Vista International Technologies Inc - FORM 10-K/A

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EX-31 - INTERIM CHIEF EXECUTIVE OFFICER - Vista International Technologies Inc	ex31.htm
EX-32 - INTERIM CHIEF EXECUTIVE OFFICER - Vista International Technologies Inc	ex32.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

AMENDMENT NO. 2

(Mark one)
x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the Fiscal Year Ended December 31, 2010

OR

o	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from ______________ to ______________

Commission File No. 000-27783


	VISTA INTERNATIONAL TECHNOLOGIES, INC.
(Name of small business issuer as specified in its charter)

Delaware		84-1572525
(State or other jurisdiction of Incorporation or organization)		(I.R.S. Employer Identification No.)

88 Inverness Circle East, Suite N-103 Englewood, Colorado		80112
(Address of principal executive offices)		(Zip Code)

	(303) 690-8300
Issuer’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, par value $0.001 per share

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No x

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. x Yes o No

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes o No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o

Non-accelerated filer o (do not check if a smaller reporting company)	Smaller reporting company þ

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x

The registrant had 114,719,553 shares of common stock outstanding as of April 13, 2011. The aggregate market value of the voting and non-voting common stock held by non-affiliates of the registrant, computed by reference to the closing price of such common stock June 30, 2010 was $1,406,045.

DOCUMENTS INCORPORATED BY REFERENCE: None

EXPLANATORY NOTE

This Amendment No. 2 on Form 10-K/A amends our Annual Report on Form 10-K for the fiscal year ended December 31, 2010, as filed with the Securities and Exchange Commission on April 15, 2011, and our Amended Annual Report on Form 10-K/A Amendment No. 1 for that year as filed with the Commission on May 9, 2011,

●

in response to comments from the Securities and Exchange Commission, to revise disclosure under the headings “Forward Looking Statements”, “Item 1-“Business”, “Item 2-Properties”, “Item 3-Legal Proceedings”, “Item 4-Management’s Discussion and Analysis of Financial Conditions and Results of Operations”, “Item 9A-Controls and Procedures”, “Item 13 Certain Relationships and Related Transactions and Director Independence”, and the signature page.

●

to correct Timothy Ruddy’s age in Item 10.

●

to correct the number of shares beneficially owned by Timothy Ruddy and by all directors executive officers as a group in Item 13.

●

to clarify that Bradley A. Ripps, as Interim Chief Executive Officer, is our principal executive officer and principal financial and accounting officer in Item 13.

●

to revise Notes 6 and 9 to the consolidated financial statements for consistency with changes made in Item 13.

For the convenience of the reader, this Amendment No. 2 on Form 10-K/A restates the original and amended filing in its entirety, but amends Items 1, 2, 3, 7, 10, 12 and 13 and the signature page of the original filing, as previously amended, in the manner described above. All other information included in the original filing as previously amended and restated remains unchanged. In addition, in accordance with Rule 12b-15 under the Exchange Act, new certifications by our Interim Chief Executive Officer (principal executive officer and principal financial and accounting officer) are filed as exhibits to this Amendment No. 2 on Form 10-K/A.

VISTA INTERNATIONAL TECHNOLOGIES, INC.

TABLE OF CONTENTS

		Page

Forward-Looking Statements		1
PART I
Item 1.	Business.	2
Item 1A.	Risk Factors.
Item 1B.	Unresolved Staff Comments.	16
Item 2.	Properties.	16
Item 3.	Legal Proceedings.	16
Item 4.	Reserved.	17
PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.	17
Item 6.	Selected Financial Data.	18
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations.	19
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk.	25
Item 8.	Financial Statements and Supplementary Data.	25
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.	25
Item 9A.	Controls and Procedures.	25
Item 9B.	Other Information.	27
PART III
Item 10.	Directors, Executive Officers and Corporate Governance.	27
Item 11.	Executive Compensation.	29
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.	29
Item 13.	Certain Relationships and Related Transactions, and Director Independence.	30
Item 14.	Principal Accountant Fees and Services.	31
PART IV
Item 15.	Exhibits and Financial Statement Schedules.	32

Signatures.		35

FORWARD-LOOKING STATEMENTS

Certain information contained in this report may include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and is subject to the safe harbor created by that act. The safe harbor created by the Securities Litigation Reform Act will not apply to certain “forward looking statements” relating to our business or operations because we issued “penny stock” (as defined in Section 3(a)(51) of the Securities Exchange Act of 1934 and Rule 3a51-1 under the Exchange Act) during the three year period preceding the date(s) on which those forward looking statements were first made. We caution readers that certain important factors may affect our actual results and could cause such results to differ materially from any forward-looking statements which may be deemed to have been made in this information statement or which are otherwise made by or on behalf of us. For this purpose, any statements contained in this report that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the generality of the foregoing, words such as “may”, “will”, “expect”, “believe”, “explore”, “consider”, “anticipate”, “intend”, “could”, “estimate”, “plan”, “continue”, or “hope” or the negative variations of those words or comparable terminology are intended to identify forward-looking statements.

Factors that may affect our results include, but are not limited to, the risks and uncertainties associated with:

	●	Our ability to raise capital necessary to implement our business plan.
	●	Our ability to finance and complete planned projects and facilities upgrades.
	●	Our ability to execute our business plan and commercialize our Thermal Gasifier™ technology which is undergoing redesign, including building Thermal Gasifiers™ that meet customers’ specifications and that meet local regulatory environmental and permit requirements.
	●	Risks related to dependency on a small number of customers.
	●	Our ability to satisfy our customers’ expectations.
	●	Our ability to employ and retain qualified management and employees.
	●	Changes in government regulations which are applicable to our business including rules related to use of tire derived fuel under the Clean Air Act as well as the Energy Independence and Security Act of 2007.
	●	The availability of a consistent, economically viable, and sustainable waste stream supply to fuel the Thermal Gasifier™ operations.
	●	Changes in the demand for our products and services, including the impact from changes in governmental regulation and funding for alternative energy.
	●	Changes in domestic and global regulation related to greenhouse gas and carbon emissions.
	●	The degree and nature of our competition, including the reliability and pricing of traditional energy sources, economic viability of other alternative energy sources such as wind and solar power.
	●	Loss of competitive advantage due to the expiration of two of our U.S. patents in 2011.
	●	The closing of the sale and leaseback of our Hutchins, Texas site where our tire processing operations are located.
	●	Our ability to pay debt service on loans as they come due.
	●	Our ability to generate sufficient cash to pay our creditors.
	●	Disruption in the economic and financial conditions primarily from the impact of terrorist attacks in the United States and overseas, threats of future attacks, police and military activities and other disruptive worldwide political events.

We are also subject to other risks detailed from time to time in other Securities and Exchange Commission filings and elsewhere in this report. Any one or more of these uncertainties, risks and other influences could materially affect our results of operations and whether forward-looking statements made by us ultimately prove to be accurate. Our actual results, performance and achievements could differ materially from those expressed or implied in these forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statements, whether from new information, future events or otherwise.

Part I

Item 1. Business.

A glossary of key terms and acronyms used in the Business discussion below is contained in this report beginning on page 12.

Company Mission

Vista International Technologies, Inc.’s mission is to provide a clean, dependable, cost-competitive waste-to-energy (WTE) and renewable energy alternative to fossil fuels world-wide using our proprietary technologies. We plan to develop projects with government, community, industry and financial partners to recover available hydrocarbon based energy from materials generally considered as waste and destined for disposal. The recovery of energy from waste utilizing our Thermal Gasifier™ will divert large volumes of material from landfills and other disposal systems while providing clean and cost effective alternative energy.

General

Vista is presently divided into two business units:

●	Renewable energy and WTE utilizing our Thermal Gasifier™ technology, and

●	Tire processing and storage.

Waste-to-Energy

At a time when world-wide demand for electricity stretches both generation and transmission capacity, and energy security threatens economic growth, we seek to provide clean, sustainable and profitable solutions to alleviate these problems. Our goal is to divert readily available waste materials from landfills or land applications and use our technology to efficiently generate clean renewable energy from this waste. Our main technical effort is on our proprietary patented technology, the Thermal Gasifier™, which is a horizontal multi-stage gasification system designed to convert residential, industrial and commercial waste, biomass, waste tires and most any other solid, hydrocarbon-based material into clean thermal and electrical energy, while maintaining emission levels under the most stringent EPA and European Union regulations.

As we advance our “state-of-the-art” WTE technology, our business model focuses on the development of qualified joint-venture partnerships and licensed partner companies to build, own and operate WTE distributed power generation facilities using our Thermal Gasifier™ patented technology. Whether through a joint-venture or licensed partner, we expect to develop efficient WTE infrastructures for industrial customers (inside the fence), or for small municipalities. These projects will reduce the environmental impact from waste disposal and reduce dependence on fossil fuels while producing efficient, clean energy from a given waste stream. Our solutions will decrease our customer’s waste disposal and power consumption costs, while at the same time lowering airborne emissions that would be generated by disposing of waste in landfills. We also expect to take advantage of government subsidies/credits to assist in the financing of WTE projects in select markets.

Historically we marketed and sold 15 first generation Thermal Gasifiers™ (prior to 2000), and three second generation Thermal Gasifiers™ (one in 2002 and two in 2004). We are currently redesigning and testing our third generation Thermal Gasifier™. We currently do not generate any revenues from our WTE business unit.

Tire Processing Operation

We operate a tire fuel processing and storage facility in Hutchins, Texas, licensed as a scrap tire transporter, processor and storage facility. We are paid a tipping fee (fee paid per tire received or per ton) for accepting waste tires. We produce the following from scrap tires: tire shreds for landfill for use as leachate material and as sanitary landfill cover.

The facility is currently the only waste tire storage and processing facility licensed by the State of Texas to operate in the Dallas/Ft. Worth metropolitan area.

We ceased production of TDF during August 2007, due to equipment damage. We considered purchasing new equipment; however, the markets for our TDF began to decline during 2008 due to the global economic downturn. As a result of the downturn and our limited financial resources, we determined not to purchase new equipment and as a result, we were unable to resume production of TDF and the exploitation of the TDF market.

In April, 2010 our Board of Directors began considering ways to maximize the value of our tire producing assets, and strategies to re-enter the TDF market. Management found that TDF market was beginning to rebound, especially as oil prices rose, since TDF represents a “high energy” alternative fuel source. Following the research conducted by management, the Company decided that

it would be an ideal time to re-enter the TDF market. In order to do that, the Company determined it would need additional funds to purchase the necessary equipment. To that end, in July, 2010 the Board engaged Colliers International, a worldwide real estate company with expertise in marketing, leasing and property management, to advise the Company on opportunities to monetize its Hutchins Texas facility to fund its TDF business plan, among other things.

In furtherance of its plan, on February 14, 2011, Vista entered into a Purchase and Sale Agreement with Brown-Lewisville Railroad Family First Limited Partnership to sell its 27 acre industrial site in Hutchins, Texas where its tire fuel processing and storage facility is located. Vista will concurrently lease back approximately 12.5 acres of the property and continue operating tire processing business. The Company plans to use the proceeds from the sale to satisfy debts and to invest in facility upgrades and additional equipment required to produce TDF.

The closing of the sale is contingent on various closing conditions and deliveries, including deposit of earnest money, Brown’s review of the physical and environmental condition of the property, transfer of necessary permits and licenses, curing liens and encumbrances, satisfactory completion of customary due diligence and shareholder approval. We expect this transaction to close on or around June 30, 2011. If this schedule is met, we expect to re-commence the production of TDF in the latter part of 2011.

Our tire processing and storage operation in Texas is subject to regulation by the Texas Commission on Environmental Quality (TCEQ). We are registered with the TCEQ, which allows us to receive, store, transport and process waste tires. Throughout 2010, we significantly increased the throughput of the facility but due to limited material being used as leachate or landfill cover, the Company was not able to continue reducing the amount of whole and shredded tires stored at the facility in order to decrease our environmental liability exposure. We are exploring the option of expanding operations with additional shredding equipment and rolling stock to further increase our throughput and begin the production of TDF to generate additional revenues. We have not re-entered the TDF production market yet. We expect that the production of TDF will eventually result in a reduction of the stored material onsite thereby reducing our financial liability exposure.

During the year ended December 31, 2010, our tire recycling processing business generated 100% of our total revenue.

Thermal Gasifier™ Technology and Operations

Prior to 2000 we sold approximately 15 first generation Thermal Gasifiers™ worldwide. We sold three second generation Thermal Gasifiers™, one in Ireland in 2002, and two in Italy in 2004. Our long term goal is to produce the majority of our revenue and cash flow from the commercialization of our third generation Thermal Gasifier™ technology which is currently undergoing redesign and testing. As a result, we plan to focus the majority of our resources on this business in the future while we continue to improve operations of our tire facility to generate positive cash flow to fund these operations. We have not sold any third generation Thermal Gasifiers™ and we currently do not generate any revenue from our Thermal Gasifier™ operations.

The Company is exploring the possibility of a commercially viable pilot project in the US to exploit its Thermal Gasifier™ patented technology. The characteristics of our ideal project are a combination of high energy demand and cost with on-site (or local) generation of large volumes of hydrocarbon based waste.

During 2010, we made further advances in the design of our third generation Thermal Gasifier™ as we continue to increase the energy efficiency and cost-effectiveness of the technology using our engineering and operating experience gained from our efforts to implement a functioning WTE facility in Cologna-Veneta Italy between 2004 and 2006. In that project, the Company hired and worked in conjunction with a team of engineers from Merrick and Company to start-up and undergo performance testing for two of our second generation Thermal Gasifiers™. During the start-up and commissioning of the Cologna-Veneta WTE plant in 2004, it was determined that the facility could not meet the contractual fuel specifications of our Thermal Gasifiers™ primarily because the facility did not have fuel preparation equipment to improve the quality of the available fuel feedstock. The use of interior grade fuel resulted in the Thermal Gasifiers™ producing only half of the rated output on each gasifier (1.5MW versus 3MW each). As a result these Thermal Gasifiers™ were not considered to be financially successful. The Thermal Gasifiers™ at the Cologna-Veneta facility operated between 2004 and 2006 until the project went into receivership. The experience from this project has provided the Company with data to implement design revisions toward more fuel flexibility and improved efficiency. These benefits include, among others, adaptations in fuel handling, fuel preparation, tuning, airflow, emissions, and variations in the fuel feedstocks provided data to support a broader compatibility of fuel type and quality, while increasing efficiency.

The Company continues to work closely with outside consultants to advance its Thermal Gasifier™ technology. In particular, we are parties to a Consulting and Services Agreement with Mustang Consulting, LLC. Pursuant to the agreement, Mustang will use its intellectual capital to provide us with guidance and advice with respect to business planning, strategies and advancement of our Thermal Gasifier™ technology, including, among other things, business and financial advisory services, technical advisory services, supervision of our technical staff, supervision of contract engineering services, supervision of documentation of modifications to the gasifier unit to prepare for commercial deployment and project management services for development projects. Under the Mustang Consulting and Services Agreement,

●

Vista pays Mustang $140 per hour for its services performed, and $70 per hour for in-transit and travel time. Mustang has the option to receive payment in Vista common stock if Vista is unable to make payment in cash.

●

Vista has granted Mustang a worldwide, irrevocable and perpetual non-exclusive license to use our commercialized gasification technology, for which we will receive a fixed license fee at the rate of $50,000 per 16 MMBtu/Hr of thermal capacity for each gasification unit built directly by Mustang.

●

Mustang has a right of first offer to purchase any of Vista’s thermal gasifier technology if Vista receives a bona fide offer from a third party to purchase it, or if a sale or transfer of a majority of Vista’s equity or a merger in which Vista is not the surviving party is proposed.

We are also parties to a Joint Development Agreement with Mustang to further advance the Thermal Gasifier™ in new waste-to-energy and biomass-to-energy projects and to facilitate the development of projects that come into Vista’s pipeline. The goal of the Joint Development Agreement, is for Vista and Mustang to develop “turn key” renewable distributed power generation facilities for customers. Under the Joint Development Agreement:

●

Vista may propose potential projects introduced to Vista through inquiries about its technology for Vista and Mustang to jointly develop.

●

Vista and Mustang will evaluate the potential opportunities to determine if a project is mutually acceptable to pursue.

●

An accepted project will be developed in a separate entity to be owned by Vista and Mustang on terms to be determined on a project-by-project basis, however, Vista’s ownership of the entity will range between 90% and 100%, subject to dilution if a third party becomes involved as an equity owner.

●

Vista will provide technology and gasification expertise in the project.

●

Mustang will provide project development, power generation, operating and maintenance experience in the project.

It is anticipated that the end-user customer for the project will finance the project or project financing will be sought for the projects that are pursued. There are no projects currently in development under the joint Development Agreement. No assurance can be given that we will identify mutually acceptable projects, and if we do, that we will be able to successfully develop or finance any projects.

Management believes that this Joint Development Agreement will allow the company to expedite the commercial application and the deployment of its third generation Thermal Gasifier™ technology across multiple vertical markets.

Mustang along with outside parties, is currently in the process of designing and fabricating an MFG-8 Thermal Gasifier™ which is a smaller version of Vista’s standard Thermal Gasifier™, at its own expense. Mustang and those third parties will co-market to take advantage of well established waste-to-energy markets in Italy. The Company will receive a license fee for each unit placed into service as discussed above. The MFG-8 Thermal Gasifier™ is being designed and commissioned as a demonstration unit and once completed, tested and started-up, will be operated on a periodic basis to test various fuel feedstocks, run efficiency and reliability tests, run air emission tests, run ash emission tests and demonstrate the performance of a variety of fuel feedstocks. This demonstration unit is being designed for the Italian market but we expect it will be able to serve other markets in the European Union and elsewhere. The fabrication process for the initial demonstration unit has been initiated and based on recent communications between Mustang, its third party fabricator and the Vista design team, we believe that in the fourth quarter of 2011 this unit will be operable on an intermittent basis to conduct testing and facilitate marketing to specific vertical markets for generating energy from municipal sewer sludge, animal waste and other forms of biomass. As with most product development efforts we cannot assure, the final completion date which could be delayed into first quarter 2012 or beyond if we run into unforeseen delays prior to start-up.

To continue to advance the Company, it is important that we attract and gain access to new capital. To identify and facilitate necessary funding to further our business plan, we continue to work on fund raising activities in multiple areas. We have obtained funds contributed by private investors and anticipate that we will seek further similar investment from time-to-time in the future. We also entered into an agreement with Colebrooke Capital, Inc., an investment advisory firm based in New York City, in April 2010, pursuant to which Colebrooke is to re-capitalize the Company, so that we can complete the deployment of the next generation Thermal Gasifier™ technology and initiate project development for its commercialization. In exchange for its corporate development services, Colebrook will receive a certain percentage of the total capital raised in each transaction (subject to certain criteria), and, in exchange for its advisory services, Colebrook will receive an agreed-upon sum. Additionally, we will seek project funding, in some cases with joint venture partners, which will be based on the size, configuration and business structure of a given project. To date, no funding opportunities have developed under the agreement with Colebrook.

We have also engaged Steven Kowalsky and Edward Kowalsky as consultants to facilitate introductions of the Company to selected clients for the purpose of developing projects where our Thermal Gasifier™ technology can be utilized. The Kowalskys will receive shares of our common stock in exchange for their services.

Operations related to the engineering and development of the Thermal Gasifier™ are ongoing and headquartered at our office in Englewood, Colorado.

Tire Processing Operations

The Company has been in the tire processing business since 1997, operating a 27 acre tire processing and storage facility in Hutchins, Texas since 1999. It is permitted by the TCEQ as a scrap tire processing and storage facility and as a used tire processor and recycler. We accept used passenger vehicle and truck tires as a waste product from businesses, governments, communities, and individuals for a “tipping fee” (disposal charge). The Hutchins facility shreds whole passenger and truck tires for disposal, and until 2007, produced tire derived fuel (or TDF). During August 2007, our TDF operations ceased due to equipment damage on our TDF processing line. We have not replaced this equipment. From August 2007 through August 2008, we focused on removing and land filling waste tires from the facility and making improvements necessary to comply with requirements of the TCEQ. In August 2008 the TCEQ gave our facility permission to re-commence operations. Since August 2008, we have been accepting and shredding waste passenger and truck tires for a tipping fee. In early 2010, the Company worked with the City of Dallas on a project to provide approximately 10,000 tons of tire shreds from approximately 518,000 passenger/light truck tires for use as filler and cover material for the city’s landfill. As a result, a number of tire shreds and stored waste tires at the facility were removed. That project has been completed and the number of tires stored on the facility property has increased since we currently do not have a ready disposal source. The Company has been finalizing arrangements to begin reselling “road worthy” used tires to the secondary market to create a second revenue center while it finalizes its evaluation of adding equipment and rolling stock to start the production of TDF sales thereby creating a third source of revenue. We did not produce TDF during 2009 or 2010.

During 2010 we generated approximately $571,300 in gross revenue from our tire processing operations, all of which was generated from tipping fees collected for the disposal of waste tires at our site. Our total cost of revenue for tire processing operations was approximately $343,000, including an increase in the environmental liability of $41,000, resulting in gross profit of approximately $187,000 or a 33% gross margin.

Vista is evaluating various improvements for the production of tire derived fuel (TDF) for use as an alternative fuel in various industrial processes.

We did not replace our damaged TDF production line equipment due to low demand for TDF in 2008 through 2010. TDF started to rebound as a high energy alternative fuel source in 2010. In response, the Company has been focusing on strategies to rejuvenate its TDF business, including:

●

sale of its industrial site in Hutchins, Texas where its tire processing business is based to generate funding for TDF production, and a leaseback of a portion of that property, among other things, and

●

exploring the option of purchasing additional equipment and rolling stock to begin the production of TDF and recommencing sales to industrial customers.

The tire processing facility provides the Company experience in securing and processing significant supplies of alternative fuel feedstocks. The tire processing operations could be used to complement the Thermal Gasifier™ should the market economics improve in Texas. This would enable the tire facility to produce revenue toward funding the development and deployment of the gasification technology in that market.

Description of Thermal Gasifier™ Technology

The Company’s proprietary patented technology, the Thermal Gasifier™, is a horizontal multi-stage gasification system designed to efficiently convert various waste materials from industrial, commercial, residential and agricultural sources into clean energy while maintaining the most stringent Environmental Protection Agency (EPA) and European Union (EU) emission standards.

The Company’s Thermal Gasifier™ is a closed, continuous flow, multi-stage gasification module. The Thermal Gasifier™ is designed to efficiently convert hydrocarbon feedstock containing solids, such as tire-derived fuel (TDF), refuse-derived-fuel (RDF) from the municipal and industrial solid waste streams, municipal sewage sludge solids (MSS), wood waste, and agricultural waste primarily into:

●

a producer gas (Syngas) comprised primarily of hydrogen and carbon monoxide, and

●

a residual inert ash (approximately 10% by weight of the feedstock on average).

Most of the feedstock mentioned above requires some preparation for use as fuel, such as shredding, blending, densifying and pelletizing, to ensure proper gasification. Following preparation, the fuel pellets or chips are fed into the Thermal Gasifier™ using a system of weigh belts and air locks to ensure an accurately metered supply of fuel is introduced while limiting the introduction of atmospheric air. The fuel is distributed on a moving belt which passes through a high temperature, oxygen starved environment. It is during this stage the solids break down into a Syngas, which is then drawn off to a separate chamber to be combusted at temperatures between 1500° to 2000° Fahrenheit.

The Thermal Gasifier’s™ multi-stage gasification and oxidation process is designed to efficiently recover the greatest percentage of available energy possible while generating very small quantities of environmental pollutants. The Thermal Gasifier’s™ high temperatures destroy the majority of hazardous air pollutants emitted from RDF and TDF including polychlorinated biphenyls (PCBs), dioxins, and furans. Most remaining gaseous pollutants are captured by scrubbers, catalytic reduction, or other pollution control equipment with the exhaust gas containing pollutants falling well below EPA and EU limits.

Marketable Products

Waste-to-Energy

Thermal Gasifier™ based WTE system are capable of producing two classes of usable products:

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Heat/Steam - produced during gasification and oxidation/combustion of Syngas. Heat is available for use in heating and cooling of adjacent buildings, industrial processes such as cement production or for generation of steam.

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Electricity - generated through addition of a steam turbine generator system or organic rankine cycle power generation system to the Thermal Gasifier™. Electricity is available for use on-site or sale to the local electrical grid.

Marketability of each usable product depends upon local demand for the front end waste processing, the back end energy commodity output and our ability to further process and distribute the products at competitive prices. We expect that these market demands will drive the configuration of the Thermal Gasifier™ in such a way as to maximize project profitability and will vary from location to location. As of the date of this report, no such projects are operational.

Tire Processing

Products from our tire processing operations include:

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Tire derived fuel (TDF) from tire shreds. As discussed above, we ceased producing TDF in August 2007 when our TDF production equipment was damaged. We are currently considering the purchase of new equipment with the funds we expect to receive from the sale of our Hutchins, Texas property.

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Filler and cover materials for landfills.

Market Opportunity

Waste to energy

In the WTE market a significant focus has been placed on the generation of electricity by the direct combustion of solid waste. This typically results in high levels of air pollution, most notably in high carbon dioxide emissions. Alternatively, solid waste can be gasified and the Syngas produced can then be combusted to generate electricity efficiently and in a more environmentally friendly manner, specifically, much lower carbon dioxide emissions. The key market drivers are the cost of waste disposal and the price paid for the electricity generated. In many instances, unless the cost of waste disposal and price of electricity are high, the project will not be economically viable compared to traditional fossil fuel generating capabilities. We believe the optimal projects for our Thermal Gasifier™ will not be large centralized power production facilities, but smaller (1 to 50 megawatt) distributed power generation facilities either co-located with the waste generator and end user of the power, or located within a municipality and interconnected to the local electricity grid.

Opportunities also exist for sale of commodities other than electricity, which can offer higher profitability to a project. While production of electricity is a mainstream technology, the necessary equipment can be quite expensive, particularly on a small scale. To maximize the projects’ efficiencies, combined heat and power (CHP) can be used to increase project return on investment. In addition, our Thermal Gasifier™ has the flexibility to handle a variety of different solid hydrocarbon based waste materials which will allow us to identify projects that could not be handled by other technologies without considerable design modification and cost.

We expect the demand for the Thermal Gasifier™ technology for creating energy infrastructures or WTE facilities to develop and increase as traditional energy costs continue to rise. In industries with high energy demands such as chemical plants or refinery operations, grid blackouts or other service interruptions also drive the need for more reliable distributed power generation facility infrastructures that we can provide utilizing our Thermal Gasifier™ as a dedicated energy source. Additionally, we expect the demand for waste processing to increase as environmental regulations increase and space constraints limit municipalities ability store carbon based waste.

Tire Fuel Processing and Storage

We believe that the demand for our tire fuel processing and storage services in Hutchins, Texas will continue to provide us opportunities to receive and process waste tires in the Dallas/Ft. Worth metropolitan area and, at a future date, to obtain customers for TDF.

According to the Rubber Manufacturers Association’s Scrap Tire Markets 9th Biennial Report of May 2009, there were 303 million waste tires disposed of in the United States during 2007. Of these 303 million tires, about 53% were used as TDF, 17% were used for crumb rubber production, 13% were disposed of in landfills, 12% were used in civil engineering applications, 3% were used in reclamation projects and the remainder was used in small specialty applications.

Management expects new emission regulations will be enacted reducing the percentage of waste tires used to fuel cement kilns in non-attainment, historically a material portion of Vista’s TDF sales. Management also expects that this will be offset by the increase in use by other industries that seek a high energy alternative fuel feedstock to that of traditional fossil fuels (i.e. oil and natural gas). Management believes that as traditional fossil fuel costs increase the market for alternative fuels, such as TDF, will become more attractive substitutes. Additionally, our Thermal Gasifier™ technology provides a viable method of utilizing waste tires, reducing landfill and stockpile accumulations while generating clean dependable energy in an environmentally friendly manner.

Business Development Activities

Waste to Energy

We seek to establish our presence in the renewable energy marketplace through strategic joint-venture partnerships with key business partners. Through participation in commercially viable WTE projects located on optimal sites, we expect to utilize the Syngas generated by the Thermal Gasifier™ to produce thermal and electrical energy. We have had initial discussions with key project partners located in the Northeastern United States. These groups have expressed strong interest in developing WTE facilities on their sites utilizing our Thermal Gasifier ™. We are currently in the process of obtaining letters of intent from these potential project partners.

There are several distinct trends pulling our solution into the marketplace:

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Increasing emphasis on climate change and the reduction of greenhouse gas emissions.

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Increasing interest in alternative waste disposal options, rather than land filling and incineration.

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The need to contain ever increasing energy costs driven by the dependence on fossil fuels.

The Thermal Gasifier™ is an ideal solution to these problems as it diverts waste from landfills, mitigates increasing costs associated with waste disposal, helps reduce our dependence on fossil fuels, and reduces carbon and greenhouse gas emissions. The Company believes that a small scale pilot facility in the US could aid significantly in promoting mainstream acceptance for the technology.

As the market develops, we anticipate that the typical project will be a standalone project that we build, own, and operate solely or under a joint venture. We expect to take advantage of our operating flexibility as different quantities of various waste streams are processed, based on fuel availability and fluctuation of quantities in regional markets. Unlike most other gasification and pyrolysis systems on the market, the Thermal Gasifier™ can process virtually any hydrocarbon-based waste stream, and can switch from one feedstock to another, or mix waste streams with no change to the Thermal Gasifier™ performance. This will allow us to process the highest value hydrocarbon-based waste available in an area, and give us the ability to switch or mix waste streams to increase our revenue per ton of waste. Vista will also be able to benefit from contractual flexibility in the sale of the energy commodity output, such as steam and/or electricity. Local market pricing will have an impact on individual project returns.

Tire Fuel Processing and Storage

Tires have relatively high energy content and are an ideal fuel for the Thermal Gasifier™ or they can be blended with other waste fuels to achieve energy content stability. At our tire fuel processing operation in Hutchins, Texas, we receive a tipping fee for accepting waste tires. We are exploring options to add new equipment to our tire fuel processing facility now that the TDF market is showing signs of recovery following the economic downturn, to re-enter the TDF market as discussed in more detail under the heading “General-Tire Processing Operation” above.

Research & Development

During 2010, we incurred approximately $56,000 in research and development salaries and benefits dedicated to internal product development which are included as selling general and administrative expense in our consolidated statement of operations. During 2010, we incurred approximately $31,500 for third party research and development services. We are engaged in continuous development and improvement of our Thermal Gasifier™ technology through advanced engineering design. We are utilizing our experience gained during development and operation of the Thermal Gasifier™ project in Italy in 2004 through 2006, which utilized a second generation Thermal Gasifier™, particularly in regard to low grade fuels, which is described in more detail under the heading “Thermal Gasifier™ Operations” above, to redesign the Thermal Gasifier™ in order to further improve energy recovery and overall efficiency. We plan to continue to invest in internal technology research and development with a goal of offering our customers the best and most efficient renewable energy opportunities to support our goal of “reducing the carbon footprint one step at a time”. We will require additional funding for these efforts to sustain our research and development efforts. We hope that our plans to re-commence our TDF production operations will provide funding for these efforts but we cannot assure it will. Alternatively, we will need to seek additional capital or debt financing. If we are unable to obtain the needed funds, we may be forced to curtail or suspend research and development activity.

Intellectual Property

We own three U.S. patents and one European patent and have two U.S. and one European patent pending.

Our two initial patents apply to the construction methodology and design of our Thermal Gasifier™ and were issued in 1993 and 1994. These patents both expire in 2011. One additional patent for our gasifier system and method of gasification was issued in 2006 and expires in 2018. Our patents cover the design of a fuel efficient dual gasification chamber and a unique computerized method of mixing air with combustible gas. As we complete the advancement of our technology toward its third generation of improvements, additional patent applications will be made to piggy-back off of the original patents, thereby extending the protection on our intellectual property.

We also have two US patent applications pending. One, filed during 2002, relates to improvements in our gasifier system, which reduces air and water pollutants and the second, filed in 2004, relates to our oxygen-based biomass gasification system and controls. In addition, two European patent applications were pending in 2010 on our gasifier system and method of gasification and on our oxygen-based biomass gasification system. On January 5, 2011, the European patent for our Gasifier System and Method was issued.

Competition

Waste-to-Energy

It is very difficult to compete on large scale utility electric generation against traditional fossil fuels on a price-per-KWh basis. Therefore we expect to compete within a broad spectrum of technologies on a smaller scale as the alternative energy industry continues to expand, including traditional solid waste burners, fluidized bed boilers, wind and solar technology and various forms of gasification and pyrolysis. We recognize that to be competitive, we must continue to expand the application and utilization of the Thermal Gasifier™ and couple it with other synergistic technologies such as power generation, pollutant controls and Material Recovery Facilities (MRF). Historically, through 2006, 15 of our first generation and three of our second generation Thermal Gasifiers™ have been used to process refuse derived fuel (RDF) from municipal solid waste on a commercial scale, and have processed most other hydrocarbon based waste streams on either a test or smaller scale. However, there are currently no third generation Thermal Gasifiers™ operational from which to collect data or which are generating revenues.

Management believes that the modular nature of our systems will give us advantages in the configuration of plants, as well as the ability to effectively process various waste steam feedstocks as long as it meets our minimum fuel quality threshold, and convert the feedstocks to different end products. The multi-fuel capabilities of the Thermal Gasifier™ will give it an advantage over most other systems, which we describe below, as it allows us to process the most valuable fuel in any given market and switch fuels to take advantage of price swings. Scalability will allow us to increase a user’s energy output and waste reduction by adding additional Thermal Gasifiers™ as components to an existing waste-to-energy system, without the need for the user to add additional equipment such as extra turbines, boilers, or waste pelletizers. Additionally, the emissions of our system meet EU and

EPA standards, and in our last emission test, did so without any effluent gas treatment other than particulate removal. We believe that installation costs for the Thermal Gasifier™ will be at or below industry averages, and operating costs will feature a minimum of personnel needed to run the system and a low parasitic load. The combination of these factors give us advantages over traditional technologies such as incinerators or mass burners, which make up the majority of current waste to energy facilities and which are falling out of favor in most developed countries due to their inefficiencies and high greenhouse gas emissions.

While there are numerous examples of laboratory scale and pilot plant waste to energy operations, very few successful commercial scale facilities have been constructed to extract the energy contained in solid waste materials.

The technologies that compete with gasification fall within a few basic categories: incinerators/mass burners, pyrolysis units, plasma gasification, retorts and fluidized-bed reactors.

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Incinerators/mass burners have been widely used to reduce the volume of material going to landfills or destroying material too hazardous to landfill. These represent more than 95% of the installed base of waste-to-energy extraction facilities. Almost all of these technologies convert raw waste streams by burning it in a heated air stream. Some of the units generate power and have some level of pollution control for the “exhaust gases”. Heat produced by this burning may be extracted by a boiler to generate electricity or it may be released directly into the environment. Most of the installed facilities are nearing the end of their useful lives and are not considered for replacement primarily due to the emission levels of air pollution associated with this equipment as compared to competing technologies including gasification.

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Plasma conversion uses electrically generated plasma to produce temperatures high enough to gasify solid fuels. The most successful version uses plasma to maintain a bath of molten iron in which the solid fuel is added. The fuel then gasifies and the produced gas is withdrawn to extract the heat energy. Plasma conversion has the potential to become a successful commercial technology and represents potential competition for our technology and gasification in general. Capital costs for plasma conversion are higher than gasification but are still competitive; however, the operating costs for this technology are significantly higher than our operating costs.

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Retorts are vessels in which solid fuel is placed. The vessel is then heated until the synthesis gas is released and collected. The vessel is cooled, the remaining solid debris is removed and the process repeated. Retorts have been used in a number of industrial-scale applications, they are used as a batch process, and they are not economically, environmentally or technically competitive as free-standing or stand-alone units as compared to our Thermal Gasifier™ technology in the smaller scale commercial and municipal markets which we are targeting.

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Fluidized bed reactors function by injecting the solid fuel into a bed of heated sand that is fluidized with air or a non-reactive gas. The heated fluidized sand and solid fuel release the synthesis gas for extraction of the heat energy. Fluidized-bed reactors are commonly used for coal-fired electric generating plants but may not be effective for many types of waste materials. Fluidized bed reactors have been used for many decades but have not gained recognition as a viable solid fuel conversion technology due to the myriad of engineering difficulties that have not been solved. We do not believe that fluidized bed reactors will play an important role in the solid fuel energy extraction field.

Gasification is significantly different from the competing technologies described above. Gasification units such as the Thermal Gasifier™ heat solid material in an oxygen-starved environment where the gaseous components of the solid material are released. These gaseous components, or producer gases, retain the heat producing qualities of the solid material. The gas is then used to heat a boiler for steam, power an internal combustion engine or power a gas turbine. Gasifiers have become increasingly attractive as a means to cleanly convert most solid, hydrocarbon-based wastes into heat, steam, electricity and liquid transportation fuels. Fixed-bed gasification units are the most common type. Equipment selections downstream of the gasifier determine the products and co-products produced. Most of the earlier models gasified coal, wood waste and petroleum coke. Discarded tires, municipal solid waste, sludge and agricultural waste are now fuels of opportunity.

Gasification technology that could be considered competitive with our Thermal Gasifier™ technology is either:

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used on larger-scale industrial level, a market on which we are not focused by companies, such as GE Biomass Solutions, and we do not expect to compete with these companies, or

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fuel specific and less efficient, such as the technology of KMW Energy and Community Power Corporation, as compared to the multi-fuel capabilities and efficiency reflected in our testing of our Thermal Gasifier™.

Our intention is to promote the modular, scalable, fuel adaptable and clean emission attributes of our third generation Thermal Gasifier™ to compete for energy-from-waste business in the smaller-scale commercial and municipal markets with competitors who use other technologies and gasification technology. Our competitors, however, may be established and have financial and marketing resources far greater than those available to us and may have greater application for large waste streams, such as municipal waste from large cities.

In industries with high energy demands, such as specialty gas plants, chemical manufacturing or refineries, we will compete with the local utilities, which provide traditional electrical power in addition to alternate power sources such as solar or wind power.

In industries with regulated waste disposal, we will compete with incinerators and waste management companies. In some cases, these solutions may provide lower cost waste disposal, but do not remove the emissions and/or pollutants from the environment. In many countries, solid waste is being stockpiled rather than placed into landfill sites. New landfill sites are extremely difficult to permit and in all situations, municipalities are looking for ways to reduce the volumes of waste going to landfill sites in order to extend their life.

For municipalities, we may compete against other alternative energy sources, especially if the municipality seeks to meet a specified target percentage of alternative or “green” energy sources. In this market, we may also compete against the local utility, incinerators or waste management companies, depending on the municipality, regulatory environment and political pressures to employ alternative energy sources.

During 2010, we did not have any customers for our Thermal Gasifier™ business.

Tire Processing

While our tire processing operations competes with several local companies that are registered to collect and process waste tires in the Dallas/Ft. Worth market, we have a competitive advantage in that we have the only storage permit in the market area. Being able to store waste tire material allows us to cover seasonal changes in the waste tire business and address opportunities for tire clean-ups in the State. The proximity of our facility to major highways and a large intermodal provides advantages over some of the local competitors for distribution of our off-take material (i.e. TDF). The local competition will continue to negatively impact our tire processing revenues until we find a long-term sustainable use for the shredded waste tires. Toward that end, the Company is evaluating improvements to the current operation for the production of TDF, as well as, reselling quality used tires to the secondary market.

Major Customers

During 2010, our total revenue was derived from tipping fees from accepting waste tires from generators and tire transporters. Our customers include numerous generators and transporters. Three customers comprised approximately 21%, 21% and 11% of revenues for the year ended December 31, 2010, and two customers comprised approximately 47% and 12% of revenues for the year ended December 31, 2009. In the first quarter of 2010, we lost our largest customer. The loss of this customer had a significant, negative impact on our overall revenue, which we were not able to replace in 2010. At this time, we do not have any other customers responsible for more than 10% of our total revenue.

Major Suppliers

Tire Processing Operation

The Company believes there is a readily available supply of waste tires for which we are paid tipping fees. We accept waste tires from many sources including distributors and transporters.

Thermal Gasifier™ Business

The Company believes there is a readily available supply of materials, equipment and associated vendors to fabricate construct and operate our Thermal Gasifiers™ in a WTE plant. Additionally, we believe the worldwide market for WTE plants continues to expand as both waste disposal costs and energy costs increase and lessening our dependency on fossil fuels becomes more critical. Increasing energy costs coupled with burgeoning waste generation and fewer landfills provides a growing market opportunity for our renewable WTE solutions. Given the fuel flexibility of our Thermal Gasifier™, we do not believe we are dependent on any single source or feedstock for our supply.

Personnel

We have seven full time employees, three of which are located at our corporate offices in Denver, Colorado, and four of which, including one Business Manager, are located at our tire processing facility in Hutchins, Texas. Additional contract personnel are utilized at the Englewood office and at the tire processing facility as necessary based on volume of work. Additional personnel will be added at the tire processing facility if and when new equipment is purchased and operations are expanded. We anticipate that significant personnel additions will be required if we move forward on Thermal Gasifier™ project related contracts and obtain project funding for the energy infrastructure or the WTE business.

Government Approval / Environmental Laws and Regulation

Operation of a Thermal Gasifier™ and a tire processing facility are subject to a variety of federal, state, and local laws and regulations, including those relating to the discharge of material into the environment and protection of the environment. The governmental authorities primarily responsible for regulating our environmental compliance are the U.S. Environmental Protection Agency, Department of Environmental Quality and comparable regulatory agencies and departments in the states and foreign countries where we establish operations. Nationally, we are subject to the air quality programs under federal and state law. For each project, we will be required to comply with applicable federal, state and local government approval (permitting) requirements where the project is domiciled, including, among other things, building, operating, and air quality permitting rules.

The rules relating to air quality permitting are generally the most onerous and it can take from 6 months to 12 months or more to obtain permits, depending on the state requirements. Steps for obtaining air quality permits generally include:

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An initial meeting with the applicable state’s Department of Environmental Protection (DEP) outlining the project and establishing the classifications which the project falls under, including any possible exemptions.

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Submission of required data (typically independent emission reports and expected emission data for the prospective system, but also can include other items such as project layout, other technologies employed, and natural resource usage).

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Review by the state DEP with possible follow up requiring further data submission or clarification of submitted data

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Approval or denial of permit.

Building permits generally have a minimal time component, and operating permits are generally granted within a short time of completion of the air quality permit, assuming proper filing procedures have been followed. Timelines for each of these vary from state to state as well. The Company is currently not involved in the permitting process in any state.

We believe these laws and regulations will not have a material adverse effect on our capital expenditures or competitive position. We believe that our technology complies, in all material respects, with the various federal, state, and local regulations that apply to our current and proposed operations.

Company History

Vista International Technologies, Inc. was incorporated in Delaware in 1996 under the name of Ajax Reinsurance Limited. The Company underwent a series of combinations and name changes until 1999 when it changed its name to Nathaniel Energy Corporation. The Company operated under this name until November 8, 2007 when it changed its name to Vista International Technologies, Inc. The name change was to reflect a broader perspective on the renewable energy technologies that were expected to be brought into the Company.

From 1997 to 2002, the Company’s operations were limited to its tire processing facility in Hutchins, TX which at that time sold TDF to others primarily for use as an alternative fuel. In August 2002, the Company acquired MCNIC Rodeo Gathering, Inc. which owned 18.55% of Keyes Helium Company, LLC. Effective as of January 1, 2003, the Company acquired the remaining 81.45% interest in Keyes Helium Company, LLC from Colorado Interstate Gas (CIG) Resources Company through our subsidiary, Nathaniel Energy Oklahoma Holdings Corporation. The Company transferred all of the stock in MCNIC to NEOHC. In April 2003, NEOHC acquired the Keyes gathering system and Sturgis gas plant from CIG Field Services and the compressor station was purchased from Colorado Interstate Gas Company. The Company upgraded and operated the helium and gas processing facilities from April 3, 2003 through March 7, 2006. On March 7, 2006, the helium and gas processing facilities and operations were sold to Midstream Energy Services, LLC.

Subsidiaries

We have one wholly-owned subsidiary, Cleanergy, Inc., which was formed as an operating company for the purposes of developing WTE projects and commercializing our Thermal Gasifier™, by entering into joint venture and licensing agreements and building and operating small WTE facilities. Cleanergy, Inc. is currently dormant and has no operations.

Available Information

The SEC maintains an internet site at www.sec.gov that contains the reports, proxy and information statements, and other information regarding the company. In addition, we provide easy access to these reports free of charge via our internet website, www.vvit.us Information on our website is not part of this report.

We maintain a codes and policies page on our website, www.vvit.us. This page includes, among other items, the Vista International Technologies, Inc. Code of Business Conduct and Ethics for Officers (Vice President and Senior) and Directors and the Vista International Technologies, Inc. Code of Business Conduct and Ethics for Employees and Officers (other than Vice President and Senior).

Glossary of Key Terms and Acronyms

Back end power system. The components downstream from the gasification units which collectively generate electricity.

Biomass. Any of a number of feedstock materials generated as agricultural waste or by-products.

BTU (British Thermal Unit). One BTU is a unit of energy defined as the amount of heat required to raise the temperature of one pound of water by one degree Fahrenheit. In North America, fuels are described using their energy content in terms of BTUs of energy per pound of material. On average, gasoline contains 20,400 BTU per pound (btu/lb) and diesel contains 19,300 btu/lb. Primary fuels for the Thermal Gasifier™ include TDF (15,000 btu/lb) and RDF (8,000 btu/lb).

Catalytic reduction. A means of converting nitrogen oxides, also referred to as NOx, with the aid of a catalyst into diatomic nitrogen, and water in order to reduce NOx emissions.

Dioxin. Dioxins are among the most toxic substances known to man. Dioxins and other persistent organic pollutants (POPs) are subject to the Stockholm Convention obliging signatories to take measures to eliminate, where possible, and minimize where not possible to eliminate, all sources of dioxin. Dioxins are produced in small concentrations when organic material is burned in the presence of chlorine, whether the chlorine is present as chloride ions or as organochlorine compounds, so they are widely produced in many contexts. According to the most recent US EPA data the major sources of dioxin are:

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Coal fired utilities

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Metal smelting

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Diesel trucks

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Land application of sewage sludge

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Burning treated wood

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Trash burn barrels

These sources together account for nearly 80% of dioxin emissions. Following incineration, dioxins can also reform in the atmosphere above the stack as the exhaust gases cool through a temperature window of 600 to 200°C. The most common method of reducing dioxins reforming or forming de novo is through rapid (30 millisecond) quenching of the exhaust gases through that 400°C window. Incinerator emissions of dioxins have been reduced by over 90% as a result of new emissions control requirements. Incineration is now a very minor contributor to dioxin emissions.

Distributed power generation. The process of using multiple smaller facilities rather than a single centralized facility for power generation.

Exhaust gas. A gas emitted as a result of combustion of fuels.

Feedstock. The carbon based fuel source used in the Thermal Gasifier.

Gasification. A process in which feedstock is thermally decomposed at high temperatures in a low oxygen environment into syngas.

Hydrocarbon. Any organic compound containing only hydrogen and carbon.

Inside the Fence. A scenario in which the waste generator (our client) will be able to process waste in order to get the desired end products, and should have a potentially usable ash residue all on his own site.

Landfill cover. Material used to conceal the daily municipal solid waste load at a landfill.

Leachate. Liquid which forms at the bottom of a landfill site.

Municipal Sewage Sludge Solids (MSS). The solids accumulated during treatment of wastewater. MSS contains up to 8,000 btu/lb of energy on a dried basis and may be blended as a possible fuel for the Thermal GasifierMunicipal Solid Waste (MSW). MSW is more commonly known as trash or garbage and consists of everyday items such as product packaging, grass clippings, furniture, clothing, bottles, food scraps, newspapers, appliances, paint, and batteries. MSW is processed into refuse derived fuel (RDF) as a fuel for the Thermal Gasifier™.

Organic rankine cycle power generation. A system of power generation similar to a steam turbine generator, but utilizing a liquid other than water to drive the turbine, allowing for power generation at lower operating temperatures.

Polychlorinated Biphenyls (PCB). PCBs are a class of organic chemical compounds which are persistent organic pollutants found in many waste streams that research has indicated are likely carcinogens. Further, improper or incomplete oxidation of PCBs may result in the formation of more toxic species such as dioxins and/or dibenzo furans.

Pyrolysis. A process in which a feedstock is thermally decomposed in the absence of oxygen, usually at elevated pressure.

Refuse Derived Fuel (RDF). A fuel produced by processing Municipal Solid Waste (MSW) to remove the inert materials, concentrating the hydrocarbon containing components, densifying and pelletizing into relatively uniform fuel pellets for ease of storage, handling and gasification and/or combustion.

Rolling stock. Self propelled or pulled transportation equipment that moves on wheels.

Scrubbers. Apparatus for removing impurities, especially from gases.

Syngas (Synthesis Gas). The name given to a gas mixture containing varying amounts of carbon monoxide and hydrogen generated by the gasification of a carbon containing fuel to a gaseous product with a heating value.

Tire Derived Fuel (TDF). A fuel produced by reducing or shredding whole tires to smaller strips, chips, or crumbs for use in fueling certain industrial processes including cement kilns, paper mills and EfW projects.

Item 1A. Risk Factors.

We are subject to many risk factors detailed below and elsewhere in this report and from time to time in our other Securities and Exchange Commission filings. Any one or more of these uncertainties, risks and other influences could materially affect our results of operations and prospects and whether forward-looking statements made by us ultimately prove to be accurate. The following risk factors represent items that management desires to highlight, in addition to forward looking statements described at the beginning of this report, to help investors better understand the potential risks and rewards of the company’s business.

We have a working capital deficit and our business model depends on obtaining significant funding.

The Company currently has a working capital deficit. We expect that our current cash on hand and revenues we expect to generate at current levels will not be sufficient to sustain our operations. We will require several million dollars in capital investments to further develop our Thermal Gasifier™ business and improve our tire processing operation. Capital investments could be in the form of debt, equity, government grants or guaranteed loans to fund our business in general or a particular project. We are also seeking other capital project financing opportunities. There can be no assurance that we will obtain the funding needed to develop this business. If we do, we cannot assure that any funds raised for our business in general or for a particular project will be sufficient to sustain our operations or complete the project respectively.

Our ability to commercialize our Thermal Gasifier™ technology is dependent on fabricating and additional successful testing of our Thermal Gasifier™ unit.

Historically, before 2000 we sold approximately 15 first generation Thermal Gasifiers™, and we sold two second generation

Thermal Gasifiers™ in each 2002 and 2004. We have not sold any have not generated any revenue from our current third generation Thermal Gasifier™. We have tested our third generation Thermal Gasifier™ technology in more than 30 applications during various stages of its design. We will need to test the current Thermal Gasifier™ design to allow us to move forward with commercialization. During 2010 and 2009, we have continued to redesign the Thermal Gasifier™ technology to further improve energy recovery and operational efficiency. We will require significant funding in order to complete the engineering specifications, fabricate a number of Thermal Gasifier™ units for demonstration, and successfully test it at full operational capacity with the new design.

Revenue and gross margin growth in our tire fuel processing operation is dependent on successful equipment maintenance, repair, upgrades and rejuvenating our TDF business.

Our business plan contemplates improvement in our tire processing operations which will require new equipment, repair and maintenance of existing equipment and increases in our workforce. During August 2007, due to equipment damage, the facility ceased production of tire derived fuel (TDF) until the equipment could either be repaired or replaced. The markets for our TDF began to decline during 2008 due to economic conditions, so we postponed the repair or replacement of the equipment. In 2010 we found that the TDF market was beginning to rebound especially as oil prices rose. The Company decided that it would be an ideal time to re-enter the market and capture the revenues that could be generated from the sale of TDF. We are evaluating investing in new equipment to re-commence TDF production to coincide with the perceived market demand.

New equipment purchases, repair of existing equipment and increasing our workforce will require additional funding and is dependent upon us obtaining additional waste tire supply contracts and making the necessary facility improvements for starting the production and sale of TDF. If the pending sale of our Hutchings, Texas industrial site closes, the Company intends to use some of the $1,348,000 proceeds for the TDF production improvements to re-enter the TDF market. It is likely that the Company will need additional funding beyond the proceeds available from the land sale to implement its business plan. Historically, we have had limited customers for our TDF and we cannot assure that if we invest in new equipment we will be successful in re-entering the TDF market and growing our TDF business.

If we fail to satisfy customer expectations, existing and continuing business could be adversely affected.

If we fail to satisfy customer expectations, our reputation and ability to retain existing customers and attract new customers may be damaged. In addition, if we fail to perform adequately on projects, we could be liable to customers for breach of contract and could incur substantial cost, negative publicity, and diversion of management resources to defend a claim, and as a result, our business results could suffer.

We have accumulated a potential cleanup liability associated with tire-derived-fuel processing operations.

Should operating conditions relating to our tire processing operations substantially deteriorate, we could be required by the TCEQ to remove the existing whole tire, partially shredded tire and tire chip inventory piles from the tire processing and storage facility. The projected cost of full cleanup of the tire processing facility is estimated to be $183,000. In the past, we have been able to dispose of this material at a municipal landfill site. During the last five months of 2010, the local landfill did not accept shredded waste tires from us but began accepting limited amounts in the first three months of 2011. Accordingly, our tire inventory and related liability for disposal has been increasing. We currently have assurance of approximately $170,000 in the form of a letters of credit in favor of the TCEQ.

If we fail to successfully use our technology in commercialized applications, our business may not become profitable.

If we fail to identify the latest alternative energy solutions or fail to successfully apply the technology to customer demand, our reputation and ability to compete for customers and the best employees could suffer. If we cannot compete successfully for projects and project funding, revenues may not grow.

Because our market changes constantly, some of the most important challenges facing us are the need to:

	●	develop equipment that meets changing customer needs;
	●	identify and effectively market alternative solutions to a diverse set of customers;
	●	enhance and protect the applications of our patented technology;
	●	influence and respond to emerging industry standards and other technological changes.

All of these challenges must be met in a timely and cost-effective manner. There is no assurance that we will succeed in effectively meeting these challenges.

The expiration of our current patents and failure to obtain patents on our patent pending technology could adversely impact our competitive advantages.

We own three U.S. patents, two of which expire in 2011 and one in 2018. Our first European patent was issued on January 5, 2011 for our Gasifier System and Method and expires in 2019. We also have two U.S. and one foreign patents pending. European patents expire 20 years after their filing date.

The expiration of two of our U.S. patents in September 2011 and a failure to obtain patents on our pending patent applications could adversely impact the competitive edge we have in our Thermal Gasifier™ technology and make it more difficult for us to distinguish ourselves and compete in the WTE market.

Research, experience and shifts in technology and market demand may require changes in our business model.

During the regular course of operating our business, we must adjust our business plan as a result of our research, experience, technology evolution and market demand. Accepting unforeseen business opportunities may also result in a business model change. We cannot guarantee that any business model or adjustment in business plan will become successful or be more successful than our current business model. A shift in our business model may result in the use of other technologies. Other technologies may in the future prove to be more efficient and/or economical to us than our current technology. We cannot guarantee that any change in technology will become successful or be more successful than its current technology.

Public company legislative and regulatory requirements, such as the Sarbanes-Oxley Act of 2002, may lead to increased insurance, accounting, legal and other costs, which may cause expenses to increase.

We are a reporting company under the Securities Exchange Act of 1934. We are committed to full regulatory compliance and high standards of corporate governance and we expect legal, accounting and professional fees to account for a substantial percentage of our operating expenses in the future. The cost of regulatory compliance could strain our limited resources as well as divert attention of our relatively small management team from daily business operations.

Due to the nature and size of the Company’s current operations and resulting lack of segregation of duties, our management has concluded that we have several material weaknesses in our internal control over financial reporting as discussed in further detail in Item 9A.

One stockholder beneficially owns almost 50% of outstanding shares and effectively controls a vote of stockholders.

One stockholder, Richard Strain, beneficially owns 48.2% of outstanding shares. An additional stockholder, Timothy Ruddy, a director of the Company, beneficially owns 8.7% outstanding shares. The rest of our shares are relatively widely held with no other shareholder owning more than 10%, as far as we are aware.

Accordingly, Mr. Strain has, in all practical likelihood, the ability to control the director elections and the approval of any other action requiring stockholder approval, including any amendments to the certificate of incorporation and mergers or sales of all or substantially all assets, even if the other stockholders perceive that these actions are not in their best interests.

Encumbrances on Company Assets may result in a delay or inability to sell the Company’s Texas facility

The following encumbrances existed on the Company’s assets as of December 31, 2010:

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$800,000 Deed of Trust filed April 23, 2002 by Alternate Power, Inc. to determine the ultimate outcome of this matter, management is vigorously pursuing appropriate legal remedies to invalidate this deed of trust in order to complete the sale of the property.

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Mechanic’s lien filed by a contractor for approximately $86,000 for services provided October, 2007 through April, 2008. The liability for this is included in accounts payable and accrued liabilities in the consolidated balance sheets.

A delay in the closing of the land and facility sale may result in the Company being unable to continue in business due to lack of liquidity anticipated as the result of closing this transaction.

Item 1B. Unresolved Staff Comments.

Not applicable.

Item 2. Properties.

We own approximately 27 acres of property at 1323 Fulghum Rd. in Hutchins, Texas in a semi-industrial region of southern Dallas County where we conduct our tire processing storage operations. The facility includes a newly replaced 10,000 square foot partially enclosed production building for waste tire processing, a 5 year old 1,200 square foot stand alone business office and a 12 year old 1,800 square foot permanently placed office trailer with employee break room. The production building collapsed from an unusually heavy snow storm in February 2010 which caused us to temporarily shut down operations for the removal of debris and repairs to the production building. The building was fully insured and has since been completely repaired. The total insurance claim is approximately $130,000, covering the production building, equipment damage, lost production and lost revenue. We believe the new production building will improve our existing used tire reclamation and processing operations.

In April, 2010 our Board of Directors decided, as part of its strategy to maximize the value of its tire processing operations, to consider monetizing its tire processing facility. After contacting and considering several real estate and appraisal firms, the Board elected to engage Colliers International, a worldwide real estate company with expertise in marketing, leasing and property management, in July, 2010 to assist the Company in the process.

As a result of management’s efforts with Colliers International, the Company entered into a Purchase and Sale Agreement with Brown-Lewisville Railroad Family First Limited Partnership in February 2011, to sell all of the approximate 27 acre industrial site for approximately $1,348,000 in cash.

We will concurrently enter into a lease with Brown to lease back approximately 12.5 acres of the property at closing to continue our tire processing business currently located on the property. The proposed lease terms include an initial 60 month lease term with mutually agreed-upon extensions and lease payments of approximately $675 per acre per month, subject to potential increases in the Consumer Price Index. Under the proposed lease the first two years of rent amounting to approximately $203,000 is waived.

At the closing, a mechanics lien on the property filed by a contractor for $86,000 relating to services provided in October 2007 through April 2008 will be resolved.

There is also a deed of trust encumbering the property which was filed in April 2002 by Alternate Power, Inc. Management believes that the Company has no liability or obligations to Alternate Power, and no liability or obligation to Alternate Power is reflected in the Company’s financial statements. Alternate Power has not made any claim or demand against the Company for any debt owed. The Company believes that Alternate Power is required to remove the deed of trust because the Company has no indebtedness or obligation to Alternate Power, and the Company believes that Alternative Power has no basis to maintain the deed of trust. The Company has contacted Alternate Power and has requested that the deed of trust be removed. The Company has not received Alternate Power’s accession to do so. In the event that the Company is unable to obtain Alternate Power’s agreement to remove the deed of trust, it may be required to seek judicial intervention to address this.

The recorded amount of the land and land improvements was approximately $155,000 at December 31, 2010.

The closing of the sale is contingent on various closing conditions and deliveries, including deposit of earnest money, curing liens and encumbrances, Brown’s review of the physical and environmental condition of the property, transfer of necessary permits and licenses, satisfaction or resolution of existing encumbrances and liens, satisfactory completion of customary due diligence and shareholder approval.

We lease approximately 1,500 square feet of office space for our corporate offices at 88 Inverness Circle East, Suite N-103 Englewood, Colorado. The present lease expires on December 31, 2012.

Our facilities are adequate for our current and foreseeable future needs.

Item 3. Legal Proceedings.

The Company was named in a suit in the Colorado District Court for the 18th Distric (Arapahoe County) by a former employee alleging that the Company reneged on its obligation to issue shares to the employee. On November 26, 2010, an amended judgment was entered against the Company for approximately $95,000. This judgment is accruing interest (from the date of the judgment) at the rate of 8% per annum. The Company believes it has entered into a settlement with the plaintiff/judgment creditor as follows: Total settlement sum of $93,617, payable with a $15,445 down payment and installments of $3,000 a month with interest at the rate of 6% until the principal is paid in full. The settlement also potentially involves the pledge of some Company

stock as security for the payments. The terms of the above mentioned settlement were agreed to by e-mail correspondence between counsels. However, at this time the plaintiff/judgment creditor is refusing to acknowledge and agree to the settlement. A hearing on the Company’s Motion To Enforce Settlement Agreement is scheduled for May 20, 2011.

Item 4. Reserved.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Our common stock is presently quoted on the Over-the-Counter Bulletin Board (OTCBB) under the symbol VVIT.OB. The following table sets forth, for the fiscal quarters indicated, the high and low close price quotations for our common stock as reported on the OTCBB. The quotations reflect inter-dealer quotations without retail markup, markdown or commission, and may not represent actual transactions.

	High		Low
Fiscal Year Ended December 31, 2009:
First Quarter	$	0.08	$	0.01
Second Quarter	$	0.13	$	0.04
Third Quarter	$	0.08	$	0.03
Fourth Quarter	$	0.08	$	0.04
Fiscal Year Ended December 31, 2010:
First Quarter	$	0.06	$	0.03
Second Quarter	$	0.04	$	0.03
Third Quarter	$	0.06	$	0.02
Fourth Quarter	$	0.05	$	0.02

Source: http://www.investorpoint.com/stock/VVIT-Vista+International+Technologies+Inc./price-history/

Stockholders of Record

As of April 13, 2011, we had approximately 876 stockholders of record.

Dividends

The Company has never declared or paid any dividends on its common stock. We currently intend to retain any earnings for use in the business and therefore do not anticipate paying any dividends in the near future. Dividends on our common stock can be paid lawfully only out of current and retained earnings and surplus of the Company, when, and if, declared by the Board of Directors. We have not declared or paid any dividends on the common stock and there is no assurance dividends will be paid in the foreseeable future. The payment of dividends in the future rests within the discretion of the Board of Directors and will depend, among other things, upon our earnings, our capital requirements and our financial condition, as well as other factors, which the Board of Directors deems relevant.

Securities Authorized for Issuance Under Equity Compensation Plans

Equity Compensation Plan Information

Plan Category	Number of Securities to be issued upon exercise of outstanding options, warrants and rights		Weighted- average Exercise price of Outstanding options, Warrants and rights			Number of securities Remaining available for Future issuance under Equity compensation plans
	(a)		(b)			(c)
Equity compensation Plans approved by Security holders 1		0		0	2	20,000,000 shares of common stock 3

1 2005 Equity Compensation Plan

2 No options, warrants, restricted stock or other rights have been granted or issued under the plan.

3 Shares may be issued directly as a restricted stock grant or upon exercise of options which may be granted under the plan.

Recent Sales of Unregistered Securities

For the year ended December 31, 2010, the Company issued an aggregate of 5,292,296 restricted shares of its common stock to various investors for cash and in payment of services pursuant to agreements entered into on various dates during 2010. These unregistered shares consist of:

●

1,475,000 shares issued to consultants during 2010 for consulting services valued at $66,750 in the aggregate

●

3,001,666 shares issued to unrelated parties for a cash investment of $100,000

●

815,630 shares issued in payment of professional services valued at $25,761 in the aggregate

Additionally, 2,765,493 shares of Vista’s unregistered common stock were issued to Richard Strain to convert outstanding accrued interest on notes and line of credit of approximately $138,300.

The above issuances were exempt from registration under Section 4(2) of the Securities Act of 1933. We did not use any underwriter or placement agent in these transactions and did not pay anyone commission or other compensation in connection with these issuances. These issuances were made directly by us to persons with whom our management had direct contact and a pre-existing relationship.

Item 6. Selected Financial Data.

Not applicable.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain statements in this report constitute forward-looking statements. See “Business—Special Note Regarding Forward-Looking Statements” in Item 1 of this report for additional factors relating to these statements, and see “Risk Factors” in Item 1A of this report for a discussion of certain risk factors applicable to our business, financial condition and results of operations.

Our analysis presented below is organized to provide the information we believe will be useful for understanding the relevant trends affecting our business. This discussion should be read in conjunction with our consolidated financial statements and the notes to the financial statements in Item 8 of this report.

Business Overview and Presentation

Our financial results were impacted by several significant trends, which are listed below. We expect that these trends will continue to affect our results of operations, cash flows or financial position.

●

Inability to attract adequate debtor equity funding to implement our business plan

●

Ongoing operating losses

●

Delay in successfully demonstrating our Gasifier technology

While these trends are important to understanding and evaluating our financial results, the other transactions, events and trends discussed in “Risk Factors” in Item 1A of this report may also materially impact our business operations and financial results.

Description of Business

Vista International Technologies, Inc. is in the business of developing, commercializing and operating renewable energy and waste-to-energy (“WTE”) technologies and projects.

The Company is currently conducting its business in the following areas:


●	Tire processing operation in Hutchins, Texas, and
●	Renewable energy and waste to energy (WTE) projects utilizing the Company’s Thermal Gasifier™ technology and corporate administration at the Company’s offices in Englewood, Colorado.

Discrete financial information is not presently maintained for our WTE business as it has not yet generated any revenues for several years. In addition, management makes investing and resource allocation decisions based on the combined results of both the processing and WTE business. Accordingly, we only have one reportable segment.

Our mission is to provide a clean, dependable, cost-competitive alternative energy to fossil fuels. We plan to develop projects with government, community, industry and financial partners to recover the available carbon based energy from materials previously considered “waste” and destined for disposal. The recovery of energy from waste using our Thermal Gasifier™ diverts large volumes of material from landfills and other disposal sites, while providing clean alternative energy and reducing greenhouse gas emissions. In addition to processing waste into clean energy, our technology has the capability to convert biomass into energy using various plant based materials as fuel.

Our tire processing operations are subject to regulation by the TCEQ. We are registered with the TCEQ, which allows us to receive, store, transport and process waste tires. Our registration was renewed on April 23, 2010 and our permit was granted through April 25, 2015.

At December 31, 2010, the Company had approximately 10,000 tons of whole tires, partially shredded tires, tire chips and process waste stored onsite at the tire processing and storage facility. Through July, 2010 we were able to dispose of this material at a municipal landfill site. However, the landfill has recently transitioned to a project based system where they will request tires as needed rather than storing tires in anticipation of future needs. As a result, tire inventory has increased without a ready disposal source.

Going Concern

Our consolidated financial statements for the year ended December 31, 2010 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business. The Report of the Independent Registered Public Accounting Firm includes an explanatory paragraph that describes substantial doubt about our ability to continue as a going concern. We have a net loss of approximately $864,000 and net cash used in operations of approximately $324,000 for the year ended December 31, 2010, a working capital deficit of approximately $3,210,000, an accumulated deficit of approximately $65,500,000 and a total stockholders’ deficit of approximately $2,905,000 at December 31, 2010.

Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow or obtain equity investment or additional financing to meet obligations on a timely basis and ultimately to achieve profitable operations.

Management’s Plans

The Company entered into a Purchase and Sale Agreement in February, 2011 to sell all of its interest in the approximate 27 acre industrial site it owns at 1323 Fulghum Rd. in Hutchins, Texas. The sale is subject to a variety of conditions, including shareholder approval. The Company expects to net approximately $1,348,000 in cash from the sale. The Company will concurrently lease back approximately 12.5 acres of the property at closing to continue the tire processing business currently located on the property, for a period of 60 months with extensions as may be mutually agreed to. The proposed lease includes a waiver of the first two years of lease payments of approximately $203,000.

Management intends to use the proceeds from the property sale to repay certain liabilities and improve operations, including the purchase of additional equipment to process waste tires into Tire Derived Fuel (TDF).

The property is encumbered as an $800,000 deed of trust which was filed against the property by Alternate Power in April 2002. Management does not believe that the Deed of Trust Secures any indebtedness or obligation to Alternate Power and is taking steps to have the Deed of Trust removed, as described in more detail in Part I of this report under Item 2 “Property” above.

The project is also subject to an $86,000 mechanics lien filed by a contractor relating to services provided in October 2007 through April 2008. This lien will be resolved at the completion of the property sale.

In addition to the continued improvements and additional investment in the Hutchins, TX facility, Management intends to focus the Company’s resources in the following areas:

●

Thermal Gasifier™ engineering design and deployment,

●

Maximizing value from the Hutchins, Texas tire processing and storage facility,

●

Development of project based opportunities, and

●

Attracting strategic investment

Management considers the Thermal Gasifier™ and waste-to-energy segment to be our core business. However, significant focus is also being placed on the improvement of the tire processing operation at our Hutchins, Texas facility to increase production and reduce operating costs, and expand sales to include used road-worthy truck and passenger tires to increase revenue and cash flow. Management believes that improvement in all facets of Company operations will improve the Company’s ability to attract investors looking to enter the waste-to-energy and renewable energy marketplace.

The Company continues to work closely with its outside consultant, Mustang Consulting, LLC, to advance its Thermal Gasifier™ technology. Mustang along with third parties, is currently in the process of designing and fabricating an MFG-8 Thermal Gasifier™ which is a smaller version of our Thermal Gasifier™. Once the fabrication of this Gasifier is completed, it will be commissioned for demonstration, marketing and testing purposes. Mustang and the third parties plan to co-market a smaller version of the Thermal Gasifier™ to take advantage of well established waste-to-energy markets within Italy. The Company will receive a license fee at the rate of $50,000 per 16 MMBtu/Hr of thermal capacity for each unit that is placed into service.

We also continue to develop our internal resources and implement business development activities to secure waste-to-energy and biomass-to-energy facility opportunities that utilize our Thermal Gasifier™ technology through build-own-operate agreements alone or through joint-venture relationships with strategic partners. We are looking to partner with companies producing a large hydrocarbon based waste stream, which are also in need of thermal and/or electrical energy. In our target markets, we target opportunities where there are high disposal fees and energy rates, where we can use the Thermal Gasifier™ with “back end power” systems to provide significant cost savings to the end user. We are reviewing the economic viability of a number of opportunities in the northeastern United States and in Colorado and are currently advancing our discussions and working toward obtaining letters of intent from these entities.

Management believes that current revenue levels will not be sufficient to meet our operational needs and execute the Company’s complete business plan. The Company is seeking additional funding for the activities described above. The Company is exploring numerous financing opportunities but has no agreements or commitments for funding at the present time. Future funding may be through an equity investment, debt or convertible debt. Current market conditions present uncertainty as to the Company’s ability to secure additional funds, as well as its ability to reach full profitability. There can be no assurances that the Company will be able to secure additional financing, or obtain favorable terms on such financing if it is available, or as to the Company’s ability to achieve positive earnings and cash flows from operations. Any continued negative cash flows and lack of liquidity create significant uncertainty about the Company’s ability to fully implement its operating plan, as a result of which the Company may have to reduce the scope of its planned operations. If cash resources are insufficient to satisfy the Company’s liquidity requirements, the Company will be required to scale back or discontinue its technology and project development programs, or obtain funds, if available, through strategic alliances that may require the Company to relinquish rights to certain of its technologies products or to discontinue its operations entirely.

Results of Operations

Overview

The following table summarizes our results of operations for the years ended December 31, 2010 and 2009:

	Years ended December 31,						Increase/(Decrease)
	2010			2009			2010 vs 2009			% change 2010 vs 2009

Revenues	$	571,258		$	806,034		$	(234,776	)		(29.1	)%

Cost of revenue		342,992			491,186			(148,194	)		(30.2	)%

Environmental remediation expense (recovery)		41,122			(207,712	)		248,834			(119.8	)%

Gross profit		187,144			522,560			(335,416	)		(64.2	)%

Operating expenses:

Selling, general and administrative expenses		1,019,015			977,677			41,338			4.2	%

Loss from operations		(831,871	)		(455,117	)		(376,754	)		82.8	%

Other income (expense):

Gain on extinguishment of liabilities		71,481			175,443			(103,962	)		(59.3	)%
Gain on disposal of property and equipment		13,397			1,000			12,397			1239.7	%
Proceeds from insurance settlement		90,769			—			90,769			N/A
Interest expense (net)		(92,446	)		(69,307	)		(23,139	)		33.4	%
Other expense		(12,188	)		—			(12,188	)		N/A
		71,013			107,136			(36,123	)		(33.7	)%

Loss before income taxes		(760,858	)		(347,981	)		(412,877	)		118.6	%

Income tax expense		103,125			—			103,125			N/A

Net loss	$	(863,983	)	$	(347,981	)		(516,002	)		148.3	%

2010 COMPARED TO 2009

Revenue

Revenue, which consists primarily of tipping fees received for acceptance of whole passenger and truck tires decreased significantly as a result of the loss of a major customer in the first quarter of 2010 and the extended closure of the Texas facility from February through July 2010 due to the snowstorm related collapse of the building.

This major customer comprised approximately 21% of revenues for the year ended December 31, 2010 as compared to approximately 47% of revenues for the year ended December 31, 2009.

Cost of Revenue

Cost of revenue for our tire processing operations decreased due to a decrease in operating costs at the facility, primarily as a result of the extended closure of the facility. The decrease was primarily due to decreases in salaries and contract labor, outside services and building depreciation expense.

Our tire operations in Texas are subject to regulation by the TCEQ. At December 31, 2010, the Company had approximately 10,000 tons of whole tires, partially shredded tires, tire chips and process waste stored onsite at the tire processing and storage facility. Through July, 2010, we were able to dispose of this material at a municipal landfill site. However, the landfill has recently transitioned to a project based system where they will request tires as needed rather than storing tires in anticipation of future needs. As a result, tire inventory has increased without a ready disposal source. We maintain a reserve for removal and cleanup of material at our Texas facility. As a result, our environmental liability increased in 2010 compared to the significant decrease in this liability in 2009.

Selling, General, and Administrative Expenses

Selling, general, and administrative expenses increased approximately $41,000 in 2010. Professional expenses increased by approximately $151,000 due to the Company’s increased use of consultants and attorneys to improve operations and negotiate debt settlements. We also recognized a significant increase in the accrual of payroll tax penalties and interest of $66,000, which was offset by a $126,000 decrease in salary and payroll costs as the result of the termination of our Chief Financial Officer and Chief Executive Officer in the fourth quarter of 2009. Additionally, relocation to smaller office facilities in the fourth quarter of 2009 enabled us reduce office rent and expense by $57,000.

Research and Development Expense

Internal and external research and development expense was approximately $87,500 for the year ended December 31, 2010 and is included in selling, general and administrative expenses. Expenditures decreased approximately 5% from approximately $92,000 for the year ended December 31, 2009 due to limited resources available to the Company.

Interest Expense

Interest expense increased approximately 33% due to a net $235,000 increase in related party borrowings.

Gain on Extinguishment of Liabilities

On August 7, 2009 the Company engaged the services of a law firm to negotiate settlements with creditors and judgment holders of the Company. The law firm was successful in settling approximately $101,000 of debt for approximately $43,500 thereby realizing a net gain of approximately $57,400 in the year ended December 31, 2009. Negotiations completed in the year ended December 31, 2010 resulted in an additional gain of approximately $71,500.

Gain (loss) on the Disposal of Equipment

Gain on the disposal of equipment increased primarily due to the repossession and auction of caterpillar equipment previously used at the Texas facility. Equipment with a net book value of approximately $35,800 and subject to debt of approximately $75,500 was sold at auction for approximately $48,600, resulting in a gain on disposal of approximately $13,000.

Income Tax Expense

The Company’s policy is to record interest and penalties as a component of income tax expense. During the year ended December 31, 2010, we accrued approximately $103,000 related to delinquent balances on federal and state tax returns filed for the tax years 2005 and 2006, while there was no such accrual for the year ended December 31, 2009.

Liquidity and Capital Resources

We had a cash balance of approximately $4,900 at December 31, 2010. We expect that our current cash on hand and our current revenue levels will not be sufficient to sustain our current operations or plans. The Company is exploring all available funding sources, including the sale of its assets, and additional debt and equity funding. In the near future we are relying on the successful closing of the sale of our Hutchins property to provide cash to fund operations as described in more detail under the heading “Management’s Plans” above. If it is unable to obtain additional funding or increase revenues, we may be required to scale back or suspend operations or revise our business plan.

As of December 31, 2010, we had a negative working capital of approximately $3,210,000, which includes a liability of approximately $183,000 for waste tire shred removal and cleanup costs at the tire processing and storage facility, an unpaid payroll liability to former officers of the Company of $482,000, a liability of $106,000 for consulting services provided to the Company and a liability of approximately $480,000 for unpaid federal and state income taxes and local sales and property taxes.

As of December 31, 2010, we owed approximately $124,000 to the Internal Revenue Service in back payroll taxes and penalties. Monthly payments of $5,000 have been made since December 28, 2010 and the final balloon payment is due April 30, 2011.

The Company was in default on various secured promissory notes and a line of credit to Richard Strain, a stockholder, in the aggregate amount of approximately $592,000. The Company received a waiver of default on the notes and line of credit on March 22, 2011 which specifies that non-payment defaults will be waived until the earlier of the closing of the Company’s sale of its Texas industrial site, or June 30, 2011. The line of credit provides for certain equity redemption rights to Mr. Strain, on terms and conditions to be agreed upon. No equity redemption rights have been provided as of December 31, 2010. The maximum amount to be drawn under the line is $375,000. However, subsequent to initial draws of approximately $100,000 in 2009, Mr. Strain has declined to provide additional funding under the line.

During the year ended December 31, 2010, the Company received proceeds of approximately $100,000 from sales of stock for cash, proceeds of $50,000 from notes payable and proceeds from related party notes of approximately $245,000. The Company received additional note proceeds of $64,000 from a related party subsequent to year-end. We expect that the Company will continue to rely on loans from related parties and issuances of shares in private placements to meet its working capital needs for the foreseeable future.

Critical Accounting Policies

Use of Estimates

Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles. These accounting principles require us to make certain estimates, judgments and assumptions. We made estimates, judgments and assumptions when accounting for items and matters such as, but not limited to allowance for doubtful accounts, depreciation, amortization, asset valuations, recoverability of assets, impairment assessments, accrued liabilities and other provisions and contingencies and we believe they are reasonable, based on information available at the time they were made. These estimates, judgments and assumptions can affect the amounts reported in our consolidated financial statements.

For all of these and other matters, actual results could differ from our estimates.

Environmental Liability

At December 31, 2010, the Company has approximately 10,000 tons of whole tires, partially shredded tires, tire chips and process waste stored onsite at the tire processing and storage facility. The waste material consists primarily of steel belting wire with attached tire rubber and will be disposed of in a permitted landfill. In the past, management has considered the piles of tires and tire shreds at the facility an asset to be reclaimed and sold to an end user. However, in order to reclaim the material for resale, we would need to install additional equipment to screen the material for potential contaminants in the piles such as rocks, pieces of metal and concrete. We currently do not have the resources to purchase the screening equipment and management has chosen to focus on shipping tire shreds to local landfills.

In the past, we have been able to dispose of this material at a municipal landfill site that uses the material as filter and bedding material. However, in July 2010 the landfill transitioned to a project based system where they will request tires as needed rather than storing tires in anticipation of further needs. On this basis, they have accepted limited amounts in the first three months of 2011. Accordingly, our tire inventory and related liability for disposal has been increasing.

The Company’s registration with the TCEQ requires the Company to provide financial assurance in the form of letters of credit to ensure that the site is restored if the Company was unable to meet its obligations with the TCEQ.

In such a case, we would be required to restore the site beginning with transportation of the material to a disposal site, such as a landfill. We have accrued approximately $183,000 and $142,000 at December 31, 2010 and 2009, respectively for the cost of disposing this material. This accrual is based on standard disposal costs prescribed by the TCEQ, based on the weight of tires at the site. These costs include transportation, labor, equipment and landfill fees assuming complete closure of the facility.

Stock Based Compensation to Other than Employees

The Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees by measuring cost at the estimated fair value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably determinable. The value of equity instruments issued in exchange for services by non-employees is determined on the earlier of the date that a performance commitment has been established or upon completion of performance. The Company determined that the market value of its shares was more reliably determinable to measure compensation expense in 2010 and 2009.

Income Taxes

The provision for income taxes consists of an amount for taxes currently payable, an amount for tax consequences deferred to future periods and adjustments to our liabilities for uncertain tax positions. The Company establishes valuation allowances when necessary to reduce deferred income tax assets to the amounts that management believes are more likely than not to be recovered.

The Company’s policy is to record interest and penalties as a component of income tax expense. As of December 31, 2010, the Company recognized interest and penalties of approximately $108,000 and no similar amount was recognized in 2009 related to uncertain tax positions.

Off-Balance Sheet Arrangements

We have no off-balance sheet arrangements that have or are reasonable likely to have a current or future effect on our financial condition, changes in financial condition, revenues, or expenses, results of operation, liquidity, capital expenditures, or capital resources that are material to investors.

Inflation

In the opinion of management, inflation has not had a material effect on the Company’s financial condition or results of its operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Not applicable.

Item 8. Financial Statements and Supplementary Data.

The financial statements required by this Item 8 are included in this Annual Report on Form 10-K following Item 15.

Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.

None.

Item 9A. Controls and Procedures.

Management’s Annual Report on Internal Control over Financial Reporting.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 13a-15(f) promulgated under the Exchange Act. Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of assets; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with U.S. generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use, or disposition of our assets that could have a material effect on our financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

A material weakness is a control deficiency, or combination of control deficiencies, that results in more than a remote likelihood

that a material misstatement of the annual or interim financial statement will not be prevented or detected. As of December 31, 2010, management assessed our internal control over financial reporting in relation to criteria described in Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Evaluation of Disclosure Controls and Procedures.

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including its chief executive officer and chief financial officer, as appropriate, to allow timely decisions regarding required disclosure.

Limitations on the Effectiveness of Disclosure Controls. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management necessarily is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Evaluation of Disclosure Controls and Procedures. As of December 31, 2010, the end of the fiscal year covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Interim Chief Executive Officer, who is our principal executive officer and principal financial and accounting officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Interim Chief Executive Officer (principal executive officer and principal financial and accounting officer) concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not operating effectively as of December 31, 2010. Our disclosure controls and procedures were not effective because of certain “material weaknesses” described below.

Management’s Conclusion

Management believes that the Company’s internal control over financial reporting was not effective as of December 31, 2010 due to material weakness in internal control, which weaknesses resulted from the failure to maintain effective internal control over the financial reporting process to ensure the timely preparation of financial statements and financial data which is necessary for the preparation of the Company’s financial statements in accordance with U.S. GAAP. Specifically, we noted the following:

●

While there were internal controls and procedures in place that relate to financial reporting and the prevention of material misstatements, these controls did not meet the required documentation and effectiveness requirements under the Sarbanes-Oxley Act; specifically, we did not maintain adequate documentation of our internal control assessment, including risk matrices, internal control narratives and flowcharts, test results, etc. We may not be able to fully remediate this material weakness unless we hire more staff. We will continue to monitor and assess the costs and benefits of additional staffing.

●

Due to the nature and size of the Company’s current operations, there is lack of segregation of duties in financial reporting. This weakness was due to our lack of working capital to hire additional staff. Our size has prevented us from being able to employ sufficient resources to enable us to have an adequate level of supervision and segregation of duties within our internal control system. There is one person involved in the processing of a significant portion of the Company’s accounting and banking transactions and a single person with responsibility for processing cash disbursements and recording journal entries. A single person is responsible for reviewing sales and cash receipts entry. Therefore, while there are some compensating controls in place, it is difficult to ensure effective segregation of accounting duties. While we strive to segregate duties as much as practicable, there is an insufficient volume of transactions to justify additional full time staff. We may not be able to fully remediate this material weakness unless we hire more staff. We will continue to monitor and assess the costs and benefits of additional staffing.

However, management believes that these material weaknesses did not materially impact the reliability of our financial statements.

Changes in Internal Control over Financial Reporting.

There were no significant changes in our internal control over financial reporting during the year ended December 31, 2010 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

The names, ages and terms of office of our directors and executive officers as of April 13, 2011 are set forth in the following table:

Name	Age	Positions with Vista International Technologies

Bradley A. Ripps	35	Interim Chief Executive Officer (principal executive officer and principal financial and accounting officer)1

Thomas P. Pfisterer*	49	Director (former Chief Executive Officer) 2

Timothy D. Ruddy	39	Director

* Mr. Pfisterer is also a named executive officer for purposes of Section 16(a)

1 Mr. Ripps has been the Interim Chief Executive Officer (principal executive officer and principal financial and accounting officer) of the Company effective January 17, 2011.

2 Mr. Pfisterer was the Interim Chief Executive Officer (principal executive officer and principal accounting officer) of the Company from October 1, 2009 through April 19, 2010 and the Chief Executive Officer of the Company from April 20, 2010 through January 17, 2011.

Directors are elected by holders of the common stock to serve until the earlier of the next annual meeting of the Company at which their successors are elected or their resignations. Officers serve at the will of the Board. Under our certificate of incorporation and Delaware law, our directors will not be liable to the Company or our stockholders for damages for a breach of fiduciary duty unless the breach involves:

●

a breach of duty or loyalty,

●

acts, or omissions or bad faith, intentional misconduct or knowing violation of law

●

unlawful dividend payments or stock purchase by the Company

●

a transaction in which the director derives improper personal benefit.

Additionally, we will indemnify directors and officers against damages which qualify, for indemnification under Delaware law and our Bylaws except in relation to matters where he or she is adjudged in a legal proceeding to be liable for negligence or misconduct in the performance of duty. Insofar as indemnification for liabilities arising under the federal securities laws may be permitted to directors, officers or persons controlling us pursuant to Delaware law and its Bylaws, we have been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the laws and is therefore unenforceable.

Management Biographies

Bradley Ripps. Bradley Ripps became our Interim Chief Executive Officer on January 17, 2011. Mr. Ripps brings a strong, diverse business background having owned, operated, analyzed and advised more than 50 businesses, across many industries. Mr. Ripps was integral to the success of major initiatives at multiple companies. He was responsible for leading 60 employees, located in 10 different facilities, in the successful re-structuring of a managed care company. Mr. Ripps also successfully deployed a multi-million dollar network for a large communication and information company in the southeastern U.S. As a testament to Mr. Ripps negotiation skills and tenacity, he was instrumental in the collection of several million-plus dollar receivables for a major telecommunication provider. Prior to joining Vista, Mr. Ripps served as Vice President of IBG Business Services, Inc., one of the leading merger and acquisition advisory firms in the United States, from April 2006 to January 2011. At IBG, Mr. Ripps handled both domestic and international clients across a broad range of industries, from physical fitness and

advertising to transportation and manufacturing. Concurrently, since 2001, he has held various senior management positions in Community Care, Inc. a private, family owned, managed care business. Mr. Ripps completed his undergraduate studies at Syracuse University, earning a Bachelor of Arts Degree in Economics (Magna Cum Laude). He completed his graduate studies at The University of Texas, earning a Master’s Degree in Business Administration.

Thomas Pfisterer. Thomas Pfisterer served as our Interim Chief Executive Officer from October 1, 2009 through April 19, 2011 and as our Chief Executive Officer from April 20, 2010 through January 17, 2011, and has served as a Director since October 2009. He is a co-founder and the President and Chief Executive Officer of Aquarius Energy Systems, Inc. located in New Hartford, New York. Aquarius Energy Systems (incorporated in 2008) is a development stage alternative “green energy” company in central New York State. Mr. Pfisterer also currently holds the position of Director of School Food Services for the Oneida County B.O.C.E.S. (Board of Cooperative Educational Services) in New Hartford, New York where he has served for the past 20 years. His operating budget for the district has grown from $88,000 in 1989 to over $5.1 million in 2010. The total number of program employees has grown from 11 to 189 during this period. Mr. Pfisterer completed his undergraduate studies at the University of Cincinnati (attending on a Division I Baseball scholarship), earning a Bachelor of Science Degree in Dietetics (Magna Cum Laude) in 1983. He completed his graduate studies at Empire State College in Saratoga Springs, New York, earning a Master’s Degree in Business Administration in 2003. The Company believes that Mr. Pfisterer’s organizational and leadership expertise, including his experienced background in growing and managing organizations and his involvement in the green energy market, gives him the qualification and skills to serve as a Director.

Timothy Ruddy. Timothy Ruddy has been a Director of Vista International Technologies, Inc. since October 2007. For the past 18 years Mr. Ruddy has been active in the financial services industry, evaluating promising technologies and companies with regard to their formation, funding and development. He has experience in startup and turnaround situations, as well as business development. Mr. Ruddy holds series 7 and 65 licenses from FINRA and is currently serving as Vice President-Investments at 1st Financial Services, a financial advisory firm. Mr. Ruddy has been active as an angel investor in the venture capital industry for the past ten years, working with companies in the medical devices field as well as emerging energy-related technologies. In addition to his position with Vista, Mr. Ruddy is a co-founder, and serves as an officer of Ambien Dynamics, a medical device company specializing in pulsed electromagnetic field therapies, a position he has held since 2002. Mr. Ruddy graduated Summa Cum Laude from the University of Notre Dame with a Bachelors Degree in Mechanical Engineering, and played center for the NFL’s Miami Dolphins from 1994-2003. The Company believes that Mr. Ruddy’s development-stage and growth-stage business expertise, including his diverse background evaluating and funding start-up, development stage and growth-stage technology and energy-related companies, gives him the qualifications and skills to be a Director.

Family Relationships

There are no family relationships among any of our executive officers and directors.

Committees

We do not have an audit committee, and accordingly we do not have an audit committee financial expert. Currently we have two members of the Board of Directors, none of whom are independent. The Board of Directors plans to seek qualified candidates for election as independent board and audit committee members. We cannot anticipate when we will have other independent board members elected or will establish an audit committee. The Company does not have a nominating committee.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16 of the Exchange Act requires that reports of beneficial ownership of common shares and changes in such ownership be filed with the Securities and Exchange Commission by Section 16 “reporting persons,” including directors, certain officers and holders of more than 10% of the outstanding common shares. We are required to disclose in this Annual Report each reporting person whom we know to have failed to file any required reports under Section 16 on a timely basis during the fiscal year ended December 31, 2010. To our knowledge, based solely on a review of copies of Forms 3, 4 and 5 filed with the Securities and Exchange Commission, and written representations from certain reporting persons, during the fiscal year ended December 31, 2010, our officers, directors and 10% stockholders complied with all Section 16(a) filing requirements applicable to them, except that Mr. Ruddy filed four Forms 4 late (each reporting one late transaction) and Mr. Pfisterer filed eight Forms 4 late (seven reporting one late transaction and one reporting three late transactions).

Code of Ethics

The Company has adopted the Vista International Technologies Inc. Code of Business Conduct and Ethics for Officers (Vice President and Senior Management) and Directors that applies to the Company’s Chief Executive Officer and Chief Financial Officer (Principal Accounting Officer), among others. The Company has also adopted the Vista International Technologies Inc. Code of Business Conduct and Ethics for Employees and Officers (other than Vice President and Senior Management).

The Company’s Code of Business Conduct and Ethics for Officers (Vice President and Senior Management) is posted on the Company’s website at: www.vvit.us.

The Company will provide to any person, without charge, a copy of its Code of Business Conduct and Ethics for Officers (Vice President and Senior Management) upon written request to: Vista International Technologies Inc., 88 Inverness Circle East, Suite N-103, Englewood, Colorado 80112, Attention: Code of Conduct and Ethics Request.

Item 11. Executive Compensation.

The following table sets forth the compensation paid during the past two years to our chief executive officer (our principal executive officer and principal financial and accounting officer). No executive officer’s remuneration exceeded $100,000 per year. We did not pay any non-cash current compensation or long term compensation to our officers during the listed years.

Summary Compensation Table

Name and Principal Position	Year		Salary		Bonus		All Other Compensation		Total
Thomas P. Pfisterer1		2009		—		—		—	—
		2010		—		—		—	—

1 Thomas Pfisterer became our Interim Chief Executive Officer on October 1, 2009, was later appointed the Chief Executive Officer on April 20, 2010 and resigned as Chief Executive Officer effective January 17, 2011. He received no compensation for officer or director duties.

No executive officer named in the table above has any unexercised or unearned options, unvested stock amounts or equity incentive plan awards.

Employment Contracts, Termination of Employment, and Change-in-Control Arrangements

Thomas P. Pfisterer. Mr. Pfisterer assumed the role of Interim Chief Executive Office on October 1, 2009 and was later appointed the Chief Executive Offer. Mr. Pfisterer resigned as Chief Executive Officer of the Company on January 17, 2011. Mr. Pfisterer continues as a Director of the Company. Mr. Pfisterer served as our Chief Executive Officer at-will and we did not have an employment agreement with him.

The Company did not pay any compensation to its directors for serving as such in 2010.

We do not have any compensation arrangements with our directors. In the future the Company may institute director compensation arrangements; however, none are currently contemplated.

Discussion about the employment terms of our current Interim Chief Executive Officer, Bradley Ripps, is included under Item 13 “Certain Relationships and Related Transactions and Director Independence”.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder matters

The following table sets forth, to the Company’s knowledge, based solely upon records available to it, certain information as of April 13, 2011 regarding the beneficial ownership of the Company’s shares of common stock by:

●

each person who we believe to be the beneficial owner of more than five percent (5%) of our outstanding shares of common stock,

●

each of the current directors,

●

each of the named executive officers listed in the summary compensation table, and

●

all of our current executive officers and directors of the group.

Name and Address of Beneficial Owner	Number of Shares			Percentage of Class
Richard Strain 417 Manchester Road Poughkeepsie, New York 12603		55,350,493	1		48.2	%

Timothy D. Ruddy 3885 Vale View Lane Mead, CO 80542		10,675,000	2		9.3	%

Thomas Pfisterer 12 Croft Road, New Hartford, NY 13413		294,000	2		*

Brad Ripps 88 Inverness Circle East, Suite N-103 Englewood, CO 80112		—	2		—

All directors and executive officers as a group (3 persons)		10,969,000	3		9.6	%

1	Information based upon a Schedule 13D/A filed by Mr. Strain with the Securities and Exchange Commission, the records of the Company’s transfer agent, and information provided to the Company by Mr. Strain.
2	Information based upon the records of the Company’s transfer agent and information provided by the beneficial owner.
3	See Notes (1) and (2) above.
*	Less than one percent.

Securities Authorized for Issuance under Equity Compensation Plans

Vista International Technologies Inc. has adopted its 2005 Equity Participation Plan, which was approved by its stockholders. There are 20,000,000 shares of common stock available for issuance under this plan. No shares of common stock, or securities, options or rights exercisable in the common stock have been granted or issued under this plan. See Part I Item 5 for further disclosure about this plan.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

Transactions with related persons, promoters and certain control persons.

On August 3, 2009, the Company entered into a loan agreement with Mr. Timothy D. Ruddy, a Director of the Company. The loan agreement formalized the terms related to working capital funding provided by Mr. Ruddy beginning in the fourth quarter of 2008. Mr. Ruddy has the option, at his discretion, to receive payment as follows:

●

repayment of principal and interest in cash;

●

conversion of outstanding amount without accrual of interest into the Company’s common stock based on the quoted market price of the stock at the dates loans were made;

●

any combination of cash and stock as described in (a) and (b)

As of December 31, 2010, that total was approximately $359,000 and accrued interest at December 31, 2010 was approximately $31,400. The loan bears interest at 8% per annum, is secured by the Company’s assets, is due on demand, and is convertible into the Company’s common stock as described above. Through April 5, 2011, Mr. Ruddy has loaned the Company an additional $64,000 under this agreement.

In December 2009, Mr. Ruddy provided $150,000 of personal assets as collateral for a letter of credit utilized for part of Vista’s required financial assurance in connection with its registration with the Texas Commission on Environmental Quality (TCEQ). This registration is required to enable us to operate our tire processing facility in Hutchins, Texas, and would be used for remediation in the event the Company liquidates and its facility closes. Mr. Ruddy was not compensated for providing this collateral.

On August 11, 2009, the Company entered into a $375,000 line of credit agreement with Mr. Richard Strain, a 48.2% shareholder of the Company. The line of credit bears interest at 9% per annum, and is payable in $8,000 monthly increments commencing on October 1, 2009. Full repayment of the line of credit is required by December 31, 2011. The line of credit is secured by a first priority security interest in the Company’s assets and provides for certain equity redemption rights to Mr. Strain, on terms and conditions to be agreed upon. During 2010, an aggregate of approximately $138,000 of accrued interest under the line of credit and other Notes was converted into 2,765,493 shares of Vista common stock. Approximately, $92,000 in principal is outstanding under the line of credit and Mr. Strain has declined to provide additional advances under the line of credit. As of December 31, 2010, the Notes and the line of credit in the principal amount of approximately $592,000 were in default due to missed principal payments. The Company received a waiver of default on the Notes and line of credit on March 22, 2011 which specifies that payment defaults will be waived until the earlier of the closing of the Company’s sale of its industrial site in Hutchins, Texas, or June 30, 2011.

Bradley A. Ripps began serving as the Company’s Interim Chief Executive Officer (principal executive officer and principal financial and accounting officer) effective January 17, 2011. Mr. Ripps will receive annual compensation of $85,000. The Company and Mr. Ripps are currently negotiating the terms of an employment agreement but they have not been finalized.

Director independence

The Company’s common stock is quoted on the Over-the-Counter Bulletin Board. The Company uses the independent director definition in Rule 4200 of the NASDAQ Stock Market, Inc. and Rule 10A-3 of the Securities Exchange Act of 1934 to determine whether the directors of the Company are independent or not.

Applying the NASDAQ standards, the Board of Directors has determined that none of our directors are independent. The Company does not have an audit committee, compensation committee or nominating committee.

Item 14. Principal Accountant Fees and Services

Audit Fees

The aggregate fees billed for our fiscal year ended December 31, 2010 by GHP Horwath, P.C. were $45,000. The aggregate fees billed for our fiscal year ended December 31, 2009 by GHP Horwath, P.C. were $35,000.

Audit Related Fees

Our principal accountants did not bill us any fees during our fiscal years ended December 31, 2010 and 2009 for any audit related services.

Tax Fees

Our principal accountants did not bill us any fees for tax compliance, tax advice and tax planning for our fiscal years ended December 31, 2010 and 2009.

Other Fees

Our principal accountants did not bill us for any services other than as reported above in this Item 14 during our fiscal years ended December 31, 2010 and 2009 respectively.

PART IV

Item 15. Exhibits and Financial Statement Schedules

2.1	Industrial Site Purchase and Sale Agreement dated February 14, 2011 by and between Vista International Technologies, Inc. and Brown-Lewisville Railroad Family First Limited Partnership∆

3(i).1	Certificate of Incorporation*

3(i).2	Articles of Amendment to the Articles of Incorporation, as amended on August 6, 1999*

3(i).3	Certificate of Amendment of Certificate of Incorporation, as amended on April 24, 2002*

3(i).4	Certificate of Amendment of the Certificate of Incorporation, filed on October 12, 2005*

3(i).5	Certificate of Amendment to Certificate of Incorporation, as amended on November 8, 2007**

3(ii).1	Amended and Restated By-Laws***

10.1	Strategic Alliance and Supply Agreement, dated December 29, 2009 by and between Vista International Technologies, Inc. and Liberty Tire Recycling, LLC ****

10.2	Consulting Agreement dated August 3, 2009 by and between Vista International Technologies, Inc and Ing. Gianfranco Licursi*****

10.3	Vista International Technologies, Inc. Equity Participation Plan*

10.4	Investment Agreement dated August 3, 2009 between Vista International Technologies, Inc. and Timothy Ruddy ****

10.5	Security Agreement dated August 3, 2009 by and between Vista International Technologies, Inc. and Timothy Ruddy ****

10.6	Promissory Note (Line of Credit) dated August 11, 2009 by and between Vista International Technologies, Inc. and Richard Strain ****

10.7	Security Agreement dated August 11, 2009 by and between Vista International Technologies, Inc. and Richard Strain∆

10.8	Promissory Note dated April 4, 2007 by and between Nathaniel Energy Corporation and Richard Strain∆

10.9	Security Agreement dated April 4, 2007 by and between Nathaniel Energy Corporation and Richard Strain∆

10.10	Promissory Note dated April 16, 2007 by and between Nathaniel Energy Corporation and Richard Strain∆

10.11	Security Agreement dated April 16, 2007 by and between Nathaniel Energy Corporation and Richard Strain∆

10.12	Promissory Note dated May 31, 2007 by and between Nathaniel Energy Corporation and Richard Strain∆

10.13	Security Agreement dated May 31, 2007 by and between Nathaniel Energy Corporation and Richard Strain∆

10.14	Engagement Letter dated April 15, 2010 by and between Vista International Technologies, Inc. and Colebrooke Capital, Inc. +

10.15	Joint Development Agreement dated October 16, 2010 by and between Vista International Technologies, Inc. and Mustang Consulting, LLC ++

10.16	Amendment to Engagement Agreement dated August 30, 2010 by and between Vista International Technologies, Inc. and Colebrooke Capital, Inc. ++

10.17	Consulting Agreement dated October 26, 2010 by and between Vista International Technologies, Inc. and Steven R. Kowalsky and Edward L. Kowalsky. ++

10.18	Consulting and Services Agreement dated June 11, 2009 by and between Vista International Technologies, Inc. and Mustang Consulting, LLC (“Consulting and Services Agreement”)∆

10.19	Continuation of Consulting and Services Agreement effective January 4, 2010∆

10.20	Exclusive Listing Agreement dated July 1, 2010 by and between Vista International Technologies, Inc. and CCBN Texas Limited Partnership d/b/a Colliers International∆

14.1	Code of Business Conduct and Ethics for Officers (Vice President and Senior) and Directors (effective March 8, 2004)+++

14.2	Code of Business Conduct and Ethics for Employees and Officers(other than Vice President and Senior) (effective March 8, 2004)+++

21	Subsidiaries****

31.	Certification of Interim Chief Executive Officer (principal executive officer and principal financial and accounting officer) pursuant to Rule 13a-14(a)or Rule 15d-14(a) as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.	Certification of Interim Chief Executive Officer (principal executive officer and principal financial and accounting officer) pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* Denotes document filed as an exhibit to our Quarterly Report on Form 10-QSB for the period ended September 30, 2005 and incorporated herein by reference.

** Denotes document filed as an exhibit to our Current Report on Form 8-K for an event dated December 21, 2007 and incorporated herein by reference.

*** Denotes document filed as an exhibit to our Current Report on Form 8-K for an event dated June 6, 2005.

**** Denotes document filed as an exhibit to our Annual Report on Form 10-K for the year ended December 31, 2009 and incorporated herein by reference.

***** Denotes document filed as an exhibit to our Quarterly Report on Form 10-Q for the period ended September 30, 2009 and incorporated herein by reference.

∆ Denotes document filed as an exhibit to our Annual Report on Form 10-K/A Amendment No. 1 for the year ended December 31, 2010 and incorporated herein by reference.

+ Denotes document filed as an exhibit to our Quarterly Report on Form 10-Q for the period ended June 30, 2010 and incorporated herein by reference.

++ Denotes document filed as an exhibit to our Quarterly Report on Form 10-Q for the period ended September 30, 2010 and incorporated herein by reference.

+++ Denotes document filed as an exhibit to our Annual Report on Form 10-KSB for the year ended December 31, 2003 and incorporated herein by reference.

VISTA INTERNATIONAL TECHNOLOGIES INC. AND SUBSIDIARIES

CONSOLIDATED FINANCIAL STATEMENTS

FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

INDEX


	Page
Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets	F-2
Consolidated Statements of Operations	F-3
Consolidated Statements of Stockholders’ Equity (Deficit)	F-4
Consolidated Statements of Cash Flows	F-5
Notes to Consolidated Financial Statements	F-6

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

Board of Directors and Shareholders

Vista International Technologies, Inc.

We have audited the accompanying consolidated balance sheets of Vista International Technologies, Inc. and subsidiaries (the “Company”) as of December 31, 2010 and 2009, and the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows for each of the two years in the period ended December 31, 2010. These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Vista International Technologies, Inc. and subsidiaries as of December 31, 2010 and 2009, and the results of their operations and their cash flows for each of the two years in the period ended December 31, 2010, in conformity with accounting principles generally accepted in the United States of America.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company reported a net loss of approximately $864,000 and used net cash in operating activities of approximately $324,000 in 2010, and has a working capital deficiency of approximately $3.2 million and an accumulated deficit of approximately $65.5 million at December 31, 2010. These factors raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/s/ GHP Horwath, P.C.

Denver, Colorado

April 15, 2011

F-1

Vista International Technologies, Inc. Consolidated Balance Sheets As of December 31, 2010 and 2009

	2010			2009
ASSETS

Current assets:
Cash	$	4,901		$	20,444
Accounts receivable, net		5,783			51,871
Other receivables		52,388			—
Prepaid expenses		42,861			14,791
Restricted cash		20,000			29,757
Total current assets		125,933			116,863

Deposits		1,896			11,431
Property and equipment, net		280,667			345,860
Intangibles, net		32,928			30,916

Total assets	$	441,424		$	505,070

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current liabilities:
Accounts payable and accrued liabilities	$	1,554,952		$	1,218,697
Accrued compensation and payroll liabilities		622,021			624,552
Accrued interest		89,304			153,375
Notes payable - related parties		403,600			168,400
Notes payable - stockholder		592,752			592,752
Notes payable and capital lease, current portion		72,827			102,302


Total current liabilities		3,335,456			2,860,078

Notes payable and capital lease, less current portion		10,887			16,713

Total liabilities		3,346,343			2,876,791

Commitments and contingencies		—			—

Stockholders’ deficit:
Common stock, $0.001 par value; 200,000,000 shares authorized; 114,719,553 and 106,841,764 shares issued and outstanding at December 31, 2010 and 2009, respectively		114,720			106,844
Additional paid-in capital		62,515,471			62,171,362
Commmon stock to be issued		10,800			32,000
Accumulated deficit		(65,545,910	)		(64,681,927	)
Total stockholders’ deficit		(2,904,919	)		(2,371,721	)

Total liabilities and stockholders’ deficit	$	441,424		$	505,070

The accompanying notes are an integral part of the consolidated financial statements.

F-2

Vista International Technologies, Inc.

Consolidated Statements of Operations

For the Years Ended December 31, 2010 and 2009

	2010			2009

Revenues	$	571,258		$	806,034

Cost of revenue		342,992			491,186

Environmental remediation expense (recovery)		41,122			(207,712	)

Gross profit		187,144			522,560

Operating expenses:

Selling, general and administrative expenses		1,019,015			977,677

Loss from operations		(831,871	)		(455,117	)

Other income (expense):

Gain on extinguishment of liabilities		71,481			175,443
Gain on disposal of property and equipment		13,397			1,000
Proceeds from insurance settlement		90,769			—
Interest expense, net		(92,446	)		(69,307	)
Other expense		(12,188	)		—
		71,013			107,136

Loss before income taxes		(760,858	)		(347,981	)

Income tax expense		103,125			—
Net loss	$	(863,983	)	$	(347,981	)

Net loss per share, basic and diluted	$	(0.01	)		*

Weighted average common shares outstanding		110,347,996			103,722,336

* less than ($.01) per share

The accompanying notes are an integral part of the consolidated financial statements.

F-3

Vista International Technologies, Inc.

Consolidated Statements of Stockholders’ Equity (Deficit)

For the Years Ended December 31, 2010 and 2009

					Additional											Stockholders’
	Common Stock				Paid-in		Shares to be issued						Accumulated			Equity
	Shares		Amount		Capital		Shares			Amount			Deficit			(Deficit)

Balances, January 1, 2009		103,002,366	$	103,002	$	61,994,691	$	1,066,217		$	1,048		$	(64,333,946	)	$	(2,235,205	)

Issuance of common stock for services		1,341,113		1,343		81,122		—			—			—			82,465

Issuance of shares in private offering		2,498,285		2,499		95,549		(531,217	)		30,952			—			129,000

Net loss for the year ended December 31, 2009		—		—		—		—			—			(347,981	)		(347,981	)

Balances, December 31, 2009		106,841,764		106,844		62,171,362		535,000			32,000			(64,681,927	)		(2,371,721	)

Issuance of common stock for services		2,290,630		2,291		90,220		—			—			—			92,511

Issuance of shares for cash		2,821,666		2,821		118,379		(355,000	)		(21,200	)					100,000

Issuance of common stock for accrued interest on notes payable - stockholder		2,765,493		2,764		135,510											138,274

Net loss for the year ended December 31, 2010		—		—		—		—			—			(863,983	)		(863,983	)

Balances, December 31, 2010		114,719,553	$	114,720	$	62,515,471		180,000		$	10,800		$	(65,545,910	)	$	(2,904,919	)

The accompanying notes are an integral part of the consolidated financial statements.

F-4

Vista International Technologies, Inc.

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2010 and 2009

	2010			2009
Cash flows from operating activities:
Net loss	$	(863,983	)	$	(347,981	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		113,422			172,984
Stock issued for services		92,511			82,465
Allowance for bad debt		2,760			1,765
Impairment loss		—			35,162
Environmental remediation expense (recovery)		41,122			(207,712	)
Gain on disposal of property and equipment		(13,397	)		(1,000	)
Gain on extinguishment of liabilities		(71,481	)		(175,443	)
Changes in assets and liabilities:
Accounts receivable, net		43,327			(48,993	)
Prepaid expenses		(28,069	)		6,740
Other receivables, deposits and restricted cash		(33,095	)		3,401
Accounts payable and accrued expenses		392,724			204,027
Net cash used in operating activities		(324,159	)		(274,585	)

Cash flows from investing activities:
Property and equipment and intangible asset purchases		(91,773	)		(10,613	)
Proceeds from insurance claim and sale of equipment		25,040			1,000
Net cash used in investing activities		(66,733	)		(9,613	)

Cash flows from financing activities:
Payments on debt		(9,851	)		(56,456	)
Payments on related party notes		(10,000	)		—
Proceeds from issuance of common stock		100,000			129,000
Proceeds from notes payable and capital leases		50,000			—
Proceeds from related party notes		245,200			218,400
Net cash provided by financing activities		375,349			290,944

(Decrease) Increase in cash		(15,543	)		6,746

Cash at beginning of period		20,444			13,698

Cash at end of period	$	4,901		$	20,444

Supplemental disclosure of cash flow information:
Cash paid during theyear for interest	$	1,000		$	6,572

Non-cash investing and financing activities:

Issuance of common stock for accrued interest on notes payable - stockholder	$	138,274		$	—
Property and equipment purchased with debt	$	—		$	28,249
Property and equipment purchased in exchange for accounts payable	$	18,680		$	—
Asset repossession by lienholder	$	48,568		$	—

The accompanying notes are an integral part of the consolidated financial statements.

F-5

Vista International Technologies, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

1. Organization, Nature of Operations, Going Concern and Management’s Plans

Organization

Vista International Technologies, Inc. (the “Company”, “we”, “our”) is in the business of developing, commercializing and operating renewable energy and waste-to-energy (“WTE”) technologies and projects.

Nature of Operations

The Company is currently conducting its business in the following areas:

●

Tire processing operation in Hutchins, Texas, and

●

Renewable energy and waste-to-energy (WTE) projects utilizing the Company’s Thermal Gasifier™ technology and corporate administration at the Company’s offices in Englewood, Colorado.

Discrete financial information is not presently maintained for our WTE business as it has not yet generated any revenues. In addition, management makes investing and resource allocation decisions based on the combined results of both the processing and WTE business. Accordingly, we only have one reportable segment.

Description of Business

We are in the business of developing, commercializing and operating renewable energy and waste-to-energy technologies and projects. Our mission is to provide a clean, dependable, cost-competitive alternative energy to fossil fuels. We plan to develop projects with government, community, industry and financial partners to recover the available carbon based energy from materials previously considered “waste” and destined for disposal. The recovery of energy from waste using our Thermal Gasifier™ diverts large volumes of material from landfills and other disposal sites, while providing clean alternative energy and reducing greenhouse gas emissions. In addition to processing waste into clean energy, we also convert biomass into energy using various plant based materials.

Going Concern and Management’s Plan

The Company reported a net loss of approximately $864,000 and used net cash in operating activities of approximately $324,000 for the year ended December 31, 2010, has a working capital deficit of approximately $3.2 million and an accumulated deficiency of approximately $65.5 million at December 31, 2010. These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments related to the recovery of the recorded assets or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.

Our continuation as a going concern is dependent upon our ability to generate sufficient cash flow from operations or obtain equity investment or additional financing to meet obligations on a timely basis and ultimately to achieve profitable operations.

F-6

Vista International Technologies, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

In February 2011, the Company entered into a Purchase and Sale Agreement to sell all of its interest in the approximately 27 acre industrial site it owns at 1323 Fulghum Rd. in Hutchins, Texas. The sale is subject to a variety of conditions, including shareholder approval (See note 9).

The Company is to concurrently lease back approximately 12.5 acres of the property to continue the tire processing business currently located on the property.

The Company expects to receive proceeds of approximately $1,348,000 in cash, which management intends to use to repay certain liabilities and improve operations, including the purchase of additional equipment to process waste tires into tire derived fuel (“TDF”), thereby establishing a new revenue stream. Management estimates that the sale leaseback and related modification of operations will result in an increase in revenue, gross margin and cash flow beginning in 2012.

Management also intends to focus the Company’s resources in the following areas:

●

Thermal Gasifier™ engineering design and deployment,

●

Maximizing value from the Hutchins, Texas tire processing and storage facility,

●

Development of project based opportunities, and

●

Attracting strategic investment

Management considers the Thermal Gasifier™ and waste-to-energy segment to be our core business. However, significant focus is also being placed on the improvement of the tire processing operation at our Hutchins, TX facility to increase production and reduce operating costs, and expand sales to include used whole truck and passenger tires to increase revenue and cash flow. Management believes that improvement in all facets of Company operations will improve the Company’s ability to attract investors looking to enter the waste-to-energy and renewable energy marketplace.

The Company continues to work with outside consultants to advance its Thermal Gasifier™ technology. These consultants are currently in the process of designing and fabricating an MFG-8, Thermal Gasifier™. Once the fabrication of this Gasifier is completed, it will be commissioned for demonstration, marketing and testing purposes. These consultants are working with outside parties to fabricate a demonstration Gasifier unit at their own expense and will co-market a smaller version of the Thermal Gasifier™ to take advantage of well established waste-to-energy markets within Italy. The Company is to receive a license fee for each unit placed into service.

We continue to develop our internal resources and implement business development activities to secure waste-to-energy and biomass-to-energy facility opportunities that utilize our Thermal Gasifier™ technology. A number of these opportunities have been discovered, and management is endeavoring to secure the rights to these projects or formulate strategic alliances with project development partners.

In the year ended December 31, 2010, the Company sold shares of common stock and received cash of $100,000. Also during year ended December 31, 2010, the Company entered into loan agreements with related parties and received proceeds of $245,200 and through April 5, 2011 has received additional loan proceeds from related parties of $64,000. In October 2010, the Company entered into an additional loan with an unrelated party and received cash of $50,000.

F-7

Vista International Technologies, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

Any continued negative cash flows and lack of liquidity create significant uncertainty about the Company’s ability to fully implement its operating plan, as a result of which the Company may have to reduce the scope of its planned operations. If cash resources are insufficient to satisfy the Company’s liquidity requirements, the Company will be required to scale back or discontinue its technology and project development programs, or obtain funds, if available, through strategic alliances that may require the Company to relinquish rights to certain of its technologies products or to discontinue its operations entirely.

2. Significant Accounting Policies:

Basis of Presentation

The accompanying consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany accounts, amounts and transactions have been eliminated in consolidation.

Use of Estimates

For all of these and other matters, actual results could differ from our estimates.

Reclassifications

We have reclassified certain prior period amounts to conform to the current period presentation.

Restricted Cash

Cash balances held as collateral for a letter of credit (See Note 9) and cash held in trust accounts which are not authorized or available for general corporate purposes are classified as restricted cash.

F-8

Vista International Technologies, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

Accounts Receivable and Concentration of Credit Risk

Accounts receivable are recognized based upon the amount due from customers for the services provided less an allowance for doubtful accounts. The allowance for doubtful accounts receivable reflects our best estimate of probable losses determined on the basis of historical experience, specific allowances for known troubled accounts and other currently available evidence. We generally consider our accounts past due if they are outstanding over 30 days. Our collection process varies by the customer type, amount of the receivable, and our evaluation of the customer’s credit risk. Our past due accounts are written off against our allowance for doubtful accounts when collection is considered to be not probable. Any recoveries of accounts previously written off are generally recognized as a reduction in bad debt expense in the period received.

The allowance for doubtful accounts receivable was approximately $4,300 and $1,800 at December 31, 2010 and 2009, respectively.

One customer comprised approximately 31% and 85% of the accounts receivable balance at December 31, 2010 and 2009, respectively.

Three customers comprised approximately 21%, 21% and 11% of revenues for the year ended December 31, 2010 and two customers comprised approximately 47% and 12% of revenues for the year ended December 31, 2009.

The Company’s financial instruments that are exposed to concentration of credit risk consist primarily of uninsured cash and certificates of deposit held at commercial banks in the United States in excess of federally insured limits and trade receivables from the Company’s customers. The Company has not experienced a loss in its cash accounts.

Property and Equipment

Property and equipment purchased or constructed is recorded at cost. Direct costs, such as labor and materials, and indirect costs, such as overhead used during construction are capitalized. Major units of property replacements or improvements are capitalized and minor items are expensed. Gain or loss is recorded in income for the difference between the net book value relative to proceeds received, if any, when the asset is sold or retired. Depreciation is provided for using the straight-line method. Estimated useful lives of the assets used in the computation of depreciation are as follows:

Machinery and equipment	2-5 years
Buildings and improvements	3-30 years
Vehicles	5 years

F-9

Vista International Technologies, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

Long-Lived Assets

The Company reviews long-lived assets, other than intangible assets with indefinite lives for impairment whenever facts and circumstances indicate that the carrying amounts of the assets may not be recoverable. An impairment loss is recognized only if the carrying amount of an asset group is not recoverable and exceeds its fair value. Recoverability of the asset group to be held and used is measured by comparing the carrying amount of the asset group to the estimated undiscounted future net cash flows expected to be generated by the asset group. If the asset group’s carrying value is not recoverable, an impairment charge is recognized for the amount by which the carrying amount of the asset group exceeds its fair value. The Company determines fair values by using a combination of comparable market values and discounted cash flows, which requires the use of significant judgment.

There were no impairment losses during the year ended December 31, 2010 and an impairment of $35,162 was included in selling, general and administrative expense for the year ended December 31, 2009.

Intangible Assets

Intangible assets consist of United States and European patents for our Thermal Gasifier™ technology. The Company reports intangible assets at cost, net of accumulated amortization. The Company amortizes intangible assets over the estimated useful lives of ten years for U.S patents. European patents expire 20 years after the filing date. Approved European patents are amortized from the grant date to the end of the 20 year period.

Revenue Recognition

Our tire fuel processing and storage facility recognizes revenue as follows:

●

Disposal fees (“tipping fees”) for waste tires are fully earned when accepted at the facility

●

Sales of unprocessed whole tires are recognized when delivered to the end user

Revenue from sales of our Thermal Gasifier™ will be recognized upon completion, delivery and customer acceptance, using the completed contract method of accounting. We have recognized no revenue from the sale of our Thermal Gasifier™ during the years ended December 31, 2010 or 2009.

Research and Development

Third party research and development expenses, all of which relate directly to the design and development of our Thermal Gasifier™ technology, are expensed as incurred. For the years ended December 31, 2010 and 2009, we incurred approximately $87,500 and $92,000, respectively for third party research and development expense which are included in selling, general and administrative expenses in the consolidated statements of operations.

F-10

Vista International Technologies, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

Stock Based Compensation to Other than Employees

In accordance with ASC 505-50, Equity-Based Payments to Non-Employees, the Company accounts for equity instruments issued in exchange for the receipt of goods or services from other than employees by measuring cost at the estimated fair value of the consideration received or the estimated fair value of the equity instruments issued, whichever is more reliably determinable. The value of equity instruments issued in exchange for services by non-employees is determined on the earlier of the date that a performance commitment has been established or upon completion of performance. The Company determined that the market value of its shares was more reliably determinable to measure compensation expense in 2010 and 2009.

Fair Value Measurement

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between willing market participants at the measurement date. The Company uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs when determining fair value and then ranks the estimated fair values based on the reliability of the inputs used following the fair value hierarchy set forth by the Financial Accounting Standards Board (FASB) as follows:

●

Level 1, defined as observable inputs, such as quoted prices in active markets

●

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable

●

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The fair values of the Company’s financial instruments, which include cash, restricted cash, accounts receivable, notes and accounts payable approximate carrying value because of their immediate or short-term maturity. The fair value of payables to related parties is not practicable to estimate, due to the related party nature of the underlying transactions. Certificates of deposit are valued utilizing Level 2 inputs.

F-11

Vista International Technologies, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

Income Taxes

The provision for income taxes consists of an amount for taxes currently payable, an amount for tax consequences deferred to future periods and adjustments to our liabilities for uncertain tax positions. The Company records deferred income tax assets and liabilities reflecting future tax consequences attributable to tax net operating loss carryforwards (“NOLs”), tax credit carryforwards and differences between the financial statement carrying value of assets and liabilities and the tax bases of those assets and liabilities. Deferred taxes are computed using enacted tax rates expected to apply in the year in which the differences are expected to affect taxable income. The effect on deferred income tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date.

The Company establishes valuation allowances when necessary to reduce deferred income tax assets to the amounts that management believes are more likely than not to be recovered. A significant portion of the Company’s net deferred tax assets relate to tax benefits attributable to NOLs. Each quarter we evaluate the need to retain all or a portion of the valuation allowance on the Company’s deferred tax assets. Future adjustments to the valuation allowance would be charged to operations in the period such determination was made.

The Company uses a two-step approach for recognizing and measuring tax benefits taken or expected to be taken in a tax return and disclosures regarding uncertainties in income tax positions.

The Company files income tax returns in the U.S. federal jurisdiction as well as state jurisdictions for which nexus has been determined and is subject to income tax examinations by federal and state tax authorities for the year 2005 and thereafter.

The Company’s policy is to record interest and penalties as a component of income tax expense. For the year ended December 31, 2010, the Company recognized interest and penalties of approximately $103,000 and no similar amount was recognized in 2009.

Net Loss per Share

The computation of basic earnings per share (“EPS”) is computed by dividing loss available to common stockholders by the weighted average number of outstanding common shares during the period. Diluted loss per share gives effect to all dilutive potential common shares outstanding during the period. The computation of diluted EPS does not assume conversion, exercise or contingent exercise of securities that would have an anti-dilutive effect on earnings. During the periods presented, the Company had no potentially dilutive securities outstanding.

F-12

Vista International Technologies, Inc

Notes to Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

Recent Accounting Pronouncements

In January 2010, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2010-06, Improving Disclosures about Fair Value Measurement, which amends the disclosure requirements related to recurring and non-recurring fair value measurements. The guidance requires additional disclosures about the different classes of assets and liabilities measured at fair value, the valuation techniques and inputs used, the activity in Level 3 fair value measurements, and the transfers between Levels 1, 2, and 3 of the fair value measurement hierarchy. We adopted this guidance at the beginning of 2010 with the exception of the disclosure requirements relating to purchases, sales, issuances and settlements of Level 3 assets and liabilities, which will be effective beginning January 1, 2011. As this guidance only requires expanded disclosures, its adoption did not and will not impact the consolidated financial statements

3. Property and Equipment

Following is a summary of property and equipment at December 31, 2010 and 2009:

	2010			2009
Machinery and equipment	$	478,198		$	601,669
Buildings		95,439			43,575
Vehicles		19,114			19,114
Land		51,085			51,085
Furniture, fixtures and equipment		62,350			44,748
Land Improvements		224,936			218,212
		931,122			978,403
Less accumulated depreciation		(650,455	)		(632,543	)
Net book value	$	280,667		$	345,860

Depreciation expense was $109,142 and $168,705 for the years ended December 31, 2010 and 2009, respectively.

4. Intangible Assets

The Company owns three U.S. patents and one European patent and has two pending U.S. patent applications and one pending European patent application which cover its Thermal Gasifier™ technology. These patents and patent applications are for utility patents directed to devices and methods of uses. Two of the U.S. patents expire on September 6, 2011, and the third expires August 21, 2018. The European patent was granted January 5, 2011 expires in August, 2019.

At December 31, 2010 and 2009, intangible assets are as follows:

	2010			2009
Patents	$	63,720		$	57,428
Less accumulated amortization		(30,792	)		(26,512	)
Intangible assets, net	$	32,928		$	30,916

Amortization expense for each of the years ended December 31, 2010 and 2009 was $4,280. The estimated annual amortization expense for each of the next five years is approximately $3,609 per year.

F-13

Vista International Technologies, Inc

Notes to Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

5. Notes Payable and Capital Lease

At December 31, 2010 and 2009, the Company had the following promissory notes outstanding:

	2010		2009
8.56% installment note, secured by equipment, due August 2013, signed personally by a related party (Note 6)	$	16,714	$	22,063
12% promissory notes payable to individual, interest due monthly, secured by the assets of the Company, due on April 22, 2011		50,000		—
15% promissory note payable to individual, due on demand, in default		17,000		17,000
Non-interest bearing promissory note payable to a vendor, secured by vehicle, repaid August 2010		—		4,500
3.68% installment note, secured by equipment sold at auction		—		75,452
Total notes payable and capital lease		83,714		119,015
Less: current maturities		72,827		102,302
Notes payable and capital lease	$	10,887	$	16,713

Maturities of notes payable and capital lease at December 31, 2010 are as follows:

Year ending December 31,
2011	$	72,827
2012		6,346
2013		4,541
	$	83,714

Equipment with a net book value of approximately $35,800 securing the 3.68% installment note with a remaining balance of approximately $75,200 was repossessed in March, 2010 and sold at auction in October, 2010 by the lienholder for approximately $48,600, and the Company recognized a resulting gain of approximately $12,800. The remaining balance due of approximately $28,800 is included in accounts payable and accrued liabilities.

6. Related Party Transactions

At December 31, 2010 and 2009, notes payable - stockholder and notes payable – related party consisted of the following:

9% promissory notes payable – Richard Strain – stockholder, due on demand, secured by a first priority security interest in Company assets – default waived through June 30, 2011	$	500,000	$	500,000
9% line of credit - Richard Strain – stockholder, matures December 31, 2011, principal payments of $8,000 per month, no prepayment penalty, secured by a first priority security interest in the Company’s assets – default waived through June 30, 2011		92,752		92,752
Notes payable- stockholder	$	592,752	$	592,752

8% promissory notes payable - Timothy Ruddy, due on demand, secured by all of the Company’s assets, security interest is subordinated to the loans extended by Mr. Strain	$	358,600	$	168,400
12% promissory notes payable to Timothy Ruddy family members, cash interest of 10% and Company stock of 2%, secured by all of the Company’s assets, security interest is subordinated to the loans extended by Mr. Strain, interest due quarterly-default waived		45,000		—
Notes payable-related parties	$	403,600	$	168,400

F-14

Vista International Technologies, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

Notes payable – stockholder

The line of credit provides for certain equity redemption rights to Mr. Strain, on terms and conditions to be agreed upon. No equity redemption rights have been provided as of December 31, 2010. The maximum amount to be drawn under the line is $375,000. However, subsequent to initial draws of approximately $100,000 in 2009, Mr. Strain has declined to provide additional funding under the line.

The Company received a waiver of default on the notes and line of credit on March 22, 2011, which specifies that non-payment defaults will be waived until the earlier of (a) the closing of the Company’s sale of its Texas industrial site or (b) June 30, 2011.

On April 15, 2010, the Company issued 2,765,493 shares of its restricted common stock in exchange for accrued interest on the notes and line of credit of approximately $138,274 (See Note 8). As of December 31, 2010 and 2009, accrued interest outstanding on the notes and line of credit was approximately $38,000 and $127,000, respectively.

Interest expense on the stockholder notes and line of credit for the years ended December 31, 2010 and 2009 was approximately $51,000 and $47,000, respectively.

Notes payable – related party

On August 3, 2009, the Company entered into a loan agreement with Mr. Timothy D. Ruddy, a Director of the Company.

The agreement formalized the terms related to working capital funding provided by Mr. Ruddy beginning in the fourth quarter of 2008. Mr. Ruddy has the option, at his discretion, to receive payment as follows:

(a)

repayment of principal and interest;

(b)

conversion of outstanding amount without accrual of interest into the Company’s common stock based on the quoted market price of the stock at the dates loans were made;

(c)

any combination of cash and stock as described in (a) and (b)

The 8.56% installment loan was executed by Mr. Ruddy on behalf of the Company. At December 31, 2010, the net book value of the equipment financed under the installment note was approximately $18,700 and the remaining lease obligation was approximately $16,700.

As of December 31, 2010 and 2009, accrued interest outstanding on the loans was approximately $33,600 and $10,800, respectively.

Interest expense on the loans for the years ended December 31, 2010 and 2009 was approximately $22,900 and $10,800, respectively.

Subsequent to December 31, 2010 and through April 5, 2011, Mr. Ruddy has loaned the Company an additional $64,000 under this agreement.

Mr. Ruddy has provided $150,000 of personal assets as collateral for a letter of credit utilized for part of the Company’s required financial assurance to the Texas Commission of Environmental Quality (“TCEQ”) (See Note 9).

F-15

Vista International Technologies, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

Notes payable – related party family

As of December 31, 2010, no interest payments had been made on these notes. Subsequent to December 31, 2010, all noteholders agreed to defer payment of interest due to the earlier of (a) the closing of the Company’s sale of its industrial site at 1323 Fulghum Road in Hutchins, Texas or (b) December 31, 2011, in effect granting default waivers to the Company.

As of December 31, 2010 accrued interest, including accrued shares of the Company and late payment penalties was approximately $3,600.

7. Income Taxes

A reconciliation between the actual income tax expense and income taxes computed by applying the statutory Federal and state income tax rates to income from continuing operations before income taxes is as follows:

	December 31, 2010			December 31, 2009
Computed “expected” income tax (benefit) at approximately 37%	$	(282,000	)	$	(104,000	)
Permanent differences		(15,000	)		(20,000)
Adjustments to net operating loss carryforwards		(2,249,000	)		—
Other adjustments		44,000			—
Change in valuation allowances of deferred income taxes		2,502,000			124,000
Penalties and interest on federal and state income tax returns		103,000			—
Income tax expense	$	103,000		$	—

During the year ended December 31, 2010, the Company recorded approximately $103,000 of penalties and interest on prior year unpaid federal and state income tax returns. Included in this amount was approximately $79,500 of expense that originated prior to January 1, 2010, consistency of approximately $36,000 which should have been recorded in 2009 and $43,500 in years prior to 2009. Management has determined that the impact of these amounts is not material to any prior interim or annual consolidated financial statements.

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of our deferred tax assets and liabilities as of December 31, 2010 and 2009 are as follows:

	December 31, 2010			December 31, 2009
Deferred tax assets:
Net operating loss	$	7,826,000		$	5,377,000
Property and equipment		49,000			52,000
Expense accruals and other		103,000			57,000
Accrued Payroll		215,000			262,000
Total gross deferred tax assets		8,193,000			5,691,000
Less: Valuation allowance		(8.193,000	)		(5,691,000	)
Net deferred tax assets	$	—		$	—

In assessing the realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will not be realized. Included in deferred tax assets is a federal net operating loss carryforward available to offset future taxable income of approximately $21,152,000 which expires between 2020 and 2030. Approximately $12,300,000 of these losses is limited under the change in control provisions of Internal Revenue Code Section 382. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income, and tax planning strategies in making this assessment. Based upon our cumulative losses through December 31, 2010, we have provided a valuation allowance reducing the net realizable benefits of these deductible differences to $-0- at December 31, 2010. The amount of the deferred tax asset considered realizable could change in the near term if projected future taxable income is realized.

F-16

Vista International Technologies, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

8. Stockholders’ Equity

Preferred Stock

The Company has 10,000,000 shares of preferred stock, $0.001 par value, authorized for issuance. Our board of directors is vested with the authority to provide for the issuance of and terms of the preferred shares. No preferred shares have been issued and no terms have been provided at December 31, 2010.

Common Stock

In April, 2010, the Company issued 2,765,493 shares of its common stock in exchange for outstanding accrued interest on notes payable –stockholder of approximately $138,300 (See Note 6).

Private Offerings

During the year ended December 31, 2010, the Company received approximately $100,000 cash in a private placement for 3,001,666 shares of common stock with 180,000 of these shares classified as common stock to be issued on the December 31, 2010 consolidated balance sheet.

During the year ended December 31, 2009, the Company received approximately $129,000 cash for 2,240,769 shares of our common stock with 535,000 of these shares classified as common stock to be issued on the December 31, 2009 consolidated balance sheet.

Issuance of Common Stock for Services

During the year ended December 31, 2010, pursuant to a consulting agreement dated June 11, 2009, the Company issued 725,000 shares of restricted common stock valued at $29,250 based on the market price of the Company’s common stock. At December 31, 2010, the Company had accrued approximately $63,000 pursuant to this agreement which is expected to be settled with the issuance of 1.9 million shares of restricted common stock.

In addition, the Company issued 815,630 shares of restricted common stock valued at $25,761 based on the market price of the Company’s common stock for legal expenses incurred during the year ended December 31, 2010.

Pursuant to a consulting agreement and subsequent amendments dated April 15, 2010 and August 30, 2010, respectively, the Company issued 750,000 shares of restricted common stock valued at $37,500 based on the market price of the Company’s common stock.

During the year ended December 31, 2009, pursuant to a consulting agreement dated June 11, 2009, the Company issued, 568,473 shares of restricted common stock valued at $34,055 based on the market price of the Company’s common stock. Additionally, the Company issued 772,640 shares of stock valued at $46,358 based on the market price of the Company’s common stock for legal expenses incurred during the year ended December 31, 2009.

F-17

Vista International Technologies, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

9. Commitments and Contingencies

Litigation and Claims

The Company was named in a suit by a former employee alleging that the Company reneged on its obligation to issue shares to the employee. On July 26, 2010, an amended judgment was entered against the Company for approximately $95,000, which was charged to expense during the year ended December 31, 2010.

Encumbrances on Company Assets

The following encumbrances exist on the Company’s assets as of December 31, 2010:

(a) $800,000 Deed of Trust filed April 23, 2002. While management is currently unable to determine the ultimate outcome of this matter, Management is vigorously pursuing appropriate legal remedies to invalidate this deed of trust in order to complete the sale of the Texas facility

(b) Mechanic’s lien filed by a contractor for approximately $86,000 for services provided October, 2007 through April, 2008. The liability for this judgment is included in accounts payable and accrued liabilities in the consolidated balance sheets

Environmental Liability

Our tire operations in Texas are subject to regulation by the Texas Commission of Environmental Quality (“TCEQ”). At December 31, 2010, the Company has approximately 10,000 tons of whole tires, partially shredded tires, tire chips and process waste stored onsite at the tire processing and storage facility. Through July, 2010, we had been able to dispose of this material at a municipal landfill site that used the material as filter and bedding material. However, the landfill has recently transitioned to a project based system where they will request tires as needed, rather than storing tires in anticipation of future needs. As a result, tire inventory has increased without a ready disposal source..

The Company’s registration with the TCEQ requires the Company to provide financial assurance in the form of letters of credit (approximately $170,000 at December 31, 2010 and 2009) for remediation in the event the Company liquidates and the facility closes. These letters of credit expire on November 27, 2011 and December 10, 2011, respectively. The Company’s certificate of deposit classified in restricted cash for $20,000 and personal assets of approximately $150,000 owned by Mr. Timothy Ruddy, a Director of the Company (See Note 6), respectively are held as collateral for these letters of credit. The Company has no other asset retirement obligations.

We have accrued approximately $183,000 and $142,000 at December 31, 2010 and 2009, respectively for the cost of disposing this material.

F-18

Vista International Technologies, Inc.

Notes to Consolidated Financial Statements

For the years ended December 31, 2010 and 2009

10. Lease Commitments

The Company leases office space under a non-cancelable operating lease that expires on December 31, 2012. At December 31, 2010, the Company was obligated for future minimum lease payments under this non-cancellable operating lease as follows:

Year ending December 31,	Amount
2011	$	24,100
2012		25,500

Total	$	49,600

Rent expense for operating leases, including month-to-month rentals, was approximately $19,500 and $45,900 for the years ended December 31, 2010 and 2009, respectively.

F-19

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	VISTA INTERNATIONAL TECHNOLOGIES, INC.

Date: June 24, 2011	By:	/s/ Bradley A. Ripps
		Interim Chief Executive Officer (principal executive officer and principal financial and accounting officer)

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Capacity	Date

/s/ Bradley A. Ripps	Interim Chief Executive Officer (principal executive officer and principal financial and accounting officer)
Bradley A. Ripps		June 24, 2011

/s/ Thomas P. Pfisterer
Thomas P. Pfisterer	Director	June 24, 2011

/s/ Timothy D. Ruddy
Timothy D. Ruddy	Director	June 24, 2011

Vista International Technologies Inc - FORM 10-K/A - June 24, 2011

Attached files

Vista International Technologies Inc Reports