UNITED STATES


SECURITIES AND EXCHANGE COMMISSION


WASHINGTON, D.C. 20549





FORM 10-Q/A


AMENDMENT NO. 1








MARK ONE





x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the Quarterly Period ended March 31, 2011; or





oTransition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from________ to ________





COMMISSION FILE NUMBER:000-27783





VISTA INTERNATIONAL TECHNOLOGIES, INC.


(Exact name of registrant as specified in its charter)





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





88 Inverness Circle East, Suite N-103, Englewood, Colorado 80112


(Address of principal executive offices, including zip code)





(303) 690-8300


(Registrant’s telephone number, including area code)





Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.


Yes  x   No  o





Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).


Yes  o   No  x





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





Large accelerated filer o Accelerated filer o Non-accelerated filer o (Do not check if a smaller reporting company) Smaller reporting company x.





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





As of May 16, 2011, Vista International Technologies, Inc. had outstanding 114,719,553 shares of common stock, par value $0.001 per share.







EXPLANATORY NOTE






This Amendment No. 1 on Form 10-Q/A amends our Form 10-Q for the fiscal year ended March 31, 2011, as filed with the Securities and Exchange Commission on May 20, 2011:




·
To revise disclosure in the following items to make the disclosure in this report consistent with the revised disclosure in our Annual Report on Form 10-K/A Amendment No. 2.  The changes include the following:




·
Part 1 Item 1 Condensed Financial Statements – Unaudited, in the following Notes to Unaudited Interim Consolidated Financial Statements:




o      Note 1 Significant Accounting Policies and Nature of Operations, under the heading “Description of Business”.


o      Note 3 Related Party Transactions, under the heading “Notes Payable – related party”.


o      Note 5 Commitments and Contingencies, under the headings “Encumbrances on Company Assets” and “Environmental Liability”.




·
Under Part I Item 2 Management’s Discussion and Analysis of Financial Condition and Results of Operations, under the headings:




o      “Forward Looking Statements”


o      “Business Description”


o      “Management’s Plan”


o      “Liquidity and Capital Resources”


o      Part I Item 4 Controls and Procedures, under the heading “Evaluation of Disclosure Controls andProcedures”.




·
To revise the list of Exhibits under Part II Item 6 Exhibits to reference only the exhibits required under Regulation S-K Item 601(a)(4).




For the convenience of the reader, this Amendment No. 1 on Form 10-Q/A restates the original filing in its entirety, but amends Part I Items 1, 2 and 4, and Part II Item 6, of the original filing in the manner described above.  All other information included in the original filing remains unchanged.  In addition, in accordance with Rule 12b-15 under the Exchange Act, new certifications by our Interim Chief Executive Officer (principal executive officer and principal financial and accounting officer) are filed as exhibits to this Amendment No. 1 on Form 10-Q/A.










VISTA INTERNATIONAL TECHNOLOGIES, INC.





TABLE OF CONTENTS








PART I – FINANCIAL INFORMATIONItem 1.
Condensed Financial Statements - UnauditedConsolidated Balance Sheets at March 31, 2011 (unaudited) and December 31, 2010

F-1Consolidated Statements of Operations for the Three Months ended March 31, 2011 and 2010 (unaudited)

F-2Consolidated Statements of Cash Flows for the Three Months ended March 31, 2011 and 2010 (unaudited)

F-3Notes to Unaudited Interim Consolidated Financial Statements

F-4Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations

1Item 3.
Quantitative and Qualitative Disclosures About Market Risk

6Item 4.
Controls and Procedures

6PART 2 - OTHER INFORMATIONItem 1.
Legal Proceedings

7Item 2.
Unregistered Sales of Equity Securities And Use of Proceeds

7Item 3.
Defaults Upon Senior Securities

7Item 4.
Reserved

7Item 5.
Other Information

7Item 6.
Exhibits

7Signatures

9










PART I – FINANCIAL INFORMATION




Item 1. Condensed Financial Statements - Unaudited








Vista International Technologies, Inc.


Condensed Consolidated Balance Sheets


March 31,

2011

(Unaudited)


December

31, 2010ASSETSCurrent assets:Cash

$
20,470


$
4,901Accounts receivable, net


3,023



5,783Other receivables


-



52,388Prepaid expenses


31,452



42,861Restricted cash


20,000



20,000Total current assets


74,945



125,933Deposits


1,896



1,896Property and equipment, net


274,165



280,667Intangible assets, net


31,552



32,928Total assets

$
382,558


$
441,424LIABILITIES AND STOCKHOLDERS’ DEFICITCurrent liabilities:Accounts payable and accrued liabilities

$
1,663,617


$
1,554,952Accrued compensation and payroll liabilities


626,351



622,021Accrued interest


114,725



89,304Notes payable - related parties


458,600



403,600Notes payable - stockholder


592,752



592,752Notes payable and capital lease, current portion


72,827



72,827Total current liabilities


3,528,872



3,335,456Notes payable and capital lease, less current portion


9,129



10,887Total liabilities


3,538,001



3,346,343Commitments and contingencies


—



—Stockholders’ deficit:Common stock, $0.001 par value; 200,000,000 shares authorized; 114,719,553 shares issued and outstanding at March 31, 2011 and December 31, 2010


114,720



114,720Additional paid-in capital


62,515,471



62,515,471Commmon stock to be issued


10,800



10,800Accumulated deficit


(65,796,434
)


(65,545,910
)Total stockholders’ deficit


(3,155,443
)


(2,904,919
)Total liabilities and stockholders’ deficit

$
382,558


$
441,424





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


F-1





Vista International Technologies, Inc.


Condensed Consolidated Statements of Operations





For the Three


For the ThreeMonths


Months EndedEnded March


March 31,31, 2011


2010(unaudited)


(unaudited)Revenues

$
102,151


$
218,069Cost of revenue


77,150



104,000Environmental remediation expense


62,018



6,177Gross (loss) profit


(37,017
)


107,892Operating expenses:Selling, general and administrative expenses


181,196



218,821Loss from operations


(218,213
)


(110,929
)Other income (expense):Gain on extinguishment of liabilities


—



64,530Interest expense, net


(32,311
)


(17,837
)Other income


—



49,768(32,311
)


96,461Net loss

$
(250,524
)

$
(14,468
)Net loss per share, basic and diluted


*



*Weighted average number of common shares outstanding


114,719,553



106,841,764


* less than ($0.01) per share





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


F-2





Vista International Technologies, Inc.


Condensed Consolidated Statements of Cash Flows





For the


For theThree


ThreeMonths


MonthsEnded


EndedMarch 31,


March 31,2011


2010(unaudited)


(unaudited)Cash flows from operating activities:Net loss

$
(250,524
)

$
(14,468
)Adjustments to reconcile net loss to net cash used in operating activities:Depreciation and amortization


12,668



35,091Other income


—



13,176Environmental remediation expense


62,018



6,177Gain on extinguishment of liabilities


—



(64,530
)Changes in assets and liabilities:Accounts receivable, net


2,760



34,283Prepaid expenses


11,409



12,711Restricted cash and other assets


52,388



2,200Accounts payable and accrued expenses


76,398



(37,046
)Net cash used in operating activities


(32,883
)


(12,406
)Cash flows from investing activities:Equipment purchases


(4,790
)


(23,925
)Net cash used in investing activities


(4,790
)


(23,925
)Cash flows from financing activities:Payments on debt


(1,758
)


(3,995
)Payments on related party notes


—



(10,000
)Proceeds from issuance of common stock


—



80,000Proceeds from related party notes


55,000



25,000Net cash provided by financing activities


53,242



91,005Increase in cash


15,569



54,674Cash at beginning of period


4,901



20,444Cash at end of period

$
20,470


$
75,118Supplemental disclosure of cash flow information:Cash paid for interest

$
1,000


$
—





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


F-3





Vista International Technologies, Inc.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Three months ended March 31, 2011 and 2010


(unaudited)





1. Significant Accounting Policies and Nature of Operations:





Unaudited Interim Financial Statements





The accompanying unaudited interim financial statements, which include the wholly-owned subsidiaries of Vista International Technologies, Inc. (the “Company”, “we”, “our”), have been prepared by the Company in accordance with the instructions to Form 10-Q of the Securities and Exchange Commission. The financial information has not been audited and should not be relied upon to the same extent as audited financial statements. Certain information and footnote disclosures normally included in audited financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. Accordingly, these interim financial statements should be read in conjunction with the Company’s financial statements and related notes contained in the Form 10-K for the year ended December 31, 2010. In the opinion of management, the interim financial statements reflect all adjustments, including normal recurring adjustments, necessary for fair presentation of the interim periods presented. The results of operations for the three months ended March 31, 2011 are not necessarily indicative of the results of operations to be expected for the full year.





Description of Business





The Company is in the business of developing, commercializing and operating renewable energy and waste-to-energy (“WTE”) technologies and projects.





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


●
Tire processing operation in Hutchins, Texas, and●
Renewable energy and WTE projects utilizing the Company’s Thermal GasifierTM technology and corporate administration at the Company’s offices in Englewood, Colorado.





Going Concern and Management’s Plan





The Company reported a net loss of approximately $251,000 and used net cash in operating activities of approximately $33,000 for the three months ended March 31, 2011, has a working capital deficit of approximately $3.5 million and an accumulated deficit of approximately $65.8 million at March 31, 2011.   These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments related to the recovery of the recorded assets or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.





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





During the three months ended March 31, 2011, the Company received proceeds of approximately $55,000 from a related party.  Subsequently, through May 20, 2011, we received additional proceeds of $39,000 (See Note 3).  We expect that the Company will continue to rely on loans from related parties and issuances of shares in private placements to meet its working capital needs for the foreseeable future.




F-4





Vista International Technologies, Inc.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Three months ended March 31, 2011 and 2010


(unaudited)





Management plans to focus the Company’s resources in four key areas:





●
Thermal GasifierTM engineering design and deployment





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





●
Development of project based opportunities, and





●
Attracting strategic investment





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





We continue to develop our internal resources and implement business development activities to secure waste-to-energy and biomass-to-energy facility opportunities that will utilize our Thermal GasifierTM technology through build-own-operate agreements or through joint-venture relationships with strategic partners. We are looking to partner with companies that produce large hydrocarbon-based waste streams and are also in need of thermal and/or electrical energy. We are targeting opportunities where there are high disposal fees and energy rates, where we can use the Thermal GasifierTM with back end power systems to provide significant cost savings to the end user.  We are reviewing the economic viability of a number of opportunities in the northeastern United States and in Colorado and are currently working towards obtaining letters of intent from these entities. Currently, the Company does not have any Thermal Gasifiers in operation.





In February 2011, the Company entered into a Purchase and sales agreement to sell all of its interest in the approximately 27-acre industrial site it owns at 1323 Fulghum Rd.in Hutchins, Texas. The sale is subject to a variety of conditions, including shareholder approval (see note 5).





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





The Company expects to receive proceeds of approximately $1,348,000 in cash, which is net of the first two years of lease payments of approximately $203,000 under the proposed lease.  Management intends to use the net proceeds to repay certain liabilities and improve operations, including the purchase of additional equipment to process waste tires into tire derived fuel (“TDF”), thereby establishing a new revenue stream.  Management estimates that the sale leaseback and related modification of operations will result in an increase in revenue, gross margin and cash flow beginning in 2012.





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


F-5





Vista International Technologies, Inc.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Three months ended March 31, 2011 and 2010


(unaudited)





Revenue Recognition





Our tire fuel processing and storage facility recognizes revenue in two ways:





●
Disposal fees (“tipping fees”) for waste tires are fully earned when accepted at the facility●
Sales of unprocessed whole tires are recognized when delivered to the end user





Revenue from sales of our Thermal GasifierTM will be recognized upon completion, delivery and customer acceptance, using the completed contract method of accounting.   We have recognized no revenue from the sale of our Thermal GasifierTM during the three months ended March 31, 2011 and 2010.





Concentration of Credit Risk





Two customers comprised approximately 24% and 12% of revenues for the three months ended March 31, 2011 and approximately 54%, and 10% of revenues for the three months ended March 31, 2010.





Use of Estimates





Our consolidated financial statements are prepared in accordance with U.S. generally accepted accounting principles.  These accounting principles require us to make certain estimates, judgments and assumptions that we believe are reasonable, based on information available at the time they were made.  These estimates, judgments and assumptions can affect the amounts reported in our condensed consolidated financial statements.





Recent Accounting Pronouncements





The Company has adopted all applicable recently-issued accounting pronouncements.  The adoption of the accounting pronouncements, including any not yet effective, is not anticipated to have a material effect on the financial position or results of operations of the Company.





Reclassifications





Certain reclassifications to the 2010 statements of operations and cash flows have been made in order to conform it to the 2011 presentation.





2. Notes Payable





At March 31, 2011, the Company had the following promissory notes outstanding:





8.56% installment note, secured by equipment, due August 2013

$
14,95615% promissory notes payable to individuals, due on demand, in default


17,00012% promissory notes payable to individual, interest due monthly, secured by all assets of the Company, due on April 22, 2011, default waived until five days after the closing of the Company’s sale of its industrial site at 1323 Fulghum Road in Hutchins, Texas


50,000Total notes payable and capital lease:


81,956Less: current maturities


72,827Notes payable and capital lease

$
9,129




F-6





Vista International Technologies, Inc.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Three months ended March 31, 2011 and 2010


(unaudited)





3. Related Party Transactions





At March 31, 2011, notes payable - stockholder and notes payable – related parties consisted of the following:





9% promissory notes payable – Richard Strain – stockholder, due on demand, secured by a first priority security interest in Company assets – default waived through June 30, 2011

$
500,0009% line of credit - Richard Strain – stockholder, matured December 31, 2010,  principal payments of $8,000 per month, secured by a first priority security interest in the Company’s assets – default waived through June 30, 2011


92,752Notes payable- stockholder

$
592,7528% promissory notes payable - Timothy Ruddy, due on demand, secured by all of the Company’s assets, security interest is subordinated to the loans extended by Mr. Strain

$
413,60012% promissory notes payable to Timothy Ruddy family members, cash interest of 10% and Company stock of 2%, secured by all of the Company’s assets, security interest is subordinated to the loans extended by Mr. Strain, interest due quarterly-default waived


45,000Notes payable-related parties

$
458,600





Notes payable – stockholder





The line of credit provides for certain equity redemption rights to Mr. Strain, on terms and conditions to be agreed upon.  No equity redemption rights have been provided as of March 31, 2011.  The maximum amount to be drawn under the line is $375,000.  However, subsequent to initial draws of approximately $100,000 in 2009, Mr. Strain has declined to provide additional funding under the line.





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





As of March 31, 2011 and 2010, accrued interest outstanding on the loans was approximately $51,400 and $140,100, respectively.





Interest expense on the loans for the three months ended March 31, 2011 and 2010 was approximately $13,400 and $13,600, respectively.





Notes payable – related party





The Company has a loan agreement with Mr. Timothy D. Ruddy, a Director of the Company, in which Mr. Ruddy has the option, at his discretion, to receive payment as follows:





(a)
repayment of principal and interest;(b)
conversion of outstanding amount without accrual of interest into the Company’s common stock based on the quoted market price of the stock at the dates loans were made;(c)
any combination of cash and stock as described in (a) and (b)





F-7





Vista International Technologies, Inc.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Three months ended March 31, 2011 and 2010


(unaudited)





The 8.56% installment loan was executed by Mr. Ruddy on behalf of the Company.  At March 31, 2011, the remaining lease obligation was approximately $15,000 and the net book value of the equipment financed was approximately $17,400.





As of March 31, 2011 and 2010, accrued interest outstanding on the loans was approximately $43,500 and $14,300, respectively.





Interest expense on the loans for the three months ended March 31, 2011 and 2010 was approximately $9,900 and $3,600, respectively.





Subsequent to March 31, 2011 and through May 20, 2011, Mr. Ruddy has loaned the Company an additional $39,000 under this agreement.





In December of 2009, Mr. Ruddy provided a $150,000 Certificate of Deposit as part of Vista’s required financial assurances in connection with its registration with the Texas Commission on Environmental Quality (TCEQ) for the operation of its tire processing facility in Hutchins, Texas, for remediation in the event the Company liquidates and its facility closes.  The Company paid no compensation or other consideration for this.





Notes payable – related party family





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





As of March 31, 2011, accrued interest outstanding on the loans was approximately $4,900 and interest expense on the loans for the three months ended March 31, 2011 was approximately $1,300.





4. Stockholders’ Equity





As of March 31, 2011, the Company has an obligation to issue approximately 2,440,000 shares of its restricted common stock for legal and consulting services performed.  The accompanying condensed consolidated balance sheets reflect an accrual of approximately $77,900 for these unissued shares as of March 31, 2011.





5. Commitments and Contingencies





Encumbrances on Company Assets





The following encumbrances exist on the Company’s assets as of March 31, 2011:





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





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




F-8





Vista International Technologies, Inc.


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


Three months ended March 31, 2011 and 2010


(unaudited)





Environmental Liability





Our tire operations in Texas are subject to regulation by the TCEQ.  At March 31, 2011, the Company has approximately 12,300 tons of whole tires, partially shredded tires, tire chips and process waste stored onsite at the tire processing and storage facility. Through July 2010, we had been able to dispose of this material at a municipal landfill site that used the material as filter and bedding material. However, the landfill has recently transitioned to a project based system where they will request tires as needed, rather than storing tires in anticipation of future needs. As a result, tire inventory has increased without a ready disposal source.





The Company’s registration with the TCEQ requires the Company to provide financial assurance in the form of letters of credit (approximately $170,000 at March 31, 2011) for remediation in the event the Company liquidates and the facility closes.  These letters of credit expire on November 27, 2011 and December 10, 2011.   The Company’s certificate of deposit classified in restricted cash for $20,000 and personal assets owned by Mr. Timothy Ruddy, a Director of the Company (See Note 3) are held as collateral for the letters of credit.  The Company has no other asset retirement obligations.





We have accrued approximately $245,000 at March 31, 2011 for the cost of disposing this material.


F-9





Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.





FORWARD LOOKING STATEMENTS





Certain information contained in this report may include “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and is subject to the safe harbor created by that act. The safe harbor created by the Securities Litigation Reform Act will not apply to certain “forward looking statements” relating to our business or operations because we issued “penny stock” (as defined in Section 3(a)(51) of the Securities Exchange Act of 1934 and Rule 3a51-1 under the Exchange Act) during the three year period preceding the date(s) on which those forward looking statements were first made., We caution readers that certain important factors may affect our actual results and could cause such results to differ materially from any forward-looking statements which may be deemed to have been made in this report 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”, or “continue” or “hope” or the negative variations of those words or comparable terminology are intended to identify forward-looking statements.





The Management’s Discussion and Analysis is intended to help stockholders and other readers understand the dynamics of the Company’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 period ended March 31, 2011, compared with the operating results for the period ended March 31, 2010.





Business Overview and Presentation





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





●
Inability to attract adequate debt or equity funding to implement our business plan





●
Ongoing operating losses





●
Delay in successfully demonstrating our Thermal GasifierTM technology





Description of Business





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





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


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





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




1





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





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





At March 31, 2011, the Company had approximately 12,300 tons of whole tires, partially shredded tires, tire chips and process waste stored onsite at the tire processing and storage facility.  Through July, 2010 we had been able to dispose of this material at a municipal landfill site.  However, the landfill has recently transitioned to a project based system where they will request tires as needed rather than storing tires in anticipation of future needs.  As a result, tire inventory has increased without a ready disposal source.





Going Concern





The Company reported a net loss of approximately $251,000 and used net cash in operating activities of approximately $33,000 for the three months ended March 31, 2011, has a working capital deficit of approximately $3.5 million and an accumulated deficit of approximately $65.8 million at March 31, 2011.   These factors raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. The financial statements do not include any adjustments related to the recovery of the recorded assets or the classification of liabilities that might be necessary should the Company be unable to continue as a going concern.





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





Management’s Plan





During the three months ended March 31, 2011, the Company received proceeds of approximately $55,000 from a related party.  Subsequently, through May 20, 2011, we received additional proceeds of $39,000 (See Note 3).  We expect that the Company will continue to rely on loans from related parties and issuances of shares in private placements to meet its working capital needs for the foreseeable future.





Management plans to focus the Company’s resources in four key areas:





●
Thermal GasifierTM engineering design and deployment





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





●
Development of project based opportunities, and





●
Attracting strategic investment





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




2





We continue to develop our internal resources and implement business development activities to secure waste-to-energy and biomass-to-energy facility opportunities that will utilize our Thermal GasifierTM technology through build-own-operate agreements or through joint-venture relationships with strategic partners. We are looking to partner with companies that produce large hydrocarbon based waste streams and are also in need of thermal and/or electrical energy. We are targeting opportunities where there are high disposal fees and energy rates, where we can use the Thermal GasifierTM with back end power systems to provide significant cost savings to the end user.  We are reviewing the economic viability of a number of opportunities in the northeastern United States and in Colorado and are currently working towards obtaining letters of intent from these entities. Currently, the Company does not have any Thermal Gasifiers in operation.





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




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





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





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





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


3





Results of Operations





Overview





The following table summarizes our results of operations for the three months ended March 31, 2011 and 2010:





Three Months ended March 31,


Increase/(Decrease)% change2011


2010


$ 2011 vs


2011 vs(unaudited)


(unaudited)


2010


2010Revenues

$
102,151


$
218,069


$
(115,918
)


(53.2
)%Cost of revenue


77,150



104,000



(26,850
)


(25.8
)%Environmental remediation expense


62,018



6,177



55,841



N/A
%Gross (loss) profit


(37,017
)


107,892



(144,909
)


(134.3
)%Operating expenses:Selling, general and administrative expenses


181,196



218,821



(37,625
)


(17.2
)%Loss from operations


(218,213
)


(110,929
)


(107,284
)


96.7
%Other income (expense):Gain on extinguishment of liabilities


—



64,530



(64,530
)


(100.0
)%Interest expense, net


(32,311
)


(17,837
)


(14,474
)


81.1
%Other income


—



49,768



(49,768
)


(100.0
)(32,311
)


96,461



(128,772
)


(133.5
)%Net loss

$
(250,524
)

$
(14,468
)

$
(236,056
)


1,631.6
%





2011 COMPARED TO 2010





Revenue





Revenue, which consists primarily of tipping fees received for acceptance of whole passenger and truck tires decreased significantly as a result of the loss of a major customer from whom we generated a significant portion of our revenues in the first quarter of 2010.





No revenue was generated from this major customer for the three months ended March 31, 2011 as compared to approximately 54.3% of revenues for the three months ended March 31, 2010.   In addition, the Company’s two largest customers comprised approximately 36% of revenues for the three months ended March 31, 2011 compared to approximately 72% of revenues for the Company’s three largest customers for the three months ended March 31, 2010




4





Cost of Revenue





Cost of revenue for our tire processing operations decreased at a slower rate than the decrease in our revenues due primarily to fixed costs such as salaries, business insurance and taxes which could not be eliminated in order to keep the tire facility operating.  The overall decrease in expense was due primarily to a reduction in depreciation expense of approximately $24,000 and outside services of approximately $31,000, offset by increases in equipment rental, repairs and maintenance and parts of approximately $21,000





Our tire operations in Texas are subject to regulation by the TCEQ.  At March 31, 2011, the Company had approximately 12,300 tons of whole tires, partially shredded tires, tire chips and process waste stored onsite at the tire processing and storage facility. Through July, 2010, we were able to dispose of this material at a municipal landfill site.  However, the landfill transitioned to a project based system where they will request tires as needed rather than storing tires in anticipation of future needs.  As a result, tire inventory has increased without a ready disposal source.  We maintain a reserve for removal and cleanup of material at our Texas facility.   As a result, our environmental liability increased in 2011 compared to 2010.





Selling, General, and Administrative Expenses





Selling, general, and administrative expenses decreased approximately $38,000 in 2011.  Professional and outside consulting expenses decreased by approximately $21,000 due to the Company’s decreased use of consultants and attorneys to improve operations and to negotiate debt settlements.  Salaries and contract labor decreased by approximately $9,000 and business insurance expense declined by approximately $13,000 due primarily to a reduction in our workers compensation premiums. These decreases were partially offset by an increase in our computer repair expense of approximately $4,000.





Interest Expense





Interest expense increased approximately 81% due to a net $275,000 increase in related party borrowings.





Gain on Extinguishment of Liabilities





On August 7, 2009 the Company engaged the services of a law firm to negotiate settlements with creditors and judgment holders of the Company.  A net gain of approximately $64,400 was recognized in the three months ended March 31, 2010, while there was no corresponding activity during the three months ended March 31, 2011.





Other income





For the three months ended March 31, 2010 other income consisted primarily of insurance proceeds net of initial costs to demolish and prepare the site to rebuild the tire processing facility in Hutchins, Texas that suffered snow damage in February 2010. There was not a comparable insurance claim during the three months ended March 31, 2011.





Liquidity and Capital Resources





We had a cash balance of approximately $20,400 at March 31, 2011.  We expect that our current cash on hand and expected revenues will not be sufficient to sustain our current operations.  The Company is exploring all available funding sources, including the sale of its assets, and additional debt and equity funding. In the near future we are relying on the successful closing of the sale of our Hutchins property to provide cash to fund operations as described in more detail under the heading “Management’s Plans” above.  If it is unable to obtain additional funding or increase revenues, we may be required to scale back or suspend operations or revise our business plan.





As of March 31, 2011, we had a working capital deficit of approximately $3.5 million, which includes a liability of approximately $245,000 for waste tire shred removal and cleanup costs at the tire processing and storage facility, an unpaid payroll liability to former officers of the Company of $482,000, a liability of $106,000 for consulting services provided to the Company and a liability of approximately $480,000 for unpaid federal and state income taxes and local sales and property taxes.


5





As of March 31, 2011, we owed approximately $109,000 to the Internal Revenue Service in back payroll taxes and penalties.  Monthly payments of $5,000 have been made since December 28, 2010 and the final balloon payment is due August 31, 2011.





The Company was in default on various secured promissory notes and a line of credit to Richard Strain, a stockholder, in the aggregate amount of approximately $592,000.  The Company received a waiver of default on the notes and line of credit on March 22, 2011 which specifies that non-payment defaults will be waived until the earlier of (a) the closing of the Company’s sale of its Texas industrial site or (b) June 30, 2011.





During the three months ended March 31, 2011, the Company received proceeds of approximately $55,000 from a related party.  We expect that the Company will continue to rely on loans from related parties and issuances of shares in private placements to meet its working capital needs for the foreseeable future.





Item 3. Quantitative and Qualitative Disclosures About Market Risk





None.





Item 4. Controls and Procedures





Evaluation of Disclosure Controls and Procedures.





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





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




6





Evaluation of Disclosure Controls and Procedures. As of March 31, 2011, the end of the fiscal quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Interim Chief Executive Officer, who is our principal executive and principal financial and accounting officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Interim Chief Executive Officer (principal executive officer and principal financial and accounting officer)  concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not operating effectively as of March 31, 2011. Our disclosure controls and procedures were not effective because of certain “material weaknesses” described in the “Management’s Annual Report on Internal Control over Financial Reporting” section in Item 9A of our Annual Report on Form 10-K/A Amendment No. 2 for fiscal year ended December 31, 2010. As of March 31, 2011, we had not completed the remediation of these material weaknesses described under Item 9A of our Annual Report.





Changes in Internal Control over Financial Reporting.





There were no significant changes in our internal control over financial reporting during the quarter ended March 31, 2011 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.





PART II: OTHER INFORMATION





Item 1. Legal Proceedings.





None other than that disclosed in our Annual Report on Form 10-K filed on April 15, 2011.  There have been no material developments in that proceeding since that filing.





Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.





During the three months ended March 31, 2011, the Company did not receive any proceeds from the issuance of restricted shares of its common stock.





Item 3. Defaults Upon Senior Securities.





Not Applicable.





Item 4. Reserved.





Item 5. Other Information.





None.





Item 6. Exhibits.





2.1
Industrial Site Purchase and Sale Agreement dated February 14, 2011 by and between Vista International Technologies, Inc. and Brown-Lewisville Railroad Family First Limited Partnership****3(i).1
Certificate of Incorporation*3(i).2
Articles of Amendment to the Articles of Incorporation, as amended on August 6, 1999*3(i).3
Certificate of Amendment of Certificate of Incorporation, as amended on April 24, 2002*3(i).4
Certificate of Amendment of the Certificate of Incorporation, filed on October 12, 2005*




7





3(i).5
Certificate of Amendment to Certificate of Incorporation, as amended on November 8, 2007**3(ii).1
Amended and Restated By-Laws***





31.
Certification of Interim Chief Executive Officer  (principal executive officer and principal financial and accounting officer) pursuant to Rule 13a-14(a)or Rule 15d-14(a)as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.32.
Certification of Interim Chief Executive Officer  (principal executive officer and principal financial and accounting officer)pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.





____________________________





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





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





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





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


8





SIGNATURES





Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.





VISTA INTERNATIONAL TECHNOLOGIES, INC.(Registrant)Date: June 28, 2011

By:
/s/ Bradley A. RippsBradley A. RippsInterim Chief Executive Officer  (principal executive officer and

principal financial and accounting officer)