UNITED
STATES


SECURITIES
AND EXCHANGE COMMISSION


Washington,
D.C. 20549


FORM
      10-K






(Mark
      one)x
            ANNUAL
      REPORT PURSUANT TO SECTION 13 OR 15(d) OF THESECURITIES
      EXCHANGE ACT OF 1934For
      the Fiscal Year Ended December 31, 2008ORo
            TRANSITION
      REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
      1934For
      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.)4704
      Harlan St.. Suite 685,
              Denver,
      Colorado
            
            80212
              (Zip
      Code)(Address
      of principal executive offices)




(303)
690-8300


Issuer’s
telephone number, including area code




Securities
registered under Section 12(b) of the Exchange Act: None




Securities
registered under Section 12(g) of the Exchange Act:




Common
      Stock, par value $0.001 pershare
            OTC
      BB(Title
      of Class)
            (Name
      of each exchange on which
              registered)




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




Check whether the issuer
is not required to file reports pursuant to Section 13 or 15(d) of the Exchange
Act. Yes o No
x




Check
whether the issuer (1) filed all reports required to be filed by Section 13 or
15(d) of the Exchange Act during the past 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. xYes  oNo









Check if there is no
disclosure of delinquent filers in response to Item 405 of Regulation S-K
(§229.405 of this chapter) contained herein, and no disclosure will 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. x




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
Smaller Reporting Company x




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 103,002,366 shares of common stock outstanding as of April 2,
2009. No subsequent shares have been issued. 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 on April 2, 2009
was $2,157,795.




DOCUMENTS
INCORPORATED BY REFERENCE: None







VISTA
INTERNATIONAL TECHNOLOGIES, INC.




TABLE OF
CONTENTS




PageForward
      Looking Statements
                          3PART
      IItem
      1.
                          Business
                          4Item
      1A
                          Risk
      Factors
                          16Item
      1B
                          Unresolved
      Staff Comments
                          16Item
      2.
                          Properties
                          16Item
      3.
                          Legal
      Proceedings
                          16Item
      4.
                          Submission
      of Matters to a Vote of Security Holders
                          17PART
      IIItem
      5.
                          Market
      for Common Equity, Related Stockholder Matters and Issuer Purchase of
      Equity Securities
                          17Item
      6
                          Selected
      Financial Data
                          18Item
      7.
                          Management’s
      Discussion and Analysis of Financial Condition and Results of
      Operations
                          19Item 7A.
                          Quantitative and Qualitative Disclosure about Market
      Risk
                          27Item
      8.
                          Financial
      Statements and Supplementary Data
                          27Item
      9
                          Changes
      in and Disagreements with Accountants on Accounting and Financial
      Disclosure
                          27Item
      9A.
                          Controls
      and Procedures
                          28Item
      9B
                          Other
      Information
                          29PART
      IIIItem
      10
                          Directors,
      Executive Officers and Corporate Governance
                          29Item
      11
                          Executive
      Compensation
                          31Item
      12
                          Security
      Ownership of Certain Beneficial Owners and Management and Related
      Stockholder Matters
                          32Item
      13
                          Certain
      Relationships and Related Transactions, and Director
      Independence
                          33Item
      14
                          Principal
      Accountant Fees and Services
                          34Item
      15
                          Exhibits,Financial
      Statement Schedules
                          34Signatures
                          36









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” 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, except to the extent otherwise specifically
provided by rule, regulation or order of the Securities and Exchange Commission.
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.


3




Part
I




Item 1.
Business.




General




We are
committed to being a leader in the waste to energy (WTE) and renewable energy
industries. At a time when world-wide demand for electricity stretches both
generating and transmission capacity and energy security threatens economic
growth, we seek to provide clean, sustainable and profitable solutions to these
problems. We are an “Environmental Partner” developing and leveraging
synergistic technologies, diverting readily available solid waste from landfills
to the generation of clean and economical energy. We are also engaged in
developing strategic collaborative partnerships for research, development and
commercialization of technologies that provide clean high value carbon neutral
fuels. The primary focus of these partnerships will be the commercialization of
technologies that either eliminate or reduce carbon emission, claimed to
contribute to global warming. Our main technical effort is on the proprietary
patented technology, the Thermal GasifierTM, which is a multi-stage gasification
system designed to convert industrial and commercial waste, biomass, waste tires
and most any other solid, hydrocarbon-based material into clean economical
thermal and electrical energy, while exceeding the most stringent EPA and
European Union emission regulations.




As we
advance the “state-of-the-art” in WTE technology, our business model focuses on
the development of qualified joint-venture partnerships and licensed partner
companies to build, own and operate distributed WTE plants. The characteristics
of our ideal project are a combination of high energy demand and cost with
on-site generation of large volumes of hydrocarbon based waste. Whether through
joint-venture or licensed partner, we expect to develop efficient WTE
infrastructures “inside the fence.” These projects reduce the environmental
impact from waste disposal, and reduce dependence on fossil fuels while
producing clean economical energy from that waste. The primary focus of our
solutions is to reduce air born carbon emissions that would otherwise be
generated by disposing of waste in landfills or fossil fuel produced energy. We
also expect to take advantage of carbon reduction credits to finance WTE
projects that would not have been built without the benefit of those
credits.




Tire
Fuel Processing Operation




Since
1999 we have operated a tire fuel processing facility in Hutchins, Texas. Under
Texas State regulations we are licensed as a tire processor and tire storage
facility. We are paid a tipping fee (fee paid per tire received) for accepting
waste tires. We process the waste tires into tire shreds and provide shreds to a
landfill for use as sanitary landfill liner. The facility is currently the only
waste tire storage and processing facility licensed by the State of Texas to
operate in the Dallas Metro area. The facility has not been fully operational
since August 2007.




Through
August 2007, the tire fuel processing facility produced tire derived fuel (TDF)
and provided TDF to one major customer which used the TDF as fuel for its kilns
used in manufacturing cement. During August 2007, due to equipment damage, the
facility curtailed production of TDF until the equipment could either be
repaired or replaced. We considered purchasing new equipment however, the
markets for our TDF began to decline during 2008 due to economic conditions. We
do not expect to produce TDF at the tire fuel processing facility until the
market for TDF improves and have not replaced the equipment to produce
TDF.




Our TDF
operation in Texas is subject to regulation by the Texas Commission of
Environmental Quality (TCEQ). We are registered with the Texas Commission on
Environmental Quality which allows us to receive, store, transport and process
waste tires. Our registration expired December 20, 2007. A permit renewal
application was submitted after obtaining local Fire Marshall’s approval and as
of April 1, 2009 was in process for approval allowing for continued operation.
It is expected that the new permit will be issued in the near future. During the
period December 20, 2007, the date our registration expired, and August 1, 2008,
the date our application was resubmitted, our ability to operate the TDF
facility was limited. We commenced receiving and partially processing waste
tires in August 2008. Our goal is to continuously remove stockpiled material
from the yard while taking in additional tires for tipping
fees.


4




We
continue to maintain our TDF facility to meet the requirements of the Texas
Commission of Environmental Quality’s regulations, however, should we be unable
to continue to fund our compliance, we could lose our permit to operate the
facility.




During
2008, we continued to remove non useable material from the site as part of the
Texas permit renewal process for the tire processing facility and reduced our
financial assurance requirements with the State. The material is being used by
the City of Dallas as filter and cover material. The city is interested in
taking the majority of our non useable material that is presently stored on site
for their ongoing operations. We expect the tire fuel processing division to
continue to expand with the addition of new tire processing equipment once the
TDF demand returns.




Due to
the extremely poor financial state of the company at the time that new
management was appointed and the undercapitalization that has plagued the
company for years, it has taken considerable time and resources to refocus the
company and commence implementing its new business strategy. The company has
been working diligently to overcome the financial and operating issues resulting
from several management changes over the last several years and ensure continued
development of the company’s intellectual property.




During
the year ended December 31, 2008, our tire recycling processing business
generated 100% of our total revenue.




Thermal
GasifierTM Technology Operations




Our long
term goal is to produce the majority of our revenue and cash flow from the
commercialization of our Thermal GasifierTM technology. As a result, the majority
of our resources in the future will be focused on this business while we
continue to improve operations of our tire facility to generate positive cash
flow.




During
2008 we made further advances in the design of the next generation Thermal
GasifierTM as we continue to increase the energy efficiency and
cost-effectiveness of the technology using our hands-on engineering and
operating experience gained from our efforts to implement a functioning WTE
facility in Italy during 2004 and 2005.




We seek
to further expand our presence in the renewable energy and biofuels marketplace
through strategic joint-venture partnerships with landfill operators. Through
participation in commercially viable WTE projects located on landfill sites, we
expect to utilize the “producer gas” generated by the Thermal GasifierTM to
produce electricity and other chemical by-products including a high octane
liquid fuel as an alternative fuel. We have had initial discussions with
landfill operators located in the North Eastern United States. These landfill
operators have expressed strong interest in developing WTE facilities on their
landfill sites utilizing our Thermal Gasifier TM. We are currently in the process
of obtaining letters of intent from these landfill operators. In addition,
during 2009 we expect to conclude more formal agreements with a number of
providers of proprietary catalytic processes to convert our producer gas into a
high octane liquid fuel, engineer the interface between our Thermal GasifierTM
and the catalytic process and build a number of pilot facilities to produce our
high octane liquid fuel.




We have
recognized no revenue from our Thermal GasifiersTM through the year ended
December 31, 2008.




Our
vision is to be an industry leader, innovating, developing, commercializing and
operating renewable energy and waste to energy technologies and
projects.


5




Company
Mission




Our
mission is to provide a clean, dependable, cost-competitive energy alternative
to fossil fuels. Through ongoing refinement and development of our proprietary
technologies, we are positioning to be a leader in WTE and renewable energy
markets. 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 GasifierTM diverts large volumes of material
from landfills and other disposal systems while providing clean alternative
energy comparable to that of fossil fuels.




Company
Operations




Current
Operations




Vista
International Technologies Inc. is presently divided into two business
focus:




●
              Renewable
      energy and WTE utilizing our Thermal GasifierTM technology,
    and●
              Tire
      derived fuel processing providing an alternative fuel supply from waste
      tires.




The
company has been in the TDF processing business since 1997 and has operated a 27
acre TDF processing facility in Hutchins, Texas since 1999. The TDF facility
shreds whole passenger tires into 11⁄2 inch and smaller “chips” for use as fuel in
various industrial processes. In 2008, our facility received and shredded a
total of 1,035 tons, approximately 53,100 passenger car tires.




The TDF
operation was curtailed during August 2007 as a result of equipment damage. The
equipment has not been replaced due to low demand for TDF. Once demand increases
the company expects to purchase new equipment to produce TDF and recommence
sales of TDF to industrial customers in the area.




Description
of Thermal GasifierTM Technology




The
company’s proprietary patented technology, the Thermal GasifierTM, is a
multi-stage gasification system designed to efficiently convert “waste”
materials from industrial, commercial, residential and agricultural sources into
clean economical energy while exceeding the most stringent Environmental
Protection Agency (EPA) and European Union (EU) emission standards.




The
Company’s Thermal GasifierTM is a closed, continuous flow, multi-stage
gasification module. The Thermal GasifierTM is designed to efficiently convert
hydrocarbon feedstock containing solids such as used tires or tire-derived fuel
(TDF), municipal and industrial solid waste streams (MSW) also known as
refuse-derived-fuel (RDF), municipal sewage sludge solids (MSSS), wood waste,
waste coal and agricultural waste to a producer gas comprised primarily of
hydrogen, carbon monoxide, carbon dioxide and residual ash (approximately 10% by
weight of the feedstock on average) by a process called
gasification.




Most of
these feedstocks require 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 GasifierTM using
a system of weigh belts and air locks to ensure an accurately metered supply of
fuel is introduced while preventing 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
producer gas, which is then drawn off to a separate chamber to be fully oxidized
(gasified) at temperatures between 1500o to 2000° Fahrenheit.


6




The
Thermal GasifierTM 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’sTM high temperatures destroy 99.9% of hazardous air pollutants emitted
from refuse-derived-fuel and tire-derived-fuel including polychlorinated
biphenyls (PCBs), dioxins, and furans. Most remaining gaseous pollutants are
captured by scrubbers, catalytic reduction, or other pollution control equipment
with the remaining pollutants falling well below EPA and EU limits.




Environmental
Testing




In May
2000, Bord na Mona Environmental Limited, a Republic of Ireland-based
environmental management company working independently on behalf of the company,
conducted a comprehensive environmental test on the Thermal GasifierTM as part of
a demonstration in Dundalk, County Louth, Republic of Ireland. Bord na Mona
concluded the Thermal GasifierTM met and surpassed existing and, at that time,
pending EU directive limits for all pollutants of concern. Management believes
it significant that independent testing verified the efficacy of the Thermal
GasifierTM and confirmed the technology produces pollutant emissions
significantly below allowable EU limits.




Marketable
Products




The
company will produce numerous marketable products through our Thermal GasifierTM
operations and our TDF processing operations.




The
Thermal GasifierTM technology is uniquely suited for the renewable energy and
especially the WTE business. Because it is a truly multi-fuel system, we enjoy
tremendous flexibility in its application. In addition, the Thermal GasifierTM
generates multiple beneficial use products.




Products
include:




●
              Heat/Steam
      - produced during gasification production, and oxidation/combustion of
      producer gas. This heat is available for use in heating and cooling of
      adjacent buildings or for generation of steam.●
              Electricity
      - generated through addition of gas turbine generator, or boiler and steam
      turbine generator, or integrated combined cycle generator, to the Thermal
      GasifierTM. Electricity is available for use on-site or sale to the local
      utility electrical grid.●
              High
      octane fuel – produced when the producer gas is cleaned to remove elements
      other than hydrogen and carbon monoxide forming a Syngas and introduced
      into a catalytic conversion process which generates an alcohol with the
      intent to use as an alternative liquid
fuel.




Marketability
of the individual products depends upon local demand and our ability to further
process and distribute them at competitive prices. We expect that these market
demands will drive the configuration of the Thermal GasifierTM in such a way as
to maximize project profitability and will vary from location to
location.




During
2008 we generated no revenue from the Thermal Gasifier TMor from
the sales of any products generated by the operation of a Thermal Gasifier TM.


7




TDF
Processing




Our TDF
processing operation in Hutchins, Texas provides valuable services to industry,
government and the local communities while simultaneously producing a marketable
product. The facility is permitted by the TCEQ as a waste tire 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” as a disposal charge. This service allowed for
the receipt of more than 53,100 tires from tire facilities and transporters in
the Dallas, Texas area during 2008.




Through
the third quarter of 2007, the tires were processed upon receipt through a
continuous loop shredding system designed to reduce the tires to 11⁄2 inch and
smaller rubber chips, known as tire-derived-fuel (TDF). During August 2007, our
TDF operations ceased due to equipment damage on our TDF processing line. The
TDF processing equipment has not been replaced. During the period from August
2007 through August 2008, we focused on removing and landfilling waste tires
from the facility and making improvements necessary to comply with requirements
of the TCEQ. The facility was given permission by the TCEQ during August 2008 to
commence operations. Since August 2008, we have been accepting and shredding
waste passenger and truck tires for a tipping fee. In cooperation with the City
of Dallas, the tire shreds and stored waste tires on the facility have been
removed and used as filter and cover material for landfills. We did not produce
TDF during 2008.




During
2008, we generated $54,582 in gross revenue from our tire processing operation
all of which was generated from tipping fees and other sales. Our total cost of
revenue for TDF processing operations during the same period was $52,589
resulting in gross income of $1,993 or a 4% gross margin for 2008. Tire
processing operations accounted for 100% of our total revenue during
2008.




Business
Model




The
company is presently divided into two business focus; renewable energy through
waste-to-energy plants utilizing our Thermal GasifierTM technology and tire fuel
processing providing an alternative fuel supply from waste tires. Going forward
we will build on our present organization and take advantage of existing
strengths.




Our
business goal is to generate the majority of our revenue from WTE projects. In
support of this goal, we have focused the majority of our resources on
engineering and project development activities in an effort to continuously
improve and fully commercialize the Thermal GasifierTM technology. In addition,
we intend to seek out technologies complementary to the Thermal GasifierTM and
build strategic relationships to further enhance our renewable energy
offerings.




We plan
to deploy our patented technology, the Thermal GasifierTM, by building, owning
and operating WTE plants on our own or with joint venture partners.




Our plan
is to seek qualified projects where the company can build, own and operate WTE
plants. Secondarily, we would identify potential joint venture partners to
utilize our technology where we will become an ongoing participant in the
project. Our joint venture percentage ownership will vary with each venture. We
will evaluate joint venture partners who possess one or more of the following
attributes: financial capability to cover the project’s development and capital
costs, governmental resources to assist in permitting and provide technical
expertise, and host business applications that will support a successful
operation. We have not generated any revenue from any joint ventures to
date.




Research
& Development




During
2008, we spent approximately $102,000 in engineering salaries and benefits
dedicated to internal product development which are included as selling general
and administrative expense in our consolidated statements of operations. During
2007, we spent $70,826 for third party research and development and
approximately $255,000 in engineering salaries and benefits. We are engaged in
continuous improvement of the Thermal GasifierTM technology through advanced
engineering design. We are utilizing our experience gained during development
and operation of the Thermal GasifierTM project in Italy to undertake “third
generation” redesign of the Thermal GasifierTM 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 seek to further expand
our presence in the renewable energy and biofuels marketplace through strategic
joint-venture partnerships.  Through participation in commercially
viable WTE projects co-located with biofuels/alcohol research and development we
expect to utilize the “producer gas” generated by the Thermal Gasifier TM to
produce other chemical by-products including alcohols as alternative
fuels.


8




Intellectual
Property




We own
three U.S. patents; the latest issued in March 2003, and have two U.S. and two
European patents pending.




Our two
initial patents apply to the construction methodology and design of our Thermal
GasifierTM and were issued in 1993 and 1994. These patents expire in 2011 and
2012, respectively. One additional patent for our gasifier system and method of
gasification was issued in 2003 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.




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 are currently
pending on our gasifier system and method of gasification and on our
oxygen-based biomass gasification system.




Government
Approval / Environmental Laws and Regulation




Operation
of a Thermal GasifierTM and a TDF 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.
We are subject to the air quality programs under federal and state
law.




Our TDF
operation in Texas is subject to regulation by the Texas Commission of
Environmental Quality (TCEQ). We are registered with the Texas Commission on
Environmental Quality which allows us to receive, store, transport and process
waste tires. Our registration expired December 20, 2007. A permit renewal
application was submitted after obtaining local Fire Marshall’s approval and as
of April 1, 2009 was in process for approval allowing for continued operation.
It is expected that the new permit will be issued in the near future. During the
period December 20, 2007, the date our registration expired, and August 1, 2008,
the date our application was resubmitted, our ability to operate the TDF
facility was limited. Our goal is to continuously remove stockpiled material
from the yard while taking in additional tires for tipping fees.




We have
continued to improve operations and remove stockpile tire shreds, whole tires
and waste material, that previous management had allowed to accumulate at our
TDF facility in Hutchins, Texas during 2008. This removal will continue during
the first half of 2009 in order to maintain compliance with the State. The TDF
facility is currently the only waste tire storage and processing facility
licensed by the State of Texas to operate in the Dallas Metro area.




We
continue to maintain our fuel processing facility to meet the requirements of
the Texas Commission of Environmental Quality’s regulations, however, should we
be unable to continue to fund our compliance, we could lose our permit to
operate the facility.


9




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 its current and proposed operations.




Market
Opportunity




The new
Energy Independence and Security Act of 2007, calls for the accelerated
deployment of renewable energy technologies as well as new energy efficiency
standards. Importantly, it prohibits oil companies from restricting the sale of
alternative fuels which will allow gas station owners to install more pumps for
alternative fuels. This Act boosts the requirements for renewable fuels use to
36 billion gallons by 2022 much of this is required to be “advanced biofuels” –
defined as fuels that cut greenhouse gas emissions by at least 50%.




In the
WTE market a significant focus has been placed on the generation of electricity
through the combustion of the solid waste in turn providing heat to generate
steam and ultimately producing electricity. Alternatively, the solid waste can
be gasified and the produced gas can be combusted to ultimately generate
electricity. The key market drivers are the need for electricity and the price
for the electricity. In many instances unless the demand and price for the
electricity are high the project is not economically viable compared to
traditional fossil fuel generating capabilities. We believe the optimal projects
for our Thermal GasifierTM are not large centralized power production facilities,
but smaller (25 to 50 megawatt range) distributed power production facilities
either co-located with the waste generator and end user of the power, or located
within a short distance of a source of fuel and the end user of the
power.




Having an
alternative end product other than electricity can offer significantly higher
profitability to any project. The company has spent considerable time evaluating
synergistic technologies that can be coupled with the Thermal GasifierTM to
increase project return on investment. The fact that our Thermal GasifierTM has
the flexibility to handle a variety of different solid hydrocarbon based waste
materials allows us to identify projects that could not be handled by other
gasification technologies without considerable design modification and
cost.




Demand
for the Thermal GasifierTM technology and creating energy infrastructures or
waste-to-energy plants using the Thermal GasifierTM all increase as traditional
energy costs 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 energy source infrastructures
that we can provide utilizing our Thermal GasifierTM as a dedicated energy
infrastructure.




We
believe that the demand for our tire fuel processing services in Hutchins, Texas
will continue to provide us opportunities to receive and process waste tires in
the Dallas metropolitan area and, at a future date, deliver TDF or whole tires
to our customers as a renewable energy source.




According
to the Rubber Manufacturers Association (RMA), there are up to 188 million waste
tires in stockpiles in the United States. The RMA estimates that in 2005, 299
million tires were scrapped. Of these 299 million tires, about 155 million were
used as fuel, 49 million were used in civil engineering applications, and 38
million were recycled.




The use
of waste tires for fuel is currently the largest single use of waste tires.
Tire-to-energy technology preserves natural resources by utilizing the stored
energy in petroleum-based tires. Due to increasing fuel prices and improvements
in the quality and reliability of TDF, demand for TDF is expected to continue to
grow in the next few years. Management expects however new emission regulations
will be enacted reducing the percentage of waste tires used to fuel cement kilns
and other industrial applications which could reduce demand for TDF from our
tire fuel processing operation in Texas. Alternatively, our Thermal GasifierTM
technology provides a viable method of utilizing waste tires, reducing landfill
and stockpile accumulations while generating clean dependable energy and other
marketable byproducts in an environmentally friendly manner.


10




Business
Development Activities




We have
been involved with a number of international trade missions to introduce our
technology to the global markets. Through the association provided by the
majority shareholder Vista International, Inc. and its membership on the
Renewable Energy and Distributed Generation Task Force of the Asia Pacific
Partnership (APP) on Clean Development and Climate, we have developed sales
pipeline opportunities for a variety of waste to energy projects in the member
countries which include; Australia, Japan, China, India, Canada, South Korea and
the United States. Additionally, we have had the opportunity to meet with
government officials in Bulgaria through association with the US Department of
Commerce on several occasions that allowed us to introduce our technology for
waste to energy projects in Southeastern Europe.




During
the first quarter of 2008, the company in conjunction with its majority
shareholder Vista International, Inc, formally entered into a partnership
agreement with Corporate Environmental Society Company (CESCO) of Mexico. The
agreement is the subsequent step in the relationship with CESCO which was formed
following the announcement of the “Zero Emission Program” for the State of
Jalisco, Mexico in late 2004. CESCO is a technical advisory body for multiple
state agencies and the private sector created in an effort to promote and
distribute energy saving and renewable energy technologies.




Under
terms of the agreement, we will develop a basic working business plan for the
distribution, marketing, promotion and sale of Vista International Technologies,
Inc. and Vista International Inc. technologies and services in Mexico, Central
and South America.




We expect
to continue discussions in a number of those countries during 2009 with the
intent to obtain firm commitments for deployment of our Thermal GasifiersTM. We
intend to expand our sales pipeline of qualified hydrocarbon-based WTE projects
and begin the development of several of these projects during 2009. However we
can not assure that any of these opportunities will result in a project that
generates revenue within the next twelve months.




We seek
to further expand our presence in the renewable energy and biofuels marketplace
through strategic joint-venture partnerships with landfill operators. Through
participation in commercially viable WTE projects located on landfill sites, we
expect to utilize the “producer gas” generated by the Thermal GasifierTM to
produce electricity and other chemical by-products including alcohol as an
alternative fuel. We have had initial discussions with landfill operators
located in North Eastern United States. These landfill operators have expressed
strong interest in developing WTE facilities on their landfill sites utilizing
our Thermal Gasifier TM. We are currently in the process of obtaining letters of
intent from these landfill operators. In addition, during 2009 we expect to
conclude an agreement with a provider of a proprietary catalytic process to
convert our producer gas into a high grade alcohol, engineer the interface
between our Thermal GasifierTM and the catalytic process and build a pilot
facility to produce high grade alcohol.




There are
several distinct trends pulling our solution into the marketplace, the
increasing emphasis on global warming and the reduction of greenhouse gas
emission, the increasing interest in waste disposal options, rather than
landfill and incineration and a need to contain ever increasing energy costs
driven by the dependency on fossil fuels. Our solution diverts waste from
landfills, mitigates increasing costs associated with waste disposal, helps
reduce our dependency on fossil fuels thereby helping to contain energy costs
and reduces carbon and greenhouse gas emissions.




As the
market matures, the typical project will be a stand alone 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. This will also require contractual flexibility in the sale of the
energy commodity output, such as steam and/or electricity or alternative fuels.
Local market pricing will have an impact on individual project
returns.


11




Tires
have relatively high energy content and are an ideal fuel for the Thermal
GasifierTM or can be blended with other waste fuels to achieve energy content
stability. At our tire fuel processing operation in Hutchins, Texas, we receive
a fee for accepting waste tires. We expect to renovate and add new equipment to
our tire fuel processing facility in Hutchins, Texas once the TDF market shows
signs of recovery, which will allow us to recommence our TDF revenues. During
installation of the equipment, we will coordinate delivery start up with our TDF
customers and make efforts to secure additional TDF customers with other
industries that use TDF as a fuel supply.




Competition




The
alternative energy industry is evolving rapidly in response to increasing
concerns about global warming, environmental degradation and the long-term
security of our petroleum products supply. The costs of electricity, natural gas
and transportation fuels have increased in the last several years and there is
no indication that prices will abate in the near future. The expanding
alternative energy industry is a rapidly changing field of technology but is
still focused towards the production of electricity thereby reducing the
reliance on fossil fuel generation. It is very difficult to compete on large
scale electric generation requirements against traditional fossil fuels on $/KWH
basis. We compete within a broad spectrum of technologies as this industry
continues to expand including: traditional solid waste burners, fluidized bed
boilers, wind and solar technology and various forms of gasification
technologies. We recognize that to be competitive, we must continue to expand
the application and utilization of the Thermal GasifierTM and couple it with
other synergistic technologies. Management believes that the modularity,
scalability, flexibility of multi-fuel capability, associated low emissions, the
advanced state of our development and competitive pricing for the manufacture
and installation of the Thermal GasifierTM, positions us to capture a share of
the waste-to-energy market. The traditional technologies such as incinerators or
mass burners which make up the majority of waste to energy facilities are
rapidly being decommissioned and outlawed in many countries due to the
inefficiencies and high additions to greenhouse gas emissions.




There are
numerous examples of laboratory scale and pilot plant operations, however, very
few successful commercial scale facilities have been constructed to extract the
energy contained in solid waste materials. The technologies that attempt to do
so fall within a few basic categories: incinerators/mass burners, gasifiers,
plasma conversion, retorts and fluidized-bed reactors.




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 of air pollution associated with this equipment. All operate under
“grandfathered” air and water permits and, without major retrofits or redesigns,
there probably will be no more built in the United States.




Gasifiers
are significantly different from mass burners and incinerators. Gasifiers heat
solid material in an oxygen-starved environment where the gaseous components of
the solid material are released. These gaseous components, or producer gas,
retain the heat producing qualities of the solid material. The gas is 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 gasifiers are the most common and are
updraft, downdraft, cross-draft and transport types. 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.


12




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. Capital costs for plasma
conversion are significantly higher than thermal gasification but still
competitive; however, the operating costs are significantly higher than our
operating costs.




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 and are used as a batch process and are
not economically, environmentally or technically competitive.




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.




We
compete for energy-from-waste business with different competitors addressed
above in each market. Our competitors, however, may 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 compete with the local utility which provides
traditional electrical power, in addition to alternate power sources such as
solar or wind power.




In
industries with regulated waste disposal, we 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.




Since the
bulk of the waste to energy industry has focused on electricity generation we
believe that it is important to find alternative uses for the gas produced by
our Thermal GasifierTM. Over the past 100 years scientists have spent
considerable time to develop catalytic conversion processes to produce alcohol
as a fuel. The best known technology is Fischer Tropsch developed in Germany
before WWII. We have seen a new industry spring up over the past 10 years for
the production of ethanol as a blended fuel additive to gasoline. The use of
corn and grain as feedstock has caused a substantial increase in their cost.
Numerous catalytic conversion processes are available to be employed to convert
clean synthesis gas (CO/H2) into a variety of alcohols. We seek to further
expand our presence in the renewable energy and biofuels marketplace through
strategic joint-venture partnerships. The company has identified a number of
suitable catalyst and catalytic conversion processes that can be efficiently
used to convert the producer gas from the Thermal GasifierTM into high octane
liquid fuel and is discussing joint development activities with several groups
at this time. We believe the production and sale of a high octane liquid fuel
will generate higher profitability for a specific project than production and
sale of electricity and provide us with a competitive advantage in the waste to
energy industry.


13




Major
Customers




During
2008, our total revenue is from tipping fees for accepting waste tires from tire
transporters. Our customers include a numerous transporters, none of which
provide a significant portion of our revenue. Two transporter customers provided
39% of our business during 2008.




We
believe that the loss of any one of our customers would not have a material
disruption to our overall revenue because we believe that we would be able to
replace this customer in a relatively short time, however, we cannot guarantee
that we will be able to replace that customer with a customer whose terms will
generate revenue equivalent to revenue we currently recognize.




During
2008, we did not have any contracted customers for our Thermal GasifierTM
business.




Major
Suppliers




Tire
Fuel Processing Operation




The
company believes there is a readily available supply of waste tires for which we
are paid tipping fees and from which we process tire-derived-fuel. We accept
waste tires from many sources and are not dependent on any one source for our
supply.




Thermal
GasifierTM Business




The
company believes there is a readily available supply of materials, equipment and
associated vendors to fabricate construct and operate our Thermal GasifiersTM in
a WTE plant. Additionally, we believe the worldwide market for WTE plants
continues to expand as 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. We do not believe we are dependent
on any single source or feedstock for our supply.




Personnel




On August
1, 2007, we appointed new officers and management with no management transition.
The previous chief executive officer terminated all our employees prior to
vacating his position on July 31, 2007 thereby preempting any attempt to
transition to a new management team. The new management successfully retained
all terminated employees. We have 6 full time employees, with four located at
our corporate offices in Denver, Colorado, and two at our fuel processing
facility in Hutchins, Texas. Additional contract personnel are utilized at the
Denver office and at the tire processing facility as necessary based on volume
of work. Additional personnel will be added at the tire processing facility as
soon as the new equipment is purchased and full operations recommence. We
anticipate that significant personnel additions will be required when we move
forward on the Thermal GasifierTM project related contracts and obtain project
funding for the energy infrastructure or waste-to-energy plant
business.




Company
History




Vista
International Technologies, Inc. was incorporated in Delaware in 1996 under the
name of Ajax Reinsurance Limited. Ajax had no active trade or business on or
subsequent to its date of incorporation. Nathaniel, Ltd. was incorporated in
Colorado in 1992. Nathaniel, Ltd. started its waste tire recycling business in
1997. In 1998, Nathaniel, Ltd. agreed to merge with G-VII Energy Corp. (“G-VII”)
which had been incorporated in Delaware in 1987. G-VII had no active trade or
business at the time of the merger. In July 1998, G-VII changed its name to
“Nathaniel Energy Corporation” and in December 1998, it agreed to merge into
Ajax. In 1999, Ajax changed its name to Nathaniel Energy
Corporation.


14




On
December 31, 2002, MNS Eagle Equity Group IV, Inc. “(MNS)” and its stockholders
entered into a Stock Exchange Agreement with Nathaniel Energy Corporation
pursuant to which Nathaniel Energy acquired all of MNS’s outstanding common
stock. Currently MNS is not engaged in any business.




From 1997
to 2002, Nathaniel Energy’s operations were limited to its TDF processing
facility in Hutchins, TX which sells TDF to others primarily for use as an
alternative fuel. On August 26, 2002, Nathaniel Energy acquired MCNIC Rodeo
Gathering, Inc. which owned 18.55% of Keyes Helium Company, LLC. On April 3,
2003, but effective as of January 1, 2003, Nathaniel Energy 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. Nathaniel Energy transferred all of the stock in MCNIC to
NEOHC. Also on April 3, 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.




On
November 8, 2007 the company filed a name change with the State of Delaware
changing the name to Vista International Technologies, Inc. The name change
reflects a broader perspective on the renewable energy technologies that may be
brought into the company.




Subsidiaries




We have
two wholly owned subsidiaries:




●
                Cleanergy,
      Inc. which was formed for the purposes of commercializing and marketing
      our Thermal GasifierTM; entering into joint venture and licensing
      agreements and; building and operating small waste to energy plants. No
      current operations.●
                Nathaniel
      Energy Oklahoma Holdings Corporation, which sold, on March 7, 2006, all of
      the interests in Keyes Helium Company, LLC, the Keyes gathering system and
      Sturgis gas processing plant and compressor station to Midstream. Energy
      Services, LLC. No current
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.viti.us.com. Information on our website is not part of
this report.




We
maintain a codes and policies page on our website, www.viti.us.com. 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).


15




Item 1A.
Risk Factors




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 the Thermal
      GasifierTM technology, including building Thermal GasifiersTM 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 TDF under the Clean Air Act as well as the new
      Energy Independence and Security Act 2007.●
                                                                                                                        The
      availability of a consistent, economically viable, and sustainable waste
      stream supply to fuel the Thermal GasifierTM 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.●
                                                                                                                        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.




Item 1B.
Unresolved Staff Comments




None




Item 2.
Properties.




We own
approximately 27 acres of property in Hutchins, Texas in a semi-industrial
region of southern Dallas County. The facility includes a 14 year old 10,000
square foot partially enclosed processing building for TDF production, a 3 year
old 1,200 square foot stand alone business office and an 11 year old 1,800
square foot permanently placed office trailer with employee break room. We
believe this facility to be suitable for our existing used tire reclamation and
TDF processing operations.




We lease
2,778 square feet of Class A office space for our corporate offices at 4704
Harlan Street in Denver, Colorado. The present lease expires on May 14, 2009 and
can be renewed for a further one year term.




Item 3.
Legal Proceedings.




A former
officer of the company was terminated in September 2003. On February 10, 2004 a
termination agreement was executed between the company and the former employee,
which granted the employee 285,000 shares of common stock, at $0.001 par value,
of which was to be delivered upon the 10th day
following the date the company effectuates a stock split. Additionally, the
company would provide cash payment of $15,000. All this compensation was for
services during the time of employment. The $15,000 was paid to the individual.
The company accrued the stock liability on the books but has never delivered the
stock since a stock split transaction has never taken place and is not
contemplated. The employee has brought suit against the company and says that
the company owes him the stock or equivalent cash at a rate of $1.00 per share.
To date, only motions for dismissal and default judgments have been filed in the
District Court, County of Arapahoe, State of Colorado, as applied to case # 2008
CV 881.
  16




Item 4.
Submission of Matters to a Vote of Security Holders.




None.




PART
II




Item 5.
Market for 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. 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
                  
                  
                  LowFiscal
      Year Ended December 31, 2007:First
      Quarter
                  
                  $
                  0.10
                  
                  
                  $
                  0.04Second
      Quarter
                  
                  $
                  0.12
                  
                  
                  $
                  0.04Third
      Quarter
                  
                  $
                  0.09
                  
                  
                  $
                  0.06Fourth
      Quarter
                  
                  $
                  0.11
                  
                  
                  $
                  0.06Fiscal
      Year Ended December 31, 2008:First
      Quarter
                  
                  $
                  0.16
                  
                  
                  $
                  0.09Second
      Quarter
                  
                  $
                  0.11
                  
                  
                  $
                  0.04Third
      Quarter
                  
                  $
                  0.05
                  
                  
                  $
                  0.03Fourth
      Quarter
                  
                  $
                  0.08
                  
                  
                  $
                  0.01




Stockholders
of Record




As of
April 2, 2009, we had approximately 977 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 InformationPlan
      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
                
                N/A 2
                
                20,000,000 shares of
      common stock 3




1.
      2005 Equity Compensation Plan2.
      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.


17




Recent
Sales of Unregistered Securities




On
January 28, 2008, the Company issued an aggregate of 750,000 restricted shares
of its common stock, valued at $75,000, to American Capital Venture, Inc.
(and its affiliates) (collectively “ACV”) for an investor relations’ services
contract. Under the contract, ACV was to plan, coordinate, establish, and manage
an investor relations program, for the benefit of the Company, through one or
more nationally recognized news and information mediums including, but not
limited to, CNN, Bloomberg and CNBC. In connection with the sale of unregistered
securities, the Company filed a Form D with the Commission.




On April
10, 2008, the Company issued an aggregate of 5,550,297 restricted shares of its
common stock to Vista International, Inc., for cash and payment of expenses
pursuant to a Definitive Agreement for equity investment executed on January 31,
2008. In connection with the purchase of unregistered securities, Vista
International, Inc. filed a Form 4 with the Commission.




On
November 21, 2008, the Company issued an aggregate of 5,970,473 restricted
shares of its common stock to Vista International, Inc., for cash and payment of
expenses pursuant to a Definitive Agreement for equity investment executed on
January 31, 2008. In connection with the purchase of unregistered securities,
Vista International, Inc. filed a Form 4 with the Commission.




Item 6.
Selected Financial Data




The
following tables set forth certain unaudited quarterly results of operations of
the company for 2008. The quarterly operating results are not necessarily
indicative of future results of operations.






Three Months Ended 2008 (unaudited)
                          
                          
                          Year endedMarch 31
                          
                          
                          June 30
                          
                          
                          Sept. 30
                          
                          
                          Dec. 31
                          
                          
                          Dec. 31,
                            2008Revenue
                          
                          $
                          5,749
                          
                          
                          $
                          888
                          
                          
                          $
                          5,574
                          
                          
                          $
                          42,371
                          
                          
                          $
                          54,582Cost
      of revenue
                          
                          
                          108,244
                          
                          
                          
                          77,225
                          
                          
                          
                          90,359
                          
                          
                          
                          (223,239
                          )
                          
                          
                          52,589Gross
      profit (loss)
                          
                          
                          (102,495
                          )
                          
                          
                          (76,337
                          )
                          
                          
                          (84,785
                          )
                          
                          
                          265,610
                          
                          
                          
                          1,993Selling,
      general and administrative expense
                          
                          
                          333,784
                          
                          
                          
                          229,511
                          
                          
                          
                          211,767
                          
                          
                          
                          179,016
                          
                          
                          
                          954,078Income
      (loss) from operations
                          
                          
                          (436,279
                          )
                          
                          
                          (305,848
                          )
                          
                          
                          (296,552
                          )
                          
                          
                          86,594
                          
                          
                          
                          (952,085
                          )Interest
      income (expense), net
                          
                          
                          (13,055
                          )
                          
                          
                          (12,320
                          )
                          
                          
                          (12,543
                          )
                          
                          
                          (13,468
                          )
                          
                          
                          (51,386
                          )Other
      income
                          
                          
                          66,667
                          
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          (66,667
                          )
                          
                          
                          —Gain
      on disposal of equipment
                          
                          
                          —
                          
                          
                          
                          —
                          
                          
                          
                          1,000
                          
                          
                          
                          (3,700
                          )
                          
                          
                          (2,700
                          )Net
      income (loss)
                          
                          
                          (382,667
                          )
                          
                          
                          (318,168
                          )
                          
                          
                          (308,095
                          )
                          
                          
                          2,759
                          
                          
                          
                          (1,006,171
                          )Net
      loss per common share (basic and diluted)
                          
                          $
                          (0.004
                          )
                          
                          $
                          (0.003
                          )
                          
                          $
                          (0.003
                          )
                          
                          $
                          (0.000
                          )
                          
                          $
                          (0.01
                          )Weighted-average
      common shares outstanding-diluted
                          
                          
                          91,110,717
                          
                          
                          
                          96,482,963
                          
                          
                          
                          97,031,893
                          
                          
                          
                          100,276,715
                          
                          
                          
                          96,238,844


18




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




The
Management’s Discussion and Analysis is intended to help shareholders and other
readers understand the dynamics of Vista International Technologies, Inc.’s
business and the key factors underlying its financial results. It explains
trends in the company’s financial condition and results of operations for the
year ended December 31, 2008 compared with the operating results for the year
ended December 31, 2007.




Restatement




On
December 7, 2007, the Company sold a shredder for $175,000, consisting of cash
of $110,000 and an account receivable of $65,000. The shredder required repairs
that the Company did not have adequate funds to make. The shredder was subject
to a lien, as part of the security interest in all of the Company’s assets,
which secured a $500,000 note payable to a stockholder. The sale had been
recorded as deferred in the financial statements for the year ended December 31,
2007. It was later determined that the sale should have been recorded during the
year ended December 31, 2007. The 2007 financial statements have been restated
as follows:


Increase
      to accounts receivable
                
                $
                65,000Decrease
      to other assets
                
                $
                (130,871
                )Decrease
      in accounts payable and accrued liabilities
                
                $
                (110,000
                )Increase
      in gain on disposition of assets
                
                $
                44,129Decrease
      in accumulated deficit
                
                $
                (44,129
                )




Environmental
Liability




The
Company has approximately 9,150 tons of whole tires, partially shredded tires,
tire chips and process waste stored onsite at the Hutchins TDF processing
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 on 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. In addition, the BTU value is somewhat degraded by
oxidation and weathering of the tires and tire chips stored in the piles onsite.
We have chosen not to utilize this tire chip inventory as feedstock for
processing due to the economic benefit of receiving new whole tires. Throughout
2008 we began selling partially shredded tires for landscaping purposes as well
as removing material to a City of Dallas landfill site to allow the material to
be used in their landfill process for filter and cover.




The waste
piles represent a potential liability if the company were to fail. In such a
case, we would be required to restore the site beginning with transporting the
material to a disposal site. There are an estimated 9,150 tons of tires and tire
shreds on site; in management’s opinion the total upper range estimate for the
cost of disposal is approximately $350,000 which includes labor, equipment,
transportation and landfill fees and assumes complete closure of the facility.
We have provided financial assurance in the form of a surety bond and a
certificate of deposit in the approximate amount of $122,000 to the Texas
Commission on Environmental Quality assuming ongoing operation of the facility.
We have accrued $350,000 for the cost of disposing of this material. Due to the
elimination of waste pile material from our facility during 2008, we reduced our
accrual for disposal costs by $429,000, which is included as a reduction in cost
of revenue in our statement of operations for the year ended December 31,
2008.


19




Company
Overview




Our
mission is to provide a lower cost, clean dependable energy alternative to
fossil fuels worldwide. We plan to focus on two major business models in the
commercialization of our Thermal GasifierTM technology, building, owning and
operating waste-to-energy plants either on our own or with joint venture
partners. Our tire fuel processing operation generated 100% of revenue from
continuing operations, or $54,582 and $337,168 during 2008 and 2007,
respectively. We recognized no revenue from our Thermal GasifierTM business
during 2008. Our long term goal is to produce the majority of our revenue and
cash flow from the commercialization of our Thermal GasifierTM technology. As a
result, the majority of our engineering resources are focused on this
business.




Historically,
we have not had difficulty finding potential project opportunities. Worldwide,
industries and municipalities seek lower cost and clean energy alternatives to
fossil fuels. Demand for these energy alternatives is expected to grow. A key to
our success will be wisely choosing among project opportunities and focusing
resources on projects with the greatest chance of success and returns for
stockholders.




We are
developing our internal resources, business alliances and advancing our business
development activities to secure energy infrastructure and waste-to-energy
facility opportunities that utilize our Thermal GasifierTM technology.
Additionally, we will seek project funding in some cases with joint venture
partners that will be based on the size, configuration and business structure of
the project. We are also developing our business alliances with other companies
to convert our producer gas into high grade alcohols for use as transportation
fuels or other chemical products.




We
anticipate that the timeframe from identification of a project to completion
will be 18 to 24 months, provided we obtain the requisite project financing and
appropriate environmental permits.




We plan
to continue to improve operations at our tire fuel processing facility in
Hutchins, Texas during 2009. The tire fuel processing facility is currently the
only waste tire storage and processing facility licensed by the State of Texas
to operate in the Dallas Metro area. Improvements in operations enabled us to
increase revenue and cash flow from this operation through the first quarter of
2007. During the second quarter of 2007, the facility was closed for cleanup,
site improvement and maintenance and repair of equipment. During July 2007, the
facility reopened and commenced accepting waste tires and producing
TDF.




On August
1, 2007, we appointed new officers and management with no management transition.
The previous chief executive officer terminated all our employees prior to
vacating his position on July 31, 2007 thereby preempting any attempt to
transition to a new management team. New management successfully retained all
terminated employees.




During
August 2007, our tire processing equipment accidentally jammed, damaging one
major piece of equipment and causing the processing line and the tire processing
facility to shut down. The equipment failure and resulting business interruption
were believed to be covered by insurance; however, the equipment insurance
policy had been cancelled. Management was advised by the issuer that the policy
had been cancelled in July 2007 for nonpayment of premiums. As a result of the
cancellation of all business insurance, we could not claim an estimated $110,000
of repair and business interruption costs. We subsequently obtained adequate
equipment insurance from another carrier during the period. At that time,
management decided to purchase new tire processing equipment as the cost of new
equipment was not significantly more than the cost of repairing the damaged
equipment. New equipment had not been ordered as of December 31, 2008 due to the
current economic climate and the low demand for tire derived fuel. We expect to
place orders for new tire shredding equipment once the demand for TDF
improves.




Our TDF
operation in Texas is subject to regulation by the Texas Commission of
Environmental Quality (TCEQ). We are registered with the Texas Commission on
Environmental Quality which allows us to receive, store, transport and process
waste tires. Our registration expired December 20, 2007. A permit renewal
application was submitted after obtaining local Fire Marshall’s approval and as
of April 1, 2009 was in process for approval allowing for continued operation.
It is expected that the new permit will be issued in the near future. During the
period December 20, 2007, the date our registration expired, and August 1, 2008,
the date our application was resubmitted, our ability to operate the TDF
facility was limited.


20




We
continue to maintain our TDF facility to meet the requirements of the Texas
Commission of Environmental Quality’s regulations, however, should we be unable
to continue to fund our compliance, we could lose our permit to operate the
facility.




We
improved operations and removed stockpile tire shreds, whole tires and waste
material during 2008 that previous management had allowed to accumulate at the
TDF facility. We expect to continue these efforts during 2009.




We
commenced receiving and partially processing waste tires in August 2008 and have
seen volumes of waste tire that we accept increase monthly.




Operating
results 2008 compared to 2007




Revenue




For the
year ended December 31, 2008, revenue from our tire fuel processing operation
decreased to $54,582 compared to $337,168 during the twelve months ended
December 31, 2007, a decrease of $282,586 or approximately 84%. The decrease was
due to the shutdown of the tire processing facility in the third quarter of 2007
until the third quarter of 2008. In August 2008 the facility was opened to
accept waste tires for a tipping fee and to produce tire shreds. Tipping fee
revenue represents the facility’s only source of revenue for 2008. During 2007,
the facility operated through the second quarter of 2007 and generated revenue
by accepting waste tires for a tipping fee and producing TDF which was sold as a
fuel to local cement kilns. We had minimal TDF revenue during 2008 from the sale
of old shreds due to accidental damage to certain tire shredding equipment
during August 2007 caused by lack of proper maintenance to the equipment over a
period of several years. The tire shredding equipment had not been replaced as
of December 31, 2008.




Cost
of Goods Sold




Cost of
goods sold for our tire fuel processing operation was $52,589 for the twelve
months ended December 31, 2008, compared to $1,893,494 during the twelve months
ended December 31, 2007, a decrease of $1,840,905 or 97%. Overall, the decrease
in cost of revenue is due to the decrease in operations and related operating
costs at the facility through the third quarter of 2008 and elimination of TDF
production and related costs during the year. The decrease was primarily due to
a decrease in our reserve for disposal costs of tires and tire shreds on site of
$429,000 during 2008 compared to an increase in our reserve and related expense
of $640,000 for 2007. This decrease is a result of removing waste tire shreds
from the facility for which we maintain a reserve for removal and clean up. At
December 31, 2008, management determined that the estimated cost of removal and
clean up exceeded the estimate required due to the reduction in waste tire
shreds on site and accordingly, reduced the reserve for removal and clean up
costs based on waste tire shreds remaining. In addition, the decrease in cost of
revenue was due to a decrease in operating costs including a reduction in
supplies expense of approximately $118,000, reduction in wages and related
benefits of approximately $129,000, reduction in rental equipment of
approximately $109,000, and a reduction in depreciation expense of approximately
$73,000 due to the disposition of tire shredding equipment in the fourth quarter
of 2007.


21




Sales,
General, and Administrative Expenses




Sales,
general, and administrative expenses were $954,078 for the twelve months ended
December 31, 2008, compared to $1,399,279 for the twelve months ended December
31, 2007, a decrease of $445,201 or approximately 32%. This decrease was due
primarily to a decrease in legal and accounting fees of approximately $224,000
from non-recurring legal costs incurred during the third and fourth quarter of
2007 for corporate governance matters, a decrease in depreciation and
amortization expense of approximately $87,000 due to the write off of
capitalized engineering drawings and blueprints which were amortized during 2007
eliminating the amortization expense in 2008, a decrease in outside services of
approximately $48,000 due to the elimination of external engineering support
services, document translation services and accounting financial software
services, and a decrease in insurance expense of approximately $45,000 due to
the elimination of employer provided health insurance benefits.




Research
and Development Expense




Research
and development expense was $70,826 during the twelve months ended December 31,
2007. No third party research and development expenses were incurred during
2008.




Interest
expense




Interest
expense, net of interest income, was $51,386 during the twelve months ended
December 31, 2008, compared to $27,462 during the twelve months ended December
31, 2007, an increase of $23,925. This increase was due to an increase in
average outstanding borrowings from 2007 to 2008. During the first and second
quarters of 2007, $500,000 of notes payable were issued on which interest
expense was incurred during the second half of 2007. The notes payable were
outstanding and we incurred interest expense on the total outstanding balance
during the entire twelve month period ended December 31, 2008.




Gain
on the Disposal of Equipment




Loss on
the disposal of equipment was $2,700 for the twelve months ended December 31,
2008 compared to $91,353 gain during the twelve months ended December 31, 2007.
The decrease was due to the sale of non-productive assets and equipment
resulting from clean up activities in 2007.




Impairment
loss




Impairment
loss of $89,097 is a result of our write off during 2007 of intangible assets
consisting of cost for engineering drawings and blueprints related to the
original design of the Thermal GasifierTM. We recognized no impairment loss
during 2008.




Income
Tax Expense (Benefit)




We
recorded no income tax benefit for our 2008 or 2007 net operating loss as
realization of that net operating loss is not assured.




Net
Income (Loss)




For the
reasons stated above, net (loss) for the year ended December 31, 2008 was
$(1,006,171), or ($0.01) per basic and diluted share compared with the net
(loss) of $(3,051,636), or $(0.03) per basic and diluted share, for the year
ended December 31, 2007.




Liquidity
and Capital Resources




As of
December 31, 2008 we owed $95,039 to financial institutions under installment
notes with an effective interest rate of 6.4%, which were secured by property
and equipment. The remaining $599,621 in total debt consists of $500,000 in
secured loans from a stockholder with an effective interest rate of 9% and
unsecured notes due vendors and unaffiliated third parties of $99,621 with an
effective interest rate of 2.6%.


22




On April
4, 2007 and April 16, 2007, we borrowed $100,000 and $200,000 respectively from
our major shareholder, Mr. Richard Strain. On May 31, 2007, we borrowed an
additional $200,000 from Mr. Strain. The loans bear interest at the annual rate
of 9%, with interest payable quarterly. The April 4, 2007 and April 16, 2007
notes were payable on or before September 30, 2007. The May 31, 2007 note was
due on or before November 30, 2007. We have obtained agreement to repay the
notes from Mr. Strain at such time we have sufficient operating capital to make
repayment. The loans are secured by a first priority security interest in our
assets.




As of
December 31, 2008, we have a negative working capital of $2,802,431. The
company’s negative working capital balance is due primarily to the reduction in
operations at our tire fuel processing facility in Hutchins, Texas and inclusion
of a liability of approximately $350,000 for waste tire shred removal and clean
up costs at the Hutchins tire processing facility.




The
following is a summary of our cash flows sources (uses) from operating,
investing and financing activities during the periods indicated:


Year ended December 31,2008
                    
                    
                    2007Operating
      activities
                    
                    $
                    (528,080
                    )
                    
                    $
                    (1,250,438
                    )Investing
      activities
                    
                    
                    (66,831
                    )
                    
                    
                    (10,106
                    )Financing
      activities
                    
                    
                    599,592
                    
                    
                    
                    1,011,693Net
      effect on cash
                    
                    $
                    4,681
                    
                    
                    $
                    (248,851
                    )




For the
period ended December 31, 2008, net cash used in operating activities of
$528,080 consists primarily of our net loss of $1,006,171 offset by non cash
depreciation and amortization expense of $173,159 and $75,000 of stock based
consulting fees and an decrease in accounts payable and accruals of $56,581. Net
cash used in investing activities of $66,831 consists primarily of the purchase
of capitalized improvements of $64,907. Net cash provided by financing
activities of $599,592 consists of proceeds from the issuance of common stock of
$669,643 offset by payments on debt of $70,051.




For the
period ended December 31, 2007, net cash used by operating activities of
$1,250,438 consists primarily of the loss from continuing operations of
$3,051,636, offset by non cash depreciation and amortization expense of
$336,307, impairment loss of $89,097 and by changes in working capital items,
primarily a decrease in accounts receivable of $112,586 and an increase in
accounts payable and accrued liabilities of $1,202,292. Net cash used by
investing activities of $10,106 consists primarily of the purchase of equipment
of $90,106 reduced by proceeds from the sale of equipment of $190,000. Net cash
provided by financing activities of $1,011,693 consists of proceeds from the
issuance of notes of $644,421 and proceeds from the issuance of common stock of
$560,636 offset by payments on debt of $193,364.




We had a
cash balance of $13,698 at December 31, 2008. We expect that our current cash on
hand and expected revenues will not be sufficient to sustain our current
operations. We received interim funding in cash and payment of expenses of
approximately $669,643 for our operations as an equity investment from Vista
International, Inc. during 2008 in exchange for common stock to be issued. Vista
International, Inc. incurred expenses during 2008 for sales and market
development efforts in China, Mexico and South Eastern Europe. Those expenses
consist primarily of travel and marketing related expenses in pursuit of
projects for the deployment of our thermal gasification technology. Vista
International, Inc. has obtained a number of letters of intent to use our
thermal gasification technology for waste to energy projects and expects to
convert those into contracts in the future. The expenses incurred have not been
recorded as equity contributions to the company at this time as Vista will not
require reimbursement. The company expects to negotiate a compensation agreement
on a project by project basis to include an equity interest in the projects that
result from Vista International, Inc.’s efforts. We expect that Vista
International, Inc. will continue to provide additional capital either as debt
or as an equity contribution to us during 2009 for the purpose of funding
ongoing operations, investing in new equipment for our tire fuel processing
operations and commercializing and deploying our Thermal GasifiersTM. We also
expect to use this funding to identify and integrate other technologies that
will improve the operation and forecasted profitability of our Thermal
GasifierTM.


23




Critical
Accounting Policies




The
preparation of financial statements and related disclosures in conformity with
accounting principles generally accepted in the United States requires
management to make judgments, assumptions and estimates that affect the amounts
reported in the consolidated financial statements and accompanying notes. Actual
results could vary from these estimates. A material change in these or other
estimates could potentially have a material impact on results of operations. The
following critical accounting policies are impacted significantly by judgments,
assumptions and estimates.




Environmental
Liability




The
Company has approximately 9,150 tons of whole tires, partially shredded tires,
tire chips and process waste stored onsite at the Hutchins TDF processing
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 on 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. In addition, the BTU value is somewhat degraded by
oxidation and weathering of the tires and tire chips stored in the piles onsite
and therefore not good for use as TDF. We have chosen not to utilize this tire
chip inventory as feedstock for processing due to the economic benefit of
receiving new whole tires. Presently we have been able to dispose of this
material to a municipal landfill site that is using the material as filter and
bedding material. The municipality has expressed a longer term need for this
material in their operation and the company expects to remove most of the
material over the next 6 months.




Management
considers the piles a potential liability if the company were to fail. In such a
case, we would be required to restore the site beginning with transporting the
material to a disposal site (LRPUT or landfill). There are an estimated 9,150
tons of tires and tire shreds on site; in management’s opinion the total upper
range estimate for the cost of disposal is approximately $350,000 which includes
labor, equipment, transportation and landfill fees and assumes complete closure
of the facility. We have provided financial assurance in the form of a surety
bond and a certificate of deposit in the approximate amount of $122,000 to the
Texas Commission on Environmental Quality assuming ongoing operation of the
facility. We have accrued $350,000 for the cost of disposing of this
material.




Property,
Plant and Equipment and Related Depreciation




Property,
plant and equipment is recorded at its original cost of construction or, upon
acquisition, the fair value of the assets acquired. 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. Depreciation is provided for using the
straight-line method. Significant assumptions and judgment is used to determine
which improvement, replacement or indirect costs are capitalized. Significant
assumptions and judgment is necessary to determine what useful life is
appropriate for each asset, particularly for machinery and equipment which
useful life can range from five to twenty years.


24




Long-Lived
Assets




In
accordance with the Financial Accounting Standards Board’s (“FASB”) Statement of
Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the
Impairment or Disposal of Long-Lived Assets”, the Company reviews its long-lived
assets for impairment whenever events or changes in circumstances indicate that
the related carrying amount may not be recoverable. Recovery of assets to be
held and used is measured by a comparison of the carrying amount of the assets
to the future net cash flows expected to be generated by the asset. If such
assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the assets exceeds the
fair value of the assets. Assets to be disposed of are reported at the lower of
the carrying amount or fair value less the cost to sell. Management uses
significant judgments, assumptions and estimates to calculate future cash flows
expected to be generated by the assets under impairment review.




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 is 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.




Impact
from Recent Accounting Pronouncements




We do not
expect the adoption of recent accounting pronouncements will have a significant
effect on our financial statement presentation or disclosures. See “Recent
Accounting Pronouncements” in Note 1 to the financial statements.




Other
Considerations




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
several million dollars in 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 GasifierTM business. 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. We
cannot assure that any funds raised for a particular project will be sufficient
to complete the project.


25




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




We have
tested our Thermal GasifierTM technology in more than 30 applications during
various stages of its design. We will need to test the current Thermal GasifierTM
design to allow us to then move forward with commercialization. During 2007 and
2008, we have continued to redesign the Thermal GasifierTM technology to further
improve energy recovery and operational efficiency utilizing the experience
gained in development and operation of the full scale Cologna-Veneta waste to
energy project. We will require significant funding in order to complete the
engineering specifications, fabricate a number of Thermal GasifierTM 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 and upgrades.




Future
revenue and gross margin increases in our tire fuel processing operation are
dependent on continuous equipment maintenance, repairs and upgrades. Our
business plan contemplates improving our tire processing operations based on new
equipment additions as waste tire volumes increase, repairing and maintaining
existing equipment and increasing our workforce. 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 maintaining our contract for sale and delivery of our
tire-derived-fuel. There is no assurance that we will be successful in obtaining
needed funding and signing such contracts.




We
depend on a small number of large customers.




The TDF
marketing in the Dallas area has only a short list of potential customers.
Previously the company has had one single large customer for our production.
During 2008 we did not produce any TDF for this customer since we did not have
the necessary equipment. Since the market for TDF is currently reduced we will
continually evaluate the investment in new equipment to coincide with the market
demand.




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, the
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-derived-fuel processing operations
substantially deteriorate, we could be required by the Texas Commission on
Environmental Quality (TCEQ) to remove the existing whole tire, partially
shredded tire and tire chip inventory piles from the Hutchins, TX facility. The
projected cost of full cleanup of the Hutchins facility is estimated to be
$350,000. We have approximately $122,000 of this amount readily available to us
in the form of a letter of credit and a surety bond. Additional financial
security will be provided to the necessary limit prior to the new permit
certification.




If
we fail to successfully use patented 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;




26




●
            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. We cannot
assure you that we will succeed in effectively meeting these
challenges.




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




During
the regular course of business we must adjust our business plan giving
consideration to our own 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 its 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 became
a reporting company under the Securities and Exchange Act of 1934 in early 2003.
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 during 2009. 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.




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




One
stockholder, Vista International Inc., beneficially owns over 50% of outstanding
shares. That shareholder has 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.




Item 7A. Quantitative and Qualitative Disclosures about Market
Risk




None




Item 8.
Financial Statements and Financial Data




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




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




None.


27




Item 9A.
Controls and Procedures




Evaluation
of Disclosure Controls and Procedures.




Our
management, with the participation of our Chief Executive Officer and Principal
Accounting Officer, has evaluated the effectiveness of our “disclosure controls
and procedures” (as defined in Rules 13a-15(e) and
15d-15(e) under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”) as of the end of the period covered by this report. Based on
this evaluation, our management has concluded that our disclosure controls and
procedures are not effective to ensure that information required to be disclosed
by us in reports that we file or submit under the Securities Exchange Act of
1934 is recorded, processed, summarized and reported within the time periods
specified in Securities and Exchange Commission rules and forms. Additionally,
based on management’s evaluation, our disclosure controls and procedures were
effective in ensuring that information required to be disclosed in our Exchange
Act reports is accumulated and communicated to our management, including our
Chief Executive Officer and Principal Accounting Officer, to allow timely
decisions regarding required disclosures




Management’s
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) of the Securities
Exchange Act of 1934. 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 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 reason able assurance regarding prevention or timely detection of
unauthorized acquisitions, use, or disposition of our assets that could have a
material effect on the 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, 2008, 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. As a result of this assessment, we
identified the following material weaknesses in internal control over financial
reporting as of December 31, 2008:




The
Company lacks sufficient accounting controls and procedures to ensure proper
timing and recording of non cash transactions and that expenditures are properly
allocated between the Company and its majority shareholder, Vista International,
Inc., which is a company also engaged in the renewable energy
business.


We lack
the ability to segregate duties as it relates to recording and reconciling our
accounts, however, management oversight of the approval of transactions helps
mitigate this deficiency.
  We
determined that the aforementioned deficiencies constitute material weaknesses
in our internal control over financial reporting as of December 31, 2008. Due
solely to these material weaknesses, we concluded that we did not maintain
effective internal control over financial reporting as of December 31,
2008.




This
Annual Report does not include an attestation report of our registered public
accounting firm regarding internal control over financial reporting.
Management’s report was not subject to attestation by our registered public
accounting firm pursuant to temporary rules of the Commission that permit us to
provide only management’s report in this report.


28




Remediation
of Internal Control Weakness:




Management
intends to implement procedures, during the second quarter of 2008,
which remediate the aforementioned deficiency in our internal control over
financial reporting whereby allocated expenditures between the Company and its
majority shareholder, Vista International, Inc. are determined on a timely basis
for financial reporting and are reviewed and approved by the Company’s Board of
Directors.




Item 9B.
Other Information




None




PART
III




Item 10. Directors, Executive Officers Promoters and Corporate
Governance




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


Name
                  
                  Age
                  
                  Positions
      with Nathaniel
                    EnergyBarry
      J. Kemble*
                  
                  59
                  
                  Chief
      Executive Officer and DirectorJohan
      C. Smith*
                  
                  49
                  
                  DirectorTimothy
      D. Ruddy*
                  
                  36
                  
                  Director




*
Directors are also named executive officers for purposes of Section
16(a)




Directors
are elected by holders of the common stock. Officers serve at the will of the
board. We may indemnify directors and officers against damages which qualify, in
the opinion of the disinterested members of the board, for indemnification under
Delaware law and our Bylaws. 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




Barry
Kemble, Chief Executive Officer and Director,Vista International Technologies, Inc.: Mr. Kemble prior to joining Vista
International Technologies, Inc. was the Vice President of Business Development
of Vista International Inc. and a Director since December 2005. Prior to joining
Vista, Mr. Kemble was Executive Vice President and Chief Operating Officer of
WRC Corporation, a premier service company providing engineering and land
services to the North American pipeline industry from 2004 to 2005. Mr. Kemble
in 2002 was Co-founder of Omega Six Group, a consulting practice specializing in
commercial proposal responses until 2004. In 1994 Mr. Kemble joined Convergent
Group as an executive, a former subsidiary of Schlumberger until 2002. Mr.
Kemble was responsible for the energy consulting practice including business
development activities across 4 continents. Mr. Kemble started his career in
1973 with Union Gas Ltd. in Canada, which has become a subsidiary of Duke
Energy. Mr. Kemble held executive positions in Engineering, Human Resources, and
Information Technology until his departure in 1994.Mr. Kemble has over 30 years
experience in engineering, operations, business development and information
technology in the energy industry. He is a graduate of the University of
Waterloo in Chemical Engineering with an M.B.A. from the University of Windsor.
Mr. Kemble remains on the Board of Directors of Vista International,
Inc.


29




Johan C.
Smith, Director, Vista International Technologies, Inc.: Mr. Smith is the CEO
and a Director of Vista International, Inc. He has over twenty-six years of
progressive experience in business development, strategic alliances, and
financial markets. After departing Sam Houston State University, Mr. Smith
provided business consulting services to a number of domestic and international
organizations, including Air 21, Global Air Cargo, Texas Fire and Safety, Dow
Chemical, Shell, MCI/WorldCom, Negev Technologies, Lucent, Erickson, Lockheed
Martin, GTE, FedEx, and American Airlines. Mr. Smith negotiated agreements for
commercial developments in the US, mainland China, the Caribbean, South America,
Mexico, Europe, and in a number of countries. Some of the projects were in the
following industries: entertainment centers and theme parks in southern
California and China, airport mixed-use commercial/industrial developments in
the US and China, telecommunications, aviation, environmental developments,
commercial developments and a number of other projects. Over the last three
years, Mr. Smith has developed relationships with a number of high ranking
government officials in China, Mexico, St. Lucia, Europe and Israel, which have
helped him to secure several $ billions in back-log of projects for the
renewable energy technologies that are encompassing Vista International, Inc.’s
core technology base. Mr. Smith will remain as an officer and Director of Vista
International, Inc.




Timothy
D. Ruddy, Director, Vista International Technologies, Inc.: Mr. Ruddy graduated
Summa Cum Laude from the University of Notre Dame with a degree in mechanical
engineering and was a standout as a football player, earning All-America as well
as Academic All-American honors. While playing in the NFL for the Miami
Dolphins, Mr. Ruddy earned his series 7 and 65 licenses from the NASD. For the
past twelve years, he has worked as a financial advisor, specializing in
managing risk through proper mutual fund and money manager selection. Mr.
Ruddy’s experience also extends to the realm of corporate formation and funding.
He is co-founder of Ambien Dynamics, a company specializing in using pulsed
electromagnetic field technologies for medical purposes, and is a founding
partner in companies utilizing proprietary coal refuses filtering technology,
including Carson One, LLC and Crystal Clear Reclamation, LLC. Mr. Ruddy has also
helped fund a number of startups including Komodo Pharmaceuticals, a corporation
involved with streamlining pharmaceutical trials, and Tri-Georgia Telecom, an
overseas VOIP company. He is involved with a number of venture capital and
private equity related fund of funds, and has experience in real estate funding,
both domestically, and internationally.




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 three members of the Board of Directors, one
of whom is 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 independent board members’ elected or will
establish an audit committee. The Company does not have a nominating
committee.




Section
16(a) Beneficial Ownership Reporting Requirements




Directors,
officers, and beneficial owners of more than ten percent of our common stock are
required to file reports of ownership as required by Section 16(a) of the
Exchange Act.




Directors,
officers, and beneficial owners of more than ten percent of our common stock are
required to file reports of ownership as required by Section 16(a) of the
Exchange Act. Barry J. Kemble, Johan C. Smith and Timothy D. Ruddy, each a
director of Vista International Technologies Inc., filed their respective Form-
5 reports. Timothy Ruddy also filed two Form 4 reports and one Form 3 report.
Vista International Inc., who beneficially owns of more than ten percent of
Vista International Technology’s common stock, filed Form 4, reporting two
transactions and a Form 5.


30




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, 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.viti.us.com




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., 4704 Harlan
Street, Suite 685, Denver, Colorado 80212, Attention: Code of Conduct and Ethics
Request.




Item 11.
Executive Compensation.




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


Summary
      Compensation TableName
      and Principal
                                        Position
                                      
                                      Year
                                      
                                      
                                      Salary
                                      
                                      
                                      Bonus
                                      
                                      
                                      All
      Other Compensation
                                      
                                      
                                      TotalBarry
      J. KembleChief
      ExecutiveOfficer 1
                                      
                                      
                                      2008
      4
                                      
                                      
                                      $
                                      11,539
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      $
                                      11,5392007 1
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —Brad
      E. Bailey
                                      
                                      
                                      2007 2
                                      
                                      
                                      $
                                      81,125
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      $
                                      81,125Chief
      ExecutiveOfficer 2Timothy
      PeachChief
      Financial
                                      
                                      
                                      2008 5
                                      
                                      
                                      $
                                      11,539
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      $
                                      11,539OfficerActing
      Chief
                                      
                                      2007
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —Executive Officer
      32006 3
                                      
                                      
                                      $
                                      152,557
                                      
                                      
                                      
                                      —
                                      
                                      
                                      
                                      —
                                      
                                      
                                      $
                                      152,557


31




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




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




Barry
J. Kemble




Barry
Kemble serves as our Chief Executive Officer. We currently do not have an
employment agreement with Mr. Kemble but he has a base salary of $150,000.00 per
annum with standard employee benefits as approved by the Board of
Directors.




The
company did not pay any compensation to its directors in 2008.




Vista
International Technologies, Inc. does not have any compensation arrangements
with its directors. In the future the company may institute director
compensation arrangements; however, none are currently
contemplated.





1Mr.
Kemble was appointed Chief Executive Officer July 31,
2007.


2 Mr.
Bailey was terminated as Chief Executive Officer and as an employee of the
company July 31, 2007.


3Mr.
Peach originally joined the company in October 2004 and was appointed Acting
Chief Executive Officer on September 25, 2006. He subsequently resigned as an
officer and employee of the company November 29, 2006. Mr. Peach rejoined the
company on August 2, 2007 as Chief Financial Officer. Mr. Peach has recently
resigned.


4The
company has accrued $188,461 for wages for Barry Kemble through December 31,
2008.


5The
company has accrued $161,185 for wages for Timothy Peach through December 31,
2008.




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




Security
Ownership of Certain Beneficial Owners and Management




The
following table sets forth, to the company’s knowledge, based solely upon
records available to it, certain information as of March 6, 2009 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 outstanding shares of common stock,


●           by
each current director,


●           by
each named executive officer, and


●           by
all current executive officers and directors of the group.


Name and Address of Beneficial Owner
              
              
              Number of Shares
              
              Percentage of ClassRichard
      Strain
                417
      Manchester Road
                Poughkeepsie,
      New York 12603
              
              9,518,333
              (1)
              
              9.2
              %Vista
      International Inc.
                8310
      South Valley Highway
                Suite
      300
                Englewood,
      CO 80112
              
              57,520,770
              (2)
              
              55.8
              %Barry
      J. Kemble (3)
              
              57,510
              
              
              *Timothy
      D. Ruddy (4)
                3885
      Vale View Lane
                Mead,
      CO 80542
              
              200,000
              
              
              *Johan
      C. Smith (4)
                8310
      South Valley Highway
                Suite
      300
                Englewood,
      CO 80112
              
              26,720
              
              
              *All
      directors and executive officers as a group (4 persons)(4)
              
              284,230
              
              
              *


32







*           Less
than 1%


(1)
            Information
      based upon the records of the company’s transfer agent and information
      provided to company by Mr. Strain.(2)
            Information
      based upon a Schedule 13D and Form 4 filed by Vista International Inc.
      with the Securities and Exchange Commission and information based upon the
      records of the company’s transfer agent.(3)
            The
      address of this person is 4704 Harlan St., Suite 685, Denver, Colorado
      80212.(4)
            Addresses
      for Mr. Smith and Mr. Ruddy are as set forth under their respective names.
      Address for the other named executive officers is 4704 Harlan St., Suite
      685, Denver, Colorado 80212.




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 April
10, 2008, the Company issued an aggregate of 5,550,297 restricted shares of its
common stock to Vista International, Inc., for cash and payment of expenses
pursuant to a Definitive Agreement for equity investment executed on January 31,
2008. In connection with the purchase of unregistered securities, Vista
International, Inc. filed a Form 4 with the Commission.




On
November 21, 2008, the Company issued an aggregate of 5,970,473 restricted
shares of its common stock to Vista International, Inc., for cash and payment of
expenses pursuant to a Definitive Agreement for equity investment executed on
January 31, 2008. In connection with the purchase of unregistered securities,
Vista International, Inc. filed a Form 4 with the Commission.




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 Mr. Ruddy is
independent. The following persons who served as directors of the Company during
2008 were not independent: Johan Smith and Barry Kemble. The Company does not
have an audit committee, compensation committee or nominating
committee.


33




Item 14.
Principal Accountant Fees and Services




Audit
Fees




The
aggregate fees billed for our fiscal years ended December 31, 2008 and 2007 by
Comiskey & Company, P.C., as well as AJ Robbins PC., our principal
accountants in 2008 and 2007, for the audit of our financial statements for each
of those years and the review of our financial statements included in our
Quarterly Reports on Form 10-QSB during those financial years were $16,994 and
$27,638 respectively.




Audit
Related Fees




Our
principal accountants did not bill us any fees during our fiscal years ended
December 31, 2008 and 2007 for any assurance and 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, 2008 and
2007.




Other
Fees




Our
principal accountants did not bill us for any services or products other than as
reported above in this Item 14 during our fiscal years ended December 31, 2008
and 2007 respectively.




Item 15.
Exhibits, Financial Statement Schedules


2.1
                                            Stock
      Exchange Agreement, dated as of December 31, 2002, by and between
      Nathaniel Energy Corporation, and MNS Eagle Equity Group, Inc. and the
      shareholders of MNS Equity Group, Inc.*2.2
                                            Stock
      Purchase Agreement, dated August 26, 2002 but effective as of June 30,
      2002, by and between MCNIC Pipeline & Processing Company and Nathaniel
      Energy Corporation*3(i).1
                                            Certificate
      of Incorporation**3(i).2
                                            Articles
      of Amendment to 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 to Certificate of Incorporation filed on October 12,
      2005**3(ii).1
                                            Amended
      and Restated By-Laws***10.1
                                            Tire
      Derived Fuel Co-Processing Agreement, dated September 30, 2005 by and
      between Nathaniel Energy Corporation and Energis, LLC.
  ****10.2
                                            Stock
      Purchase Agreement dated September 29, 2005 between Nathaniel Energy
      Oklahoma Holdings, Corporation (“NEOHC”) and Richard
    Strain**10.3
                                            Purchase
      and Sale Agreement dated September 30, 2005 between Nathaniel Energy
      Corporation, NEOHC, MCNIC Rodeo Gathering, Inc. and Midstream Energy
      Services**10.4
                                            Nathaniel
      Energy Corporation 2005 Equity Participation Plan**10.5
                                            Employment
      Agreement dated October 16, 2006 between Nathaniel Energy Corporation and
      Brad E. Bailey+10.6
                                            Agreement
      dated December 5, 2006 between Nathaniel Energy Corporation and
      Bailey-Jamar, LLC. ****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.
                                            Subsidiaries31.
                                            Certification
      of Chief Executive Officer and Principal 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


34




32.
            Certification
      of Chief Executive Officer and Principal 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 Annual Report on Form 10-KSB for the year
ended December 31, 2003 and incorporated herein by reference.




**
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 31, 2002 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, 2005.




+Denotes
documents filed as an exhibit to our Current Report on Form 8-K filed on October
20, 2006 and incorporated herein by reference.




****
Denotes documents filed as an exhibit to our Annual Report on Form 10-KSB for
the year ended December 31, 2006 and incorporated herein by
reference.


35


VISTA
INTERNATIONALTECHNOLOGIES INC. AND SUBSIDIARIES
 CONSOLIDATED
FINANCIAL STATEMENTS


FOR
THE
 FISCAL
YEARS ENDED DECEMBER 31, 2008 AND 2007
  INDEX
 PageReport
      of Independent Registered Public Accounting
Firm
                  
                  F-1Consolidated
      Balance Sheets
                  
                  F-2Consolidated
      Statements of Operations
                  
                  F-3Consolidated
      Statement of Stockholders’ Equity (Deficit)
                  
                  F-4Consolidated
      Statements of Cash Flows
                  
                  F-5Notes
      to Consolidated Financial Statements
                  
                  F-6
  
  AJ.
ROBBINS, P.C.
 CERTIFIED
PUBLIC ACCOUNTANTS
 216
SIXTEENTH STREET
 SUITE
600
 DENVER,
COLORADO 80202
  REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
  To
the Board of Directors and
 Stockholders
of
 Vista
International Technologies, Inc.
 Denver,
Colorado
  We have
audited the accompanying consolidated balance sheet of Vista International
Technologies, Inc. as of December 31, 2008 and the related consolidated
statements of operations, changes in stockholders’ equity (deficit), and cash
flows for the year then ended. Vista International Technologies, Inc.’s
management is responsible for these consolidated financial statements. Our
responsibility is to express an opinion on these financial statements based on
our audit.
  We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. The Company
is not required to have, nor were we engaged to perform, an audit of its
internal control over financial reporting. Our audit included consideration of
internal control over financial reporting as a basis for designing audit
procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the company’s internal control
over financial reporting. Accordingly, we express no such opinion. An audit also
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the consolidated financial statements, assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audit provides a reasonable basis for our opinion.
  In our
opinion, the consolidated financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Vista
International Technologies, Inc. as of December 31, 2008 and the results of its
operations and its cash flows for the year then ended, 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
financial statements, the Company has incurred substantial losses from
operations and has a working capital deficit, and is in default on all of its
notes payable. Its ability to continue as a going concern is dependent upon its
ability to develop additional sources of capital, and ultimately achieve
profitable operations. These conditions raise substantial doubt about its
ability to continue as a going concern. Management’s plans regarding these
matters are also discussed in Note 1 to the consolidated financial statements.
These consolidated financial statements do not include any adjustments that
might result from the outcome of this uncertainty.
  AJ.
ROBBINS, P.C.
 CERTIFIED
PUBLIC ACCOUNTANTS
  Denver,
Colorado
 April
8, 2009
  
 REPORT
OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
 
 The Board
of Directors
 Vista
International Technologies Inc.
 
 We have
audited the accompanying consolidated balance sheets of Vista International
Technologies Inc. (formerly Nathaniel Energy Corporation) as of December 31,
2007, and the related consolidated statements of operations, stockholders’
equity (deficit), and cash flows for the year ended December 31, 2007. These
financial statements are the responsibility of the Company’s management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
 
 We
conducted our audit in accordance with the standards of the Public Company
Accounting Oversight Board (U.S.). Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. The Company is not required to
have, nor were we engaged to perform, an audit of its internal control over
financial reporting. Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company’s internal control over financial
reporting. Accordingly, we express no such opinion. An audit also 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
audit provides a reasonable basis for our opinion.
 
 In our
opinion, the financial statements referred to above present fairly, in all
material respects, the consolidated financial position of Vista International
Technologies, Inc. as of December 31, 2007, and the consolidated results of its
operations, changes in stockholders’ equity (deficit) and cash flows for the
year ended December 31, 2007 in conformity with accounting principles generally
accepted in the United States of America.
    The
accompanying financial statements are presented assuming the company will
continue as a going concern. As more fully described in Note 1 to the financial
statements, at December 31, 2007 the Company had a working capital deficit of
$2,596,474, an accumulated deficit of $63,327,775, and used cash of $1,250,438
in operating activities for the year then ended. These conditions raise
substantial doubt about its ability to continue as a going concern. Management’s
plans to address these conditions are also set forth in Note 1 to the financial
statements. The accompanying financial statements do not include any adjustments
which might be necessary if the Company is unable to continue.
 
 Denver,
Colorado
 April 29,
2008, except for
   
 GRAPHIC
 
 Certified
Public Accountants and Consultants
 789
Sherman Street, Suite 385, Denver Co 80203
 (303) 830-2255 - Fax
(303) 830-0876–info@comiskey.com–
www.comiskey.com
 F-1
  Vista
International Technologies, Inc.
 Consolidated Balance
Sheet
 December
      31, 2008
                        
                        
                        December
                          31,
      2007
                          (Restated)ASSETSCurrent
      assetsCash
      and cash equivalents
                        
                        $
                        13,698
                        
                        
                        $
                        9,017Restricted
      cash
                        
                        
                        23,422
                        
                        
                        
                        21,498Accounts
      receivable, net
                        
                        
                        4,643
                        
                        
                        
                        65,586Prepaid
      expenses
                        
                        
                        21,531
                        
                        
                        
                        58,684Total
      current assets
                        
                        
                        63,294
                        
                        
                        
                        154,785Deposits
                        
                        
                        21,167
                        
                        
                        
                        17,662Property
      and equipment, net
                        
                        
                        510,865
                        
                        
                        
                        637,012Intangibles,
      net of accumulated amortization
                        
                        
                        35,195
                        
                        
                        
                        39,474Total
      assets
                        
                        $
                        630,521
                        
                        
                        $
                        848,933LIABILITIES
      AND STOCKHOLDERS’ EQUITY (DEFICIT)Current
      liabilitiesAccounts
      payable and accrued liabilities
                        
                        $
                        1,577,932
                        
                        
                        $
                        1,934,620Payable
      to related parties
                        
                        
                        66,900
                        
                        
                        
                        —Accrued
      compensation and payroll liabilities
                        
                        
                        426,823
                        
                        
                        
                        121,774Accrued
      interest
                        
                        
                        99,411
                        
                        
                        
                        42,591Notes
      payable and capital leases - current portion
                        
                        
                        194,660
                        
                        
                        
                        152,274Notes
      payable - stockholder
                        
                        
                        500,000
                        
                        
                        
                        500,000Total
      current liabilities
                        
                        
                        2,865,726
                        
                        
                        
                        2,751,259Long-term
      portion of notes payable
                        
                        
                        —
                        
                        
                        
                        71,351Total
      liabilities
                        
                        
                        2,865,726
                        
                        
                        
                        2,822,610Commitments
      and Contingencies:Stockholders’
      equity (deficit)Preferred
      stock, $0.001 par value: 10,000,000 shares authorized; none issued or
      outstanding
                        
                        
                        —
                        
                        
                        
                        —Common
      stock, $0.001 par value; 200,000,000 shares authorized; 103,002,366 and
      90,731,596 shares issued and outstanding at December 31, 2008 and 2007
      respectively
                        
                        
                        103,002
                        
                        
                        
                        90,731Additional
      paid-in capital
                        
                        
                        61,994,691
                        
                        
                        
                        61,257,476Common
      stock to be issued
                        
                        
                        1,048
                        
                        
                        
                        5,891Accumulated
      deficit
                        
                        
                        (64,333,946
                        )
                        
                        
                        (63,327,775
                        )Total
      stockholders’ equity (deficit)
                        
                        
                        (2,235,205
                        )
                        
                        
                        (1,973,677
                        )Total
      liabilities and stockholders’ equity (deficit)
                        
                        $
                        630,521
                        
                        
                        $
                        848,933
  The
accompanying notes are an integral part of the consolidated financial
statements.
  F-2
  Vista
International Technologies, Inc.
 Consolidated Statements of
Operations
 For
      the
                          Year
                          Ended
                          December
                          31,
      2008
                        
                        
                        For
      the
                          Year
                          Ended
                          December
                          31,
      2007
                          (Restated)Revenues
                        
                        $
                        54,582
                        
                        
                        $
                        337,168Cost
      of revenue
                        
                        
                        52,589
                        
                        
                        
                        1,893,494Gross
      loss
                        
                        
                        1,993
                        
                        
                        
                        (1,556,326
                        )Operating
      expenses:Selling,
      general and administrative expenses
                        
                        
                        954,078
                        
                        
                        
                        1,399,279Research
      and development
                        
                        
                        —
                        
                        
                        
                        70,826Total
      operating expenses
                        
                        
                        954,078
                        
                        
                        
                        1,470,105Loss
      from operations
                        
                        
                        (952,085
                        )
                        
                        
                        (3,026,431
                        )Other
      income (expense):Interest
      income (expense)
                        
                        
                        (51,386
                        )
                        
                        
                        (27,462
                        )Gain
      (loss) on disposal of equipment
                        
                        
                        (2,700
                        )
                        
                        
                        91,353Impairment
      loss
                        
                        
                        —
                        
                        
                        
                        (89,097
                        )Total
      other income (expense)
                        
                        
                        (54,086
                        )
                        
                        
                        (25,206
                        )Loss
      from operations before income tax
                        
                        
                        (1,006,171
                        )
                        
                        
                        (3,051,637
                        )Income
      tax benefit (expense)
                        
                        
                        —
                        
                        
                        
                        —Net
      loss
                        
                        $
                        (1,006,171
                        )
                        
                        $
                        (3,051,637
                        )Net
      loss per share, basic and diluted
                        
                        $
                        (0.01
                        )
                        
                        $
                        (0.03
                        )Weighted
      average common shares outstanding
                        
                        
                        96,238,844
                        
                        
                        
                        90,731,596
  The
accompanying notes are an integral part of the consolidated financial
statements.
  F-3
  Vista
International Technologies, Inc.
 Consolidated Statement of
Stockholders’ Equity (Deficit)
 Additional
                      Paid-in
                      Capital
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    
                    Stockholders’
                      Equity
                      (Deficit)Shares
      to be issued
                    
                    
                    Accumulated
                      DeficitShares
                    
                    
                    Amount
                    
                    
                    Shares
                    
                    
                    AmountBalance
      at December 31, 2006
                    
                    
                    90,731,596
                    
                    
                    $
                    90,731
                    
                    
                    $
                    60,702,446
                    
                    
                    
                    284,667
                    
                    
                    $
                    285
                    
                    
                    $
                    (60,276,138
                    )
                    
                    $
                    517,324Issuance
      of shares in private offering
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    555,030
                    
                    
                    
                    5,606,360
                    
                    
                    
                    5,606
                    
                    
                    
                    —
                    
                    
                    
                    560,636Net
      loss for the year ended December 31, 2007 (Restated)
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    (3,051,637
                    )
                    
                    
                    (3,051,637
                    )Balance
      at December 31, 2007 (Restated)
                    
                    
                    90,731,596
                    
                    
                    
                    90,731
                    
                    
                    
                    61,257,476
                    
                    
                    
                    5,891,027
                    
                    
                    
                    5,891
                    
                    
                    
                    (63,327,775
                    )
                    
                    
                    (1,973,677
                    )Issuance
      of common stock for services
                    
                    
                    750,000
                    
                    
                    
                    750
                    
                    
                    
                    74,250
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    75,000Issuance
      of shares in private offering
                    
                    
                    11,520,770
                    
                    
                    
                    11,521
                    
                    
                    
                    662,965
                    
                    
                    
                    (4,824,810
                    )
                    
                    
                    (4,843
                    )
                    
                    
                    —
                    
                    
                    
                    669,643Net
      loss for the year ended December 31, 2008
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    —
                    
                    
                    
                    (1,006,171
                    )
                    
                    
                    (1,006,171
                    )Balance
      December 31, 2008
                    
                    
                    103,002,366
                    
                    
                    $
                    103,002
                    
                    
                    $
                    61,994,691
                    
                    
                    
                    1,066,217
                    
                    
                    $
                    1,048
                    
                    
                    $
                    (64,333,946
                    )
                    
                    $
                    (2,235,205
                    )
  The
accompanying notes are an integral part of the consolidated financial
statements.
  F-4
  Vista
International Technologies, Inc.
 Condensed
Consolidated Statements of Cash Flows
 For
      the
                    Year
                    Ended
                    December
                    31,
      2008
                  
                  
                  For
      the
                    Year
      Ended
                    December
                    31,
      2007
                    (Restated)Cash
      flows from operating activities:Net
      Income (loss)
                  
                  $
                  (1,006,171
                  )
                  
                  $
                  (3,051,637
                  )Adjustments
      to reconcile net loss to net cash used in operating
      activities:Depreciation
      and amortization
                  
                  
                  173,159
                  
                  
                  
                  336,307Stock
      issued for services
                  
                  
                  75,000
                  
                  
                  
                  —(Gain)
      Loss on disposition of equipment
                  
                  
                  2,700
                  
                  
                  
                  (91,353
                  )Reserve
      for doubtful accounts
                  
                  
                  —
                  
                  
                  
                  8,104Impairment
      loss
                  
                  
                  —
                  
                  
                  
                  89,097Interest
      expense
                  
                  
                  56,820
                  
                  
                  
                  32,819Other
      income
                  
                  
                  —
                  
                  
                  
                  (13,981
                  )Changes
      in assets and liabilities:(Increase)
      decrease in assets:Accounts
      receivable, net
                  
                  
                  60,943
                  
                  
                  
                  112,586Prepaid
      expenses
                  
                  
                  102,655
                  
                  
                  
                  (18,407
                  )Other
      assets
                  
                  
                  (3,505
                  )
                  
                  
                  33,735Increase
      (decrease) in liabilities:Related
      party payables
                  
                  
                  66,900
                  
                  
                  
                  —Accounts
      payable and accrued liabilities
                  
                  
                  (56,581
                  )
                  
                  
                  1,202,292Net
      cash used in operating activities
                  
                  
                  (528,080
                  )
                  
                  
                  (1,360,438
                  )Cash
      flows from investing activities:Equipment
      and intangible asset purchases
                  
                  
                  (64,907
                  )
                  
                  
                  (90,106
                  )Increase
      in restricted cash
                  
                  
                  (1,924
                  )
                  
                  
                  —Proceeds
      from sale of equipment
                  
                  
                  
                  
                  
                  
                  190,000Net
      cash provided by (used in) investing activities
                  
                  
                  (66,831
                  )
                  
                  
                  99,894Cash
      flows from financing activities:Payments
      on debt
                  
                  
                  (70,051
                  )
                  
                  
                  (193,364
                  )Proceeds
      from issuance of common stock
                  
                  
                  669,643
                  
                  
                  
                  560,636Proceeds
      from issuance of notes and loans
                  
                  
                  —
                  
                  
                  
                  644,421Net
      cash provided by (used in) financing activities
                  
                  
                  599,592
                  
                  
                  
                  1,011,693Increase
      (decrease) in cash and cash equivalents
                  
                  
                  4,681
                  
                  
                  
                  (248,851
                  )Cash
      and cash equivalents at beginning of period
                  
                  
                  9,017
                  
                  
                  
                  257,868Cash
      and cash equivalents at end of period
                  
                  $
                  13,698
                  
                  
                  $
                  9,017Supplemental
      disclosure of cash flow information:Cash
      paid during the period for:Interest
                  
                  $
                  5,206
                  
                  
                  $
                  6,162Taxes
                  
                  $
                  5,000
                  
                  
                  $
                  10,000Non
      cash financing activities:Stock
      issued for services
                  
                  $
                  75,000
                  
                  
                  $
                  —Equipment
      purchased with debt
                  
                  $
                  —
                  
                  
                  $
                  107,294
  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, 2008 and 2007
  1.
Significant Accounting Policies and Nature of Operations
  Description
of Business
  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. The Company’s mission is to provide a
clean, dependable, cost-competitive energy alternative to fossil fuels. We plan
to develop projects with government, community, industry and financial partners
to recover the available hydro-carbon based energy from materials previously
considered “waste” and destined for disposal. The recovery of energy from waste
using our Thermal GasifierTM diverts large volumes of material from landfills and
other disposal while providing clean alternative energy comparable to that of
fossil fuels.
  Business
  The
Company is focusing its business on two areas which are presently conducted in
two separate facilities:
 ●
                tire
      derived fuel (“TDF”) processing operation in Hutchins, Texas,
      and●
                renewable
      energy and waste to energy (WTE) utilizing the company’s Thermal GasifierTM
      technology and corporate offices in Denver,
  Colorado
  Restatement
  On
December 7, 2007, the Company sold a shredder for $175,000, consisting of cash
of $110,000 and an account receivable of $65,000. The shredder required repairs
that the Company did not have adequate funds to make. The shredder was subject
to a lien, as part of the security interest in all of the Company’s assets,
which secured a $500,000 note payable to a stockholder. The sale had been
recorded as deferred in the financial statements for the year ended December 31,
2007. It was later determined that the sale should have been recorded during the
year ended December 31, 2007. The 2007 financial statements have been restated
as follows:
 Increase
      to accounts receivable
                    
                    $
                    65,000Decrease
      to other assets
                    
                    $
                    (130,871
                    )Decrease
      in accounts payable and accrued liabilities
                    
                    $
                    (110,000
                    )Increase
      in gain on disposition of assets
                    
                    $
                    44,129Decrease
      in accumulated deficit
                    
                    $
                    (44,129
                    )
  F-6
  Vista
International Technologies, Inc.
 Notes
to Consolidated Financial Statements
 For
the years ended December 31, 2008 and 2007
  Liquidity,
Going Concern, and Management’s Plan
  The
Company’s consolidated financial statements have been presented on the basis
that it is a going concern, which contemplates the realization of assets and
satisfaction of liabilities in the normal course of business. The Company had a
net loss of $1,006,171 for the year ended December 31, 2008. At December 31,
2008 the Company had a working capital deficit of $2,802,432, and an accumulated
deficit of $64,333,946. The Company is currently in default on notes payable of
$694,660. As a result, the Company’s independent registered public accounting
firm, in their report on the Company’s 2008 consolidated financial statements,
has raised substantial doubt about the Company’s ability to continue as a going
concern.
  Management
believes that additional financing will be necessary in order for the Company to
execute its business plan. There can be no assurance that additional financing
will be available at rates favorable to the Company, or at all.
  Our
financial statements do not include any adjustments relating to the
recoverability and classification of recorded asset amounts or the amounts and
classification of liabilities that might be necessary should we be unable to
continue as a going concern. Our continuation as a going concern is dependent
upon the 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
plans to focus the company’s resources in three key areas: Thermal GasifierTM
engineering design, development of core business opportunities and attracting
strategic investment. While management considers the Thermal GasifierTM and waste
to energy segment to be our core business, we also intend to continue
modernization and improvement of the TDF processing operation at our Hutchins,
TX facility to increase production and reduce operating costs. It is
management’s belief that by improving all facets of company operations, we will
be better situated to attract investors looking to enter the waste to energy and
renewable energy marketplace.
  The
Company believes its cash on hand and the revenues it expects to generate at
current levels will not be sufficient to fund the Company’s planned operating
needs. We are seeking funding for the purposes described above. The Company is
exploring numerous financing opportunities but has no agreements or commitments
for funding, with the exception of an agreement with our majority stockholder
Vista International, Inc., which is described below. 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 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. 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 would be
required to scale back or discontinue its technology and product 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.
  On
January 31, 2008, we executed an agreement with Vista International, Inc. (a
majority stockholder) to provide $2,000,000 of working capital in exchange for
our common stock at a value of $0.10 per common share. The value of our common
stock at closing on the date of the agreement was $0.12. The agreement
formalized a verbal agreement with Vista International, Inc. which, through
December 31, 2008, provided an equity investment of approximately $669,643 in
cash during 2008 for our operations for which we have issued 11,520,770 shares
of our common stock, representing investment for both 2008 and
2007.
  The
Company can give no assurance that it will be able to obtain funds from
financing opportunities, or that if available; the Company will be able to
obtain funds on favorable terms and conditions. If the Company cannot secure
additional funds it may be required to scale back operations or change its
plans.
  F-7
  Vista
International Technologies, Inc.
 Notes
to Consolidated Financial Statements
 For
the years ended December 31, 2008 and 2007
  Principles
of Consolidation
  The
financial statements include the accounts of Vista International Technologies,
Inc. and its wholly owned subsidiaries; Nathaniel Energy Oklahoma Holdings
Corporation and Cleanergy, Inc. All material intercompany accounts and
transactions have been eliminated in consolidation.
  Cash
and Cash Equivalents
  For the
purpose of the consolidated statements of cash flows, the Company considers all
highly liquid debt instruments purchased with an initial maturity of three
months or less to be cash equivalents. Cash balances used to fund particular
capital projects, including amounts underlying a letter of credit for
environmental cleanup, which are not authorized or available for general
corporate purposes, are classified as restricted cash.
  Inventory
  Tire-derived-fuel
(TDF) inventory is valued at its cost to produce a salable product using the
first-in first-out method, but in an amount not to exceed realizable value,
determined with respect to existing contractual sales prices, less costs to
complete the waste tire processing. TDF inventory value at December 31, 2008 is
zero.
  The
Thermal GasifiersTM are valued at that portion of the contract price we
reasonably expect to receive upon completion and acceptance by our customer,
reduced by our contractual exposure to penalties contained in the contract which
could be incurred if our Thermal GasifiersTM do not produce to the specifications
in the contract. The Thermal GasifierTM inventory value at December 31, 2008 is
zero.
  Research
and Development
  Research
and development expenses, all of which relate directly to the design and
development of our Thermal GasifierTM technology, are expensed as incurred. For
the years ended December 31, 2008 and 2007, we incurred $-0- and
$70,826 for outside resources for research and development expense.
  Property,
Plant and Equipment and Related Depreciation
  Property,
plant 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 straight-line and accelerated methods. Estimated useful lives
of the assets used in the computation of depreciation are as
follows:
 Machinery
      and equipment
                          2-5
      yearsBuildings
      and improvements
                          2-15
      yearsVehicles
                          5
      years
  Depreciation
expense recorded in the statements of operations was $168,880 and $257,192 for
the years ended December 31, 2008 and 2007, respectively.
  Long
Lived Assets
  In
accordance with the Financial Accounting Standards Board’s (“FASB”) Statement of
Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment
or Disposal of Long-Lived Assets”, the Company reviews its long-lived assets,
including intangible assets, for impairment whenever events or changes in
circumstances indicate that the related carrying amount may not be
recoverable.
  F-8
  Vista
International Technologies, Inc.
 Notes
to Consolidated Financial Statements
 For
the years ended December 31, 2008 and 2007
  Recovery
of assets to be held and used is measured by a comparison of the carrying amount
of the assets to the future net cash flows expected to be generated by the
asset. If such assets are considered to be impaired, the impairment to be
recognized is measured by the amount by which the carrying amount of the assets
exceeds the fair value of the assets. Assets to be disposed of are reported at
the lower of the carrying amount or fair value less the cost to sell. Management
uses significant judgments, assumptions and estimates to calculate future cash
flows expected to be generated by the assets under impairment review. No
impairment was recognized during the years ended December 31, 2008 and
2007.
  Revenue
Recognition
  Our tire
fuel processing facility recognizes revenue in two ways. First when waste tires
are accepted at the facility we receive a disposal fee (“tipping fees”) and
secondly from the sale of processed tire-derived-fuel or unprocessed whole
tires. The revenues from tipping fees are fully earned when the waste tires are
accepted at the facility and the processed tire shred revenues are recognized
when the TDF is delivered to the end user. Internal quality controls are in
place to ensure that the tire-derived-fuel meets the standards required in
contracts for the delivery to our customers. This quality control reduces the
risk of significant returns and allowances of tire-derived-fuel sold. Sales
returns are reprocessed and added back to the existing production of
tire-derived-fuel. Sales returns estimates are booked based on the Company’s
historical experience. During the years ended December 31, 2008 and 2007, the
Company recognized disposal fees of $47,815 and $210,822 and sales of tire
shreds of $4,637 and $120,932, respectively
  We
recognize revenue from the sale of our Thermal GasifiersTM upon completion,
delivery and customer acceptance, using the completed contract method of
accounting. We recognize revenue for consulting services during the period those
services are provided. We have recognized no revenue from the sale of our
Thermal GasifiersTM as of December 31, 2008 or 2007.
  Net
Income (Loss) Per Common Share
  SFAS
No. 128, “Earnings Per Share” requires presentation of basic (loss) or
earnings per share (“Basic EPS”) and diluted (loss) or earnings per share
(“Diluted EPS”). The computation of basic loss per share 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.
  Accounts
Receivable/Concentration of Credit Risk
  The
Company utilizes the allowance method for accounts receivable valuation,
providing for allowances for estimated uncollectible accounts receivable. As of
December 31, 2008 and 2007, the Company recorded an allowance for doubtful
accounts totaling $0 and $8,104 and bad debt expense of $0 and $8,104 for the
years ended December 31, 2008 and 2007. The Company routinely assesses the
financial strength of its customers as part of its consideration of accounts
receivable collectability by performing credit evaluations of customers. Trade
receivables are not collateralized. The Company generally grants credit terms to
certain customers ranging from 20 to 30 days.
  The
Company’s financial instruments that are exposed to concentration of credit risk
consist primarily of uninsured cash, cash equivalents held at commercial banks
and institutions primarily in the United States, and trade receivables from the
Company’s customers. The Company maintains all cash in bank accounts, which at
times may exceed federally insured limits. The Company has not experienced a
loss in such accounts.
  F-9
  Vista
International Technologies, Inc.
 Notes
to Consolidated Financial Statements
 For
the years ended December 31, 2008 and 2007
  Use
of Estimates
  The
preparation of the Company’s financial statements in conformity with generally
accepted accounting principles requires the Company’s management to make
estimates and assumptions that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
  Identifiable
Intangible Assets
  The
Company reports identifiable intangible assets net of accumulated amortization.
Accumulated amortization on intangible assets was $22,233 and $167,954 at
December 31, 2008 and 2007, respectively. The company amortizes intangible
assets, excluding goodwill and trademarks, over their estimated useful lives of
ten years. Intangible assets consist of patents for our Thermal GasifierTM
technology. The estimated annual amortization expense related to patents is
approximately $4,279 per year.
  Goodwill
and Other Intangible Assets
  The
Company adopted the Financial Accounting Standards Board (FASB), Statement of
Financial Accounting Standards (SFAS) No. 142, Goodwill and Other
Intangible Assets, during fiscal year 2002. The Company has no recorded goodwill
at December 31, 2008 and 2007.
  Advertising
  The
Company expenses non-direct advertising costs as incurred. The Company did not
incur any direct response advertising costs during the years ended
December 31, 2008 and 2007 to be capitalized and deferred to future
periods. The Company had advertising expenses of $-0- and $5,594 during the
years ended December 31, 2008 and 2007, respectively.
  Stock-Based
Compensation
  Effective
January 1, 2006, the Company adopted SFAS No. 123 (revised), “Share-Based
Payment” (SFAS 123(R)) utilizing the modified prospective approach. Prior to the
adoption of SFAS 123(R) we accounted for stock option grant in accordance with
APB Opinion No. 25, “Accounting for Stock Issued to Employees” (the intrinsic
value method), and accordingly, recognized compensation expense for stock option
grants.
  Under the
modified prospective approach, SFAS 123(R) applies to new awards and to awards
that were outstanding on January 1, 2006 that are subsequently modified,
repurchased or cancelled. Under the modified prospective approach, compensation
cost recognized in the nine months of fiscal 2006 includes compensation cost for
all share-based payments granted prior to, but not yet vested as of January 1,
2006, based on the grant-date fair value estimated in accordance with the
original provisions of SFAS 123, and compensation cost for all share-based
payments granted subsequent to January 1, 2006 based on the grant-date fair
value estimated in accordance with the provisions of SFAS 123(R). Prior periods
were not restated to reflect the impact of adopting the new
standard.
  The
Company had no employee stock-based compensation activity during the years ended
December 31, 2008 and 2007, and had no unvested stock options outstanding at
December 31, 2008 and 2007.
  F-10
  Vista
International Technologies, Inc.
 Notes
to Consolidated Financial Statements
 For
the years ended December 31, 2008 and 2007
  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 in accordance with Statement of
Financial Accounting Standards No. 123, “Accounting for Stock-Based
Compensation,” and the conclusions reached by the Emerging Issues Task Force in
Issue No. 96- 18, “Accounting for Equity Instruments That Are Issued to Other
Than Employees for Acquiring or in Conjunction with Selling Goods or Services”
(“EITF 96-18”). Costs are measured at the estimated fair market 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 for consideration other than employee services is determined on the
earlier of a performance commitment or completion of performance by the provider
of goods or services as defined by EITF 96-18. In the case of equity instruments
issued to consultants, the fair value of the equity instrument is recognized
over the term of the consulting agreement.
  Fair
Value of Financial Instruments
  The fair
values of cash and cash equivalents, accounts receivable, short-term debt and
accounts payable approximate cost because of the immediate or short-term
maturity of these financial instruments.
  Fair
Value Measurement
  The
Company adopted SFAS No. 157, Fair
Value Measurement, (“SFAS No. 157”) during 2008. SFAS No. 157
defines fair value, establishes a framework for measuring fair value, and
expands disclosures about fair value measurements. Adoption has not had a
material impact on the Company’s consolidated results of operations or financial
condition.
  Income
Taxes
  The
Company accounts for income taxes pursuant to SFAS No. 109, “Accounting for
Income Taxes” (“SFAS No. 109”), which establishes financial accounting and
reporting standards for the effects of income taxes that result from an
enterprise’s activities during the current and preceding years. SFAS No. 109
requires an asset and liability approach for financial accounting and reporting
for income taxes. Accordingly, the Company recognizes deferred tax assets and
liabilities for the expected impact of differences between the financial
statements and the tax basis of assets and liabilities.
  The
Company records a valuation allowance to reduce its deferred tax assets to the
amount that is more likely than not to be realized. In the event the Company was
to determine that it would be able to realize its deferred tax assets in the
future in excess of its recorded amount, an adjustment to the deferred tax
assets would be credited to operations in the period such determination was
made. Likewise, should the Company determine that it would not be able to
realize all or part of its deferred tax assets in the future, an adjustment to
the deferred tax assets would be charged to operations in the period such
determination was made.
  For
federal income tax purposes, net operating losses can be carried forward for a
period of 20 years until they are either utilized or until they
expire.
  On
January 1, 2007, the Company adopted FASB Interpretation No. 48, “Accounting for
Uncertainty in Income Taxes, an interpretation of FASB Statement No. 109,
Accounting for Income Taxes” (“FIN 48”). FIN 48 addresses the determination of
whether tax benefits claimed or expected to be claimed on a tax return should be
recorded in the financial statements. Under FIN 48, the Company may recognize
the tax benefit from an uncertain tax position only if it is more likely than
not that the tax position will be sustained on examination by the taxing
authorities, based on the technical merits of the position. The tax benefits
recognized in the financial statements from such a position are measured based
on the largest benefit that has a greater than fifty percent likelihood of being
realized upon ultimate settlement. FIN 48 also provides guidance
on de-recognition, classification, interest and penalties on income taxes,
accounting in interim periods and requires increased disclosures. The adoption
of the provisions of FIN 48 did not have a material effect on the Company’s
financial statements. As of December 31, 2008, no liability for unrecognized tax
benefits was required to be recorded.
  F-11
  Vista
International Technologies, Inc.
 Notes
to Consolidated Financial Statements
 For
the years ended December 31, 2008 and 2007
  The
Company files income tax returns in the U.S. federal jurisdiction and is subject
to income tax examinations by federal tax authorities for the year
2005 and thereafter. The Company’s policy is to record interest and penalties on
uncertain tax provisions as income tax expense. As of December 31, 2008, the
Company has no accrued interest or penalties related to uncertain tax
positions.
  Reclassifications
  We have
reclassified certain prior period amounts to conform to the current period
presentation. (See note on restatement).
  Recent
Accounting Pronouncements
  The
Company has adopted all recently issued accounting pronouncements. The adoption
of the accounting pronouncements, including those not yet effective is not
anticipated to have a material effect on the financial position or results of
operations of the Company.
  In March
2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments
and Hedging Activities – An Amendment to FASB Statement No. 133”, which changes
the disclosure requirements for derivative instruments and hedging activities
and is effective for fiscal years beginning after November 15, 2008. Companies
are required to provide enhanced disclosures about (a) how and why an entity
uses derivative instruments, (b) how derivative instruments and related hedged
items are accounted for under SFAS No. 133 and its related interpretations and
(c) how derivative instruments and related hedged items affect a company’s
financial position, financial performance and cash flows. The Company is
currently evaluating the disclosure requirements of this standard.
  In
December, 2007, the FASB issued SFAS No. 141 (revised 2007), Business
Combinations, (“SFAS No. 141R”). SFAS No. 141R establishes
principles and requirements for how an acquirer recognizes and measures in its
financial statements the identifiable assets acquired, the liabilities assumed,
any non-controlling interest in an acquiree and the goodwill acquired. SFAS No.
141R is to be applied prospectively to business combinations for which the
acquisition date is on or after January 1, 2009. The Company expects SFAS
No. 141R will have an impact on the Company’s accounting for future business
combinations once adopted but the effect is dependent upon any acquisitions that
are made in the future and the structure of those transactions.
  In
December 2007, the FASB issued SFAS No.160, Non-controlling Interests in
Consolidated Financial Statements, including an amendment of ARB No. 51 (“SFAS
No, 160) which established accounting and reporting standards for the
non-controlling interest in a subsidiary and for the deconsolidation of a
subsidiary. The effective date of SFAS No. 160 is for fiscal years and interim
periods within those fiscal years, beginning on or after December 15, 2008. We
are still evaluating the effects that SFAS No. 160 will have on our consolidated
financial statements.
  In
February 2007, the FASB issued SFAS No. 159, “The Fair Value Option
for Financial Assets and Financial Liabilities: (“SFAS No. 159”) which
permits entities to choose to measure many financial instruments and certain
other items at fair value that are not currently required to be measured at fair
value. SFAS No. 159 will be effective for us on January 1, 2008.
The Company is currently evaluating the impact of adopting
SFAS No. 159 on its financial position, cash flows and results of
operations.
  F-12
  Vista
International Technologies, Inc.
 Notes
to Consolidated Financial Statements
 For
the years ended December 31, 2008 and 2007
  2.
Property, Plant and Equipment
  Following
is a summary of property, plant and equipment at December 31, 2008 and
2007:
 December 31,
                    2008
                  
                  
                  December 31,
                    2007Machinery
      and equipment
                  
                  $
                  572,967
                  
                  
                  $
                  603,991Buildings
                  
                  
                  43,575
                  
                  
                  
                  43,575Vehicles
                  
                  
                  14,614
                  
                  
                  
                  15,000Land
                  
                  
                  51,085
                  
                  
                  
                  51,085Furniture,
      fixtures and equipment
                  
                  
                  74,249
                  
                  
                  
                  192,571Leasehold
      Improvements
                  
                  
                  218,212
                  
                  
                  
                  189,511974,702
                  
                  
                  
                  1,095,733Less
      accumulated depreciation
                  
                  
                  (463,837
                  )
                  
                  
                  (458,721
                  )Net
      book value
                  
                  $
                  510,865
                  
                  
                  $
                  637,012
  As of
December 31, 2008, the Company had software purchased under a capital lease for
$34,674. The Company has not placed the asset in service as it does not have
adequate funds to upgrade its computer systems and therefore no depreciation has
been recorded on the asset. The lease was due in full during September 2008. As
of December 31, 2008 total payments due are $20,735, which includes imputed
interest of $1,149 and is recorded in notes payable and capital leases as
$19,586.
  3.
Intellectual Property
  The
Company owns three U.S. patents, two pending U.S. patent applications and two
pending European patent applications covering the Thermal GasifierTM technology.
These patents and patent applications are for utility patents directed to
devices and methods of uses. The three U.S. patents expire September 6,
2011, December 4, 2012, and February 4, 2022,
respectively.
 2008
                      
                      
                      2007Patents
      and other
                      
                      $
                      57,428
                      
                      
                      $
                      207,428Less
      accumulated amortization
                      
                      
                      (22,233
                      )
                      
                      
                      (167,954
                      )Intangible
      assets, net
                      
                      $
                      35,195
                      
                      
                      $
                      39,474
  Amortization
expense for the twelve months ended December 31, 2008 and 2007 was $4,279
and $79,115, respectively.
  F-13
  Vista
International Technologies, Inc.
 Notes
to Consolidated Financial Statements
 For
the years ended December 31, 2008 and 2007
  4.
Notes Payable
  At
December 31, 2008 and 2007, the Company had the following promissory notes
outstanding:
 2008
                                
                                
                                20073.68%
      installment note, secured by equipment
                                
                                $
                                75,452
                                
                                
                                $
                                92,6223.35%
      capital lease, secured by equipment, repossessed 2008
                                
                                
                                —
                                
                                
                                
                                18,4729.09%
      capital lease, secured by software
                                
                                
                                19,586
                                
                                
                                
                                13,78115%
      promissory notes payable to individuals, due on demand
                                
                                
                                17,000
                                
                                
                                
                                17,000Non-interest
      bearing unsecured promissory note due upon receipt of payments from the
      Cologna Veneta, Italy Thermal Gasifier TM project owner at 20% of amount
      received
                                
                                
                                70,000
                                
                                
                                
                                70,000Promissory
      note payable to a vendor
                                
                                
                                12,622
                                
                                
                                
                                11,750Total
      debt:
                                
                                $
                                194,660
                                
                                
                                $
                                223,625
  Notes are
in default.
  On May
31, 2007 we entered into an installment sale agreement to purchase equipment for
$115,559. The agreement has a term of four years with an annual interest rate of
3.68%.
  5.
Related Party Transactions
  On April
4, 2007 and April 16, 2007, we borrowed $100,000 and $200,000 respectively from
a shareholder, Mr. Richard Strain. On May 31, 2007, we borrowed an additional
$200,000 from Mr. Strain.
  The loans
bear interest at the annual rate of 9%, with interest payable quarterly. The
April 4, 2007 and April 16, 2007 notes are payable before September 30, 2007.
The May 31, 2007 note is due before November 30, 2007. We may prepay the notes
at any time without penalty. The loans are secured by a first priority security
interest in our assets. No principal or interest was paid on these loans during
the year ended December 31, 2008 and the notes are in default. In addition, in
2007 an asset was sold without payment on these notes to Mr. Strain. The
interest expense for the periods to December 31, 2008 and December 31, 2007 are
$45,000 and $32,819 respectively.
  On
January 31, 2008, we executed an agreement with Vista International, Inc., our
majority shareholder, to provide $2,000,000 of working capital in exchange for
our common stock at a value of $0.10 per common share. The value of our common
stock at closing on the date of the agreement was $0.12. The agreement
formalized a verbal agreement with Vista International, Inc. which, for the year
through December 31, 2008, provided an investment of approximately $669,643 in
cash for which we have issued 11,520,770 shares of our common stock,
representing investment for both 2008 and 2007.
  F-14
  Vista
International Technologies, Inc.
 Notes
to Consolidated Financial Statements
 For
the years ended December 31, 2008 and 2007
  During
2008, we borrowed $50,000 from a member of our Board of Directors. The amount
borrowed is not evidenced by a formal agreement, does not bear interest, and has
been classified as an accrued liability in our December 31, 2008 consolidated
balance sheet. Subsequent to year end an additional $47,900 was
advanced.
  6.
Income Taxes
  Deferred
income taxes result from the temporary differences arising from differences in
the timing of recognition of the state income tax provision for book and tax
reporting purposes, and an accumulation of net operating loss carryforwards for
income tax purposes with a valuation allowance against the carryforwards for
book purposes.
  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
$14,500,000, which expires between 2020 and 2028. Approximately $12,300,000 of
these losses are 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, 2008, we have provided a valuation allowance
reducing the net realizable benefits of these deductible differences to $-0- at
December 31, 2008. The amount of the deferred tax asset considered realizable
could change in the near term if projected future taxable income is
realized.
  Past due
Federal income taxes of approximately $161,000 are included in accrued expenses
as of December 31, 2008 and 2007. Interest and penalties of $12,617 have been
recognized in general and administrative expenses during the year ended December
31, 2008.
  The
income tax provision (benefit) for the years ended December 31, 2008 and 2007
consists of the following:
 December
                      31,
      2008
                    
                    
                    December
                      31,
      2007Continuing
      OperationsCurrent:Federal
                    
                    $
                    —
                    
                    
                    $
                    —State
                    
                    
                    —
                    
                    
                    
                    ——
                    
                    
                    
                    —Deferred:Federal
                    
                    
                    —
                    
                    
                    
                    —State
                    
                    
                    —
                    
                    
                    
                    ——
                    
                    
                    
                    —Total
                    
                    $
                    —
                    
                    
                    $
                    —
  F-15
  Vista
International Technologies, Inc.
 Notes
to Consolidated Financial Statements
 For
the years ended December 31, 2008 and 2007
  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,
      2008
                    
                    
                    December
                      31,
      2007Computed
      “expected” income tax expense (benefit) at approximately
    37%
                    
                    $
                    (372,000
                    )
                    
                    $
                    (892,000
                    )Permanent
      differences
                    
                    
                    9,000
                    
                    
                    
                    —Discretionary
      change in valuation allowances of deferred income taxes
                    
                    
                    363,000
                    
                    
                    
                    892,000$
                    —
                    
                    
                    $
                    —
  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, 2008 and 2007 are as
follows:
 December
                        31,
      2008
                      
                      
                      December
                        31,
      2007Deferred
      tax assets:Federal
      net operating loss
                      
                      $
                      5,397,000
                      
                      
                      $
                      4,958,000Allowance
      and accruals not recognized for income tax purposes
                      
                      
                      —
                      
                      
                      
                      —Total
      gross deferred tax assets
                      
                      
                      5,397,000
                      
                      
                      
                      4,958,000Less
      : Valuation allowance
                      
                      
                      (5,397,000
                      )
                      
                      
                      (4,958,000
                      )Net
      deferred tax assets
                      
                      $
                      —
                      
                      
                      $
                      —Deferred
      tax liabilities:Total
      gross deferred tax liabilities:Depreciation
      and amortization, net
                      
                      
                      —
                      
                      
                      
                      —Deferred
      state tax liability
                      
                      
                      —
                      
                      
                      
                      —Total
      net deferred tax liabilities
                      
                      $
                      —
                      
                      
                      $
                      —
  These
amounts have been presented in the consolidated balance sheets as
follows:
 December
                      31,
      2008
                    
                    
                    December
                      31,
      2007Current
      deferred tax asset
                    
                    $
                    —
                    
                    
                    $
                    —Current
      deferred tax liability
                    
                    
                    —
                    
                    
                    
                    —Non
      current deferred tax asset
                    
                    
                    —
                    
                    
                    
                    —Non
      current deferred tax liability
                    
                    
                    —
                    
                    
                    
                    —Total
      net deferred tax asset
                    
                    $
                    —
                    
                    
                    $
                    —
  F-16
  Vista
International Technologies, Inc.
 Notes
to Consolidated Financial Statements
 For
the years ended December 31, 2008 and 2007
  7.
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, 2008.
  Common
Stock
  Twelve
months ended December 31,
2008
  During
the twelve months ended December 31, 2008, the Company received approximately
$669,643 cash and payment of expenses for our operations for which we have
issued 11,520,770 shares of our common stock, representing investment for both
2008 and 2007, and an obligation to issue an additional 782,020 shares of common
stock. These shares are classified as common stock to be issued on our December
31, 2008 consolidated balance sheet.
  On
January 28, 2008, the company issued an aggregate of 750,000 restricted shares
of its common stock valued at $75,000 to American Capital Venture, Inc. (and its
affiliates) (collectively “ACV”) for an investor relations services contract.
Under the contract, ACV was to plan, coordinate, establish and manage an
investor relations program for the benefit of the Company.
  Twelve
months ended December 31,
2007
  During
the twelve months ended December 31, 2007, the Company received approximately
$561,000 in cash and payment of expenses for our operations for which we have
issued 5,606,360 shares of our common stock.
  8.
Commitments and Contingencies
  Commitments
  The
company entered into a termination agreement with a former employee dated
February 10, 2004 for services that were performed prior to termination. The
company is required to issue to the employee two hundred and eighty five
thousand (285, 000) shares of common stock, $.001 par value of the Company upon
the company effectuating a stock split. To date the stock split has not taken
place but the settlement was accrued previously.
  Litigation
and Claims
  The
Company is subject to a variety of litigation and claims relating to past due
payments for goods and services. The Company is in the process of negotiating
settlement arrangements for these items, and the estimated settlement amounts
are recorded on the books in accounts payable.
  Environmental
Liability
  The
Company has approximately 9,150 tons of whole tires, partially shredded tires,
tire chips and process waste stored onsite at the Hutchins TDF processing
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 on 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
  F-17
  Vista
International Technologies, Inc.
 Notes
to Consolidated Financial Statements
 For
the years ended December 31, 2008 and 2007
  concrete.
In addition, the BTU value is somewhat degraded by oxidation and weathering of
the tires and tire chips stored in the piles onsite and therefore not good for
use as TDF. We have chosen not to utilize this tire chip inventory as feedstock
for processing due to the economic benefit of receiving new whole tires.
Presently we have been able to dispose of this material to a municipal landfill
site that is using the material as filter and bedding material. The municipality
has expressed a longer term need for this material in their operation and the
company expects to remove most of the material over the next 6
months.
  Management
considers the piles a potential liability if the company were to fail. In such a
case, we would be required to restore the site beginning with transporting the
material to a disposal site (LRPUT or landfill). There are an estimated 9,150
tons of tires and tire shreds on site; in management’s opinion the total upper
range estimate for the cost of disposal is approximately $350,000 which includes
labor, equipment, transportation and landfill fees and assumes complete closure
of the facility. We have provided financial assurance in the form of a surety
bond and a certificate of deposit in the approximate amount of $122,000 to the
Texas Commission on Environmental Quality assuming ongoing operation of the
facility. We have accrued $350,000 for the cost of disposing of this
material.
  9.
Lease Commitments
  The
company leases certain office facilities under non-cancelable operating leases
that expire at various dates through 2009. At December 31, 2008, the
company was obligated for future minimum lease payments under operating leases
that have initial or remaining non-cancelable terms of less than one year, as
follows:
 2009
                        
                        $
                        19,3882010
                        
                        
                        —2011
                        
                        
                        —2012
                        
                        
                        —Total
      minimum lease payments
                        
                        $
                        19,388
  Rent
expense for operating leases, including month-to-month rentals, was $68,685 and
$208,641 for the years ended December 31, 2008 and 2007,
respectively.
  F-18
  Signatures
  In
accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
 VISTA
      INTERNATIONAL TECHNOLOGIES INC.Date:
      April 15, 2009
                  By:
                  /s/ Barry
      J. KembleBarry
      J. KembleChief
      Executive Officer
  In
accordance with the Exchange Act, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
  /s/ Johan
      C. SmithJohan
      C. Smith, DirectorDate:
      April 15, 2009/s/Timothy D. RuddyTimothy
      D. Ruddy, DirectorDate:
      April 15, 2009