I asked Heath about this directly today in a PM, and here’s what he told me:
The amount was supposed to be paid back by my machine shop before anyone even knew I ever borrowed it. They had botched nearly an entire full run of yo-yos, and I was on the winning side of that argument to getting my money back (almost exactly the amount I borrowed from the charity funds). Plan B was to sell personal possessions until i had the money to pay it back should that money not get to me in time.
At this point, it’s obvious that I lost that battle with Southern Precision, and things escalated long before I could make that money back,
In the end I never got that money back.
If this sounds familiar, it’s because “an entire run of yo-yos got messed up” is pretty common. Heath ended up eating costs on that. Don’t believe me? Take it from Steve Brown:
Whether you want to believe him or not is a judgment call, but this kind of story is 100% consistent with what we know happens when you run a yo-yo company.
Should Heath have been way more up front and honest about what was actually happening? Heck yes! Obviously! I’d say half of this is miscommunication because when people don’t hear what’s happening they start playing a game of “telephone” and what comes out on the other end is inevitably dark and unrecognizable and scary. But when you’re in a position where you run a popular yo-yo company, you sponsor a whole yo-yo team, your yo-yos are the toast of the forums … people look up to you and you don’t want to let anyone down…
… do you?
That is my guess as well. Yo-yo community people aren’t exactly known for their… let’s say… business acumen? And honestly, if you want to be successful in the business world, I think a yo-yo company might be the very last business in the world you would ever choose to start. Good lord. Yo-yo is a lot of 
and fun things, but a path to fame and riches … it definitely ain’t.
(looks around) would you honestly call this, what we’re doing right now … a celebration of Heath? Because I don’t see any celebration of Heath. At any rate, to me, it’s about the yo-yos first and foremost, more than any individual person. And the goal is to put what is widely considered to be a classic (and virtually unobtainable) yo-yo in the hands of a huge number of players, at a heretofore unseen low cost… for charity.
That said, I completely agree with some of the other arguments that it’s better to ease our way in here, and I already made the following changes to the Ti-Vayder project as a result of this specific discussion:
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It’s formally marked as a collaboration, not a VsN release – which, again, is the truth on the ground. At the end of the day, I did and paid for 97% of what is going on here.
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We won’t include any kind of note from Heath in the box.