GreenHunter's preferred sale delayed but still in process, source says

By Stephanie N. Rotondo

Portland, Ore., March 14 - GreenHunter Energy Inc.'s previously reported plan to sell at least $12.5 million of 10% series C cumulative preferred stock is still on, according to a source familiar with the matter.

The company originally announced the deal Dec. 8 and amended it Jan. 18.

According to the source, the original prospectus was based on third-quarter results. The deal is still within the registration period, but the numbers have "gone stale." As such, GreenHunter is in process of auditing its fourth-quarter results, which will then be used to amend the prospectus a second time.

The deal is expected to be completed shortly thereafter.

As previously reported, the company anticipates having a $1.875 million over-allotment option.

C.K. Cooper & Co. is underwriting the public offering.

The liquidation preference is $100 per preferred, though the price per preferred has not yet been set.

GreenHunter can call the preferreds beginning in 2015 or in the event of a change of ownership or control.

Additionally, for each preferred purchased, buyers will receive 10 warrants for common stock with a strike price of $2 per share.

The warrants are immediately exercisable until the third anniversary of the date of issuance. The company can force holders to exercise the warrants in certain cases.

The company intends to list the preferreds on the NYSE Amex under the symbol "GRHPC."

Proceeds will be used for capital expenditures, working capital, acquisitions, directly or indirectly, of salt water disposal facilities, repayment or refinancing of debt, investments in subsidiaries or general corporate purposes.

GreenHunter is a Grapevine, Texas-based provider of water management services for oil and gas exploration in shale fields.

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