**UNITED
        STATES**
 **SECURITIES
        AND EXCHANGE COMMISSION**
 **Washington,
        D.C. 20549**
 
 **FORM
        10-KSB**
 
  (Mark
                  one)**x**
              **ANNUAL
                  REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                  ACT OF
                  1934****For
                  the Fiscal Year Ended December 31, 2007****OR****o**
              **TRANSITION
                  REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
                  OF 1934****For
                  the transition period from  ______________ to ______________**
 
 *Commission
        File No.****000-27783***
 
 **VISTA
        INTERNATIONAL TECHNOLOGIES, INC. (formerly Nathaniel Energy Corporation)**
 (Name
        of
        small business issuer as specified in its charter)
 
 **Delaware**
              
              **84-1572525**(State
                  or other jurisdiction of
                Incorporation
                  or organization)
              
              (I.R.S.
                  EmployerIdentification
                No.)**8001
                  South InterPort Blvd.**
                **Suite
                  260, Englewood, Colorado**
              
              **80112**(Address
                  of principal executive
                offices)
              
              (Zip
                  Code)
 
 **(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:
 
 Title
        of
        class: Common Stock, $0.001 par value per share
 
 Check
        whether the issuer is not required to file reports pursuant to Section 13
        or
        15(d) of the Exchange Act. o
 Note
        -
        checking the box above will not relieve any registrant required to file reports
        pursuant to Section 13 or 15(d) of the Exchange Act from their obligations
        under
        those sections.
 
 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. x Yes **** o No
 
 Check
        if
        there is no disclosure of delinquent filers in response to Item 405 of
        Regulation S-B in this form, 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-KSB or any amendment
        to
        this Form 10-KSB. 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
 
 Vista
        International Technologies, Inc.'s revenues for its most recent fiscal year
        (2007): $337,168
 
 The
        aggregate market value of the voting and non-voting common equity held by
        non-affiliates computed by reference to the average bid and asked price of
        such
        common equity, as of April 28, 2008 was $2,876,000.
 
 The
        number of shares outstanding of each of the issuer's classes of common equity,
        as of April 28, 2008 is 97,031,893 shares.
 
 **DOCUMENTS
        INCORPORATED BY REFERENCE: None**
  
  **VISTA
        INTERNATIONAL TECHNOLOGIES, INC.**
 
 TABLE
        OF
        CONTENTS
 
 **Page**Forward
                  Looking Statements
              3**PART
                  I**Item
                  1.
              Description
                  of Business
              4Item
                  2.
              Description
                  of Property
              16Item
                  3.
              Legal
                  Proceedings
              16Item
                  4.
              Submission
                  of Matters to a Vote of Security Holders
              16**PART
                  II**Item
                  5.
              Market
                  for Common Equity, Related Stockholder Matters and Small Business
                  Issuers Purchase of Equity Securities
              16Item
                  6.
              Management's
                  Discussion and Analysis or Plan of Operation
              18Item
                  7.
              Financial
                  Statements
              27Item
                  8.
              Changes
                  in and Disagreements with Accountants on Accounting and Financial
                  Disclosure
              27Item 8A.
              Controls
                  and Procedures
              27**PART
                  III**Item
                  9
              Directors,
                  Executive Officers, Promoters, Control Persons, and Corporate Governance;
                  Compliance with Section 16(a) of the Exchange Act
              28Item 10
              Executive
                  Compensation
              31Item 11
              Security
                  Ownership of Certain Beneficial Owners and Management and Related
                  Stockholder Matters
              32Item 12
              Certain
                  Relationships and Related Transactions, and Director Independence
              33Item 13
              Exhibits
              34Item 14
              Principal
                  Accountant Fees and Services
              35Signatures
              37
  
  **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. 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 businessincluding
                  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.
  3
  **Part
        I**
 
 **Item
        1. Description of 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.
  
 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. During 2008, we expect to conclude an agreement with a
        provider of a catalytic process to convert our producer gas into a high grade
        alcohol. In addition, we expect to engineer the interface between our Thermal
        GasifierTM and the catalytic process and build a pilot facility for the combined
        processes.
 
 **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-derived-fuel at our facility.
        We sell the TDF product from our tire fuel processing operation to one major
        user, our primary customer, Geocycle, US, a wholly owned subsidiary of a
        large
        cement company located in Texas, which uses the tire-derived-fuel for firing
        its
        kilns, thereby displacing equal amounts of coal.
 
 The
        tire
        fuel processing facility improvements and expansion which began in 2005 provided
        the foundation to model the tire processing facility on a global basis. 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. During
        2006,
        subsequent to the completion of our equipment installation and site improvements
        we increased the production and the volume of waste tires we process. We
        realized higher tipping fee revenues during 2006. The
        improvements enabled us to continue 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 and site improvement. During July 2007,
        the
        facility reopened and commenced accepting waste tires and producing TDF.
  4
  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. In
        addition, new management tested and improved controls surrounding the security
        of our management and financial information systems to insure the integrity
        of
        the Company’s records.
 
 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. New management was advised by the issuer that
        the
        policy had been cancelled in July 2007 for nonpayment of premiums by prior
        management. As a result of the insurance cancellation, 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,
        2007.
        We expect to place orders for new tire shredding equipment during the second
        quarter of 2008 with expected delivery in the third quarter of 2008. As a
        result
        of the long lead time on this new equipment and additional time to install,
        we
        do not expect the tire processing facility to be fully operational
        until the third quarter of 2008.
 
 During
        2007, we spent considerable effort preparing for the installation of new
        equipment for the processing of tire derived fuel. Simultaneously, we are
        continuing to remove non useable material from the site as part of the Texas
        permit renewal process for the tire processing facility. We expect the tire
        fuel
        processing division to continue to expand and grow profitably with the addition
        of new tire processing equipment.
 
 We
        operate the tire fuel processing facility under permit with the Texas Commission
        on Environmental Quality, which expired in December 2007. We prepared our
        application for renewal of that permit and submitted the application on October
        17, 2007. The TCEQ allows us to continue to operate under our current permit
        while we are in the permit renewal process through May 19, 2008. At
        this
        time the Company has submitted a request to the TCEQ to extend the period
        of
        time to complete the work necessary for the permit renewal.
 
 We
        will
        take advantage of our existing expertise in fuel procurement to increase
        throughput at various tire fuel processing facilities which we may acquire
        as we
        expand, create a new market for our tire-derived-fuel (as environmental
        regulations tighten up on our current customers) and position us as a “turn key”
provider of WTE solutions.
 
 During
        the year ended December 31, 2007, our tire fuel 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 are focused on this business model.
 
 During
        2007 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
        have
        recognized no revenue from the sale or delivery of our Thermal GasifiersTM
through the year ended December 31, 2007.
  5
  Our
        vision is to be an industry leader, innovating, developing, commercializing
        and
        operating renewable energy and waste to energy technologies and projects.
 
 **Company
        Mission**
 
 Our
        mission is to provide a clean, dependable, cost-competitive energy alternative
        to fossil fuels. Through ongoing research and development of our proprietary
        technologies, we are positioning to be a leader in the waste to energy (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 segments:
 
 ·
              Renewable
                  energy and waste to energy (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 2007, our facility received a total of 4,978
        tons, approximately 497,851 passenger car tires, and processed 4,991 tons
        of TDF
        for sale to our industrial customer for use as fuel in their cement kilns.
        Our
        future plans call for a portion of the TDF produced annually to be used to
        augment and support commercialization of the Thermal GasifierTM WTE business.
 
 **Description
        of Thermal Gasifier** TM **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,
        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
        (combusted) at temperatures at or above 3,000° 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 segment. 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
        2007 we generated no revenue from the sale of Thermal Gasifiers TM or
        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
        tires as a waste product from businesses, governments, communities, and
        individuals for a “tipping fee” as a disposal charge. This service diverted more
        than 497,000 tires from landfills in the Dallas, Texas area during 2007.
 
 The
        tires
        are 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). Following processing, the TDF is temporarily stored
        on
        site awaiting transportation to the end user. During 2007, we produced 4,991
        tons of TDF, all of which we sold to Geocycle US, an alternative fuel buyer
        for
        Holcim, Inc., a major Dallas area cement producer who uses TDF as an alternative
        fuel in its cement kiln.
 
 During
        2007, we generated $337,168 in gross revenue from TDF processing operations
        with
        $120,932 generated from TDF sales and $216,236 generated from tipping fees
        and
        other sales. Our total cost of revenue for TDF processing operations during
        the
        same period was $1,893,494 resulting in a gross loss of $1,556,326 or 462%
        negative gross margin for 2007. TDF processing operations accounted for 100%
        of
        our total revenue during 2007.
 
 **Business
        Model**
 
 The
        company is presently divided into two business segments; 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 waste to energy
        (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 waste-to-energy plants on our own or with joint venture partners.
 
 Our
        plan
        is to seek qualified projects where the company can build, own and operate
        waste-to-energy 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 licensing or
        joint
        ventures to date.
  8
  **Research
        & Development**
 
 During
        2007, we spent approximately $70,826 with third parties for research and
        development related to our Thermal GasifierTM technology and approximately
        $127,000 in engineering salaries dedicated to internal product development.
        During 2006, we spent $55,861 for research and development and approximately
        $255,000 in engineering salaries. 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.
 
 **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
        tire
        fuel processing 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 but a
        permit
        renewal has been submitted and is in process for approval allowing for continued
        operation. 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. At
        this
        time the Company has submitted a request to the TCEQ to extend the period
        of
        time to complete the work necessary for the permit renewal. During
        2007, we expensed approximately $798,000 related to the disposal of un-salable
        tire shreds and waste material.
 
 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.
  9
  **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
        waste to energy 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 deliver TDF to our customer.
 
 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.
 
 **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.
  10
  During
        the first quarter of 2008, the company in conjunction with its parent company
        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 2008 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 2008. However
        we
        can not assure that any of these opportunities will result in a project that
        generates revenue within the next twelve months .
 
 The
        company will also benefit from a Letter of Intent entered into in the first
        quarter of 2008 between its parent company Vista International, Inc. and
        Liberty
        Ashes Inc., a municipal solid waste collection company located in Queens,
        NY.
        The project will encompass the installation of a thermal gasification unit
        which
        would be used to provide syngas to produce high octane alcohol. The plant
        is
        estimated to handle approximately 250 tons per day of municipal solid waste
        and
        produce approximately 25,000 gallons of high octane alcohol per
        day.
 
 As
        we
        expand our business development activities we will attempt to use the
        waste-to-energy plant in Italy as “proof of process” for our first commercial
        Thermal GasifiersTM. We expect to focus on forming joint ventures with partners
        or customers that will benefit from waste-to-energy facilities where there
        is an
        urgent need to solve a waste disposal problem and an energy need at a specific
        host location. The need for a waste disposal option combined with the host’s
        option to use the total energy output from the Thermal GasifierTM, specifically
        when the industrial or municipal customer buys 100% of the steam and/or electric
        output from the project represents a “closed loop” contract
        arrangement.  This
        arrangement avoids market price risk from the ongoing sale of the energy
        commodities and contractually matches the energy production obligation directly
        to the heat content of the disposed waste. Selling the energy commodities
        at a
        retail rate to the host enhances the return on a project.
 
 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.
 
 Once
        the
        market has fully matured, and the “best practices” for operating the Thermal
        GasifierTM have been captured in standard operating procedures, there will be an
        opportunity to leverage the sales of the Thermal GasifierTM with licensing
        agreements to qualified companies and joint venture partners.
  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 deliver TDF to our customer for use as
        a
        fuel and recognize income from the sale of TDF. We expect to renovate and
        add
        new equipment to our tire fuel processing facility in Hutchins, Texas during
        2008, which will allow us to increase our TDF revenues. During installation
        of
        the equipment, we will coordinate delivery start up with our current TDF
        customer and make efforts to secure additional TDF customers with other
        industries in area 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 dramatically 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 applicationsand 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.
  13
  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. 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. 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 alcohols and is discussing joint development activities.
        We
        believe the production and sale of a high octane liquid fuel or alcohol 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.
 
 **Major
        Customers**
 
 We
        have
        one major customer for our tire-derived-fuel. Geocycle US, an alternative
        fuel
        procurement subsidiary wholly owned by Holcim, Ltd. a global supplier of
        cement,
        aggregates and concrete with a large production facility located in Texas,
        accounted for approximately 36% of our tire-derived-fuel and total revenue
        for
        the year ended December 31, 2007. We entered into a new contract with Geocycle
        US effective September 1, 2007. Geocycle US will accept up to 1,500 tons
        of
        tire-derived-fuel per month for their operation. The contract has options
        to
        renew annually. The contract establishes a base price for the tire-derived-fuel
        with a price re-opener at the beginning of each renewal period. Either party
        has
        the right to terminate the agreement at the end of the initial term giving
        the
        other party 90 days advance notice of such termination. Should the company
        not
        be able to supply Geocycle US with the contracted supply of tire-derived-fuel
        under the agreement then Geocycle US has the right to purchase material from
        another third party supplier.
 
 We
        believe that the loss of this customer would not have a material disruption
        to
        our overall sales volume 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 the contract with a contract whose terms will generate
        revenue equivalent to revenue we currently recognize. When the renovation
        of the
        facility in Hutchins, Texas is complete, we will look for additional customers
        in the region to diversify our customer base.
 
 During
        2007, 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 waste to energy (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.
  14
  **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 9
        full time employees, with six located at our corporate offices in Englewood,
        Colorado, and three at our fuel processing facility in Hutchins, Texas.
        Additional personnel will be added at the tire processing facility as soon
        as
        the new equipment arrives and 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.
 
 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.
  15
  **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).
 
 **Item
        2. Description of Property.**
 
 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
        2 year
        old 1,200 square foot stand alone business office and a 10 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
        3,815 square feet of Class A office space for our corporate offices at
        Centennial Airport in Englewood, Colorado. The
        present lease expired on March 31, 2008. We have extended the lease on a
        month
        to month basis. We have commenced the process of evaluating alternative office
        and manufacturing space to suit our growth requirements.
 
 **Item
        3. Legal Proceedings****.**
 
 We
        are
        involved in routine litigation which is incidental to our business, none
        of
        which is anticipated to have a material adverse effect on our financial
        condition, operations or prospects.
 
 **Item
        4.****Submission
        of Matters to a Vote of Security Holders.**
 
 None.
  **PART
        II**
   **Item
        5. Market for Common Equity, Related Stockholder Matters and Small Business
        Issuers 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.
  16
  **High**
              
              **Low**Fiscal
                  Year Ended December 31, 2006:First
                  Quarter
              
              $
              0.29
              
              $
              0.06Second
                  Quarter
              
              $
              0.58
              
              $
              0.08Third
                  Quarter
              
              $
              0.12
              
              $
              0.06Fourth
                  Quarter
              
              $
              0.09
              
              $
              0.06Fiscal
                  Year Ended December 31, 2007:First
                  Quarter
              
              $
              0.10
              
              $
              0.04Second
                  Quarter
              
              $
              0.12
              
              $
              0.04Third
                  Quarter
              
              $
              0.09
              
              $
              0.06Fourth
                  Quarter
              
              $
              0.11
              
              $
              0.06
 
 **Stockholders
        of Record**
 
 As
        of
        April 28, 2008, we had approximately 980 stockholders of record.
 
 **Dividends**
 
 The
        company has never declared or paid any dividends on its common stock. We
        currently intend to retain any earnings for use in the business and therefore
        do
        not anticipate paying any dividends in the near future. Dividends on our
        common
        stock can be paid lawfully only out of current and retained earnings and
        surplus
        of the company, when, and if, declared by the Board of Directors. We have
        not
        declared or paid any dividends on the common stock and there is no assurance
        dividends will be paid in the foreseeable future. The payment of dividends
        in
        the future rests within the discretion of the Board of Directors and will
        depend, among other things, upon our earnings, our capital requirements and
        our
        financial condition, as well as other factors, which the Board of Directors
        deems relevant.
  **Securities
        Authorized for Issuance Under Equity Compensation Plans**
 
 **Equity
                  Compensation Plan Information****Plan
                  Category**
              
              **Number of Securities**
                **to be issued**
                **upon exercise of**
                **outstanding options,**
                **warrants and rights**
              
              **Weighted-average**
                **Exercise price of**
                **Outstanding options,**
                **Warrants and rights**
              
              **Number of securities**
                **Remaining available for**
                **Future issuance under**
                **Equity compensation plans**(a)
              
              (b)
              
              (c)Equity
                  compensation Plans approved by Security holders1
              
              
              0
              
              
              N/A2
              
              
              20,000,000
                  shares of common stock3
 
 1.
        2005 Equity Compensation Plan
 2.
        No options, warrants, restricted stock or other rights have been granted
        or
        issued under the plan.
 3.
        Shares may be issued directly as a restricted stock grant or upon exercise
        of
        options which may be granted under the plan.
 
 **Recent
        Sales of Unregistered Securities**
 On
          January 28, 2008, the Company issued an aggregate of 750,000 restricted
          shares
          of its common stock 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 unrestricted securities, Vista
          International, Inc. filed a Form 4 with the Commission.


17
 
 **Item
        6. Management's Discussion and Analysis or Plan of Operation.**
 
 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, 2007 compared with the operating results for the
        year
        ended December 31, 2006.
 
 **Environmental
        Liability**
 
 The
        Company has approximately 18,400 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. During
        the
        fourth quarter of 2007 we began selling partially shredded tires for landscaping
        purposes.
 
 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 (LRPUT or landfill). There are an estimated 18,400
        tons of tires and tire shreds on site; in management’s opinion the total upper
        range estimate for the cost of disposal is approximately $877,000 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
        reserved $779,000 for the cost of disposing of this material. Our accrual
        for
        disposal costs expensed in our statement of operations for the year ended
        December 31, 2007 is $749,000.
 
 **Results
        of Operations**
 
 The
        following tables set forth certain unaudited quarterly results of operations
        of
        the company for 2007. The quarterly operating results are not necessarily
        indicative of future results of operations.
  ****
              
              **Three Months Ended 2007 (unaudited)**
              
              **Year ended**
                **Dec. 31,****March 31**
              
              **June 30**
              
              **Sept. 30**
              
              **Dec. 31**
              
              **2007**Revenue
              
              $
              208,197
              
              $
              96,118
              
              $
              23,345
              
              $
              9,508
              
              $
              337,168Cost
                  of revenue
              
              
              339,227
              
              
              383,798
              
              
              340,746
              
              
              829,723
              
              
              1,893,494Gross
                  profit (loss)
              
              
              (131,030
              )
              
              (287,680
              )
              
              (317,401
              )
              
              (820,215
              )
              
              (1,556,326
              )Selling,
                  general and administrative expense
              
              
              361,114
              
              
              332,312
              
              
              263,918
              
              
              441,935
              
              
              1,399,279Research
                  and development expense
              
              
              68,776
              
              
              —
              
              
              2,000
              
              
              51
              
              
              70,827Loss
                  from operations
              
              
              (560,920
              )
              
              (619,992
              )
              
              (583,319
              )
              
              (1,262,201
              )
              
              (3,026,432
              )Interest
                  income (expense), net
              
              
              (3,382
              )
              
              (10,350
              )
              
              18
              
              
              (13,748
              )
              
              (27,462
              )Gain
                  (loss) on disposal of equipment
              
              
              8,181
              
              
              18,481
              
              
              20,892
              
              
              (330
              )
              
              47,224Impairment
                  loss
              
              
              —
              
              
              —
              
              
              (89,097
              )
              
              —
              
              
              (89,097
              )Loss
                  from operations before income tax benefit
              
              
              (556,121
              )
              
              (611,861
              )
              
              (651,506
              )
              
              (1,276,279
              )
              
              (3,095,767
              )Income
                  tax benefit
              
              
              —
              
              
              —
              
              
              —
              
              
              —
              
              
              —Net
                  income (loss)
              
              
              (556,121
              )
              
              (611,861
              )
              
              (651,506
              )
              
              (1,276,279
              )
              
              (3,095,767
              )Net
                  loss per common share (basic and diluted)
              
              $
              (0.006
              )
              $
              (0.007
              )
              $
              (0.007
              )
              $
              (0.01
              )
              $
              (0.03
              )Weighted-average
                  common shares outstanding-diluted
              
              
              90,731,596
              
              
              90,731,596
              
              
              90,731,596
              
              
              90,731,596
              
              
              90,731,596
  18
  **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% and 97% of revenue
        from continuing operations, or $337,168 and $1,114,887 during 2007 and 2006,
        respectively. We recognized no revenue from our Thermal GasifierTM business
        segment during 2007. 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 are focused on this
        business segment.
 
 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
        are
        actively involved in ongoing business development activities. Currently the
        company is in the process of evaluating certain project opportunities and
        providing detailed proposals for selected qualified projects. We are currently
        in the process of completing a number of feasibility studies for several
        WTE
        projects in China. We expect to build, own and operate these projects. The
        total
        waste material handled daily is expected to range from 500 to more than 1,600
        tons per day during the first phase of deployment. These projects have multiple
        phases with total waste material handled expected as high as 5,000 tons per
        day
        from various sources of waste.
 
 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 insure the
        company’s intellectual property was protected. In addition to the termination of
        the chief executive officer and the vice president and secretary during July
        2007, during the third quarter of 2006 the board requested and accepted the
        resignation of the company’s chief executive officer at that time. The former
        chief executive officer retained a seat on the board of directors and eventually
        resigned from the board of directors during the fourth quarter of 2006. The
        board of directors of the company was advised that the primary reason for
        this
        resignation was to pursue a license agreement with the company to use the
        company’s technology in the development and operation of renewable energy
        facilities, in addition to pursuing other business activities. The company
        stated at that time it was evaluating a possible non-exclusive license to
        an
        affiliate of the former chief executive officer and the company’s former vice
        president of engineering for the use of the company’s Thermal GasifierTM
technology in projects which may be developed by him or his affiliate and
        which
        are approved by the company. To the best of the company’s knowledge, no projects
        were developed nor was a non-exclusive license executed. During September
        2007
        new management notified both the former chief executive officer and vice
        president of engineering that any understanding, undertaking, letter of intent,
        pre-contractual agreement of negotiation related to the company’s technology was
        terminated.
  19
  We
        plan
        to continue to improve operations at our tire fuel processing facility in
        Hutchins, Texas during 2008. 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. During
        2006, subsequent to the completion of our new equipment installation and
        site
        improvements we increased the production and the volume of waste tires we
        process. The
        improvements enabled us to continue 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,
        2007.
        We expect to place orders for new tire shredding equipment during the second
        quarter of 2008 with expected delivery in the third quarter of 2008. As a
        result
        of the long lead time on this new equipment and additional time to install,
        we
        do not expect the tire processing facility to be fully operational until
        the
        third quarter of 2008.
 
 **Operating
        results 2007 compared to 2006**
 
 *Revenue*
 
 For
        the
        year ended December 31, 2007, revenue from our tire fuel processing operation
        decreased to $337,168 compared to $1,114,887 during the twelve months ended
        December 31, 2006, a decrease of $777,719 or approximately 70%. The decrease
        was
        due to the decrease in operating efficiency of the tire shredding equipment
        as a
        proper repair and maintenance schedule for the shredding equipment was not
        followed during the later part of 2006 and the first half of 2007. During
        the
        second quarter of 2007, the facility ceased receiving waste tires due to
        clean
        up activities at the tire processing facility and as part of a plan to refurbish
        the facility. In August, before equipment refurbishment was fully completed,
        the
        facility was closed due to accidental damage to certain tire shredding
        equipment. The cost of repairing the damaged equipment approximated the cost
        of
        new shredding equipment. Management decided to purchase new equipment; however,
        the company was not able to place the order in 2007 due to financial
        constraints. As a result, the facility operated on a limited basis during
        the
        second half of 2007. During the fourth quarter of 2007, in anticipation of
        ordering replacement equipment, management entered into a contract to sell
        certain of the Company’s major pieces of shredding equipment for total proceeds
        of $175,000.
 
 Revenue
        from the discontinued operations segment of $34,597 during 2006 consisted
        of
        management fees for asset transition agreed to by the parties to the purchase
        and sale agreement for the helium and gas processing facility. We recognized
        no
        revenue for discontinued operations in 2007.
  20
  *Cost
        of Goods Sold*
 
 Cost
        of
        goods sold related to our tire fuel processing operation was $1,893,494 for
        the
        twelve months ended December 31, 2007, compared to $1,270,494 during the
        twelve
        months ended December 31, 2006, an increase of $623,000 or 49%. The increase
        was
        primarily due to an increase in our reserve for disposal costs of tires and
        tire
        shreds on site of $640,000, an increase in business insurance expense of
        $15,000
        and an increase in equipment repair and maintenance expense of approximately
        $72,000 offset by a reduction in workforce at our tire fuel processing operation
        which resulted in a decrease in payroll and related employment benefits costs
        of
        approximately $68,000 and a decrease in equipment rental expenses due to
        the
        decreased tire fuel business activity of approximately $35,000.
 
 *Sales,
        General, and Administrative Expenses*
 
 Sales,
        general, and administrative expenses were $1,399,279 for the twelve months
        ended
        December 31, 2007, compared to $1,722,298 for the twelve months ended December
        31, 2006, a decrease of $323,019 or approximately 19%. This decrease was
        due to
        the elimination of bonuses and reduction of headcount which resulted in a
        decrease in payroll and related employment benefits of approximately $244,000
        and a reduction in depreciation and amortization expense of approximately
        $63,000 due primarily to the write off of capitalized engineering drawings
        and
        blueprints which were previously being amortized.
 
 *Research
        and Development Expense*
 
 Research
        and development expense totaled $70,826 for the twelve months ended December
        31,
        2007, compared to $55,861 during the twelve months ended December 31, 20065,
        an
        increase of $14,965 or 27%. The increase is due primarily to an increase
        in
        contract engineering as part of continuing efforts to redesign and improve
        the
        company’s Thermal GasifierTM.
 
 *Interest
        expense*
 
 Interest
        expense, net of interest income, was $27,462 during the twelve months ended
        December 31, 2007, compared to $137,389 during the twelve months ended December
        31, 2006, a decrease of $109,927. This decrease was due to a reduction in
        average outstanding borrowings from 2006 to 2007, as a result of debt being
        paid
        off during the first half of 2006 using proceeds from the sale of the company’s
        helium and gas processing assets in that year.
 
 *Gain
        on the Disposal of Equipment*
 
 Income
        on
        the disposal of equipment was $47,224 during the twelve months ended December
        31, 2007 compared to $4,175 during the twelve months ended December 31, 2006.
        The increase was due to the sale of non-productive assets and equipment
        resulting from increased 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. As we are in the process of
        redesigning the Thermal GasifierTM, management considered the value of these
        intangible assets to be nominal.
 
 *Gain
        on Settlement of Liabilities*
 
 During
        the twelve months ended December 31, 2006, the Company reached a settlement
        of
        certain liabilities which resulted in a gain of $34,666. No comparable gains
        were recognized during 2007.
  21
  *Income
        Tax Expense (Benefit)*
 
 Income
        tax expense was $ 12,000 for the twelve months ended December 31, 2006. We
        recorded no income tax benefit for our 2007 net operating loss as realization
        of
        that net operating loss is not assured.
 
 *Loss
        from Continuing Operations*
 
 For
        the
        reasons stated above, the loss from continuing operations before taxes was
        $(3,095,767), or $(0.03) per basic and diluted share, for the year ended
        December 31, 2007, compared to $(2,009,717), or $(0.02) per basic and diluted
        share, for the year ended December 31, 2006.
 
 *Income
        (Loss) from Discontinued Operations*
 
 Income
        from discontinued operations was $193,428 for the year ended December 31,
        2006.
        We had no income from discontinued operations during the year ended December
        31,
        2007. Income from discontinued operations was a result of the operation of
        the
        company’s helium and gas processing assets through the March 7, 2006 date of
        sale.
 
 *Gain
        on the Sale of Assets- Discontinued Operations*
 
 Gain
        on
        the sale of assets was $6,119,673 (net of income tax expense of $759,000)
        for
        the year ended December 31, 2006, and it is comprised of the sale of the
        company’s helium and gas processing facilities and assets to Midstream Energy
        Services on March 7, 2006.
 
 *Net
        Income (Loss)*
 
 For
        the
        reasons stated above, net (loss) for the year ended December 31, 2007 was
        $(3,095,767), or ($0.03) per basic and diluted share compared with the net
        income of $4,303,384, or $0.05 per basic and diluted share, for the year
        ended
        December 31, 2006.
 
 **Liquidity
        and Capital Resources**
 
 As
        of
        December 31, 2007 we owed $124,875 to financial institutions under installment
        notes with an effective interest rate of 6.2%, which were secured by property
        and equipment. The remaining $598,750 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 $98,750 with
        an
        effective interest rate of 2.6%.
 
 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, 2007, we have a negative working capital of $2,662,101. 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 $779,000 for clean up costs at the Hutchins facility.
 
 The
        following is a summary of our cash flows sources (uses) from operating,
        investing and financing activities during the periods
        indicated:
  22
 
 **Year ended December 31,******
              
              **2007**
              
              **2006**Operating
                  activities
              
              $
              (1,250,438
              )
              $
              (1,226,589
              )Investing
                  activities
              
              
              (10,106
              )
              
              14,718,920Financing
                  activities
              
              
              1,011,693
              
              
              (13,494,495
              )Net
                  effect on cash
              
              $
              (248,851
              )
              $
              (2,164
              )
 
 For
        the
        period ended December 31, 2007, net cash used by operating activities of
        $1,250,438 consists primarily of our net loss of $3,095,766 offset by non
        cash
        depreciation and amortization expense of $336,307, an increase in accounts
        payable and accruals of $1,312,292, a decrease in accounts receivable of
        $112,586 and non cash impairment loss of $89,097. 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 $80,000. 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.
 
 For
        the
        period ended December 31, 2006, net cash used by operating activities of
        $1,226,589 consists primarily of the loss from continuing operations of
        $1,889,169, offset by changes in working capital items, primarily income
        tax
        expense of $771,000, a decrease in prepaid expenses of $171,661, and an increase
        in accounts payable of $614,380. Net cash provided by investing activities
        of
        $14,718,920 is primarily due to positive cash flows from discontinued operations
        of $15,645,759, which includes the proceeds from the sale of helium assets.
        Net
        cash used in financing activities of $13,494,495 is primarily due to payment
        of
        debt of $4,602,344 and net cash used to finance discontinued operations of
        $8,892,151.
 
 We
        had a
        cash balance of $9,017 at December 31, 2007. 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 $561,000 for our operations as an equity investment from Vista
        International, Inc. during the second half of 2007 in exchange for common
        stock
        to be issued. In addition, Vista International, Inc. incurred expenses on
        behalf
        of the company during the second half of 2007 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 on our behalf have not been
        recorded as equity contributions to the company at this time. 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 2008 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.
 
 The
        independent auditors report on our December 31, 2007 financial statements
        states
        that our recurring losses raise substantial doubts about our ability to continue
        as a going concern.
 
 **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.
  23
  *Conversion
        of Debt into Common Stock*
 
 When
        debt
        is converted into shares of common stock the transaction is recorded at the
        fair
        market value of the stock. The difference between the fair market value of
        the
        stock issued and the carry value of the debt is recorded as a non cash financing
        expense in the period the transaction occurs.
 
 *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.
 
 *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.
  24
  *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
        segment. We cannot assure that any funds raised for a particular project
        will be
        sufficient to complete the project.
 
 *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 2006
        and
        2007, we undertook 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.*
 
 Our
        top
        customer accounted for 36% of 2007 revenue. Although we believe we could
        replace
        this customer if lost, if we do not maintain positive relationships with
        this
        customer, this customer changes their business strategy, or their financial
        position deteriorates, our revenue and operating results could be materially
        and
        negatively impacted.
 
 *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.
  25
  *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
        $877,000. 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;
 ·
              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 2008. 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.
  26
  **Item
        7. Financial Statements**
 
 The
        financial statements required by this Item 7 are included in this Annual
        Report
        on Form 10-KSB following Item 14 hereof.
 
 **Item
        8. Changes In and Disagreements with Accountants on Accounting and Financial
        Disclosure.**
 
 None.
 
 **Item
        8A. 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, 2007, 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 weakness
        in
        internal control over financial reporting as of December 31, 2007:
  The
        Company lacks sufficient accounting controls and procedures to ensure 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.
  27
  We
        determined that the aforementioned deficiency constitutes a material weakness
        in
        our internal control over financial reporting as of December 31, 2007. Due
        solely to this material weakness, we concluded that we did not maintain
        effective internal control over financial reporting as of December 31, 2007.
  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.
 
 ***Remediation
        of Internal Control Weakness:***
 
 Management
        has commenced procedures to 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.
 
 **PART
        III**
 
 **Item****9.
        Directors, Executive Officers Promoters, Control Persons and Corporate
        Governance; compliance with Section 16(a) of the Exchange Act.**
 
 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 Energy**Barry
                  J. Kemble
              
              58
              
              Chief
                  Executive Officer and DirectorTimothy
                  A. Peach
              
              56
              
              Chief
                  Financial OfficerJohan
                  C. Smith*
              
              48
              
              DirectorTimothy
                  D. Ruddy*
              
              35
              
              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.
 
 On
        September 12, 2007, Vista International, Inc. (“Vista”), the company’s majority
        shareholder, delivered to Nathaniel’s Chief Executive Officer a written consent
        pursuant to Section 228 of the Delaware General Corporation Law (“DGCL”) and in
        lieu of a special meeting of stockholders (the “Consent”). The Consent removed
        immediately Karen Smythe and Michael Burdis as directors of the Company and
        elected Timothy D. Ruddy as a director of the Company to fill a vacancy on
        the
        Board of Directors to serve until his successor is elected and qualified
        or
        until his earlier death, resignation or removal.
  28
  Concurrent
        with delivering the Consent, plaintiffs Vista and Timothy Ruddy filed a Verified
        Complaint under Section 225 of the DGCL against Karen Smythe and Michael
        Burdis
        in the Delaware Court of Chancery (the “Complaint”). The Complaint requested
        that the Delaware Court of Chancery issue an order (i) declaring the Consent
        valid and effective in all material respects under Delaware law, (ii) declaring
        that, on September 12, 2007, defendants Smythe and Burdis were validly and
        effectively removed as directors of the Company, (iii) enjoining defendants
        from
        holding themselves out as directors of the Company, (iv) declaring that,
        on
        September 12, 2007, plaintiff Ruddy was validly and effectively elected as
        a
        director of the Company, and (v) granting such other relief as may be just
        and
        proper under the circumstances. Upon consideration of the plaintiffs’ Motion for
        Summary Judgment filed with regard to the Complaint, the Delaware Court of
        Chancery issued an Order on October 15, 2007 granting all of the relief sought
        by the plaintiffs in the Complaint.
 
 **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.
 
 **Timothy
        Peach** ,
        Chief
        Financial Officer, Vista International Technologies, Inc.: Mr. Peach has
        rejoined Vista International Technologies, Inc. as CFO on August 2, 2007
        after
        resigning this position in November 2006 to join Vista International to become
        Vista’s new Chief Financial Officer. Previously, he served in the same role for
        Nathaniel Energy as of July 8, 2005. Before then, Mr. Peach served as the
        company's Vice President of Finance. Timothy Peach joined the company as
        Vice
        President of Finance in October 2004. Immediately prior to joining Nathaniel,
        Mr. Peach provided the technical accounting support for a successful initial
        public offering by Affordable Residential Communities, Inc., a real estate
        investment trust, and was engaged as an advisor to Duke Energy Field Services,
        Inc., an oil and gas transportation and processing company, in the development
        of and overview of their Sarbanes-Oxley compliance programs. In 1997, Mr.
        Peach
        joined Convergent Group Corporation, a large scale systems integration and
        consulting firm in the utility industry, as Vice President Finance and Chief
        Accounting Officer. Mr. Peach was an integral participant in that company’s
        redesign and implementation of internal management systems and financial
        reporting, restructuring and improving operating structures, and its successful
        initial public offering. In 2000, Convergent Group was acquired by
        SchlumbergerSema, oil and gas information and services company. Mr. Peach
        served
        as Chief Accounting Officer and Vice President Finance of SchlumbergerSema
        North
        American Operations. In this position, Mr. Peach managed the integration
        of
        Convergent Group Corporation and two other business units focused on the
        manufacture of utility meters and technologically advanced remote meter reading
        systems for the utility industry through 2002. Mr. Peach has over 25 years
        of
        proven experience in finance, administration and operations which included
        over
        ten years with Price-Waterhouse Coopers in the Pittsburgh and Denver offices,
        focusing primarily on consulting with international, publicly traded companies
        in technology, refining, manufacturing and banking business sectors. Mr.
        Peach’s
        background includes senior executive financial positions in medical equipment
        and telecommunications industries. Mr. Peach holds a B.S and an M.B.A. from
        the
        University of Pittsburgh and is a member of the AICPA and the Pennsylvania
        Institute of Public Accountants. Mr. Peach will continue as a Director for
        Vista
        International Inc.
  29
  **Johan
        C. Smith** ,
        Director, Vista International Technologies, Inc.: Mr. Smith is the President
        and
        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.
 
 **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 one report, their
        respective Forms 3. Vista International Inc., who beneficially owns of more
        than
        ten percent of Vista International Technology’s common stock, filed Form 13 D,
        reporting one transaction.
  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., 8001 South
        InterPort Boulevard, Suite 260, Englewood, Colorado, Attention: Code of Conduct
        and Ethics Request.
 
 **Item****10.
        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 Table****Name
                  and Principal**
                **Position**
              
              **Year**
              
              **Salary**
              
              **Bonus**
              
              **All
                  Other**
                **Compensation**
              
              **Total**Barry
                  J. Kemble
                Chief
                  Executive Officer1
              
              
              2007
              1
              
              -
              
              
              -
              
              
              -
              
              
              -Brad
                  E. Bailey
              
              
              2007
              2
              $
              81,125
              
              
              -
              
              
              -
              
              $
              81,125Chief
                  Executive Officer2
              
              
              2006
              
              $
              22,500
              
              
              -
              
              
              -
              
              $
              22,500George
                  A. Cretecos
              
              
              2006
              
              $
              154,999
              
              
              -
              
              $
              2,993
              3
              $
              157,9922005
              
              $
              128,605
              
              
              -
              
              
              -
              
              $
              128,605Timothy
                  Peach
                Chief
                  Financial Officer
              
              
              2007
              
              
              -
              
              
              -
              
              
              -
              
              
              -Acting
                  Chief Executive Officer4
              
              
              2006
              4
              $
              152,557
              
              
              -
              
              
              -
              
              $
              152,5572005
              
              $
              117,123
              
              
              -
              
              
              -
              
              $
              117,123
 
 No
        executive officer named in the table above has any unexercised or unearned
        options, unvested stock amounts or equity incentive plan awards.
  31
  **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.
 
 **Timothy
        A. Peach**
 
 Timothy
        Peach serves as our Chief Financial Officer. We currently do not have an
        employment agreement with Mr. Peach but he has a base salary of $150,000.00
        per
        annum with standard employee benefits as approved by the Board of
        Directors.
 
 **Brad
        E. Bailey**
 
 The
        company had an at-will employment agreement with its former Chief Executive
        Officer, Brad E. Bailey. The agreement provided for, among other things,
        a base
        salary of $130,000.00 per annum with standard employee benefits, and includes
        covenants covering non-solicitation of employees and other persons who have
        relationships with the company, disclosure of discoveries to the company,
        and
        confidential treatment of certain information and trade secrets.
 
 **Russell
        “Gene” Bailey**
 
 Russell
        "Gene" Bailey served as our Vice President since 1998 and served as a director
        from 2000 through March 2006. From February 2000 to April 2003 Mr. Bailey
        served
        as our Chief Financial Officer. We did not have an employment agreement with
        Mr.
        Bailey but he had a base salary of $85,000.00 per annum with standard employee
        benefits as approved by the Board of Directors. Mr. Bailey was terminated
        as
        Vice President and Secretary on July 31, 2007.
 
 The
        company did not pay any compensation to its directors in 2007.
 
 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.
 _____________________________
 1 Mr.
        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.
 3 Represents
        automobile lease payments.
 4 Mr.
        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.
 
 **Item
        11. 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 April 29, 2008 regarding
        the
        beneficial ownership of the Company's shares of common stock by:
 
 32
  ·
              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 Class**Richard
                  Strain
                417
                  Manchester Road
                Poughkeepsie,
                  New York 12603
              
              
              9,518,333
              (1)
              
              9.8
              %Vista
                  International Inc.
                8310
                  South Valley Highway
                Suite
                  300
                Englewood,
                  CO 80112
              
              
              51,567,449
              (2)
              
              53.1
              %Barry
                  J. Kemble (3)
              
              
              57,510
              
              
              *Timothy
                  D. Ruddy
                3885
                  Vale View Lane
                Mead,
                  CO 80542
              
              
              200,000
              
              
              *Johan
                  C. Smith
                8310
                  South Valley Highway
                Suite
                  300
                Englewood,
                  CO 80112
              
              
              26,720
              
              
              *Timothy
                  A. Peach (3)
              
              
              NoneAll
                  directors and executive officers as a group (4 persons)(4)
              
              
              284,230
              
              
              *
 
 _______________________
 *            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.(3)
              The
                  address of this person is 8001 South InterPort Blvd., Suite 260,
                  Englewood, Colorado 80112.(4)
              Addresses
                  for Mr. Smith and Mr. Ruddy are as set forth under their respective
                  names.
                  Address for the other named executive officers is 8001 South InterPort
                  Blvd., Suite 260, Englewood, Colorado 80112.
 
 **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****12.
        Certain Relationships and Related Transactions, and Director Independence.**
 
 *Transactions
        with related persons, promoters and certain control persons* .
 
 On
        July
        7, 2005, Mr. Strain guaranteed up to $500,000 of third party debt incurred
        by us
        for purposes of improving our operations at our Hutchins, Texas tire processing
        facility. Mr. Strain secured this guarantee by posting a $500,000 letter
        of
        credit in favor of our institutional lender. On September 13, 2005, Mr. Strain
        guaranteed up to an additional $500,000 of third party debt incurred by us
        for
        purposes of settling a dispute between the Company and Merrick & Company who
        had provided installation and start up services for us on our Thermal GasifierTM
Project in Cologna Veneta, Italy. To secure this guarantee, Mr. Strain increased
        the supporting letter of credit posted by him to $1,000,000. In June 2006,
        Mr.
        Strain requested the third party debt be settled in order that he might withdraw
        his letter of credit. On June 9, 2006 we retired the outstanding principal
        in
        the amount of $790,000 plus interest and bank charges of $10,109 and Mr.
        Strain
        subsequently withdrew the letter of credit.
  33
  On
        March
        7, 2006, the Company paid Richard Strain, the beneficial holder of 61.30%
        of the
        company’s outstanding common stock at that time, $14,482,171 in satisfaction of
        indebtedness owed by the company to Mr. Strain, inclusive of $13,128,361
        in
        principal remaining after conversion of $10,000,000 of indebtedness into
        50,000,000 shares of common stock in 2003 and 2005 pursuant to an October
        3,
        2003 Conversion Agreement, and $1,353,801 of accrued interest on the debt.
 
 The
        indebtedness from the Company to Mr. Strain arose from loans
        by
        Mr. Strain to the Company which were consolidated and restated in the following
        three promissory notes:
  ·  $2,000,000
        promissory note dated October 1, 2003 bearing interest at 3.33% annually,
 ·  $2,000,000
        promissory note dated March 17, 2004 bearing interest at 3.49% annually,
        and
 ·  $4,892,151
        promissory note dated October 3, 2003 bearing interest of 8% annually.
 ·  a
        note
        from the Company to Mr. Strain in payment for 49% of the common stock of
        the
        Company’s then 51%-owned subsidiary, Nathaniel Energy Oklahoma Holdings
        Corporation (“NEOHC”), in the principal amount of $3,354,210 bearing interest at
        7% annually. The Company paid Richard Strain an additional $882,000 in payment
        for the NEOHC shares pursuant to the terms of the stock purchase agreement
        between the Company and Mr. Strain for the purchase of the NEOHC shares to
        reflect 49% of the upward adjustment of the purchase price for the helium
        and
        gas processing facilities and assets which were sold by NEOHC to Midstream
        Services, LLC on March 7, 2006.
  On
        December 5, 2006, the Company entered into an agreement with Bailey-Jamar,
        LLC,
        under which Bailey-Jamar agreed to provide the company with $7,500,000 in
        capital through an equity investment by a joint venture consisting of
        Bailey-Jamar and a co-venturer to be identified by Bailey-Jamar in the future.
        That agreement expired without any investment in the Company.
 
 *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
        2007 were not independent: Johan Smith and Barry Kemble. The Company does
        not
        have an audit committee, compensation committee or nominating committee.
 
 **Item
        13. Exhibits**
 
 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**
  34
 
 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 (“NEHOC”) 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 200232.
              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
        document filed as an exhibit to our Annual Report on Form 10-KSB for the
        year
        ended December 31, 2006 and incorporated herein by
        reference.
  +Denotes
        documents filed as an exhibit to our Current Report on Form 8-K filed on
        October
        20, 2006 and incorporated herein by reference.
 
 **Item
        14. Principal Accountant Fees and Services**
 
 **Audit
        Fees**
 
 The
        aggregate fees billed for our fiscal years ended December 31, 2007 and 2006
        by
        Comiskey & Company, P.C., our principal accountants in 2007 and 2006, 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 $27,638 and $32,635 respectively.
 
 **Audit
        Related Fees**
 
 Our
        principal accountants did not bill us any fees during our fiscal years ended
        December 31, 2007 and 2006 for any assurance and related services.
  35
  **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, 2007 and 2006.
 
 **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,
        2007
        and 2006 respectively.
  36
  **VISTAINTERNATIONALTECHNOLOGIES
        INC. AND SUBSIDIARIES**
 **CONSOLIDATED
        FINANCIAL STATEMENTS**
 **FOR
        THE**
 **FISCAL
        YEARS ENDED DECEMBER 31, 2007 AND 2006**
 
 **INDEX**
 
 **Page**Report
                  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
  
  **Comiskey
        & Company**
 **Professional
        Corporation**
 
 **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 2006, and the related consolidated statements of operations,
        stockholders’ equity (deficit), and cash flows for the years ended December 31,
        2007 and 2006. 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 audits.
 
 We
        conducted our audits 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 audits 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
        audits provide 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 2006, and the consolidated
        results of its operations, changes in stockholders’ equity (deficit) and cash
        flows for the years ended December 31, 2007 and 2006 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 2 to the financial
        statements, at December 31, 2007 the Company had a working capital deficit
        of
        $2,662,101, an accumulated deficit of $63,371,904, 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 2 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
 
 /s/
        Comiskey & Company
 **PROFESSIONAL
        CORPORATION**
 
 **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, 2007**
              
              **December**
                **31, 2006****ASSETS**Current
                  assetsCash
                  and cash equivalents
              
              $
              9,017
              
              $
              257,868Accounts
                  receivable
              
              
              586
              
              
              121,276Other
                  assets
              
              
              130,871Prepaid
                  expenses
              
              
              58,684
              
              
              40,277Total
                  current assets
              
              
              199,158
              
              
              419,421Deposits
              
              
              39,160
              
              
              72,895Property
                  and equipment, net
              
              
              637,012
              
              
              1,069,443Intangibles,
                  net of accumulated amortization
              
              
              39,474
              
              
              193,423Total
                  assets
              
              $
              914,804
              
              $
              1,755,182**LIABILITIES
                  AND STOCKHOLDERS' EQUITY (DEFICIT)**Current
                  liabilitiesAccounts
                  payable and accrued liabilities
              
              $
              2,044,620
              
              $
              981,169Accrued
                  compensation and payroll liabilities
              
              
              121,774
              
              
              39,917Accrued
                  interest
              
              
              42,591
              
              
              12,035Notes
                  payable and capital leases - current portion
              
              
              152,274
              
              
              162,814Notes
                  payable - stockholder
              
              
              500,000
              
              
              -Total
                  current liabilities
              
              
              2,861,259
              
              
              1,195,935Long-term
                  portion of notes payable
              
              
              71,351
              
              
              41,923Total
                  liabilities
              
              
              2,932,610
              
              
              1,237,858Stockholders’
                  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;90,731,596
                  shares issued and outstanding at December 31, 2007 and
                  2006
              
              
              90,731
              
              
              90,731Additional
                  paid-in capital
              
              
              61,257,476
              
              
              60,702,446Common
                  stock to be issued
              
              
              5,891
              
              
              285Accumulated
                  deficit
              
              
              (63,371,904
              )
              
              (60,276,138
              )Total
                  stockholders’ equity (deficit)
              
              
              (2,017,806
              )
              
              517,324Total
                  liabilities and stockholders’ equity (deficit)
              
              $
              914,804
              
              $
              1,755,182
 
 *The
        accompanying notes are an integral part of the financial
        statements.*
  F-2
  **Vista
        International Technologies, Inc.**
 **Consolidated
        Statements of Operations**
 
 **For the**
                **Year**
                **Ended**
                **December**
                **31, 2007**
              
              **For the**
                **Year**
                **Ended**
                **December**
                **31, 2006**Revenues
              
              $
              337,168
              
              $
              1,149,484Cost
                  of revenue
              
              
              1,893,494
              
              
              1,270,494Gross
                  profit (loss)
              
              
              (1,556,326
              )
              
              (121,010
              )Operating
                  expenses:Selling,
                  general and administrative expenses
              
              
              1,399,279
              
              
              1,722,298Research
                  and development
              
              
              70,826
              
              
              55,861Total
                  operating expenses
              
              
              1,470,106
              
              
              1,778,159Loss
                  from operations
              
              
              (3,026,432
              )
              
              (1,899,169
              )Other
                  income (expense):Interest
                  income (expense)
              
              
              (27,462
              )
              
              (137,389
              )Gain
                  (loss) on disposal of equipment
              
              
              47,224
              
              
              4,175Gain
                  on settlement of liabilities
              
              
              -
              
              
              34,666Impairment
                  loss
              
              
              (89,097
              )
              
              -Loss
                  from continuing operations before income tax benefit
              
              
              (3,095,766
              )
              
              (1,997,717
              )Income
                  tax benefit (expense)
              
              
              -
              
              
              (12,000
              )Loss
                  from continuing operations
              
              
              (3,095,766
              )
              
              (2,009,717
              )Income
                  from discontinued operations
              
              
              -
              
              
              193,428Gain
                  on sale of assets, discontinued operations, net of tax
              
              
              -
              
              
              6,119,673Net
                  income (loss)
              
              $
              (3,095,766
              )
              $
              4,303,384Loss
                  per share from continuing operations, basic and diluted
              
              $
              (0.03
              )
              $
              (0.02
              )Income
                  per share from discontinued operations, basic and diluted
              
              $
              0.00
              
              $
              0.00Income
                  per share from gain on sale of assets, basic and diluted
              
              $
              0.00
              
              $
              0.07Net
                  income (loss) per share, basic and diluted
              
              $
              (0.03
              )
              $
              0.05Weighted
                  average common shares outstanding
              
              
              90,731,596
              
              
              90,731,596
 
 *The
        accompanying notes are an integral part of the financial statements.*
  F-3
  **Vista
        International Technologies, Inc.**
 **Consolidated
        Statement of Stockholders' Equity (Deficit)**
 
 ****
              
              ****
              
              **Additional**
              
              ****
              
              ****
              
              ****
              
              **Stockholders'******
              
              ****
              
              ****
              
              **Paid-in**
              
              **Shares to be issued**
              
              **Accumulated**
              
              **Equity******
              
              **Shares**
              
              **Amount**
              
              **Capital**
              
              **Shares**
              
              **Amount**
              
              **Deficit**
              
              **(Deficit)**Balance
                  at December 31, 2005
              
              
              90,698,263
              
              $
              90,698
              
              $
              61,584,446
              
              
              318,000
              
              $
              318
              
              $
              (64,579,522
              )
              $
              (2,904,060
              )Issuance
                  of shares to satisfy debt conversion
              
              
              33,333
              
              
              33
              
              
              -
              
              
              (33,333
              )
              
              (33
              )
              
              -
              
              
              -Acquisition
                  of minority interest
              
              
              -
              
              
              -
              
              
              (882,000
              )
              
              -
              
              
              -
              
              
              50,380
              
              
              (882,000
              )Net
                  income for the year ended December 31, 2006
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              4,303,384
              
              
              4,303,384Balance
                  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
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              -
              
              
              (3,095,766
              )
              
              (3,095,766
              )Balance
                  December 31, 2007
              
              
              90,731,596
              
              $
              90,731
              
              $
              61,257,476
              
              
              5,891,027
              
              $
              5,891
              
              $
              (63,371,904
              )
              $
              (2,017,806
              )
 
 *The
        accompanying notes are an integral part of the financial statements.*
  F-4
  **Vista
        International Technologies, Inc.**
 **Condensed
        Consolidated Statements of Cash Flows**
 
 **For the**
                **Year**
                **Ended**
                **December**
                **31, 2007**
              
              **For the**
                **Year**
                **Ended**
                **December**
                **31, 2006**Cash flows from
                  operating activities:Net
                  Income (loss)
              
              $
              (3,095,766
              )
              $
              4,303,384**Adjustments
                  to reconcile net loss to net****cash
                  used in operating activities:**Depreciation
                  and amortization
              
              
              336,307
              
              
              397,746(Gain)
                  Loss on disposition of equipment
              
              
              (47,224
              )
              
              (1,546
              )Reserve
                  for doubtful accounts
              
              
              8,104
              
              
              -Impairment
                  loss
              
              
              89,097
              
              
              -Interest
                  expense
              
              
              32,819
              
              
              -Other
                  income
              
              
              (13,981
              )
              
              -Gain
                  on sale of assets
              
              
              -
              
              
              (6,119,673
              )Income
                  tax expense
              
              
              -
              
              
              12,000Changes
                  in assets and liabilities:(Increase)
                  decrease in assets:Accounts
                  receivable, net
              
              
              112,586
              
              
              (29,858
              )Prepaid
                  expenses
              
              
              (18,407
              )
              
              171,661Other
                  assets
              
              
              33,735
              
              
              15,427Increase
                  (decrease) in liabilities:Accounts
                  payable
              
              
              1,312,292
              
              
              614,380Net
                  effect on cash from discontinued operations
              
              
              -
              
              
              (590,110
              )**Net
                  cash used in operating activities**
              
              
              (1,250,438
              )
              
              (1,226,589
              )Cash
                  flows from investing activities:Proceeds
                  from sale of equipment
              
              
              80,000
              
              
              -Acquisition
                  of minority interest
              
              
              -
              
              
              (882,000
              )Cash
                  flows from discontinued operations
              
              
              -
              
              
              15,645,759Equipment
                  and intangible asset purchases
              
              
              (90,106
              )
              
              (44,839
              )**Net
                  cash provided by (used in) investing activities**
              
              
              (10,106
              )
              
              14,718,920Cash
                  flows from financing activities:Payments
                  on debt
              
              
              (193,364
              )
              
              (4,602,344
              )Cash
                  flows from discontinued operations
              
              
              -
              
              
              (8,892,151
              )Proceeds
                  from issuance of common stock
              
              
              560,636
              
              
              -Proceeds
                  from issuance of notes and loans
              
              
              644,421
              
              
              -**Net
                  cash provided by (used in) financing activities**
              
              
              1,011,693
              
              
              (13,494,495
              )Increase
                  (decrease) in cash and cash equivalents
              
              
              (248,851
              )
              
              (2,164
              )Cash
                  and cash equivalents at beginning of period
              
              
              257,868
              
              
              260,032Cash
                  and cash equivalents at end of period
              
              $
              9,017
              
              $
              257,868Supplemental
                  disclosure of cash flow information:Cash
                  paid during the period for:Interest
              
              $
              6,162
              
              $
              1,486,395Taxes
              
              $
              10,000
              
              $
              100,000Non
                  cash financing activities:Equipment
                  purchased with debt
              
              $
              107,294
              
              $
              -Book
                  value of vehicle transferred to employee as compensation
              
              $
              -
              
              $
              2,629Gain
                  on vehicle returned for cancellation of note payable
              
              $
              -
              
              $
              5,224Insurance
                  financed with notes payable
              
              $
              91,171
              
              $
              123,240
 
 *The
        accompanying notes are an integral part of the financial statements*
  F-5
  **Vista
        International Technologies, Inc.**
 **Notes
        to Consolidated Financial Statements**
 **For
        the years ended December 31, 2007 and 2006**
 
 **1.  
        Significant Accounting Policies and Nature of Operations**
 
 **Description
        of Business**
 
 Vista
        International Technologies, Inc. is in the business of developing,
        commercializing and operating renewable energy and waste to energy (WTE)
        technologies and projects. The Company’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.
 
 During
        September 2005, we entered into a Purchase and Sale Agreement with Midstream
        Energy Services, LLC pursuant to which we agreed to sell the assets which
        comprise our helium and gas processing facilities and operations to Midstream.
        On March 7, 2006, we closed the Purchase and Sale Agreement and sold those
        assets. The results of operations of our helium and gas processing facilities
        and operations through the date of the closing are shown as income from
        discontinued operations in our statement of operations. See Note 3. —
“Disposition of a Business Segment”. The gain on the sale of our helium and gas
        processing facilities and operations is shown as gain on sale of assets,
        discontinued operations in our statement of operations.
 
 **Business
        Segments**
 
 The
        Company operates two separate segments which are presently conducted in two
        separate facilities:
 
 · tire derived fuel processing operation in Hutchins, Texas, and
 · renewable
        energy and waste to energy (WTE) utilizing the company’s Thermal GasifierTM
technology operations in Englewood, Colorado alternative energy engineering
        and
        corporate offices in Englewood, Colorado
 
 **Principles
        of Consolidation**
 
 The
        financial statements include the accounts of Vista International Technologies,
        Inc. and its subsidiaries. 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, 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, 2007
        is
        zero.
  F-6
 
 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, 2007 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, 2007 and 2006, we incurred $70,826 and
        $55,861 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
              5
                  yearsBuildings
                  and improvements
              5-15
                  yearsVehicles
              5
                  years
 
 **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.
        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.
 
 **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. 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 are booked
        based on the Company’s historical experience.
 
 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, 2007.
  F-7
 
 **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.
 
 **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 $167,954 and $313,344 at
        December 31, 2007 and 2006, respectively. The company amortizes intangible
        assets, excluding goodwill and trademarks, over their estimated useful lives,
        which range from three to ten years. Intangible assets consist of patents,
        capitalized web site costs, contracts acquired, and engineering drawings,
        designs and manuals for our Thermal GasifierTM technology.
 
 **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, 2007 and 2006.
 
 **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, 2007 and 2006 to be capitalized and deferred to future
        periods.
 
 **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.
  F-8
 
 The
        Company had no stock-based compensation activity during the twelve months
        ended
        December 31, 2007 and 2006, and had no unvested stock options outstanding
        at
        December 31, 2007 and 2006.
 
 **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. The fair value of the Company’s
        long-term note and interest receivable from officers and related parties
        does
        not significantly differ from cost at December 31, 2007 and 2006.
 
 **Income
        Taxes**
 
 Under
        SFAS 109, “Accounting for Income Taxes,” deferred tax assets and liabilities are
        generally determined based on the difference between the financial statements
        and the tax bases of assets and liabilities using enacted tax rates in effect
        for the years in which the differences are expected to reverse. Recognition
        of a
        deferred tax asset is allowed if future realization is more-likely-than-not.
        The
        Company has provided a full valuation allowance for its deferred tax asset
        because its realization is not considered more-likely-than-not.
 
 **Reclassifications**
 
 We
        have
        reclassified certain prior period amounts to conform to the current period
        presentation.
 
 **Recent
        Accounting Pronouncements**
 
 In
        December 2007, the FASB issued SFAS No. 141 (revised December 2007),
“Business Combinations” (“SFAS 141R”), which replaces FASB Statement
        No. 141, “Business Combinations.” This statement requires an acquirer to
        recognize identifiable assets acquired, liabilities assumed, and any
        non-controlling interest in the acquiree at the acquisition date, measured
        at
        their full fair values at that date, with limited exceptions. Assets and
        liabilities assumed that arise from contractual contingencies as of the
        acquisition date must also be measured at their acquisition-date full fair
        values. SFAS 141R requires the acquirer to recognize goodwill as of the
        acquisition date, and in the case of a bargain purchase business combination,
        the acquirer shall recognize a gain. Acquisition-related costs are to be
        expensed in the periods in which the costs are incurred and the services
        are
        received. Additional presentation and disclosure requirements have also been
        established to enable financial statement users to evaluate and understand
        the
        nature and financial effects of business combinations. SFAS 141R is to be
        applied prospectively for acquisition dates on or after the beginning of
        the
        first annual reporting period beginning on or after December 15, 2008.
 
 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-9
 
 In
        September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements”
(“SFAS No. 157”). This standard defines fair value, establishes a
        framework for measuring fair value in accounting principles generally accepted
        in the United States of America and expands disclosure about fair value
        measurements. This pronouncement applies under the other accounting standards
        that require or permit fair value measurements. Accordingly, this statement
        does
        not require any new fair value measurement. This statement is effective for
        fiscal years beginning after November 15, 2007, and interim periods within
        those fiscal years. The Company is currently evaluating the requirements
        of
        SFAS No. 157 and has not yet determined the impact, if any, on the
        financial statements.
 
 In
        June
        2006, the Financial Accounting Standards Board (“FASB”) issued FASB
        Interpretation No. 48 (“FIN No. 48”), “Accounting for Uncertainty
        in Income Taxes.” FIN No. 48 clarifies the accounting for uncertainty
        in income taxes recognized in a company’s financial statements in accordance
        with SFAS No. 109, “Accounting for Income Taxes.” This Interpretation
        defines the minimum recognition threshold a tax position is required to meet
        before being recognized in the financial statements. FIN No. 48 is
        effective for fiscal years beginning after December 15, 2006. The Company
        is currently evaluating the requirements of FIN No. 48 and has
        estimated the impact on the financial statements. (see Note 9)
 
 
 **2.  
        Liquidity, Going Concern, and Management’s Plan**
 
 The
        Company had a net loss of $3,095,766 for the twelve months ended December
        31,
        2007. At December 31, 2007 the Company had a working capital deficit of
        $2,662,101, and an accumulated deficit of $63,371,904. During the twelve
        months
        ended December 31, 2007 the Company used cash of $1,250,438 in operating
        activities.
 
 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
        to
        meet obligations on a timely basis and ultimately to achieve successful
        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. Future funding may be through an equity investment, debt or
        convertible debt.
 
 On
        January 31, 2008, we executed an agreement with Vista International, Inc.
        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, 2007, provided
        an
        equity investment of approximately $561,000 in cash and payment of expenses
        for
        our operations for which we have an obligation to issue 5,606,360 shares
        of our
        common stock.
  F-10


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.





**3.  
      Disposition of a Business Segment**





On
      March
      7, 2006 the Company, its wholly-owned subsidiary Nathaniel Energy Oklahoma
      Holdings Corporation (“NEOHC”) and NEOHC’s wholly-owned subsidiary, MCNIC Rodeo
      Gathering, Inc. closed a Purchase and Sale Agreement with Midstream Energy
      Services, LLC pursuant to which NEOHC sold the assets which comprised the
      Company’s helium and gas processing facilities and operations to Midstream. The
      final purchase price which reflected post-closing adjustments pursuant to the
      terms of the Purchase and Sale Agreement was $16,999,569. Nathaniel used
      $14,482,171 of the sale proceeds to satisfy its indebtedness to Richard Strain,
      which reduced the company’s debt by approximately 89%.





Midstream
      assumed all the liabilities under the contracts included in the gas assets
      being
      sold that arose after the closing date.





The
      gain
      on sale of the helium and gas processing facilities and operations of $6,119,673
      is reflected as gain on sale of assets, net of tax in our consolidated statement
      of operations for the period ended December 31, 2006.




**4.  
      Property, Plant and Equipment**





Following
      is a summary of property, plant and equipment at December 31, 2007 and
      2006:





**December 31, 2007**
            
            **December 31, 2006**Machinery
                and equipment
            
            $
            603,991
            
            $
            1,158,155Buildings
            
            
            43,575
            
            
            43,575Vehicles
            
            
            15,000
            
            
            66,225Land
            
            
            51,085
            
            
            51,085Furniture,
                fixtures and equipment
            
            
            192,571
            
            
            184,317Improvements
            
            
            189,511
            
            
            128,2801,095,733
            
            
            1,631,637Less
                accumulated depreciation
            
            
            (458,721
            )
            
            (562,194
            )Net
                book value
            
            $
            637,012
            
            $
            1,069,443





Depreciation
      expense recorded in the statements of operations was $257,192 and $268,687
      for
      the years ended December 31, 2007 and 2006, respectively.





**5.
      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.


F-11





**2007**
            
            **2006**Patents
            
            $
            207,428
            
            $
            207,428Blueprints
                and engineering design
            
            
            -
            
            
            299,339Less
                accumulated amortization
            
            
            (167,954
            )
            
            (313,344
            )Intangible
                assets, net
            
            $
            39,474
            
            $
            193,423




Amortization
      expense for the twelve months ended December 31, 2007 and 2006 was $79,115
      and $129,059, respectively.





**6.
      Notes Payable**





At
      December 31, 2007 and 2006, the Company had the following promissory notes
      outstanding:





**2007**
            
            **2006**9%
                promissory payable to a stockholder
            
            $
            500,000
            
            $
            -3.68%
                installment note, secured by equipment, monthly payments of $2,408
                principal and interest
            
            
            92,622
            
            
            -3.35%
                installment note, secured by equipment, monthly payments of $905
                principal
                and interest
            
            
            18,472
            
            
            28,5459.09%
                capital lease, secured by software, monthly payments of $1,716 principal
                and interest
            
            
            13,781
            
            
            31,29915%
                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
            
            
            11,750
            
            
            -4.5%
                installment note, secured by equipment, monthly payments of $2,531
                principal and interest
            
            
            -
            
            
            15,12610.59%
                installment note, secured by equipment, monthly payments of $3,231
                principal and interest
            
            
            -
            
            
            26,1189.00%
                installment note, secured by vehicle, monthly payments of $641 principal
                and interest
            
            
            -
            
            
            10,9458.45%
                installment note, secured by vehicle, monthly payments of $308 principal
                and interest
            
            
            -
            
            
            1,50815%
                installment notes for insurance premium financing
            
            
            -
            
            
            4,196Total
                debt:
            
            $
            723,625
            
            $
            204,737Current
                portion:
            
            
            (652,274
            )
            
            (162,814
            )Long-term
                portion:
            
            $
            71,351
            
            $
            41,923




F-12


Maturities
      of debt are as follows:





**December
                31,**2009
            
            $
            652,2742010
            
            
            28,8902011
            
            
            5,9532010
            
            
            -thereafter
            
            
            -$
            723,625




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,
      2007.





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%.





On
      March
      7, 2006, we repaid total principal of $12,246,361 related to all previous
      obligations due Richard Strain out of the proceeds we received from the sale
      of
      our helium and gas processing assets to Midstream.





On
      June
      9, 2006, we paid off the borrowings outstanding on our line of credit of
      $790,000. The line of credit was secured by a letter of credit provided by
      a
      stockholder, Richard Strain.





**7.
      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,
      2007.





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, through
      December 31, 2007, provided an investment of approximately $561,000 in cash
      and
      payment of expenses for our operations for which we have an obligation to issue
      5,606,360 shares of our common stock.


F-13





On
      March 7, 2006, we closed the Purchase and Sale Agreement with Midstream for
      our helium and gas processing operations and received $16,915,676. From the
      $16,915,676 received, we paid Mr. Strain $13,600,171 in satisfaction of our
      October 2003 promissory notes of $6,892,151, our March 2004 promissory
      note of $2,000,000, our September 2005 promissory note of $3,354,210 and
      accrued interest through March 7, 2006 on those notes of $1,353,810.





Pursuant
      to our Purchase and Sale Agreement with Midstream, the purchase price under
      that
      agreement was subject to an upward adjustment by up to $1,800,000 if Midstream
      and Colorado Interstate Gas entered into an agreement for nitrogen and/or air
      blending services which commences on or before January 1, 2007. This agreement
      was entered into in December 2005. As a result of this upward adjustment, we
      paid Richard Strain an additional $882,000 at closing.





On
      December 5, 2006, we entered into an agreement with Bailey-Jamar, LLC, under
      which Bailey-Jamar agreed to provide the company with $7,500,000 in capital
      through an equity investment by a joint venture consisting of Bailey-Jamar
      and a
      co-venturer to be identified by Bailey-Jamar in the future. Brad E. Bailey,
      the
      company’s Chief Executive Officer, is a principal member of Bailey-Jamar. At
      December 31, 2007, we had not utilized this financing arrangement. Bailey-Jamar
      was not able to identify a joint venture party. This agreement expired on
      February 28, 2007. No funds were received as a result of this agreement and
      no
      shares were issued.





**8.  
      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 realizability 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
      $13,400,000, which expires between 2020 and 2027. Approximately $12,300,000
      of
      these losses are limited under the change in control provisions of Internal
      Revenue Code Section 382. Losses so limited will be available to offset
      future taxable income of up to $274,000 annually until their expiration. 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,
      2007, we have provided a valuation allowance reducing the net realizable
      benefits of these deductible differences to $ zero at December 31, 2007. The
      amount of the deferred tax asset considered realizable could change in the
      near
      term if projected future taxable income is realized.





As
      a
      result of the sale of our helium and gas processing assets on March 7,
      2006, we utilized approximately $5,975,000 of our December 31, 2005 and
      prior net operating loss carryforwards to offset the gain on the sale of those
      assets. As of December 31, 2005, we had recorded a deferred tax asset and total
      provision benefit of $759,000. In 2006, this amount has reduced gain on disposed
      operations to its net of tax amount.





The
      income tax provision (benefit) for the years ended December 31, 2007 and 2006
      consists of the following:


F-14




**December 31, 2007**
            
            **December 31, 2006**Continuing
                OperationsCurrent:Federal
            
            $
            —
            
            $
            —State
            
            
            —
            
            
            12,000—
            
            
            12,000Deferred:Federal
            
            
            —
            
            
            —State
            
            
            —
            
            
            ——
            
            
            —Discontinued
                OperationsFederal
            
            
            —
            
            
            641,490State
            
            
            —
            
            
            117,100—
            
            
            759,000Total
            
            $
            —
            
            $
            771,000





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, 2007**
            
            **December 31, 2006**Computed
                “expected” income tax expense (benefit) at approximately 37%
            
            $
            (892,000
            )
            $
            1,978,000Use
                of in NOL carryforwards
            
            
            —
            
            
            (1,978,000
            )Discretionary
                change in valuation allowances of deferred income taxes
            
            
            892,000
            
            
            —Various
                other
            
            
            —
            
            
            12,000Discontinued
                Operations
            
            
            —
            
            
            759,000$
            —
            
            $
            771,000





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, 2007 and 2006 are as follows:





**December 31, 2007**
            
            **December 31, 2006**Deferred
                tax assets:Federal
                net operating loss
            
            $
            4,958,000
            
            $
            4,971,000Allowance
                and accruals not recognized for income tax purposes
            
            
            —
            
            
            —Total
                gross deferred tax assets
            
            
            4,958,000
            
            
            4,971,000Less
                : Valuation allowance
            
            
            (4,958,000
            )
            
            (4,971,000
            )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
            
            $
            —
            
            $
            —




F-15




These
      amounts have been presented in the consolidated balance sheets as follows:





**December 31, 2007**
            
            **December 31, 2006**Current
                deferred tax asset
            
            $
            —
            
            $
            —Current
                deferred tax liability
            
            
            —
            
            
            —Non
                current deferred tax asset
            
            
            —
            
            
            —Non
                current deferred tax liability
            
            
            —
            
            
            —Total
                net deferred tax asset
            
            $
            —
            
            $
            —





In
      July
      2006, the FASB issued FASB Interpretation No. 48,*“Accounting
      for Uncertainty in Income Taxes” - an interpretation of FASB Statement No. 109 (
      FIN 48 )*. 
      This interpretation of SFAS No. 109 prescribes a recognition threshold and
      measurement attribute for the financial statement recognition and measurement
      of
      a tax position taken or expected to be taken in a tax return.  This
      interpretation also provides guidance on de-recognition, classification,
      interest and penalties, accounting in interim periods, disclosure and
      transition.  The interpretation is effective for fiscal years
      beginning after December 15, 2006.  The company has reserves related to
      certain of its tax positions, which would be subject to analysis under FIN
      48.  Specifically, the Company believes there may be an exemption for some
      or all of the gain from the sale of the helium assets under the Oklahoma source
      capital gain exception for corporations for purposes of Oklahoma state income
      tax. In addition, the Company believes there is justification for the
      utilization of certain outside basis adjustments incurred by the Company in
      2005
      as a reduction of its taxable capital gain for both federal and state tax
      reporting purposes. The company adopted FIN 48 as of January 1, 2007, as
      required.




**9.  
      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, 2007.





**Common
      Stock**





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
      an
      obligation to issue 5,606,360 shares of our common stock. These shares are
      classified as common stock to be issued on our December 31, 2007 consolidated
      balance sheet.




F-16


Twelve
      months ended December 31, 2006





During
      the twelve months ended December 31, 2006, the Company issued 33,333 shares
      of
      common stock previously classified as Shares to be Issued. These shares were
      issued in satisfaction of certain liabilities of the Company which were agreed
      to be settled for stock in a previous period.





**10.
      Minority Interest**





On
      September 29, 2005 we entered into a Stock Purchase Agreement with
      Mr. Richard Strain to purchase the 49% minority interest in our 51% owned
      subsidiary, Nathaniel Energy Oklahoma Holdings Corporation, owned by
      Mr. Strain, and issued a $3,354,210 promissory note to Mr. Strain. We
      recorded the $3,354,210 promissory note as a current note payable due
      stockholder with a corresponding reduction in our additional paid-in capital
      on
      our balance sheet as of December 31, 2005. This note was paid in full to
      Mr. Strain during the twelve months ended December 31, 2006.





Pursuant
      to our Purchase and Sale Agreement with Midstream for the sale of our helium
      and
      gas operations the purchase price under that agreement was subject to an upward
      adjustment by up to $1,800,000 if Midstream and Colorado Interstate Gas entered
      into an agreement for nitrogen and/or air blending services which commences
      on
      or before January 1, 2007. This agreement was entered into in December 2005.
      As
      a result of this upward adjustment, we paid Richard Strain an additional
      $882,000 at closing. This amount was charged to additional paid-in capital
      on
      the Company’s balance sheet at December 31, 2006.





**11.  
      Commitments and Contingencies**





**Commitments**





We
      entered into a new contract with Geocycle US effective September 1, 2007.
      Geocycle US can take up to 1500 tons of tie-derived-fuel per month for their
      operation. .The contract has options to renew annually. The contract establishes
      a base price for the tire-derived-fuel with a price re-opener at the beginning
      of each renewal period. Either party has the right to terminate the agreement
      at
      the end of the initial term giving the other party 90 days advance notice of
      such termination. Should the company not be able to supply Geocycle US with
      the
      contracted supply of tire-derived-fuel under the agreement then Geocycle US
      has
      the right to purchase material from another third party supplier.




**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 18,400 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. Management believes we could potentially receive
      more than double our current processing capacity of new whole tires for which
      we
      would receive a tipping fee. 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.


F-17





While
      management considers the piles a potential asset, they also 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 (LRPUT or landfill). There are an estimated 18,400 tons of tires
      and tire shreds on site; in management’s opinion the total upper range estimate
      for the cost of disposal is approximately $877,000 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 reserved $779,000 for the cost of disposing of this material.
      Our accrual for disposal costs expensed in our statement of operations for
      the
      year ended December 31, 2007 is $749,000.





**12.  
      Segment Data**





The
      Company conducts business in two separate facilities presently managed as two
      energy operating business segments, alternative energy and tire fuel processing.
      The location and use of our facilities are shown as follows:





·
            the
                renewable energy (WTE) and waste to energy operation and corporate
                offices
                in Englewood, Colorado and


·
            the
                tire fuel processing operation in Hutchins, Texas.





**Year
                ended December 31, 2007****Fuel**
            
            **Renewable**
            
            **Discontinued**
            
            ************
            
            **Processing**
            
            **Energy
                and WTE**
            
            **Helium
                Operations**
            
            **Total**Revenue
            
            $
            337,168
            
            $
            -
            
            $
            -
            
            $
            337,168Significant
                non-cash expenditures:Depreciation
                and amortization
            
            $
            261,471
            
            $
            74,836
            
            $
            -
            
            $
            336,307Net
                income (loss)
            
            $
            (2,939,786
            )
            $
            (155,980
            )
            $
            -
            
            $
            (3,095,766
            )Capital
                expenditures
            
            $
            194,700
            
            $
            -
            
            $
            -
            
            $
            194,700Total
                assets as of December 31, 2007
            
            $
            914,804
            
            $
            -
            
            $
            -
            
            $
            914,804**Year
                ended December 31, 2006****Fuel**
            
            
            **Renewable**
            
            
            **Discontinued****Processing**
            
            
            **Energy
                and WTE**
            
            
            **Helium**
              **Operations**
            
            
            **Total**Revenue
            
            $
            1,114,887
            
            $
            -
            
            $
            34,597
            
            $
            1,149,484Significant
                non-cash expenditures:depreciation
                and amortization
            
            $
            297,966
            
            $
            99,780
            
            $
            -
            
            $
            397,746Net
                income (loss)
            
            $
            (1,446,996
            )
            $
            (562,721
            )
            $
            6,313,101
            
            $
            4,303,384Capital
                expenditures
            
            $
            105,077
            
            $
            -
            
            $
            -
            
            $
            105,077Total
                assets as of December 31, 2006
            
            $
            1,615,513
            
            $
            139,669
            
            $
            -
            
            $
            1,755,182




F-18





**13.  
      Lease Commitments**





The
      company leases certain office facilities under non-cancelable operating leases
      that expire at various dates through 2008. At December 31, 2007, 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:





2008
            
            $
            22,0502009
            
            
            —2010
            
            
            —2011
            
            
            —2012
            
            
            —Total
                minimum lease payments
            
            $
            22,050





Rent
      expense for operating leases, including month-to-month rentals, was $208,641
      and
      $79,219 for the years ended December 31, 2007 and 2006, respectively.





**14.
      Subsequent Events**





On
      March 20,
      2008, the company received notification from the Internal Revenue Service of
      the
      filing of a federal tax lien in the approximate amount of $120,000 related
      to
      late payment of federal income tax, penalty and interest on the September 30,
      2005 corporate income
      tax return of Nathaniel Energy Oklahoma Holdings Corporation. Nathaniel Energy
      Oklahoma Holdings Corporation was required to file a short period federal income
      tax return for 2005 as the company acquired a 49% minority interest of Nathaniel
      Energy Oklahoma Holdings Corporation on that date from Mr. Richard Strain,
      the
      company’s majority shareholder and debt holder at that time. Nathaniel Energy
      Oklahoma Holdings Corporation filed a consolidated return for the remainder
      of
      the 2005 tax year with Nathaniel Energy Corporation. The short period return
      gave rise to a federal income tax liability of approximately $200,000. The
      company made installments against this tax liability of $100,000 during 2006
      and
      an additional $10,000 during the first quarter of 2007.




F-19




**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: May
                15, 2008
            By:
            /s/   Barry
                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:
                May 15, 2008/s/
                Timothy D. RuddyTimothy
                D. Ruddy, DirectorDate:
                May 15, 2008


37