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 September 30, 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 
incorporation or organization)
    
    (IRS employer identification No.)
 1048 Texan Trail, Grapevine, Texas 76051
 (972) 410-1044
  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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##### 



PART 1  FINANCIAL STATEMENTS
 Item 1. Financial Statements
 GREENHUNTER ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
 September 30, 2009
    
    
    December 31, 2008ASSETSCURRENT ASSETS:Cash and cash equivalents
    
    $
    764,525
    
    
    $
    676,636Restricted cash
    
    
    4,575,045
    
    
    
    342,653Accounts receivable, net of allowance of $202,585 and $542,965, respectively
    
    
    405,532
    
    
    
    4,475,670Inventory
    
    
    590,327
    
    
    
    6,137,780Prepaid expenses and other current assets
    
    
    1,032,778
    
    
    
    943,135Assets held for sale  current
    
    
    
    
    
    
    53,555Total current assets
    
    
    7,368,207
    
    
    
    12,629,429FIXED ASSETS:Land and improvements
    
    
    4,732,095
    
    
    
    5,394,866Buildings
    
    
    3,100,621
    
    
    
    3,100,621Plant and other equipment
    
    
    47,703,129
    
    
    
    45,521,460Accumulated depreciation
    
    
    (6,045,617
    )
    
    
    (2,855,250
    )Construction in progress
    
    
    10,698,817
    
    
    
    11,934,854Net fixed assets
    
    
    60,189,045
    
    
    
    63,096,551OTHER ASSETS:Assets held for sale
    
    
    
    
    
    
    4,887,945Deferred financing costs
    
    
    2,906,278
    
    
    
    3,720,893Other noncurrent assets
    
    
    8,271,261
    
    
    
    9,404,152Total assets
    
    $
    78,734,791
    
    
    $
    93,738,970LIABILITIES AND STOCKHOLDERS EQUITYCURRENT LIABILITIES:Current portion of notes payable
    
    $
    281,501
    
    
    $
    507,102Current portion of notes payable, nonrecourse
    
    
    37,931,084
    
    
    
    6,761,417Accounts payable
    
    
    11,998,313
    
    
    
    16,020,538Dividends payable
    
    
    
    
    
    
    250,000Accrued liabilities
    
    
    7,380,217
    
    
    
    5,254,965Liabilities associated with assets held for sale
    
    
    
    
    
    
    2,224,447Total current liabilities
    
    
    57,591,115
    
    
    
    31,018,469NON-CURRENT LIABILITIES:Notes payable
    
    
    3,006,078
    
    
    
    3,062,642Notes payable, nonrecourse, less current portion
    
    
    
    
    
    
    36,738,583Redeemable debentures, net of discount of $1,247,274 and $1,485,006,
respectively
    
    
    25,188,765
    
    
    
    23,139,057Liabilities associated with assets held for sale, non-current
    
    
    
    
    
    
    74,319Total long-term liabilities
    
    
    28,194,843
    
    
    
    63,014,601COMMITMENTS AND CONTINGENCIES (Notes 6, 12, & 13)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
    
    
    86,755,648
    
    
    
    81,100,216Accumulated deficit
    
    
    (111,299,234
    )
    
    
    (103,478,564
    )Treasury stock, at cost, 22,412 and 44,436 shares, respectively
    
    
    (336,285
    )
    
    
    (678,538
    )Noncontrolling interest in consolidated subsidiaries
    
    
    (134,911
    )
    
    
    (107,290
    )Unearned common stock in KSOP, at cost, 15,200 shares
    
    
    (225,913
    )
    
    
    (225,913
    )Total stockholders deficit
    
    
    (7,051,167
    )
    
    
    (294,100
    )Total liabilities and stockholders deficit
    
    $
    78,734,791
    
    
    $
    93,738,970
 See
accompanying notes to consolidated financial statements
 -1-




---



##### 



GREENHUNTER ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
 For the Three Months Ended
    
    
    For the Nine Months EndedSeptember 30,
    
    
    September 30,2009
    
    
    2008
    
    
    2009
    
    
    2008REVENUE:Product sales
    
    $
    238,640
    
    
    $
    312,747
    
    
    $
    4,617,215
    
    
    $
    628,899Terminal revenues
    
    
    165,046
    
    
    
    18,740
    
    
    
    527,867
    
    
    
    348,473Processing revenue
    
    
    
    
    
    
    
    
    
    
    165,697
    
    
    
    Total revenue
    
    
    403,686
    
    
    
    331,487
    
    
    
    5,310,779
    
    
    
    977,372COSTS AND EXPENSES:Cost of sales and services
    
    
    520,017
    
    
    
    2,893,682
    
    
    
    8,003,810
    
    
    
    4,083,481Hurricane repairs and losses (insurance proceeds)
    
    
    (246,212
    )
    
    
    4,042,681
    
    
    
    (11,081,769
    )
    
    
    4,042,681Project costs
    
    
    24,457
    
    
    
    54,598
    
    
    
    168,290
    
    
    
    248,832Depreciation expense
    
    
    1,069,676
    
    
    
    1,029,627
    
    
    
    3,209,969
    
    
    
    1,216,773Selling, general and administrative
    
    
    2,418,018
    
    
    
    2,827,863
    
    
    
    8,000,894
    
    
    
    16,494,045Loss on asset impairments
    
    
    
    
    
    
    
    
    
    
    1,651,161
    
    
    
    Total costs and expenses
    
    
    3,785,956
    
    
    
    10,848,451
    
    
    
    9,952,355
    
    
    
    26,085,812OPERATING LOSS FROM CONTINUING OPERATIONS
    
    
    (3,382,270
    )
    
    
    (10,516,964
    )
    
    
    (4,641,576
    )
    
    
    (25,108,440
    )OTHER INCOME (EXPENSE):Interest and other income
    
    
    877,626
    
    
    
    119,858
    
    
    
    987,515
    
    
    
    588,605Interest, accretion and other expense
    
    
    (1,518,340
    )
    
    
    (1,367,250
    )
    
    
    (4,527,719
    )
    
    
    (2,346,824
    )Total other income (expense)
    
    
    (640,714
    )
    
    
    (1,247,392
    )
    
    
    (3,540,204
    )
    
    
    (1,758,219
    )Loss from continuing operations before
noncontrolling interest
    
    
    (4,022,984
    )
    
    
    (11,764,356
    )
    
    
    (8,181,780
    )
    
    
    (26,866,659
    )Noncontrolling Interest
    
    
    12,234
    
    
    
    
    
    
    
    59,256
    
    
    
    Loss from continuing operations
    
    
    (4,010,750
    )
    
    
    (11,764,356
    )
    
    
    (8,122,524
    )
    
    
    (26,866,659
    )Gain (loss) on sale of discontinued operations
    
    
    (88,363
    )
    
    
    
    
    
    
    460,666
    
    
    
    Gain (loss) from discontinued operations, net of
taxes
    
    
    722,895
    
    
    
    (126,724
    )
    
    
    460,910
    
    
    
    (126,724
    )Net Loss
    
    
    (3,376,218
    )
    
    
    (11,891,080
    )
    
    
    (7,200,948
    )
    
    
    (26,993,383
    )Preferred stock dividends
    
    
    (146,750
    )
    
    
    (250,000
    )
    
    
    (619,722
    )
    
    
    (750,000
    )Deemed preferred stock dividends
    
    
    
    
    
    
    (14,522,517
    )
    
    
    
    
    
    
    (14,522,517
    )Net loss to common stockholders
    
    $
    (3,522,968
    )
    
    $
    (26,663,597
    )
    
    $
    (7,820,670
    )
    
    $
    (42,265,900
    )Weighted average shares outstanding, basic and diluted
    
    
    22,097,434
    
    
    
    20,202,531
    
    
    
    21,447,349
    
    
    
    19,985,349Net loss per share from continuing operations
    
    $
    (0.19
    )
    
    $
    (1.31
    )
    
    $
    (0.41
    )
    
    $
    (2.10
    )Net earnings (loss) per share from discontinued
operations
    
    $
    0.03
    
    
    $
    (0.01
    )
    
    $
    0.04
    
    
    $
    (0.01
    )Net loss per share
    
    $
    (0.16
    )
    
    $
    (1.32
    )
    
    $
    (0.36
    )
    
    $
    (2.11
    )
 See
accompanying notes to consolidated financial statements
 -2-




---



##### 



GREENHUNTER ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS EQUITY
FOR THE PERIOD FROM JANUARY 1, 2009 TO SEPTEMBER 30, 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
    
    
    856,389
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    856,389Issue 42,797 warrants on Series B
Debentures
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    942
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    942Stock compensation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    184,000
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    184,000Conversion 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
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (619,722
    )
    
    
    
    
    
    
    
    
    
    
    (619,722
    )Abandonment of Haining City interests
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,635
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    31,635Net loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (59,256
    )
    
    
    (7,200,948
    )
    
    
    
    
    
    
    
    
    
    
    (7,260,204
    )BALANCE, September 30, 2009
    
    $
    7,592,389
    
    
    $
    10,575,000
    
    
    $
    22,139
    
    
    $
    86,755,648
    
    
    $
    (134,911
    )
    
    $
    (111,299,234
    )
    
    $
    (336,285
    )
    
    $
    (225,913
    )
    
    $
    (7,051,167
    )
 See accompanying notes to consolidated financial statements
 -3-




---



##### 



GREENHUNTER ENERGY, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
 NINE MONTHS ENDED SEPTEMBER 30,2009
    
    
    2008CASH FLOWS FROM OPERATING ACTIVITIES:Net loss
    
    $
    (7,200,948
    )
    
    $
    (26,993,383
    )Adjustments to reconcile net loss to net cash used in operating activities:Depreciation expense
    
    
    3,209,969
    
    
    
    1,216,773Noncash stock compensation
    
    
    184,000
    
    
    
    7,318,474Amortization of deferred financing costs
    
    
    990,066
    
    
    
    314,753Inventory valuation allowance
    
    
    
    
    
    
    532,784Non-cash asset impairment
    
    
    1,651,161
    
    
    
    Hurricane property losses
    
    
    
    
    
    
    3,192,276Noncontrolling interest
    
    
    (59,256
    )
    
    
    (19,545
    )Gain on sale of assets
    
    
    (450,924
    )
    
    
    (74,677
    )Accretion of discount
    
    
    338,758
    
    
    
    169,280Changes in certain assets and liabilities:Accounts receivable
    
    
    4,435,688
    
    
    
    (476,065
    )Inventory
    
    
    5,547,453
    
    
    
    (17,260,000
    )Prepaid and other expense
    
    
    (92,560
    )
    
    
    (1,499,703
    )Accounts payable
    
    
    (5,360,525
    )
    
    
    4,380,083Accrued liabilities
    
    
    2,174,142
    
    
    
    4,435,688Net cash provided by (used in) operating activities
    
    
    5,367,024
    
    
    
    (24,763,262
    )CASH FLOWS FROM INVESTING ACTIVITIES:Change in restricted cash
    
    
    (4,232,392
    )
    
    
    (299,841
    )Acquisition of Telogia
    
    
    
    
    
    
    (2,500,000
    )Proceeds from sale of assets
    
    
    4,356,468
    
    
    
    87,517Additions to fixed assets
    
    
    (734,804
    )
    
    
    (48,537,506
    )Increase in other assets
    
    
    (348,270
    )
    
    
    (6,078,496
    )Net cash used in investing activities
    
    
    (958,998
    )
    
    
    (57,328,326
    )CASH FLOWS FROM FINANCING ACTIVITIES:Gross proceeds from stock and warrant issuance
    
    
    
    
    
    
    2,556,875Net 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
    )Gross proceeds from redeemable debenture issuance
    
    
    1,711,892
    
    
    
    13,705,858Purchase treasury shares
    
    
    
    
    
    
    (1,350,521
    )Increase in notes payable
    
    
    298,323
    
    
    
    50,653,281Payment of notes payable
    
    
    (6,154,901
    )
    
    
    (7,911,627
    )Payment of deferred financing costs
    
    
    (175,451
    )
    
    
    (1,725,112
    )Preferred dividends paid in cash
    
    
    
    
    
    
    (750,000
    )Net cash provided by (used in) financing activities
    
    
    (4,320,137
    )
    
    
    65,499,796CHANGE IN CASH
    
    
    87,889
    
    
    
    (16,591,792
    )CASH, beginning of period
    
    
    676,636
    
    
    
    18,750,394CASH,end of period
    
    $
    764,525
    
    
    $
    2,158,602Cash paid for interest
    
    $
    2,330,971
    
    
    $
    1,857,041NONCASH TRANSACTIONS:Issue treasury shares for payment of services
    
    $
    36,560
    
    
    $
    KSOP company match in stock
    
    $
    
    
    
    $
    104,232Noncash common dividends
    
    $
    
    
    
    $
    3,183,350Noncash preferred dividends
    
    $
    
    
    
    $
    14,522,517
 See accompanying notes to consolidated financial statements
 -4-




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##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
 Note 1. Organization and Nature of Operations
    Current Plan of Operations and Ability to Operate as a Going Concern
   See accompanying notes to consolidated financial statements
 -5-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
      Nature of Operations
   See accompanying notes to consolidated financial statements
 -6-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
       Income or Loss Per Share
   See accompanying notes to consolidated financial statements
 -7-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
  Note 2. Recently Issued Accounting Standards
 The FASB Accounting Standards
Codification (ASC or Codification) and the Hierarchy of Generally Accepted Accounting Principles
(GAAP)
      See accompanying notes to consolidated financial statements
 -8-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
   Note 3. Discontinued Operations
   Sales and other revenues from discontinued operations
    
    $
    Operating expenses from discontinued operations
    
    
    (215,832
    )Other income from discontinued operations
    
    
    725,348Net loss from discontinued operations
    
    $
    509,516
   Sales and other revenues from discontinued operations
    
    $
    Operating expenses from discontinued operations
    
    
    (61,080
    )Noncontrolling interest from discontinued operations
    
    
    12,474Net loss from discontinued operations
    
    $
    (48,606
    )
 Note 4. Impairments
  See accompanying notes to consolidated financial statements
 -9-




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##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
 Note 5. Inventories
  Finished goods
    
    $
    36,210Work in process
    
    
    861,649Raw materials
    
    
    502,762Valuation allowance
    
    
    (810,295
    )$
    590,327
 Note 6. Notes Payable
  Long-Term Debt:Note payable due June 17, 2010, 7.0%
    
    $
    76,762Note payable due February 2, 2010, 6.1%
    
    
    111,904Note payable due November 31, 2017, 5.7%
    
    
    3,098,913Non-recourse construction facility, 4.85% at September 30,
2009
    
    
    28,885,030Non-recourse working capital line of credit, 4.85% at
September 30, 2009
    
    
    9,046,05410% Series A Senior Secured Redeemable Debentures, net of
$1,104,495 discount
    
    
    19,929,6539% Series B Senior Secured Redeemable Debentures, net of
$42,696 discount
    
    
    5,259,11266,407,428Less: current portion
    
    
    (38,212,585
    )Total Long-Term Debt
    
    $
    28,194,843
 Note Payable
   Non-recourse Notes Payable
  See accompanying notes to consolidated financial statements
 -10-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
   10% Series A Senior Secured Redeemable Debentures (Nonrecourse to GreenHunter Energy)
  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
    
    
    (5,750
    )
    
    
    1,150,000Issue warrants on 9% Series B Redeemable
Debentures issuances
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    42,797Issue 22,024 treasury shares for services provided
    
    
    
    
    
    
    
    
    
    
    (22,024
    )September 30, 2009
    
    
    17,325
    
    
    
    22,138,876
    
    
    
    22,412
    
    
    
    15,200
    
    
    
    6,251,745
 Preferred Stock
     See accompanying notes to consolidated financial statements
 -11-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
 Treasury Stock
  Common Stock Warrants
  Note 8. Stock-Based Compensation
     See accompanying notes to consolidated financial statements
 -12-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
 Number
    
    
    Weighted
    
    
    Aggregateof
    
    
    average
    
    
    Intrinsic Value*Shares
    
    
    Exercise Price
    
    
    ($000s)Outstanding  Beginning of
Year
    
    
    5,629,500
    
    
    $
    9.88
    
    
    
    Granted
    
    
    2,161,000
    
    
    $
    1.87
    
    
    
    Exercised
    
    
    
    
    
    
    
    
    
    
    Cancelled
    
    
    889,669
    
    
    $
    14.41
    
    
    
    Outstanding  End of Period
    
    
    6,900,831
    
    
    $
    6.36
    
    
    
    Exercisable   End of Period
    
    
    4,474,995
    
    
    $
    8.39
    
    
    $
    
 
 *
    
    The Aggregate Intrinsic Value was calculated using the September 30, 2009 stock
price of $1.97.  Weighted AverageNumber of
    
    Remaining
    
    Number ofOptions
    
    Contractual
    
    ExercisableExercise Price
    
    Outstanding
    
    Life (Years)
    
    Options$.97
    
    
    100,000
    
    
    
    9.68
    
    
    
    $1.96
    
    
    1,961,000
    
    
    
    9.91
    
    
    
    $5.00
    
    
    3,247,000
    
    
    
    7.63
    
    
    
    3,247,000$7.50
    
    
    33,333
    
    
    
    8.01
    
    
    
    33,333$10.00
    
    
    248,333
    
    
    
    8.16
    
    
    
    171,665$10.12
    
    
    2,500
    
    
    
    9.03
    
    
    
    $12.00
    
    
    6,500
    
    
    
    8.24
    
    
    
    5,500$13.66
    
    
    3,000
    
    
    
    8.76
    
    
    
    3,000$17.76
    
    
    40,000
    
    
    
    8.37
    
    
    
    50,000$18.00
    
    
    16,667
    
    
    
    8.45
    
    
    
    16,667$18.91
    
    
    1,107,498
    
    
    
    8.38
    
    
    
    887,830$19.75
    
    
    13,333
    
    
    
    8.55
    
    
    
    13,333$20.02
    
    
    25,000
    
    
    
    8.72
    
    
    
    $20.64
    
    
    75,000
    
    
    
    8.69
    
    
    
    25,000$22.75
    
    
    21,667
    
    
    
    8.62
    
    
    
    21,667
 Note 9. Related Party Transactions
  Note 10. Segment Data
   See accompanying notes to consolidated financial statements
 -13-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
      For the Three Months Ended September 30, 2009UnallocatedCorporate
    
    
    BioPower
    
    
    Wind Energy
    
    
    BioFuels
    
    
    TOTALTotal Revenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    403,686
    
    
    $
    403,686Total Operating Costs
(recoveries)
    
    
    
    
    
    
    
    
    
    
    24,457
    
    
    
    273,805
    
    
    
    298,262Depreciation expense
    
    
    43,081
    
    
    
    
    
    
    
    8,149
    
    
    
    1,018,446
    
    
    
    1,069,676Selling, general and
administrative
    
    
    870,201
    
    
    
    346,296
    
    
    
    97,917
    
    
    
    1,103,604
    
    
    
    2,418,018Operating income (loss)
    
    
    (913,282
    )
    
    
    (346,296
    )
    
    
    (130,523
    )
    
    
    (1,992,169
    )
    
    
    (3,382,270
    )Other income and
(expense)
    
    
    (704,109
    )
    
    
    
    
    
    
    (89,447
    )
    
    
    152,842
    
    
    
    (640,714
    )Income (loss) from
continuing
operations before
noncontrolling interest
    
    $
    (1,617,391
    )
    
    $
    (346,296
    )
    
    $
    (219,970
    )
    
    $
    (1,839,327
    )
    
    $
    (4,022,984
    )Total Assets
    
    $
    14,191,934
    
    
    $
    15,366,842
    
    
    $
    1,233,869
    
    
    $
    47,942,146
    
    
    $
    78,734,791Capital Expenditures
    
    $
    
    
    
    $
    2,418
    
    
    $
    
    
    
    $
    25,435
    
    
    $
    27,853
 See accompanying notes to consolidated financial statements
 -14-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
 For the Three Months Ended September 30, 2008UnallocatedCorporate
    
    
    BioPower
    
    
    Wind Energy
    
    
    BioFuels
    
    
    TOTALTotal Revenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    331,487
    
    
    $
    331,487Total Operating Costs
    
    
    
    
    
    
    3,296
    
    
    
    51,302
    
    
    
    6,936,363
    
    
    
    6,990,961Depreciation expense
    
    
    65,199
    
    
    
    
    
    
    
    18,039
    
    
    
    946,389
    
    
    
    1,029,627Selling, general and
administrative
    
    
    1,223,022
    
    
    
    99,780
    
    
    
    330,112
    
    
    
    1,174,949
    
    
    
    2,827,863Operating income (loss)
    
    
    (1,288,221
    )
    
    
    (103,076
    )
    
    
    (399,453
    )
    
    
    (8,726,214
    )
    
    
    (10,516,964
    )Other income and
(expense)
    
    
    (645,275
    )
    
    
    2,204
    
    
    
    22,890
    
    
    
    (627,211
    )
    
    
    (1,247,392
    )Loss from continuing
operations before
noncontrolling interest
    
    $
    (1,933,496
    )
    
    $
    (100,872
    )
    
    $
    (376,563
    )
    
    $
    (9,353,425
    )
    
    $
    (11,764,356
    )Total Assets
    
    $
    15,506,595
    
    
    $
    19,725,446
    
    
    $
    1,330,662
    
    
    $
    79,916,764
    
    
    $
    116,479,467Capital Expenditures
    
    $
    69,149
    
    
    $
    11,822,470
    
    
    $
    123,411
    
    
    $
    4,074,530
    
    
    $
    16,089,560
 For the Nine Months Ended September 30, 2009UnallocatedCorporate
    
    
    BioMass
    
    
    Wind Energy
    
    
    BioFuels
    
    
    TOTALTotal Revenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    5,310,779
    
    
    $
    5,310,779Total Operating Costs
(recoveries)
    
    
    (449,941
    )
    
    
    28,309
    
    
    
    139,981
    
    
    
    (2,628,018
    )
    
    
    (2,909,669
    )Depreciation expense
    
    
    137,377
    
    
    
    
    
    
    
    48,481
    
    
    
    3,024,111
    
    
    
    3,209,969Loss on asset
impairments
    
    
    1,651,161
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,651,161Selling, general and
administrative
    
    
    3,491,552
    
    
    
    746,007
    
    
    
    627,694
    
    
    
    3,135,641
    
    
    
    8,000,894Operating income (loss)
    
    
    (4,830,149
    )
    
    
    (774,316
    )
    
    
    (816,156
    )
    
    
    1,779,045
    
    
    
    (4,641,576
    )Other income and
(expense)
    
    
    (2,285,845
    )
    
    
    7,878
    
    
    
    (89,522
    )
    
    
    (1,172,715
    )
    
    
    (3,540,204
    )Income (loss) from
continuing
operations before
noncontrolling interest
    
    $
    (7,115,994
    )
    
    $
    (766,438
    )
    
    $
    (905,678
    )
    
    $
    606,330
    
    
    $
    (8,181,780
    )Total Assets
    
    $
    14,191,934
    
    
    $
    15,366,842
    
    
    $
    1,233,869
    
    
    $
    47,942,146
    
    
    $
    78,734,791Capital Expenditures
    
    $
    2,463
    
    
    $
    (10,408
    )
    
    $
    
    
    
    $
    742,748
    
    
    $
    734,804
 For the Nine Months Ended September 30, 2008UnallocatedCorporate
    
    
    BioMass
    
    
    Wind Energy
    
    
    BioFuels
    
    
    TOTALTotal Revenues
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    977,372
    
    
    $
    977,372Total Operating Costs
    
    
    
    
    
    
    3,296
    
    
    
    245,536
    
    
    
    8,126,162
    
    
    
    8,374,994Depreciation expense
    
    
    146,160
    
    
    
    
    
    
    
    38,545
    
    
    
    1,032,068
    
    
    
    1,216,773Selling, general and
administrative
    
    
    12,181,685
    
    
    
    407,330
    
    
    
    884,737
    
    
    
    3,020,293
    
    
    
    16,494,045Operating income (loss)
    
    
    (12,327,845
    )
    
    
    (410,626
    )
    
    
    (1,168,818
    )
    
    
    (11,201,151
    )
    
    
    (25,108,440
    )Other income and
(expense)
    
    
    (1,295,944
    )
    
    
    2,204
    
    
    
    20,050
    
    
    
    (484,529
    )
    
    
    (1,758,219
    )Loss from continuing
operations before
noncontrolling interest
    
    $
    (13,623,789
    )
    
    $
    (408,422
    )
    
    $
    (1,148,768
    )
    
    $
    (11,685,680
    )
    
    $
    (26,866,659
    )Total Assets
    
    $
    15,506,595
    
    
    $
    19,725,446
    
    
    $
    1,330,662
    
    
    $
    79,916,764
    
    
    $
    116,479,467Capital Expenditures
    
    $
    532,862
    
    
    $
    13,036,918
    
    
    $
    284,175
    
    
    $
    37,183,551
    
    
    $
    51,037,506
 See accompanying notes to consolidated financial statements
 -15-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
 Note 11. Commitments and Contingencies
    Orion
 et al,
  Bioversel
   See accompanying notes to consolidated financial statements
 -16-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
  Jacob Stern
   Crown Engineering
   Gavilon
   Steel Painters
  Bridgefield Electrical Services and Quality Contract Services
  Shamrock Gulf
  Note 12. Subsequent Events
  See accompanying notes to consolidated financial statements
 -17-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
  See accompanying notes to consolidated financial statements
 -18-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 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, 2008 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
    See accompanying notes to consolidated financial statements
 -19-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
  BioMass
  Wind Energy
  Results of Operations
 Three
Months Ended September 30, 2009 Compared to Three Months Ended September 30, 2008:
 BioFuels Revenues
  BioFuels Costs of Sales and Services
  See accompanying notes to consolidated financial statements
 -20-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
  Wind Energy Project Costs
  Hurricane repairs and losses
  Depreciation Expense
  Selling, General and Administrative Expense
      Operating Loss
     See accompanying notes to consolidated financial statements
 -21-




---



##### 

\

GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
  Interest and Other Revenues
  Interest, Accretion and Other Expense
  Loss on Sale of Discontinued Operations
  Loss from Continuing Operations
  Preferred Stock Dividends
  Deemed Preferred Stock Dividends
   Net Loss to Common Stockholders
  Nine Months Ended September 30, 2009 Compared to Nine Months Ended September 30, 2008:
 BioFuels Revenues
  See accompanying notes to consolidated financial statements
 -22-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
 BioFuels Costs of Sales and Services
  Wind Energy Project Costs
  Hurricane repairs and losses
  Depreciation Expense
  Selling, General and Administrative Expense
      See accompanying notes to consolidated financial statements
 -23-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
 Operating Income/ Loss
      Interest and Other Revenues
  Interest, Accretion and Other Expense
  Gain on Sale of Discontinued Operations
  Loss from Continuing Operations
  Preferred Stock Dividends
  Deemed Preferred Stock Dividends
  See accompanying notes to consolidated financial statements
 -24-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
  Net Loss to Common Stockholders
  Liquidity and Capital Resources
 Cash Flow and Working Capital
  Operating Activities
   Financing Activities
  Notes Payable
    See accompanying notes to consolidated financial statements
 -25-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
 9% Series B Senior Secured Redeemable Debentures
  Nonrecourse Term Loan and Working Capital Loan
  Investing Activities and Future Requirements
 Capital Expenditures
  Forecast
  BioFuels
  See accompanying notes to consolidated financial statements
 -26-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
 BioMass
  Wind Energy
   Obligations Under Material Contracts
  Consulting Agreement with former owner of Mesquite Lake
  Port Sutton
  Mesquite Lake Power Purchase Agreement
  Weaknesses and Uncertainties that May Affect our Financial Condition and Ability to Continue
as a Going Concern
   See accompanying notes to consolidated financial statements
 -27-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
       See accompanying notes to consolidated financial statements
 -28-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
        Critical Accounting Policies and Other
  See accompanying notes to consolidated financial statements
 -29-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
   Project Costs
  Fair Value of Financial Instruments
  Revenue recognition
  Stock-Based Compensation
 Share-Based Payments
 Impairments
  See accompanying notes to consolidated financial statements
 -30-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
  Asset Retirement Obligations
  Recent Accounting Standards
 The FASB Accounting Standards
Codification (ASC or Codification) and the Hierarchy of Generally Accepted Accounting Principles
(GAAP)
     See accompanying notes to consolidated financial statements
 -31-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
    Off-Balance Sheet Arrangements
  Item 3. Quantitative and Qualitative Disclosures About Market Risks
  Commodity Price Risk
  Interest Rate Risk
  See accompanying notes to consolidated financial statements
 -32-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
 Item 4. Controls and Procedures
 Disclosure Controls and Procedures
  Changes in Internal Control Over Financial Reporting
  PART II  OTHER INFORMATION
 Item 1. Legal Proceedings
 Orion
 et al,
  Bioversel
   Jacob Stern
  See accompanying notes to consolidated financial statements
 -33-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
  Crown Engineering
   Gavilon
   Steel Painters
  Bridgefield Electrical Services and Quality Contract Services
  Shamrock Gulf
  See accompanying notes to consolidated financial statements
 -34-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
 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
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    410,600April 1 through April 30, 2009
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    410,600May 1 through May 31, 2009
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    410,600June 1 through June 30, 2009
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    410,600July 1 through July 30, 2009
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    410,600August 1 through August 30, 2009
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    410,600September 1 through September 30,
2009
    
    
    
    
    
    $
    
    
    
    
    
    
    
    
    410,600
 See accompanying notes to consolidated financial statements
 -35-




---



##### 



GREENHUNTER ENERGY, INC.
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 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*
    
    Bylaws3.4 
    
    Amendment No. 1 to the 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, 200710.13*****
    
    Amendment no. 1 to the 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-K, dated June 30, 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*****
    
    Incorporated by reference to the Companys Form 8-K, dated June 25, 2009
    
    Filed herewith See accompanying notes to consolidated financial statements
 -36-




---



##### 



SIGNATURES
  GreenHunter Energy, Inc.Date: November 16, 2009
    By:
    /s/ Gary C. EvansGary C. EvansChairman and Chief Executive OfficerDate: November 16, 2009
    By:
    /s/ David S. KruegerDavid S. KruegerVice President, and Chief Financial Officer See accompanying notes to consolidated financial statements
 -37-