Notes Payable

6 Months Ended

Jun. 30, 2012

Notes Payable [Abstract]

NOTES PAYABLE

NOTE 5. NOTES PAYABLE

Notes Payable at June 30, 2012 and December 31, 2011, consisted of the following:

	June 30, 2012			December 31, 2011
Long-Term Debt:
Note payable collateralized by building due November 31, 2017, 5.7%	$	1,423,563		$	1,447,888
Notes payable for insurance premiums due between July 1, 2012 and February 15, 2013, rates from 6.5% to 6.75%		131,247			77,072
Notes payable collateralized by equipment due from December 9, 2014 to August 17, 2017, from 4.25% to 7.99%		4,619,105			815,765
Note payable to related party due December 31, 2012, 14%		1,869,269			889,269
10% convertible promissory note to a related party due February 17, 2017, 10%		2,200,000			—
9% Series B Senior Secured Redeemable Debentures due on various dates ranging from September 30, 2013 to February 28, 2014, net of discount of $13,792 and $19,923 at June 30, 2012 and December 31, 2011, respectively		2,561,123			5,281,884
		12,804,307			8,511,878
Less: current portion		(5,940,213	)		(6,435,759	)
Total Long-Term Debt	$	6,864,094		$	2,076,119

Notes Payable

On January 23, 2012, we entered into a note payable with a bank for the purchase of a water hauling truck in the amount of $179 thousand, bearing a fixed interest rate of 7.99% with principal and interest payable monthly over the term of the loan. The note payable has a final maturity date of January 24, 2015.

On May 17, 2012, we entered into a note payable with a bank for the purchase of ten water hauling trucks and trailers in the amount of $1.7 million, bearing interest at a rate of one-month LIBOR plus 4.0% with principal and interest payable monthly over the term of the loan. The note payable has a final maturity date of August 17, 2017.

On February 17, 2012, we entered into a note payable with a bank in the amount of $2.2 million, bearing a fixed interest rate of 5.5%, to finance a portion of the consideration paid in our acquisition of Hunter Disposal. The note is collateralized by the equipment acquired. See Note 3 – Acquisitions, for additional information.

Note Payable to Related Party

During the six months ended June 30, 2012, the Company borrowed an additional $1.3 million under a promissory note due to the Company’s Chairman and Chief Executive Officer, and the company repaid $300 thousand of the borrowings on that note during the quarter. The note was repaid subsequent to June 30, 2012. See Note 10 – Subsequent Events.

Convertible Promissory Note Payable

On February 17, 2012, the Company entered into a 10% convertible promissory note for $2.2 million payable to Triad Hunter as partial consideration in the Hunter Disposal acquisition. Terms of payment under the note are interest only due quarterly from May 17, 2012 to February 17, 2013. Thereafter, beginning May 17, 2013 and continuing quarterly until February 17, 2017, the payments due will include accrued interest and principle payments of $137,500 per quarter. The promissory note matures on February 17, 2017 and is convertible at any time by the holder into shares of common stock of the Company at a conversion price of $2.50 per share. See Note 3 – Acquisitions, for additional information.

9% Series B Senior Secured Redeemable Debentures

The Company has not paid interest on the Series B debentures for the period March 2011 through June 2012. Therefore, we were technically in default on our Series B Debentures at June 30, 2012. Upon an event of default, the debentures become due and payable upon demand, so we have classified the debentures as a current liability as of June 30, 2012. These debentures are secured by GreenHunter Energy’s interest in GreenHunter Mesquite Lake, LLC, and are otherwise non-recourse to GreenHunter Energy.

On October 21, 2011, we offered the holders of the 9% Series B Redeemable Debentures the opportunity to convert the principal and accrued but unpaid interest on the debentures to shares of our 10% Series C Preferred Stock. The offer has been extended until August 31, 2012.

During the six months ended June 30, 2012, holders of $2,726,892 of our Series B Debentures elected to convert their principal and accrued interest. Additionally, we have received irrevocable agreements from other holders of our Series B Debentures to convert approximately $295 thousand of our Series B Debentures into our 10% Series C Preferred Stock subsequent to June 30, 2012.

Maturities

The following table presents the approximate annual maturities of all of our debt as of June 30, 2012:

Remaining in 2012	$	5,128,667
2013		1,763,920
2014		1,942,428
2015		1,268,069
2016		1,151,696
Thereafter		1,563,319
	$	12,818,099