financing costs
    
    
    
    
    
    
    (136,951
    )Net cash provided by (used in) financing activities
    
    
    (76,334
    )
    
    
    573,422CHANGE IN CASH
    
    
    (3,994,084
    )
    
    
    532,552CASH, beginning of period
    
    
    6,915,514
    
    
    
    676,636CASH,end of period
    
    $
    2,921,430
    
    
    $
    1,209,188Cash paid for interest
    
    $
    665,632
    
    
    $
    1,128,708
 See accompanying notes to consolidated financial statements
 -4-




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GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2010
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 1. Organization and Nature of Operations
    Nature of Operations
   Current Plan of Operations and Ability to Operate as a Going Concern
   -5-




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GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2010
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
   Income or Loss Per Share
   Note 2. Recently Issued Accounting Standards
 Consolidation Improvements to Financial Reporting by Enterprises
Involved with Variable Interest Entities.
 Improving Disclosures about Fair Value
Measurements
 -6-




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GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2010
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  Amendments to Certain Recognition and
Disclosure Requirements Subsequent Events
 Note 3. Discontinued Operations
   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
    )
   Sales and other revenues from discontinued operations
    
    $
    Operating expenses from discontinued operations
    
    
    (47,245
    )Other income from discontinued operations
    
    
    8,886Net loss from discontinued operations
    
    $
    (38,359
    )
   Sales and other revenues from discontinued operations
    
    $
    Operating expenses from discontinued operations
    
    
    (49,592
    )Other income from discontinued operations
    
    
    34,714Net loss from discontinued operations
    
    $
    (14,878
    )
 -7-




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GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2010
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 4. Impairments
  Note 5. Notes Payable
  Long-Term Debt:Note payable due November 31, 2017, 5.7%
    
    
    3,050,217Note payable due June 17, 2010, 7.0%
    
    
    26,035Non-recourse construction facility, 6.75% at March 31, 2010
    
    
    28,633,780Nonrecourse
working capital line of credit, 6.75% at March 31, 2010
    
    
    9,046,054Nonrecourse 10% Series A Redeemable Debentures, net of
$909,584 discount
    
    
    20,124,564Nonrecourse 8% Series B Redeemable Debentures, net of
$37,441 discount
    
    
    5,264,36766,145,017Less: current portion
    
    
    (37,796,874
    )Total Long-Term Debt
    
    $
    28,348,143
 Notes Payable  Nonrecourse
   Nonrecourse10% Series A Senior Secured Redeemable Debentures
  -8-




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GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2010
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Note 6. Stockholders Equity
  Preferred
    
    Common
    
    TreasuryStock
    
    Stock
    
    Stock
    
    KSOP
    
    WarrantsDecember 31, 2009
    
    
    17,325
    
    
    
    22,138,876
    
    
    
    22,412
    
    
    
    15,200
    
    
    
    6,251,745Issue 100,000 common stock warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    100,000March 31, 2010
    
    
    17,325
    
    
    
    22,138,876
    
    
    
    22,412
    
    
    
    15,200
    
    
    
    6,351,745
 Preferred Stock
  Common Stock
  Common Stock Warrants
  Note
7. Share-Based Compensation
 s
 Common Stock Options
  -9-




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GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2010
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
    Number of
    
    
    Weighted average
    
    
    Aggregate IntrinsicShares
    
    
    Exercise Price
    
    

Value* ($000s)Outstanding  Beginning of Year
    
    
    7,399,832
    
    
    $
    5.93
    
    
    
    18,000Granted
    
    
    
    
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    Cancelled
    
    
    
    
    
    
    
    
    
    
    Outstanding  End of Period
    
    
    7,399,832
    
    
    $
    5.93
    
    
    
    33,000Exercisable   End of Period
    
    
    4,614,499
    
    
    $
    8.64
    
    
    $
    
 
 *
    
    The Aggregate Intrinsic Value was calculated using the March 31, 2010 stock
price of $1.30.  Number of
    
    Weighted Average
    
    Number ofOptions
    
    Remaining Contractual
    
    ExercisableExercise Price
    
    Outstanding
    
    Life (Years)
    
    Options$
    .97
    
    
    
    100,000
    
    
    
    8.43
    
    
    
    $
    1.41
    
    
    
    500,000
    
    
    
    8.95
    
    
    
    $
    1.96
    
    
    
    1,960,000
    
    
    
    8.66
    
    
    
    $
    5.00
    
    
    
    3,247,000
    
    
    
    6.38
    
    
    
    3,247,000$
    7.50
    
    
    
    33,333
    
    
    
    6.76
    
    
    
    33,333$
    10.00
    
    
    
    248,333
    
    
    
    6.91
    
    
    
    210,000$
    10.12
    
    
    
    2,500
    
    
    
    7.78
    
    
    
    833$
    12.00
    
    
    
    6,500
    
    
    
    6.99
    
    
    
    6,000$
    13.66
    
    
    
    3,000
    
    
    
    7.50
    
    
    
    3,000$
    17.76
    
    
    
    40,000
    
    
    
    7.12
    
    
    
    40,000$
    18.00
    
    
    
    16,667
    
    
    
    7.20
    
    
    
    16,667$
    18.91
    
    
    
    1,107,499
    
    
    
    7.13
    
    
    
    997,666$
    19.75
    
    
    
    13,333
    
    
    
    7.30
    
    
    
    13,333$
    20.02
    
    
    
    25,000
    
    
    
    7.46
    
    
    
    $
    20.64
    
    
    
    75,000
    
    
    
    7.44
    
    
    
    25,000$
    22.75
    
    
    
    21,667
    
    
    
    7.36
    
    
    
    21,667
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GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2010
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
 Restricted Shares
  Number of Shares
    
    

Grant
Date
Fair Value
Per ShareUnvested  Beginning of Year
    
    
    100,000
    
    
    $
    1.87Granted
    
    
    79,670
    
    
    
    1.30Cancelled
    
    
    
    
    
    
    Exercised
    
    
    
    
    
    
    Vested
    
    
    (79,670
    )
    
    
    (1.30
    )Unvested  End of Period
    
    
    100,000
    
    
    $
    1.87
 Note 8. Related Party Transactions
    Note 9. Segment Data
   -11-




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GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2010
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  For the Three Months Ended March 31, 2010UnallocatedCorporate
    
    
    BioMass
    
    
    Wind Energy
    
    
    BioFuels
    
    
    TOTALTotal Revenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    243,394
    
    
    $
    243,394Total Operating Costs
    
    
    
    
    
    
    
    
    
    
    4,065
    
    
    
    442,038
    
    
    
    446,103Depreciation expense
    
    
    47,675
    
    
    
    
    
    
    
    
    
    
    
    948,015
    
    
    
    995,690Loss on asset impairments
    
    
    
    
    
    
    
    
    
    
    160,824
    
    
    
    
    
    
    
    160,824Selling, general and
administrative
    
    
    1,678,903
    
    
    
    (474,103
    )
    
    
    6,951
    
    
    
    823,087
    
    
    
    2,034,838Operating income (loss)
    
    
    (1,726,578
    )
    
    
    474,103
    
    
    
    (171,840
    )
    
    
    (1,969,746
    )
    
    
    (3,394,061
    )Other income and (expense)
    
    
    (561,744
    )
    
    
    1,696,130
    
    
    
    
    
    
    
    (284,847
    )
    
    
    849,539Income (loss) from continuing
operations
    
    $
    (2,288,322
    )
    
    $
    2,170,233
    
    
    $
    (171,840
    )
    
    $
    (2,254,593
    )
    
    $
    (2,544,522
    )Total Assets
    
    $
    8,625,340
    
    
    $
    17,022,061
    
    
    $
    38,936
    
    
    $
    36,642,388
    
    
    $
    62,328,725Capital Expenditures
    
    $
    4,638
    
    
    $
    170,524
    
    
    $
    
    
    
    $
    400
    
    
    $
    175,562
 For the Three Months Ended March 31, 2009UnallocatedCorporate
    
    
    BioMass
    
    
    Wind Energy
    
    
    BioFuels
    
    
    TOTALTotal Revenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    3,189,618
    
    
    $
    3,189,618Total Operating Costs
    
    
    
    
    
    
    556
    
    
    
    35,085
    
    
    
    3,924,629
    
    
    
    3,960,270Depreciation expense
    
    
    47,840
    
    
    
    
    
    
    
    18,425
    
    
    
    991,737
    
    
    
    1,058,002Loss 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 loss
    
    
    (4,115,588
    )
    
    
    (163,532
    )
    
    
    (336,725
    )
    
    
    (3,061,180
    )
    
    
    (7,677,025
    )Other income and expense
    
    
    (785,006
    )
    
    
    7,539
    
    
    
    (75
    )
    
    
    (640,851
    )
    
    
    (1,418,393
    )Loss from continuing
operations
    
    $
    (4,900,594
    )
    
    $
    (155,993
    )
    
    $
    (336,800
    )
    
    $
    (3,702,031
    )
    
    $
    (9,095,418
    )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
 Note 10. Commitments and Contingencies
   -12-




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GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2010
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
  Crown Engineering
    Gavilon
  Steel Painters
  Note 11. Subsequent Events
   -13-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2010
 
 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, 2009 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
   Current Plan of Operations and Ability to Operate as a Going Concern
   BioFuels
  -14-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2010
      BioMass
     -15-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2010
    Wind Energy
  Solar Energy
  Results of Operations
 Three Months Ended March 31, 2010
Compared to Three Months Ended March 31, 2009:
 BioFuels Revenues
  BioFuels Costs of Sales and Services
  -16-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2010
  Wind Energy Project Costs
  Hurricane repairs and losses
  Depreciation Expense
  Loss on Asset Impairments
  Selling, General and Administrative Expense
      Operating Loss
  -17-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2010
     Other Income
  Interest, Accretion and Other Expense
  Preferred Stock Dividends
  Liquidity and Capital Resources
 Cash Flow and Working Capital
  Operating Activities
  -18-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2010
 Financing Activities
  Investing Activities and Future Requirements
 Capital Expenditures
  BioMass
  Obligations Under Material Contracts
     Recent Accounting Standards
 Consolidation Improvements to Financial Reporting by Enterprises
Involved with Variable Interest Entities.
 -19-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2010
 Improving Disclosures about Fair Value
Measurements
 Amendments to Certain Recognition and
Disclosure Requirements Subsequent Events
 Off-Balance Sheet Arrangements
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risks
  Commodity Price Risk
  Interest Rate Risk
  -20-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2010
 
 Item 4. Controls and Procedures
 Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  
 PART II  OTHER INFORMATION
 
 Item 1. Legal Proceedings
 Crown Engineering
    Gavilon
  Steel Painters
  -21-




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##### Table of Contents



GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2010
 
 Item 6. Exhibits
 ExhibitNumber
    
    Exhibit Title3.1*
    
    Certificate of Incorporation3.2*
    
    Amendment to the Certificate of Incorporation3.3*
    
    Bylaws4.1***
    
    Amended and Restated Certificate of Designations of 2007 Series A 8% Convertible Preferred
Stock4.2***
    
    Form of Warrant Agreement by and between GreenHunter Energy, Inc. and West Coast
Opportunity Fund, LLC4.3*
    
    Form of Warrant Agreement by and between GreenHunter Energy, Inc. and certain accredited
investors4.4***
    
    Certificate of Designations of 2008 Series B Convertible Preferred Stock10.1*
    
    Stock Purchase Agreement dated February 2007 among Channel Refining Corporation, GreenHunter
Energy, Inc. and certain selling shareholders10.2*
    
    Amendment No. 1 to Stock Purchase Agreement dated February 2007 among Channel Refining
Corporation, GreenHunter Energy, Inc. and certain selling shareholders10.3*
    
    Purchase and Sale Agreement, dated May 14, 2007 between GreenHunter Energy, Inc. and
Chateau Energy, Inc. regarding acquisition of power purchase agreement10.4*
    
    Purchase and Sale Agreement, dated May 14, 2007 between GreenHunter Energy, Inc. and
Chateau Energy, Inc. regarding acquisition of Mesquite Lake Resource Recovery Facility10.5*
    
    Consulting Agreement dated May 14, 2007 between GreenHunter Energy, Inc. and Chateau
Energy, Inc.10.6*
    
    Registration rights agreement, dated March 9, 2007 between GreenHunter Energy, Inc. and
certain institutional investors10.7*
    
    Registration rights agreement, dated April 13, 2007 between GreenHunter Energy, Inc. and
certain selling shareholders10.8*
    
    Investor rights agreement, dated May 14, 2007 between GreenHunter Energy, Inc. and Chateau
Energy, Inc.10.9*
    
    Form of subordinated promissory note of GreenHunter BioFuels, Inc.10.10**
    
    Second Amended and Restated Credit Agreement dated as of March 7, 2008 among GreenHunter
BioFuels Inc., WestLB AG New York Branch as the administrative agent, WestLB New York
Branch as the LC Issuing Bank and the Lenders Party to the Amended and Restated Credit
Agreement from time to time10.11****
    
    First Amendment to Second Amended and Restated Credit Agreement dated as of March 7, 2008
among GreenHunter BioFuels Inc., WestLB AG New York Branch as the administrative agent,
WestLB New York Branch as the LC Issuing Bank and the Lenders Party to the Amended and
Restated Credit Agreement from time to time10.12******
    
    Second amendment to Second Amended and Restated Credit Agreement dated as of March 7, 2008
among GreenHunter BioFuels Inc., WestLB AG New York Branch as the administrative agent,
WestLB New York Branch as the LC Issuing Bank and the Lenders Party to the Amended and
Restated Credit Agreement from time to time10.13*****
    
    Third amendment to Second Amended and Restated Credit Agreement dated as of March 7, 2008
among GreenHunter BioFuels Inc., WestLB AG New York Branch as the administrative agent,
WestLB New York Branch as the LC Issuing Bank and the Lenders Party to the Amended and
Restated Credit Agreement from time to time31.1 
    
    Certifications of the Chief Executive Officer.31.2 
    
    Certifications of the Chief Financial Officer.32.1 
    
    Certifications of the Chief Executive Officer provided pursuant to 18 U.S.C. Section 1350
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2 
    
    Certifications of the Chief Financial Officer provided pursuant to 18 U.S.C. Section 1350
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 *
    
    Incorporated by reference to the Companys Form 10, dated October 19, 2007**
    
    Incorporated by reference to the Companys Form 10-Q, dated May 15, 2008***
    
    Incorporated by reference to the Companys Form 8-K, dated August 21, 2008****
    
    Incorporated by reference to the Companys Form 8-K, dated June 25, 2009*****
    
    Incorporated by reference to the Companys Form 8-K, dated March 30, 2010******
    
    Incorporated by reference to the Companys Form 10-K, dated December 31, 2009
    
    Filed herewith -22-




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GREENHUNTER ENERGY, INC.
FOR THE THREE MONTHS ENDED MARCH 31, 2010
 
 SIGNATURES
  GreenHunter Energy, Inc.Date: May 17, 2010
    By:
    /s/ Gary C. EvansGary C. EvansChairman, President and Chief Executive OfficerDate: May 17, 2010
    By:
    /s/ David S. KruegerDavid S. KruegerVice President, and Chief Financial Officer -23-