Related Party Transactions

6 Months Ended

Jun. 30, 2012

Related Party Transactions [Abstract]

Related Party Transactions

3. Related Party Transactions

At June 30, 2012 and December 31, 2011 notes payable - stockholder and notes payable – related parties consisted of the following:

	June 30, 2012		December 31, 2011
	(unaudited)
9% promissory notes payable – Richard Strain – stockholder, due on demand, secured by a first priority security interest in Company assets – default waived through June 30, 2011	$	500,000	$	500,000
9% line of credit - Richard Strain – stockholder, matures December 31, 2011,  principal payments of $8,000 per month, no prepayment penalty, secured by a first priority security interest in the Company’s assets – default waived through June 30, 2011		146,931		146,931
9% note payable-Richard Strain- stockholder, due on demand, secured by a first priority interest in Company assets.  Due 12/31/2011 – in default		450,000		450,000
Notes payable- stockholder	$	1,096,931	$	1,096,931
8% promissory notes payable - Timothy Ruddy, due on demand, secured by all of the Company’s assets, security interest is subordinated to the loans extended by Mr. Strain	$	695,043	$	613,901
12% promissory notes payable to Timothy Ruddy family members, cash interest of 10% and Company stock of 2%, secured by all of the Company’s assets, security interest is subordinated to the loans extended by Mr. Strain, interest due quarterly-default waived		45,000		45,000
Notes payable-related parties	$	740,043	$	658,901

.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 June 30, 2012.  The maximum amount to be drawn under the line is $375,000.   Mr. Strain indicated that no further advances will be made under the line of credit agreement. The outstanding balance as of June 30, 2012 is $146,931.

In September through December 2011, the Company received $450,000 from a promissory note extended by Mr. Strain  to be used for working capital  and to be paid directly to specified vendors for the purchase of shredding equipment to be utilized for the Company’s TDF production line. The outstanding balance as of June 30, 2012 is $450,000

All other debt of the Company is substantially subordinated to Mr. Strain.

As of June 30, 2012 and December 31, 2011, accrued interest outstanding on the loans was approximately $150,700 and $102,000, respectively.

Interest expense on the loans for the three and six months ended June 30, 2012 was approximately $24,500 and $48,900.  Interest expense on the loans for the three and six months ended June 30, 2011 was approximately $13,000 and $26,500.

Notes payable – related party

The Company has a loan agreement with Mr. Timothy D. Ruddy, a Director and Interim CEO 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)

The outstanding balance as of June 30, 2012 is $695,043

Vista International Technologies, Inc.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Three and six months ended June 30, 2012 and 2011

 (unaudited)

3. Related Party Transactions (Continued)

The 20.6% installment note (note 2) was executed by Mr. Ruddy on behalf of the Company in July 2011.  At June 30, 2012, the remaining obligation was approximately $8200 and the net book value of the equipment financed was approximately $24,600.  Mr. Ruddy also paid $6,000 of the required down payment, which has been included in his outstanding loan balance.  The Company is responsible for future monthly payments of $1,350, continuing through December 2012.  Interest is accrued based on the outstanding balance of the obligation.

The 18% installment note (note 2) was executed by Mr. Ruddy on behalf of the Company in February 2012.  At June 30, 2012, the remaining obligation was approximately $26,900 and the net book value of the equipment financed was approximately $35,500.  The Company is responsible for future monthly payments of $1,955, continuing through December 2013.  Interest is accrued based on the outstanding balance of the obligation.

The 14% installment note (note 2) was executed by Mr. Ruddy on behalf of the Company in May 2012.  At June 30, 2012, the remaining obligation was approximately $22,800 and the net book value of the equipment financed was approximately $24,400.  The Company is responsible for future monthly payments of $1,080, continuing through July 1, 2014.  Interest is accrued based on the outstanding balance of the obligation.

 As of June 30, 2012 and December 31, 2011, accrued interest outstanding on the loan with Mr Ruddy was approximately $100,300 and $73,300, respectively.

Interest expense on the loans for the three and six months ended June 30, 2012 was approximately $13,300 and $25,500.  Interest expense on the loans for the three and six months ended June 30, 2011 was approximately $9,600 and $19,500.

During the six months ended June 30, 2012, the Company received additional loans from Mr. Ruddy of approximately $76,000.

In December 2010, Mr. Ruddy provided $150,000 of personal assets as collateral for a letter of credit utilized for part of the Company’s required financial assurance to the Texas Commission of Environmental Quality (“TCEQ”).  This letter was called by the TCEQ in December 2011.  Subsequently, Mr. Ruddy provided $75,000 in additional funding to partially cover the amount due by the bank which held the letter of credit, and the Company and Mr. Ruddy jointly executed an unsecured loan for the remaining $75,000 (See Note 3).   This loan has subsequently been paid off by Mr Ruddy.

Notes payable – related party family

12% promissory note payable to Timothy Ruddy family member has an outstanding balance of $45,000 as of March 31, 2012.

As of June 30, 2012, no interest payments have been made on these notes. Default has been waived.

As of June 30, 2012 and December 31, 2011, accrued interest outstanding on the loans was approximately $11,600 and $8,950, respectively.

Interest expense on the loans for the three and six months ended June 30, 2012 was approximately $1,300 and $2,600.  Interest expense on the loans for the three and six months ended June 30, 2011 was approximately $1,300 and $2,600.

Settlement Payments

The Company was named in a suit in the Colorado District Court for the 18th District (Arapahoe County) by a former employee alleging that the Company did not meet its obligation to issue shares to the employee.  On July 12, 2011 the Court granted a motion to enforce a settlement dated September 16, 2010. In accordance with the terms of the court order, the Company is obligated to make payments totaling approximately $104,700, including annual 6% interest.   An initial payment of $15,455 was made on July 22, 2011 and monthly payments of $3,000, including interest are due through November 2013.  A final payment of approximately $5,200 will be due in December 2013. As of June 30, 2012, the Company has accrued the short term portion of this settlement of approximately $42,300 under accounts payable and accrued liabilities, and has listed the long term portion of this settlement of $19,866 under other long term liabilities on its balance sheet. Through June 30, 2012, $38,945 has been paid toward the settlement, with no additional payments having been paid in the subsequent period, as of August 6th, 2012