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EX-32 - SUNVESTA CERT - SUNVESTA, INC. | exhibit32.htm |
EX-31 - SUNVESTA CERT - SUNVESTA, INC. | exhibit31.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 for the quarterly period ended March 31, 2016.
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 for the transition period from
to
.
Commission file number: 000-28731
SUNVESTA, INC.
(Exact name of registrant as specified in its charter)
Florida
98-0211356
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
Seestrasse 97, Oberrieden, Switzerland CH-8942
(Address of principal executive offices) (Zip Code)
011 41 43 388 40 60
(Registrants telephone number, including area code)
n/a
(Former name, former address and former fiscal year, if changed since last report)
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 þ 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 þNo o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and
smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes o No þ
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest
practicable date. The number of shares outstanding of the issuers common stock, $0.01 par value (the only
class of voting stock), at June 15, 2016, was 95,941,603.
1
TABLE OF CONTENTS
PART 1- FINANCIAL INFORMATION
Item1.
Financial Statements:
3
Consolidated Balance Sheets as of March 31, 2016 (unaudited) and December 31,
4
2015
Unaudited Consolidated Statements of Comprehensive Loss (unaudited) for the
5
three months ended March 31, 2016 and March 31, 2015
Unaudited Consolidated Statements of Stockholders Equity (Deficit) for the three
6
months ended March 31, 2016
Unaudited Consolidated Statements of Cash Flows (unaudited) for the three months
7
ended March 31, 2016 and March 31, 2015 and cumulative amounts
Notes to Unaudited Consolidated Financial Statements
8
Managements Discussion and Analysis of Financial Condition and Results of
37
Operations
Quantitative and Qualitative Disclosures about Market Risk
46
Controls and Procedures
47
PART II-OTHER INFORMATION
Legal Proceedings
48
Risk Factors
48
Unregistered Sales of Equity Securities and Use of Proceeds
48
Defaults Upon Senior Securities
48
Mine Safety Disclosures
48
Other Information
48
Exhibits
48
49
50
2
PART I FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS
As used herein, the terms Company, we, our, and us refer to SunVesta, Inc., a Florida
corporation, and its predecessors and subsidiaries, unless otherwise indicated. In the opinion of
management, the accompanying unaudited, consolidated financial statements included in this Form 10-Q
reflect all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of
the results of operations for the periods presented. The results of operations for the periods presented are
not necessarily indicative of the results to be expected for the full year.
3
SUNVESTA, INC.
CONSOLIDATED BALANCE SHEETS
March 31, 2016
December 31, 2015
(Unaudited)
Assets
Current assets
Cash and cash equivalents
$
206,678
111,830
Receivable from related parties
17,951
19,945
Other assets
442,062
158,574
Total current assets
666,691
290,349
Non-current assets
Property and equipment - net
62,504,899
61,271,424
Deposits related to construction work
642,397
798,874
Notes receivable
280,242
280,242
Down payment for property and equipment
2,981,439
2,972,083
Restricted cash
1,688,434
1,684,467
Total non-current assets
68,097,411
67,007,090
Total assets
$
68,764,102
67,297,439
Liabilities and stockholders' deficit
Current liabilities
Bank liabilities
-
179,313
Accounts payable
7,855,443
8,048,608
Accrued expenses
11,608,001
7,831,247
Note payable
2,736,293
2,736,912
Notes payable to related parties
777,377
1,130,978
EUR-Bond
8,783,680
8,347,717
Total current liabilities
31,760,794
28,274,775
Non-current liabilities
Convertible CHF-Bond
29,122,971
25,866,148
Liability related to conversion feature
7,370,936
6,976,322
Notes payable to related parties
50,928,320
47,198,362
Other long term debts
27,105
36,140
Pension liabilities
217,202
210,680
Total non-current liabilities
87,666,534
80,287,652
Total liabilities
$
119,427,328
108,562,427
Stockholders' deficit
Preferred stock, $0.01 par value; 50,000,000 shares
authorized, no shares issued and outstanding
Common stock, $0.01 par value; 200,000,000 shares
authorized; 95,941,603 shares issued and outstanding
959,416
959,416
Additional paid-in capital
23,531,273
23,403,438
Accumulated other comprehensive income / (loss)
(166,602)
1,778,961
Accumulated deficit
(74,987,313)
(67,406,803)
Total stockholders' deficit
(50,663,226)
(41,264,988)
Total liabilities and stockholders' deficit
$
68,764,102
67,297,439
The accompanying notes are an integral part of these consolidated financial statements.
4
SUNVESTA, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Three months ended March 31,
2016
2015
(Unaudited)
(Unaudited)
Revenues
Revenues, net
$
-
-
Cost of revenues
-
-
Gross profit
-
-
Operating expenses
General and administrative expenses
$
(6,072,970)
(1,856,467)
Total operating expenses
(6,072,970)
(1,856,467)
Loss from operations
$
(6,072,970)
(1,856,467)
Other income / - expenses
Interest income
12,123
6,784
Interest expense
(1,372,638)
(1,775,115)
Amortization of debt issuance costs and
commissions
(349,159)
(446,204)
Change in Fair Value of Conversion
408,697
-
Feature
Exchange differences
(169,951)
463,442
Other income / - expenses
(36,612)
(25,641)
Total other income / - expenses
$
(1,507,540)
(1,330,530)
Loss before income taxes
$
(7,580,510)
(3,186,997)
Income Taxes
-
(1,151)
Net loss
$
(7,580,510)
(3,188,148)
Comprehensive income /(loss)
Foreign currency translation
(1,945,563)
(1,050,205)
Comprehensive income / (loss)
$
(9,526,073)
(4,238,353)
Loss per common share
Basic and diluted
$
(0.08)
(0.03)
Weighted average common shares
Basic and diluted
98,506,438
92,607,159
The accompanying notes are an integral part of these consolidated financial statements.
5
SUNVESTA, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
Common
Additional
Accumulated
Accumulated
Treasury
Total
Stock
Paid in
Other
deficit
Stock
Stockholders
Capital
Comprehensive
Equity
Income (Loss)
(Deficit)
December 31, 2015
$
959,416 $
23,403,438 $
1,778,961 $
(67,406,803) $
- $
(41,264,988)
Net loss
-
-
-
(7,580,510)
-
(7,580,510)
Translation
-
-
(1,945,563)
-
-
(1,945,563)
adjustments
Stock based
-
127,835
-
-
127,835
compensation expense
March 31, 2016
$
959,416 $
23,531,273 $
(166,602) $
(74,987,313) $
- $
(50,663,226)
The accompanying notes are an integral part of these consolidated financial statements.
6
SUNVESTA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
January 1 to
January 1 to
March 31, 2016
March 31, 2015
Unaudited
Unaudited
Cash flows from operating activities
Net loss
$
(7,580,510)
(3,188,148)
Adjustments to reconcile net loss to net cash
Depreciation and amortization
16,513
16,802
Amortization of debt issuance cost and commissions
349,159
446,204
Unrealized exchange differences
108,344
(551,593)
Stock compensation expense
127,835
243,904
Change in Fair Value of Conversion Feature, net
173,143
-
- Increase / decrease in:
Other current assets
601,426
11,590
Accounts payable
(328,072)
(771,197)
Accrued expenses
5,603,355
1,322,708
Net cash used in operating activities
(928,807)
(2,469,730)
Cash flows from investing activities
Receivables from related parties
1,994
1,994
Purchase of property and equipment
(1,247,923)
(765,999)
Deposits related to construction
(641,818)
3,311
Down payments for property and equipment
-
(101,945)
Restricted cash
20
16
Net cash used in investing activities
(1,887,727)
(862,623)
Cash flows from financing activities
Decrease in bank liabilities
(179,313)
(153,375)
Proceeds from notes payable related parties
2,192,216
1,294,163
Repayment of notes payable related parties
(1,230,691)
-
Proceeds from bond issuance, net of commissions and debt issuance
costs
2,156,758
2,404,088
Changes in other debt
(33,838)
(119,601)
Net cash provided by financing activities
2,905,132
3,425,275
Effect of exchange rate changes
6,250
(824)
Net increase / - decrease in cash
(94,848)
(92,098)
Cash and cash equivalents, beginning of period
111,830
14,347
Cash and cash equivalents, end of period
$
206,678
106,445
Additional information
Capitalized interest and debt issuance costs for construction (non-cash)
883,000
765,000
Repayment of Specogna Holding AG loan by Aires
-
707,428
Interest paid
-
160,000
The accompanying notes are an integral part of these consolidated financial statements.
7
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
1.
CORPORATE INFORMATION
On August 27, 2007, SunVesta Inc. (SunVesta) acquired SunVesta Holding AG (SunVesta
AG) (collectively the Company). SunVesta AG holds five wholly-owned subsidiaries:
SunVesta Projects and Management AG, a Swiss company; Rich Land Investments Limitada,
a Costa Rican company (Rich Land); SunVesta Costa Rica Limitada, a Costa Rican
company (SVCR), Altos del Risco SA, a Costa Rican company (AdR) and SunVesta
Holding España SL (España), a Spanish company.
In January 2005, the Company changed its business focus to the development of holiday
resorts and investments in the hospitality and related industry. The Company has one major
project in Costa Rica. Planning for this project has been fully completed, all consents have
been granted, and excavation work began in March 2013. The Company is still in process of
securing financing for the project and has not realized revenue to date. Since the financing of
the project is not complete, the Companys activities are subject to significant risks and
uncertainties.
These consolidated financial statements are prepared in US Dollars on the basis of generally
accepted accounting principles in the United States of America (US GAAP).
The accompanying unaudited interim consolidated financial statements have been prepared by
management in accordance with the instructions in Form 10-Q and, therefore, do not include
all information and footnotes required by generally accepted accounting principles and
should, therefore, be read in conjunction with the Companys Form 10-K, for the year ended
December 31, 2015, filed with the Securities and Exchange Commission. These statements do
include all normal recurring adjustments which the Company believes necessary for a fair
presentation of the statements. The interim results of operations are not necessarily indicative
of the results to be expected for the full year ended December 31, 2016.
Except as indicated in the notes below, there have been no other material changes in the
information disclosed in the notes to the financial statements included in the Companys Form
10-K for the year ended December 31, 2015, filed with the Securities and Exchange
Commission.
8
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
2.
SIGNIFICANT ACCOUNTING POLICIES
New accounting standard updates not adopted yet
In February 2016, the Financial Accounting Standards Board (FASB) issued Accounting
Standards Update 2016-02, Leases (Topic 842). The standard requires the recognition of lease
assets and lease liabilities by lessees for those leases classified as operating leases. Leases will
be classified as either finance or operating, with classification affecting the pattern of expense
recognition. The standard requires lessors to classify leases as either sales-type, finance or
operating. A sales-type lease occurs if the lessor transfers all of the risks and rewards, as well
as control of the underlying asset, to the lessee. If risks and rewards are conveyed without the
transfer of control, the lease is treated as a financing lease. If the lessor does not convey risks
and rewards or control, an operating lease results. The standard will become effective for the
Company beginning January 1, 2019. The Company is currently assessing the impact
adoption of this standard will have on its consolidated results of operations, financial
condition, cash flows, and financial statement disclosures.
In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting
Standards Updates (ASU) 2014-15 requiring an entitys management to evaluate whether
there are conditions or events, considered in aggregate, that raise substantial doubt about
entitys ability to continue as a going concern within one year after the date that the financial
statements are issued (or within one year after the date that the financial statements are
available to be issued when applicable). The amendments to (ASU) 2014-15 are effective for
the annual period ending after December 15, 2016, and for annual periods and interim periods
thereafter. Early application is permitted. The Company is in the process of evaluating the
prospective impact that (ASU) 2014-15 will have on its balance sheet.
New accounting standard updates - adopted
In April 2015, the Financial Accounting Standards Board (FASB) issued Accounting
Standards Updates (ASU) 2015-03 which requires that debt issuance costs be reported in the
balance sheet as a direct deduction from the face amount of the related liability, consistent
with the presentation of debt discounts. Prior to the amendments, debt issuance costs were
presented as a deferred charge (i.e., an asset) on the balance sheet. The ASU provides
examples illustrating the balance sheet presentation of notes net of their related discounts and
debt issuance costs. Further, the amendments require the amortization of debt issuance costs
to be reported as interest expense. Similarly, debt issuance costs and any discount or premium
is considered in the aggregate when determining the effective interest rate on the debt. The
amendments are effective for public business entities for fiscal years beginning after
December 15, 2015, and interim periods within those fiscal years. The application of this
ASU resulted in the reclassification of debt issuance cost and the relating amortization.
The Company had unamortized debt issuance costs of $2,916,207 and $2,995,209 as of
March 31, 2016 and December 31, 2015 respectively. The Company reclassified
amortizisation of debt issuance cost and commissions in the amount of $349,159 and
$446,204 to interest expense for the periods ended March 31, 2016 and 2015, respectively.
This ASU was applied retrospectively for all periods presented.
9
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
3.
GOING CONCERN
The Company is currently working on building a hotel in the Papagayo Gulf Tourism Project
area of Guanacaste, Costa Rica. The project is expected to open in the fourth quarter of 2018.
Until the completion of the project, the following expenditures are estimated to be incurred:
a. Gross project cost
$
217,000,000
b. Less: Proceeds from sale of villas
(25,000,000)
c. Net project cost
192,000,000
d. Overhead expenses
20,000,000
e. Total, excluding other potential projects
$
212,000,000
Sixty percent (60%) of the Net project cost is intended to be financed through the issuance of
secured bonds, for which negotiations have been initiated. The remaining forty percent (40%)
of the net project cost, as well as non-recuperated overhead expenses are intended to be
financed by the main shareholders or lenders of the project, i.e. Zypam Ltd., shareholder and
related entity to Mr. Josef Mettler, Mr. Hans Rigendinger, shareholder, Company Director
and Chief Operating Officer, Dr. Max Rӧssler, controlling shareholder of Aires International
Investment, Inc. and Company Director, Mr. Josef Mettler, shareholder, Company Director,
Chief Executive Officer and Chief Financial Officer.
On July 16, 2012, certain principal shareholders of the Company or principal lenders to the
project entered into a Guaranty Agreement in favor of the Company. The purpose of the
guaranty is to ensure that until financing is secured for the entire project that they will act as
guarantors to creditors to the extent of the projects ongoing capital requirements. On
September 22, 2015, the signatories to the guaranty formally agreed to maintain the guaranty,
as necessary, until December 31, 2018, after which date the guaranty will expire.
The Guaranty Agreement requires that within 30 days of receiving a demand notice,
requested funds are made available by the guarantors to the Company. Based on this
guaranty, management believes that available funds are sufficient to finance cash flows for
the twelve months subsequent to March 31, 2016 and the filing date, though future anticipated
cash outflows for investing activities continue to depend on the availability of financing.
4.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents are available to the Company without any restriction or limitation
on withdrawal and/or use of these funds. The Companys cash equivalents are placed with
financial institutions that maintain high credit ratings. The carrying amounts of these assets
approximate their fair value.
Cash & cash
USD ($)
EURO
CHF
AUD
CRC
Total
Total
equivalents
March 31, 2016
December 31, 2015
original currency
4,537
10,678 183,132
-300
9,445
in $
4,537
12,126 190,227
-230
18
206,678
111,830
USD ($) =
US Dollar
EURO =
Euro
CHF
=
Swiss Francs
AUD
=
Australian Dollar
CRC
=
Costa Rican Colón
10
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
5.
RESTRICTED CASH
As of March 31, 2016, the Company has the following restricted cash positions:
March 31,
December 31,
Restricted Cash
2016
2015
$
$
Credit Suisse in favor of
BVK Personalvorsorge des Cantons Zurich
132,773
128,805
HSBC in favor of
Costa Rican Tourism Board
370,000
370,000
Banco Nacional de Costa Rica in favor of the
Costa Rican Environmental Agency SETENA
622,311
622,312
Banco National de Costa Rica in favor of the Costa
Rican Tourism Board
563,350
563,350
Gross
1,688,434
1,684,467
Restricted cash positions in favor of Costa Rican Tourism Board and Costa Rican
Environmental Agency SETANA are related to the hotel project in Costa Rica and therefore
their release is not expected before finalization of the corresponding project. Due to this fact
these restricted cash positions have been classified as long term.
The restricted cash position in favor of BVK Personalvorsorge des Cantons Zurich is a rental
deposit related to a long term lease contract for office space. Due to this fact this restricted
cash position is also classified as long term.
6.
NOTE RECEIVABLE
On June 15, 2015, the Company granted REP Caribbean Development Corporation, a third
party, a short term advance in the amount of $250,000. The repayment was due on November
30, 2015, with a fixed interest payment of $5,000. The advance is secured by a non-related
Swiss individual. On December 10, 2015, the advance was increased by $25,000. Including
accrued fixed interest, the overdue amount at March 31, 2016, was approximately $280,000.
Dated April 27, 2016, a related party, QuadEquity Holdings AG signed a commitment to
purchase against cash this note receivable not later than June 30, 2016.
11
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
7.
PROPERTY & EQUIPMENT
March 31, 2016
December 31, 2015
Land
$
19,700,000
19,700,000
IT Equipment
185,846
185,846
Other equipment and furniture
278,000
278,000
Leasehold improvements
66,617
66,617
Vehicles
139,000
139,000
Construction in-process
42,660,274
41,412,351
Foreign currency adjustments
14,514
-
Gross
63,044,251
61,781,814
Less accumulated depreciation
(526,903)
(510,390)
Foreign currency adjustments
(12,449)
-
Net
$
62,504,899
61,271,424
Depreciation expenses for the period ended
March 31, 2016 and 2015
16,513
16,802
Property and equipment is comprised primarily of land held in Costa Rica that is currently
being developed for hotels and capitalized project costs in connection with the Papagayo Gulf
Tourism project. The land amounts to $19.7 million comprised of $7 million related to the
concession held by Rich Land (~84,000 m2) and $12.7 million held by AdR (~120,000 m2).
The Rich Land concession is a right to use the property for a specific period of time of
initially 20 years from the date of grant, which thereafter can be renewed at no further cost, if
the landholder is up to date with its obligations and if there is no significant change in
government policies. The current concession initially expired in June 2022.
The AdR concession is also a right to use the property for a specific period of time of initially
30 years from the date of grant, which thereafter can be renewed at no further cost, if the
landholder is up to date with its obligations and if there is no significant change in
government policies. The current concession initially expired in November 2036.
On July 14, 2015 the Consejo del Polo de DesarrolloTuristico Papagayo at ICT (Council of
Papagayo Tourism Development Project), unanimously has approved the extension of both
concessions until 2052.
The construction in process through December 31, 2015 and March 31, 2016, is represented
primarily by architectural work related to the hotel and apartments as well as construction
work.
Deposit related to construction work
For the quarter ended March 31, 2016, the Company made deposits with several contractors
to initiate earth moving groundwork. These deposits will be offset against invoices for such
groundwork as completed. As of March 31, 2016 and December 31, 2015, the Company has
deposits of $642,397 and $798,874 respectively, which have not yet been set off.
12
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
8.
DOWN PAYMENTS FOR PROPERTY & EQUIPMENT
March 31, 2016
December 31, 2015
La Punta (neighboring piece of land)
$
2,669,816
2,669,816
Hotels Engadina
311,624
302,267
Gross
$
2,981,439
2,972,083
Total (net)
$
2,981,439
2,972,083
Agreement to purchase neighboring pieces of land
On April 20, 2012, the Company entered into an agreement to purchase two additional
concession properties located at Polo Papagayo, Guanacaste, with a total surface of
approximately 230,000 square meters for $22,895,806, whereof fifty percent was to be paid in
cash and the other fifty percent through a combination of a 10 percent equity share in La
Punta (the concession properties in Polo Papagayo) and five percent in equity of Paradisus
Papagayo Bay Resort & Luxury Villas (currently under development). Both of these
properties are located in Costa Rica. The payment schedule was as follows:
-
$0.5 million is required as a cash payment by May 16, 2012
-
$5.0 million is required as a cash payment by August 31, 2012
-
$5.698 million is required as a cash payment by January 31, 2013
-
Equity is required to be transferred upon final payment
On November 13, 2012, the above agreement was amended to decrease the total purchase
price to $17.2 million with no equity payments. The terms and conditions of the cash payment
were to be defined. Furthermore, all payments by the Company to date and in the future
became refundable. During the second quarter of 2013, the Company entered into a new,
revised agreement for the purchase of two additional concession properties at Polo Papagayo,
Guanacaste. The original contract as described above was cancelled and replaced by a new
contract, which included the following clauses:
-
The total purchase price is $17,500,000 of which $1,369,816 has been paid as of date of the new revised
agreement and therefore $16,130,184 is outstanding as per date of the new, revised agreement.
-
Since the original seller of these two additional concession properties at Polo Papagayo, Guanacaste owes a
third party $8,000,000 the Company has to pay $8,000,000 of the purchase price directly to this third party
instead of the original seller. The remaining $8,130,184 will be paid directly to the original seller of the
concession properties.
-
The payment schedule for these two additional concession properties at Polo Papagayo Guanacaste is as
hereinafter:
Third Party
-
$300,000 on May 4, 2013 which was paid on May 3, 2013 and is non-refundable
-
$1,000,000 on June 30, 2013, which is refundable and $700,000 of this $1,000,000 was paid on October 29,
2013. The remaining $300,000 was paid in 2015.
-
$1,000,000 on July 31, 2013, which is refundable and has not been paid as of the date of this report.
-
$1,000,000 on August 31, 2013 which is refundable and has not been paid as of the date of this report.
-
$1,500,000 on September 30, 2013, which is refundable and has not been paid as of the date of this report.
-
$1,500,000 on October 31, 2013, which is refundable and has not been paid as of the date of this report.
-
$1,700,000 on November 30, 2013, which is refundable and has not been paid as of the date of this report.
$8,000,000 in total to Third Party
13
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
8.
DOWN PAYMENTS FOR PROPERTY & EQUIPMENT - Continued
Original Seller
-
$1,000,000 on January 31, 2014 which has not been paid as of the date of this report and is non-refundable.
-
$1,000,000 on February 28, 2014 which has not been paid as of the date of this report and is non-
refundable.
-
$1,000,000 on March 31, 2014 which has not been paid as of the date of this report and is non-refundable.
-
$1,000,000 on April 30, 2014 which has not been paid as of the date of this report and is non-refundable.
-
$1,000,000 on May 31, 2014 which has not been paid as of the date of this report and is non-refundable.
-
$1,000,000 on June 30, 2014 which has not been paid as of the date of this report and is non-refundable.
-
$1,000,000 on July 31, 2014 which has not been paid as of the date of this report and is non-refundable.
$1,130,184 on August 31, 2014 which has not been paid as of the date of this report and is non-refundable.
$8,130,184 in total to Original Seller
The Company had paid down payments on the purchase of these properties of $2,669,816 as
of March 31, 2015, of which $300,000 was paid in refundable payments during the period
ended December 31, 2015 as part of the new, revised agreement noted above totaling
$16,100,000. The Company is in discussions with the Original Seller regarding an extension
of this agreement.
Additionally, a failure to pay will lead to liquidated damages of 5% of any installments paid
toward the purchase price. Should the Company not be successful in obtaining a time
extension for the payment of the purchase price or amendment to the purchase agreement, it
will have to write-off $300,000 of that purchase price paid in 2013 for the new, revised
agreement and 5% of additional damages on the additional $1,000,000 paid for a total of
$50,000, which is not refundable as per contract terms.
The original $1,369,816 was made pursuant to a previous agreement and is not subject to the
5% liquidated damages clause.
Down payment for Purchase Four Hotels in the Canton of Graubünden, Switzerland
On September 19, 2015, the Company signed an option agreement to acquire four existing
hotels in the Canton of Graubünden, Switzerland with an urelated third party. The properties
optioned comprise an aggregate of 141 rooms. The consideration for the option is CHF
300,000, which amount was paid on October 25, 2015.
Dated May 10, 2016, the Company, QuadEquity Holdings AG and the potential Seller of the
four hotels concluded an agreement, whereby QuadEquity Holdings AG assumed all of the
Companys rights and obligations from the original contract. In return, QuadEquity Holdings
AG will pay the Company the amount of USD $302,000 (CHF 300,000) before May 30,
2016. This payment was received by the Company on June 1, 2016.
14
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
9.
FAIR VALUE MEASUREMENT
The guidance on fair value measurements defines fair value as the exchange price that would
be received for an asset or paid to transfer a liability (an exit price) in the principal or most
advantageous market for the asset or liability in an orderly transaction between market
participants. This guidance also specifies a fair value hierarchy based upon the observability
of inputs used in valuation techniques. Observable inputs (highest level) reflect market data
obtained from independent sources, while unobservable inputs (lowest level) reflect internally
developed market assumptions. In accordance with this guidance, fair value measurements are
classified under the following hierarchy:
Level 1
Quoted prices for identical instruments in active markets.
Level 2
Quoted process for similar instruments in active markets, quoted prices for identical or similar
instruments in markets that are not active; and model-derived valuations in which significant
inputs or significant value drivers are observable in active markets.
Level 3
Model derived valuations in which one or more significant inputs or significant value-drivers are
unobservable.
When available, the Company uses quoted market prices to determine fair value, and
classifies such measurements within Level 1. In some cases, where market prices are not
available, the Company makes use of observable market based inputs to calculate fair value,
in which case the measurements are classified within Level 2. If quoted or observable market
prices are not available, fair value is based upon internally developed models that use, where
possible, current market-based parameters such as interest rates, yield curves and currency
rates. These measurements are classified within Level 3.
Fair value measurements are classified according to the lowest level input or value-driver that
is significant to the valuation. A measurement may therefore be classified within Level 3 even
though there may be significant inputs that are readily observable.
Fair value measurement includes the consideration of nonperformance risk. Nonperformance
risk refers to the risk that an obligation (either by counterparty or the Company) will not be
fulfilled. For financial assets traded in an active market (Level 1), the nonperformance risk is
included in the market price. For certain other financial assets and liabilities (Level 2 and 3),
the Companys fair value calculations have been adjusted accordingly.
As of March 31, 2016 and December 31, 2015, respectively, there are no financial assets or
liabilities measured on a recurring basis at fair value with the exception of the liability related
to the conversion feature.
In addition to the methods and assumptions to record the fair value of financial instruments as
discussed above, the Company used the following methods and assumptions to estimate the
fair value of our financial instruments:
15
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
9.
FAIR VALUE MEASUREMENT - Continued
Cash and cash equivalents carrying amount approximated fair value.
Restricted cash carrying amount approximated fair value.
Receivables from related parties (current) carrying amount approximated fair value due to the short term nature
of the receivables.
Accounts Payable carrying amount approximated fair value.
Note payable carrying amount approximated fair value due to the short term nature of the note payable.
Bank liabilities - carrying amount approximated fair value due to the short term nature of bank liabilities.
Notes receivable - carrying amount approximated fair value.
Notes payable to related parties - Dr. M. Rӧssler (current) The fair value was calculated based on the underlying
publically traded shares. However, the Company records the loan at nominal value. The Company does not have
sufficient cash to repurchase the shares as of balance sheet date and hence repay the loans in shares.
Notes payable to related parties (current) carrying amount approximated fair value due to the short term nature
of the notes payable.
EUR bond (old) carrying amount approximated fair value due to its short term nature
EUR- bonds The fair values of the bonds payable are classified as level 3 fair values. The fair values of the bonds
have been determined by discounting cash flow projections discounted at the respective interest rates of 7.25% for
EUR bonds, which represents the current market rate based on the creditworthiness of the Company. Hence, the
carrying values approximate fair value.
CHF-bonds The fair values of the bonds payable are classified as level 3 fair values. The fair values of the bonds
have been determined by discounting cash flow projections discounted at the respective interest rates of 7.25% for
CHF bonds, which represents the current market rate based on the creditworthiness of the Company. Hence, the
carrying values approximate fair value.
Notes payable to related parties Aires (non-current) The fair values of the notes payable to Aires International
Investments Inc. are classified as level 3. The fair values of the notes were determined by discounting cash flow
projections discounted at the respective interest rates of 7.25%, which represents the current market rate based on
the creditworthiness of the Company. Hence, the carrying value approximates fair value.
Convertible CHF-bonds The fair values of the convertible bonds payable are classified as level 3 fair values. The
fair values of the convertible bonds have been determined by discounting cash flow projections discounted at the
respective interest rates of 6.00% for convertible CHF bonds, which represents the current market rate based on the
creditworthiness of the Company. Hence, the carrying values approximate fair value.
Liability related to conversion feature - The fair value of the liability related to conversion feature is classified as
level 3 in the fair value hierarchy. The fair value of the liability is determined using a Black Scholes model to
calculate the option value at each reporting date and multiplied by the number of potentially convertible shares.
Hence the carrying value of the obligation approximates the fair value.
16
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
9.
FAIR VALUE MEASUREMENT - Continued
The fair value of our financial instruments is presented in the table below:
March 31, 2016
December 31, 2015
Carrying
Fair Value Carrying
Fair Value
Fair Value
Amount
Amount
Reference
$
$
$
$
Levels
Cash and cash equivalents
206,678
206,678
111,830
111,830
1
Note 4
Restricted cash
1,688,434
1,688,434
1,684,467
1,684,467
1
Note 5
Receivables from related
parties other (current)
17,951
17,951
19,945
19,945
3
Note 10
Accounts Payable
7,855,443
7,855,443
8,048,608
8,048,608
1
-
Bank liabilities
-
-
179,313
179,313
1
Note11
Note payable
2,736,293
2,736,293
2,736,912
2,736,912
1
Note 17
Notes payable to related
parties Rigendinger
2,033
2,033
1,973
1,973
3
Note 10
(current)
Notes payable to related
parties other (current)
775,344
775,344
1,129,005
1,129,005
3
Note 10
Notes receivable
280,242
280,242
280,242
280,242
EUR-bonds
8,783,680
8,783,680
8,488,631
8,488,631
3
Note 12
Convertible CHF-bonds
29,122,971
29,122,971
28,720,443
28,720,443
Note 12
Notes payable to related
parties Aires (non-
50,928,320
50,928,320 47,198,362
47,198,362
3
Note 10
current)
Liability related to
conversion feature
7,370,936
7,370,936
6,976,322
6,976,322
3
Note 12
The Company's financial liabilities measured at fair value on a recurring basis consisted of the
liability relates to conversion feature as of the following date:
Balance at December 31, 2015
$6,976,322
Q1 Additions
$581,840
Change in Fair Value of Conversion Feature
($408,697)
FX Revaluation
$221,471
Balance at March 31, 2016
$7,370,936
The Company used a Black-Scholes model to value the liability related to conversion feature
as of March 31, 2016 and December 31, 2015.
The assumptions as of December 31, 2015 are as follows:
Stock Price: CHF 5.08
Annualized Risk Free Rate: 0.72%
Exercise Price: CHF 8
Annualized Volatility: 80%
Time to Maturity: 2.75 years
The assumptions as of March 31, 2016 are as follows:
Stock Price: CHF 5.08
Annualized Risk Free Rate: 0.87%
Exercise Price: CHF 8
Annualized Volatility: 80%
Time to Maturity: 2.5 years
17
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
10.
RELATED PARTY TRANSACTIONS
The advances from (to) related parties are composed as follows:
Receivables
Payables
March 31,
December 31,
March 31,
December 31,
2016
2015
2016
2015
1
Hans Rigendinger
-
-
2,033
1,973
2
Aires International
-
-
50,928,320
47,198,362
3
Akyinyi Interior and
Exterior Decoration
-
-
290,000
290,000
4
Global Care AG
-
-
252,124
240,210
5
Geoffrey Long
17,951
19,945
-
-
6
Sportiva participations ag
-
-
233,220
528,660
7
Josef Mettler
-
-
-
70,135
8
QuadEquity Holdings
-
-
-
-
9
4f capital ag
-
-
-
-
Total excluding interest
17,951
19,945
51,705,697
48,329,340
Accrued interest
-
-
4,489,666
6,370,579
Total
17,951
19,945
56,195,363
54,699,919
of which non-current
-
-
50,928,320
47,198,362
Related party
Capacity
Interest Repayment
Rate
Terms
Security
1 Hans Rigendinger Shareholder, COO and Company board member
3%
none
none
2 Aires International
*** see hereinafter ***
Akyinyi Interior
3 and Exterior
Company owned by the wife of Josef Mettler
none
none
none
Decoration
4 Global Care AG
Company owned by Dr. Max Rössler
none
none
none
5 Geoffrey Long
Head of Accounting The Americas
none
none
none
6 Sportiva
participations ag
Company owned by Josef Mettler
3%
none
none
7 Josef Mettler
Shareholder, CEO, CFO and Company board member
3%
none
none
8 QuadEquity
Holdings
Company owned by Josef Mettler (see above)
none
none
none
9 4f capital ag
Company owned by Josef Mettler (see above)
none
none
none
18
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
10.
RELATED PARTY TRANSACTIONS - Continued
Loan agreement Aires International Investment Inc.
As of March 31, 2016 the Company owes Aires International Inc. the following:
Borrower
Debt instrument
Amount in CHF
Amount in
Annual
Repayment date
denominated in
USD
interest
*
CHF
rate
SunVesta Inc.
Promissory note
10,044,370
10,433,541
7.25 %
Dec 31, 2017
SunVesta Inc.
Promissory note
10,000,000
10,387,452
7.25 %
Dec 31, 2017
SunVesta Inc.
Promissory note
10,000,000
10,387,452
7.25 %
Dec 31, 2017
SunVesta Inc.
Promissory note
3,415,340
2,575,289
7.25 %
Dec 31, 2017
SunVesta Holding
Loan agreement
16,505,093
17,144,586
7.25 %
Dec 31, 2017
Total
50,928,320
*
The notes may be repaid in whole or in part.
Loans Dr. Max Rӧssler
In 2012, Dr. Max Rössler, a related party, provided loans totaling $0.8 million that were
initially repayable in December 2012, but were extended through December 2015. These
loans were to be repaid in cash or with the delivery of certain shares of equity in two public
companies. The Company had the right of settlement and carried the loans at their fair values,
which was the amount of cash paid in without considerations for the change in value of the
underlying securities. In December 2015, Dr. Rössler and the Company settled these loans
through a transfer to a separate debtor - Aires - of $1,551,669 (CHF 1,535,900). The
Company assessed this debt modification to be an extinguishment under the guidance
prescribed in ASC 470-50 and correspondingly recognized a Loss on Extinguishment in its
statements of comprehensive loss for $748,466 for the year ended December 31, 2015.
Loan Global Care AG
During 2014, Global Care AG loaned the Company $190,270 (CHF 185,000), which amount
was repayable on October 31, 2014. The loan includes a fixed interest payment of $20,570
(CHF 20,000). As of the date of this report, both amounts are overdue. According to the
agreement, there are no penalties for late payment.
Payable to Josef Mettler
As of March 31, 2016, the payable to Mr. Mettler in the amount of $70,135 has been repaid.
Current account sportiva participations ag
During the three-month period ended March 31, 2016, the Company borrowed approximately
$0.9 million and repaid $1.1 million resulting in a payable as of March 31, 2016 of $233,000
(CHF 224,309). The current account Sportiva participations ag carries an interest rate of 3%.
19
10: RELATED PARTY TRANSACTIONS - Continued
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
Commissions paid or payable to related parties
During the periods ended March 31, 2016, and March 31, 2015, the Company paid
commissions to 4f Capital AG in the amount of $0 and $29,181, respectively, for services
related to financing the Company. These costs are capitalized as debt issuance costs and
presented net with the corresponding debt obligation. 4f Capital AG is a company owned and
directed by Mr. Mettler (Board Member and CEO of the Company) that receives a
commission of 1.5% for new funds that the Company receives based on consulting services
rendered by 4f Capital AG.
Hans Rigendinger
In 2013, the Company borrowed $600,000 at 3% interest from Hans Rigendinger. The amount
due to Mr. Rigendinger for this loan at March 31, 2016 was $2,033.
Mr. Rigendinger also held bonds denominated in Euros and Swiss Francs valued at
approximately $467,000 as of March 31, 2016 and $492,000 as of December 31, 2015.
Service fees paid or payable to Akyinyi Interior and Exterior Decoration
During the periods ended March 31, 2016, and March 31, 2015, the Company paid or accrued
fees to Akyinyi Interior and Exterior Decoration, which is a company owned by the wife of a
member of the Board of Directors, related to interior design of the Papagayo Gulf Tourism
project in the amount of $0 and $30,000 respectively. These costs have been capitalized to
property and equipment.
Consulting Fees paid or payable to Cambridge Limited Corp.
During the three months periods ended March 31, 2016, and March 31, 2015, the Company
paid fees to Cambridge Limited Corporation, which is a company owned by the the father-in-
law of a member of the Board of Directors. These fees related to accounting and consulting
services rendered in Costa Rica for the Company in the amount of approximately $44,300 and
$43,500, respectively.
11.
BANK LIABLITIES
There is no bank liability at March 31, 2016. The bank liability at December 31, 2015,
represented a temporary, secured overdraft facility, bearing an interest rate of 8.9%.
20
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
12.
BONDS
Description
EUR () bond new I
CHF bond II (parallel)
Issuer:
SunVesta Holding AG
SunVesta Holding AG
Type of securities:
Bond in accordance with Swiss law
Bond in accordance with Swiss law
Approval by SunVesta AG BOD:
October 31, 2013
May 19, 2014
Volume:
Up to EUR15,000,000
CHF 15,000,000
Units:
EUR10,000
CHF 10,000
Offering period:
11/07/2013 03/31/2014
05/01/2014 06/30/2014
Due date:
December 2, 2016
August 31, 2015
Issuance price:
100%
100 %
Issuance day:
December 2, 2013
September 01, 2013 (retroactive)
Interest rate:
7.25% p.a.
7.25 % p.a.
Interest due dates:
December 2, 2013
August 31
Applicable law:
Swiss
Swiss
Description
EUR () bond new II (parallel)
Issuer:
SunVesta Holding AG
Type of securities:
Bond in accordance with Swiss law
Approval by SunVesta AG BOD:
May 19, 2014
Volume:
Up to EUR 15,000,000
Units:
EUR 10,000
Offering period:
05/01/14 06/30/14
Due date:
December 02, 2016
Issuance price:
100 %
Issuance day:
December 02, 2013 (retroactive)
Interest rate:
7.25 % p.a.
Interest due dates:
December 02
Applicable law:
Swiss
21
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
12.
BONDS - Continued
On September 30, 2015, the Company approved the issuance of two new CHF-bonds. The
major terms and conditions are the following:
Description
Convertible CHF Bond I
Convertible CHF Bond II
Issuer:
SunVesta Holding AG
SunVesta Holding AG
Type of securities:
Senior convertible bonds,
Senior convertible bonds,
convertible into shares of the issuer, in convertible into shares of the issuer, in
accordance with Swiss law
accordance with Swiss law
Approval by SunVesta AG BOD:
September 30, 2015
September 30, 2015
Volume:
Up to CHF 45,000,000
Up to CHF 15,000,000
Denomination:
CHF 5,000
CHF 5,000
Offering period:
October 01, 2015
October 01, 2015
Maturity date:
September 30, 2018
September 30, 2018
Issue price:
100 %
100 %
Redemption price:
100 %
100 %
Issuance date:
October 01, 2015
October 01, 2015
Coupon:
6.00 % p.a.
6.00 % p.a.
Interest due dates:
September 30 of each year, the first time September 30 of each year, the first time
September 30, 2016
September 30, 2016
Reference price:
CHF 6.50
CHF 6.50
Initial conversion price:
CHF 8.00
CHF 8.00
Applicable law:
Swiss
Swiss
In October 2015, Sunvesta Holding AG, a wholly owned subsidiary of the Company settled
approximately $27,300,000 worth of old CHF-Bonds which had matured on August 31, 2015
and were extended through September 30, 2015 (i.e. unpaid). These were rolled
forward/exchanged into two substantially different convertible bonds of Sunvesta Holding
AG. One is a $45,000,000 Convertible Bond and the other a $15,000,000 Convertible Bond as
is discussed in tables above. These new Convertible bonds are substantially different than the
previous CHF bonds that matured in the third quarter of 2015 and this is subsequently
accounted for as an extinguishment. The Company has recorded a loss on extinguishment
equal to the fair value of the conversion feature. Third party issuance costs totaling
$3,100,000 have been capitalized and amortized over the life of the bonds under the effective
interest rate method. Finally, the change of the fair value of the liability related to conversion
feature was expensed in the period.
The nominal amounts have changed as follows:
CHF Bond
CHF Bond
CHF BOND I
2016
2015
$
$
Balances January 1
-
10,999,192
Cash inflows
-
-
Cash outflows
-
(5,913,796)
Foreign currency adjustments
-
159,884
Reclassifications to CHF Bond II
-
-
Reclassifications to Convertible CHF Bond I
-
(2,005,548)
Reclassifications to Convertible CHF Bond II
-
(3,239,732)
Sub-total
-
-
Discounts (commissions paid to bondholders)
-
(670,764)
Accumulated amortization of discounts
-
670,764
Unamortized discounts
-
-
Balances March 31 and December 31(Carrying value)
-
-
22
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
12.
BONDS - Continued
From the CHF Bond I issue in this rollforward, $2,005,548 was reclassified to the Convertible
CHF Bond I in the fourth quarter of 2015. Additionally, $3,239,732 was reclassified to the
Company's CHF Convertible Bond II.
EUR-Bond
EUR-Bond
(new)
(new)
2016
2015
$
$
Balances January 1
6,871,630
7,355,572
Cash inflows
-
281,754
Cash outflows
-
-
Foreign currency adjustments
282,374
(765,696)
Sub-total
7,154,004
6,871,630
Discounts (commissions paid to bondholders) and debt
(588,613)
(588,613)
issuance costs
Accumulated Amortization of discounts and debt
486,828
431,894
issuance costs
Foreign currency adjustments
856
234
Total Accumulated Unamortized discounts and debt
(100,929)
(156,485)
issuance costs
Balances March 31 and December 31 (Carrying value)
7,053,075
6,715,145
As per date of this report the Company has realized a cumulative amount of EUR 6.89 million
($7.82 million) related to the EURO Bond I.
CHF Bond
CHF Bond II
CHF BOND II
II
2016
2015
$
$
Balances January 1
-
15,304,228
Cash inflows
-
10,819,209
Cash outflows
-
(3,923,675)
Foreign currency adjustments
-
(51,779)
Reclassifications from CHF Bond I
-
-
Reclassifications to Convertible CHF Bond I
-
(185,127)
Reclassifications to Convertible CHF Bond II
-
(21,962,856)
Sub-total
-
-
Discounts (commissions paid to bondholders)
-
(1,578,825)
Accumulated amortization of discounts
-
1,578,825
Unamortized discounts
-
-
Balances March 31 and December 31(Carrying value)
-
-
From the CHF Bond II issue in this rollforward, $185,127 was reclassified to the Convertible
CHF Bond I in Q4 2015. Additionally, $21,962,856 was reclassified to the Company's CHF
Convertible Bond II.
23
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
12.
BONDS - Continued
EUR-Bond
EUR-Bond
EURO BOND NEW II
new II
new II
2016
2015
$
$
Balances January 1
1,658,300
1,761,258
Cash inflows
-
-
Cash outflows
-
-
Foreign currency adjustments
97,060
(102,958)
Sub-total
1,755,360
1,658,300
Discounts (commissions paid to bondholders) and debt
(174,660)
(174,660)
issuance costs
Accumulated Amortization of discounts and debt
162,351
148,932
issuance costs
Foreign currency adjustments
(12,446)
-
Total Accumulated Unamortized discounts and debt
(24,755)
(25,728)
issuance costs
Balances March 31 and December 31(Carrying value)
1,730,605
1,632,572
As per date of this report the Company has realized a cumulative amount of EUR 1.65 million
($1.87 million) related to the EURO Bond new II.
Convertible
Convertible
CHF Bond I
CHF Bond I
Convertible CHF BOND I
2016
2015
$
$
Balances January 1
2,250,048
-
Cash inflows
976,445
100,990
Cash outflows
-
-
Foreign currency adjustments
80,564
(41,617)
Reclassifications to Bonds
(634,186)
2,190,675
Sub-total
2,672,871
2,250,048
Discounts (commissions paid to bondholders) and debt
(136,722)
(136,219)
issuance costs
Accumulated Amortization of discounts and debt
57,896
57,896
issuance costs
Foreign currency adjustments
(2,441)
-
Total Accumulated Unamortized discounts and debt
(81,267)
(78,323)
issuance costs
Balances March 31 and December 31(Carrying value)
2,591,604
2,171,725
In the fourth quarter of 2015, the Company issued this Convertible CHF Bond I with funds
received from new bondholders totaling $100,990. Additionally, $2,005,548 was reclassified
from CHF Bond I and $185,127 was reclassified from CHF Bond II. In the first quarter of
2016, the Company reclassified $634,186 to Convertible CHF Bond II.
As per date of this report, the Company has realized a cumulative amount of CHF 2.57 million ($2.67
million) related to the Convertible Bond I.
24
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
12.
BONDS - Continued
Convertible
Convertible
CHF Bond
CHF Bond II
Convertible CHF BOND II
II
2016
2015
$
$
Balances January 1
26,470,395
-
Cash inflows
1,569,155
1,747,122
Cash outflows
-
-
Foreign currency adjustments
869,579
(479,315)
Reclassifications from Bonds
634,186
25,202,588
Sub-total
29,543,315
26,470,395
Discounts (commissions paid to bondholders) and debt
(3,365,404)
(2,977,065)
issuance costs
Accumulated Amortization of discounts and debt
481,862
201,329
issuance costs
Foreign currency adjustments
(128,406)
(236)
Total Accumulated Unamortized discounts and debt
(3,011,948)
(2,775,972)
issuance costs
Balances March 31 and December 31(Carrying value)
26,531,367
23,694,423
In fourth quarter of 2015, the Company issued this Convertible CHF Bond II with funds
received from new bondholders totaling $1,747,122. Additionally, $3,239,732 was
reclassified from CHF Bond I and $21,962,856 was reclassified from CHF Bond II. In the
first quarter of 2016, the Company reclassified $634,186 from Convertible CHF Bond I.
As per date of this report the Company has realized a cumulative amount of CHF 28.44
million ($29.54 million) related to the Convertible Bond II.
25
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
13.
PENSION PLAN
The Company maintains a pension plan covering all employees in Switzerland. The plan is
considered a defined benefit plan and accounted for in accordance with ASC 715
Compensation - Retirement Benefits. This model allocates pension costs over the service
period of employees in the plan. The underlying principle is that employees render services
ratably over this period, and therefore, the income statement effects of pensions should follow
a similar pattern. ASC 715 requires recognition of the funded status, or difference between
the fair value of plan assets and the projected benefit obligations of the pension plan on the
balance sheet, with a corresponding adjustment recorded in the net loss. If the projected
benefit obligation exceeds the fair value of plan assets, then that difference or unfunded status
represents the pension liability.
The Company records a net periodic pension cost in the statement of comprehensive loss. The
liabilities and annual income or expense of the pension plan is determined using
methodologies that involve several actuarial assumptions, the most significant of which are
the discount rate and the long-term rate of asset return (based on the market-related value of
assets). The fair values of plan assets are determined based on prevailing market prices.
Actuarial valuation
Net periodic pension cost has been included in the Companys results as follows:
Three months
Three months
Pension expense
ended
ended
March 31, 2016
March 31, 2015
$
$
Current service cost
15,607
14,648
Net actuarial (gain) loss recognized
649
-
Interest cost
961
1,348
Expected return on assets
(1,948)
(1,659)
Employee contributions
(5,973)
(5,963)
Net periodic pension cost
9,297
8,374
During the three months periods ended March 31, 2016 and March 31, 2015 the Company
made cash contributions of $5,973 and $5,914, respectively, to its defined benefit pension
plan.
All of the assets are held under the collective contract by the plans re-insurer Company and
are invested in a mix of Swiss and international bond and equity securities within the limits
prescribed by the Swiss Pension Law.
The expected future cash flows to be paid by the Company in respect of employer
contributions to the pension plan for the year ended December 31, 2016 are $17,919.
26
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
14.
STOCK COMPENSATION
The Company has included share based compensation under the SunVesta Inc. Stock Option
Plan 2013 (the Plan) as part of the total remuneration in certain employment and Board of
Directors contracts. The Company is authorized to grant up to 50,000,000 shares under the
Plan.
The purpose of the Plan is to advance the interests of the Company by encouraging its
employees to remain associated with the Company and assist the Company in building value.
Such share based remuneration includes either shares or options to acquire shares of the
Companys common stock.
For all employees, fair value is estimated at the grant date. Compensation costs for unvested
shares are expensed over the requisite service period on a straight-line basis.
Share Grants Mr. Hans Rigendinger
On January 1, 2013, the Company granted to Hans Rigendinger 3,500,000 common shares,
valued at $0.08 an amount equal to the share price and fair value of the shares on the grant
date. These shares were granted as a signing bonus with the Company. Additionally, the
Company granted 2,500,000 common shares as a retention award due on each anniversary of
his signing with the Company. The employment contract was initially for three years with an
additional bilateral option for an additional two years. Therefore, the Company could be
required to issue up to 12,500,000 common shares through January 1, 2018.
Share Grants Dr. Max Rössler
On July 3, 2013, the Company granted to Dr. Max Rössler 3,000,000 common shares, valued
at $0.07 an amount equal to the share price and fair value of the shares on the grant date.
These were issued in connection with his appointment to the Board of Directors. These shares
were officially issued on October 15, 2013.
Share Grants Mr. Josef Mettler
On July 4, 2013, the Company granted 5,000,000 common shares to Josef Mettler, valued at
$0.07, an amount equal to the share price and fair value of the shares on the grant date, in
connection with his employment agreement. These shares were officially issued on October
15, 2013. Additionally, the Company granted 3,000,000 common shares as a retention award
for each completed year of employment (e.g. first time as per July 4, 2014). The employment
contract is for an initial term of three years with an additional bilateral option for another two,
two-year periods, but a maximum of December 31, 2020. Therefore, in total the Company
could be requested to issue up to 21,000,000 common shares through December 31, 2020
related to the retention bonus.
Share Grants Mr. José María Figueres
On March 10, 2014, the Company authorized the issuance of 500,000 common shares, valued
at $0.10, an amount equal to the share price and therefore the fair value on grant date, and a
retention award of 200,000 common shares for each fully completed year of service to José
María Figueres in connection with his appointment to the Board of Directors.
27
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
14.
STOCK COMPENSATION - Continued
Share Grants Mr. Howard M. Glicken
On March 10, 2014, the Company authorized the issuance of 500,000 common shares, valued
at $0.10, an amount equal to the share price and therefore the fair value on grant date, and a
retention award of 200,000 common shares for each fully completed year of service to
Howard Glicken in connection with his appointment to the Board of Directors.
Based on these contracts the Company has included the following stock-based compensation
in the Companys results:
Stock-based compensation
Three months
Three months
(shares)
ended March 31, 2016
ended March 31, 2015
Shares granted
46,800,000 shares
46,400,000 shares
Fair Value respectively
market price on grant date
$0.0744
$0.0744
Total maximal expenses
(2013-2020)
$3,450,000
$3,450,000
Shares vested
26,800,000 shares
20,900,000 shares
Unvested shares
20,000,000 shares
25,900,000 shares
As of December 31, 2016, the Company expects to record compensation expense in the future
up to $1,242,500 as follows:
Year ending December 31,
Stock-based
Through
compensation
December 31,
(shares)
2016
2017
2018
2019
2020
$
$
$
$
$
Unrecognized
compensation
307,500
410,000
210,000
210,000
105,000
expense
28
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
14.
STOCK COMPENSATION - Continued
Stock Options Mr. Hans Rigendinger
The Company granted to Hans Rigendinger, in connection with his employment contract,
10,000,000 stock options on January 1, 2013. Each option entitles Mr. Rigendinger to buy one
Company share at a strike price of $0.05. These options will be vested in two identical
installments (installment A and B) of 5,000,000 options.
Installment A is contingent on obtaining a financing arrangement with a specific counterparty.
As of the grant date, the fair value was $300,000. As of July 4, 2013, the Company assessed
that this financing arrangement with the specific counterparty will not be completed.
Therefore, the Company assessed the probability of completion to be zero and recognized no
expense. On July 4, 2013, the Company authorized a revised stock option agreement. This
removed the requirement for financing with a specific counterparty and updated for any
counterparty. As of date of the revised stock option agreement, the fair value was $246,000.
Installment A was modified on July 4, 2013, since the initial performance condition was
improbable to be met. Since the modification changed the expectation that the options will
ultimately vest and no expense had been recognized for the original award, the fair value of
the modified award has been expensed on a straight line basis over the expected vesting
period.
For installment B, it is required that Meliá Hotels International (Melía) assumes
management responsibilities for Paradisus Papagayo Bay Resort & Luxury Villas. As of grant
date, the fair value was $340,000 and the Company estimated that Meliá assumes
responsibility as of July 1, 2015. As of March 6, 2014 the Company still assesses the
probability that this performance condition will be met at 100%, but the date the performance
condition will be achieved was postponed to the fourth quarter 2015, as the opening date was
postponed. As of the date of this report, the estimated opening date was postponed to the
fourth quarter 2018. The Company still assessed the probability that this performance
condition will be met at 100%. Hence, the remaining fair value of the award will be expensed
on a straight-line basis over the recalculated expected remaining vesting period.
Stock Options Dr. Max Rӧssler
The Company granted to Dr. Max Rӧssler, in connection with his appointment to the Board of
Directors, 10,000,000 stock options on July 3, 2013. Each option entitles Dr. Rӧssler to buy
one Company share at a strike price of $0.05. These options will be vested in two identical
installments (installment A and B) of 5,000,000 options.
For installment A (5,000,000 options), it is required to complete a financing arrangement for
the Project. As of grant date, the fair value was $249,835. The Company expensed the total
fair value on a straight-line basis over the expected vesting period.
29
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
14.
STOCK COMPENSATION - Continued
Stock Options Dr. Max Rӧssler - continued
For installment B (5,000,000 options), it is required that Meliá assumes management
responsibilities for Paradisus Papagayo Bay Resort & Luxury Villas. As of grant date the fair
value was $258,210 and the Company estimated that Meliá would assume responsibility as of
July 1, 2015. As of March 6, 2014 the Company assessed the probability that this
performance condition will be met at 100%, but the date the performance condition will be
achieved was postponed to the fourth quarter 2015, as the opening date was postponed. As of
the date of this report, the estimated opening date was postponed to the fourth quarter 2018.
The Company still assessed the probability that this performance condition will be met at
100%. Hence, the remaining fair value of the award will be expensed on a straight-line basis
over the recalculated expected remaining vesting-period.
Stock Options Mr. Josef Mettler
The Company granted to Josef Mettler, in connection with his employment contract,
12,000,000 stock options on July 4, 2013. Each option entitles Mr. Mettler to buy one share at
a strike price of $0.05. These options have three different performance conditions.
For installment A (3,000,000 options), it is required to complete a bridge financing
arrangement. As of grant date the fair value was $149,000. The Company expensed the total
fair value on a straight-line basis over the expected vesting period.
For installment B (4,000,000 options), it is required to complete a financing arrangement
(main financing arrangement for Paradisus Papagayo Bay Resort & Luxury Villas). As of
grant date the fair value was $200,000. The Company has expensed the total fair value on a
straight-line basis over the expected vesting period.
For installment C (5,000,000 options), it is required that Meliá assumes management
responsibilities for Paradisus Papagayo Bay Resort & Luxury Villas. As of grant date, the fair
value was $258,000 and the Company estimated that Meliá assumes responsibility as of July
1, 2015. As of March 6, 2014 the Company still assesses the probability that this performance
condition will be met at 100%, but the date the performance condition will be achieved was
postponed to the fourth quarter 2015, as the opening date was postponed. As of the date of
this report, the estimated opening date was postponed to the fourth quarter 2018. The
Company still assessed the probability that this performance condition will be met at 100%.
Hence, the remaining fair value of the award will be expensed on a straight-line basis over the
recalculated expected remaining vesting-period.
Stock Options Summary
A summary of stock options outstanding as per March 31, 2016 is as follows:
Options outstanding
Number of
Weighted average
Weighted average
Options
exercise price
remaining
contractual life
Outstanding January 1, 2016
32,000,000
$ 0.05
7.42 years
Granted
-
Exercised
-
Forfeited or expired
-
Outstanding March 31, 2016
32,000,000
$ 0.05
7.17 years
Exercisable March 31, 2016
-
30
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
14.
STOCK COMPENSATION - Continued
Stock Options Summary - Continued
The following table depicts the Companys non-vested options as of March 31, 2016 and
changes during the period:
Non-vested options
Shares under Options
Weighted average grant date
fair value
Non-vested at December 31, 2015
32,000,000
$ 0.053
Non-vested-granted
-
-
Vested
-
-
Non-vested, forfeited or cancelled
-
-
Non-vested at March 31, 2016
32,000,000
$ 0.053
Under the provisions of ASC 718 Compensation Stock Compensation, the Company is
required to measure and recognize compensation expense related to any outstanding and
unvested stock options previously granted, and thereafter recognize, in its consolidated
financial statements, compensation expense related to any new stock options granted after
implementation using a calculated fair value based option-pricing model. The Company uses
the Black-Scholes option-pricing model to calculate the fair value of all of its stock options
and its assumptions are based on historical and available market information. No stock
options were granted for the periods ended March 31, 2016 and March 31, 2015.
Assumption
March 31, 2016
March 31, 2015
Dividend yield
Risk-free interest rate used (average)
Expected market price volatility
Average expected life of stock options
n.a.
n.a.
The computation of the expected volatility assumption used in the Black-Scholes calculation
for new grants is based on historical volatilities of a peer group of similar companies in the
same industry. The expected life assumptions are based on underlying contracts.
As of March 31, 2016, the Company had unrecognized compensation expenses related to
stock options currently outstanding, to be recognized in future quarters respectively years as
follows:
Through to
Year ending
Year ending
Stock-based compensation (options)
December 31,
December 31,
December 31,
2016
2017
2018
$
$
$
Unrecognized compensation expense
46,005
61,340
46,005
31
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
15.
SUMMARY OF SHARE AND OPTION COMPENSATION EXPENSE
The Company recorded the following amounts related to stock based compensation expense
during the periods ended March 31, 2016 respectively March 31, 2015:
Three
Three
Summary of share and option
months
months
based compensation expense
March 31,
March 31,
2016
2015
$
$
Share grants
112,500
210,166
Option grants
15,335
33,738
Total
(recorded under general &
127,835
243,904
administrative expense)
16.
FUTURE LEASE COMMITTMENTS
On December 1, 2012, the Company entered into a lease agreement for the premises for its
Swiss office with an unrelated entity. The annual rental expense amounts to approximately
$130,000 on a fixed term expiring on December 31, 2017.
December
December
Future lease commitments
31, 2016
31,2015
$
$
2016
97,500
130,000
2017
130,000
130,000
32
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
17.
NOTE PAYABLE
March 31, 2016
December 31, 2015
$
$
Promissory note
2,000,000
2,000,000
Specogna Holding AG
624,494
605,743
R. Weimar (private investor)
111,799
131,169
Total
2,736,293
2,736,912
Promissory Note
As part of the completion of the purchase of Altos del Risco on March 9, 2013, the parties
agreed that $2,000,000 of consideration is converted into a non-interest bearing and
uncollateralized loan payable which was originally due for payment on March 8, 2014, then
extended to March 8, 2015. On March 16, 2015, the Company agreed with the counterparty to
extend the due date through March 16, 2016.
On April 21, 2016, the Company signed a new agreement, which stipulated new payment
terms. The total amount of $2,000,000 is now repayable in four quarterly instalments of
$500,000 each, starting on 21 August, 2016.
Loans Specogna Holding AG
On December 31, 2015, the Company entered into a short term loan agreement for
approximately $607,000 with Specogna repayable on February 29, 2016, with an interest
payment of 8 % per annum. The loan is secured personally and jointly by Dr. Rössler, Mr.
Mettler and Mr. Rigendinger.
Loan R. Weimar (private investor)
On May 23, 2014, the Company entered into a short term loan agreement for approximately
$376,800 with Roland Weimar. The loan was repayable in five installments, (four payments
of $84,700, one payment of $38,000), with the initial payment due on June 2, 2014 and the
latest one due on June 1, 2015. The interest rate is 2 % per annum. The Company has repaid
$24,685 during first quarter 2016 and an additional $33,083 as of the filing date of this report,
whereas the entire loan amount should have been repaid. The agreement does not stipulate
any repercussions for late payments.
33
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
18.
OPENING DATE PARADISUS PAPAGAYO BAY RESORT & LUXURY VILLAS
On June 2, 2014, the Company amended its agreement with Meliá (Sixth addendum to the
management agreement of March 8, 2011) to postpone the opening date as follows:
- The construction of the Paradisus will be completed by November 15, 2015
- Should the Paradisus not be completed by November 15, 2015, (subject to force
majeure) and should an extension date not be agreed, subsequent to November 15,
2015, the Company will be obligated to pay Meliá a daily amount of $2,000 as
liquidated damages.
- Should the Company be unable to complete the construction of the Paradisus by
February 15, 2016, Meliá, can terminate the management agreement obligating the
Company to compensate Meliá in the amount of $5,000,000 unless the respective
parties agree to extend such date.
Dated April 27, 2016, a seventh addendum has been signed between the Company and Meliá
with the following major conditions:
a.
New completion date: September 15, 2018 (subject to force majeure)
b.
Should the completion not occur by September 15, 2018, and should the parties not
have agreed in writing an extension to such date, after September 15, 2018, the Company
shall pay Meliá a daily amount of USD $2,000 as liquidated damages.
c.
Should the completion not occur by November 15, 2018, the Meliá will be entitled to
terminate the agreement unless the parties agree in writing to extend such date. The Company
shall be obliged to pay Meliá an amount of USD $5,000,000 as liquidated damages solely to
compensate Meliá.
As the seventh addendum was not in place at March 31, 2016, the provisions of the sixth
addendum had to be taken into consideration. Consequently, an accrual in the amount of $5
million was charged against general and administrative expenses. In light of the signed
seventh addendum, this accrual will be reversed in the second quarter of 2016.
34
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
19.
EARNINGS PER SHARE
Basic earnings per share are the result of dividing the Companys net income (or net loss) by
the weighted average number of shares outstanding for the contemplated period. Diluted
earnings per share are calculated applying the treasury stock method. When there is a net
income dilutive effect all stock-based compensation awards or participating financial
instruments are considered. When the Company posts a loss, basic loss per share equals
diluted loss per share. The following table depicts how the denominator for the calculation of
basic and diluted earnings per share was determined under the treasury stock method.
Three-month
Three-month
Earnings per share
period ended
period ended
March 31, 2016 March 31, 2015
Company posted
Net loss
Net loss
Basic weighted average shares
outstanding
98,506,438
92,607,159
Dilutive effect of common stock
equivalents
None
None
Dilutive weighted average shares
outstanding
98,506,438
92,607,159
A total of 2,900,000 common shares vested were not issued as per balance sheet date and
included in the basic weighted average shares outstanding.
The following table shows the number of stock equivalents that were excluded from the
computation of diluted earnings per share for the respective period because the effect would
have been anti-dilutive.
Three-month
Three-month
Earnings per share
period ended
period ended
March 31, 2016 March 31, 2015
Options to Hans Rigendinger
10,000,000
10,000,000
Options to Dr. M. Rössler
10,000,000
10,000,000
Options to Josef Mettler
12,000,000
12,000,000
Total Options
32,000,000
32,000,000
Shares to Hans Rigendinger
5,000,000
7,500,000
(retention bonus non vested)
Shares to Josef Mettler (retention
15,000,000
18,000,000
award)
Shares to Howard Glicken and
400,000
400,000
José Maria Figueres (retention
award)
Shares associated with
3,877,625
-
Convertible CHF Bonds
Total Shares
24,277,625
25,900,000
Total Options and Shares
56,277,625
57,900,000
Options related to Convertible CHF bonds: Each bond in the principal amount of CHF 5,000 can be
converted on any business day during the conversion period into 625 common shares of SunVesta
Holding AG at a conversion price equal to CHF 8.
35
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2016
20.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses according consolidated statement of comprehensive loss
include:
Three-month
period ended
Three-month
General and administrative expenses
March 31,
period ended
2016
March 31, 2015
$
$
Rental & related expenses
(54,616)
(51,682)
Audit
12,777
(49,809)
Consulting
(211,319)
(275,338)
Marketing, Investor & public relations
(28,777)
(14,641)
Travel expenses
(103,746)
(174,932)
Personnel costs including social securitys
costs and share based remuneration
(463,701)
(1,201,168)
Expense for penalty on management
agreement
(5,000,000)
-
Various other operating expenditures
(223,588)
(88,897)
Total according statements of
comprehensive loss
(6,072,970)
(1,856,467)
21.
SUBSEQUENT EVENTS
Management has evaluated subsequent events after the balance sheet date, through the
issuance of the financial statements, for appropriate accounting and disclosure. The Company
has determined that there were no such events that warrant disclosure or recognition in the
financial statements, except for the below:
On May 9, 2016, the Company signed an agreement with Median Trust SA, by which this
service provider is mandated to set-up a special purpose vehicle (SPV), as so called
Compartment in accordance with Luxembourg law. The objective of the SPV is to obtain
an investment grade rating and to make a bond offering of not less than $100 million. The
SPVwill be the issuer, however, the responsibility to place the bonds remains with the
Company.
36
ITEM 2.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This Managements Discussion and Analysis of Financial Condition and Results of Operations and
other parts of this quarterly report contain forward-looking statements that involve risks and
uncertainties. Forward-looking statements can be identified by words such as anticipates, expects,
believes, plans, predicts, and similar terms. Forward-looking statements are not guarantees of
future performance and our actual results may differ significantly from the results discussed in the
forward-looking statements. Factors that might cause such differences include but are not limited to
those discussed in the subsection entitled Forward-Looking Statements and Factors That May Affect
Future Results and Financial Condition below. The following discussion should be read in
conjunction with our financial statements and notes hereto included in this report. All information
presented herein is based on our three month periods ended March 31, 2016 and March 31, 2015. Our
fiscal year end is December 31.
Discussion and Analysis
Business Overview
We are in the process of developing high-end luxury hotels and resorts worldwide. Our initial focus is
concentrated on offering luxury hotel products located in attractive, top-class coastal vacation
destinations in countries that are fast emerging as popular tourist destinations. Each prospective
development takes into consideration country specific conditions and general considerations that
include the stability of local political conditions, geologically useful cultivability, and the types of
destinations that attract a five-star clientele. Once identified as eligible, prospective developments are
compared against a validation checklist and then, if warranted, subjected to a substantial due diligence
process. Since location is the key to the success of any tourist based luxury real estate project, each
development will be carefully considered during the eligibility process.
Initial Development
Our initial real estate development on 20.5 hectares of prime land located in Guanacaste Province,
Costa Rica, is the Paradisus Papagayo Bay Resort & Luxury Villas project includes two concepts; i.e.
the Vista Mar (Family Concierge) and the Vista Bahia (Royal Service), a five-star luxury hotel. All
permitting for the project is in place, including permission to incorporate the beachfront adjacent to
the two concessions into the development and all significant site work completed. Vertical
construction is expected to commence in the first quarter of 2017, while the opening of.the Paradisus
Papagayo Bay Resort & Luxury Villas is scheduled for the fourth quarter 2018, subject to the
procurement of the requisite financing.
Specifications
Paradisus Papagayo Bay Resort & Luxury Villas initial specifications are to be as follows:
eco-luxury all-inclusive resort
382-keys
direct beach access
five restaurants and five bars
Yhi Spa and Health Club
Paradisus adults-only Royal Service level of accommodations
Paradisus Family Concierge program
19,000 square feet of meeting facilities with the business traveler in mind
37
Vista Mar
Family Concierge
The Family Concierge will be a family orientated part of the Paradisus Papagayo Bay Resort &
Luxury Villas. The accommodations will be designed to satisfy the needs of the modern family.
The Family Concierge area will include:
166 Junior Suites Deluxe
(47* square meters)
34 Suites Deluxe
(87* square meters)
33 Suites Premium
(93* square meters)
6 Handicapped Junior Suites Deluxe
(47* square meters)
1 Bridal Suites
(93* square meters)
2 Deluxe Suites Presidential
(88* square meters)
1 Presidential Suite
(194* square meters)
*
Room size does not include balconies and terraces.
All ground floor suites will have direct access to swim-up pools. Each of the suites and villas will
have a full view of the sea. Family Concierge guests will furthermore have access to restaurants, bars,
and lounges. The planned Onyx Night Club and the Gabi Club will be located near the beach.
Vista Bahia
Royal Service
Our Royal Service will include an extensive range of services such as a butler service, private pools
for each Garden Villa and/or a Jacuzzi in every suite.
The Royal Service area will include:
108 Junior Suites Grand Deluxe
(43-60* square meters)
2 Junior Suites Grand Deluxe for Handicapped Guests
(53* square meters)
6 Grand Master Suites
(87* square meters)
2 Deluxe Suites Presidential
(60 square meters)
1 Grand Presidential Suite (4 bedrooms)
(145* square meters)
20 one or two-bedroom Garden Villas
(91212* square meters)
Room size does not include balconies and terraces.
* Room size does not include balconies and terraces.
All ground floor suites will have direct access to swim-up pools. Each of the suites and villas will
have a full view of the sea. Royal Service guests will furthermore have access to restaurants, bars,
lounges, fitness equipment, spas and outside massage areas.
The Paradisus Papagayo Bay Resort & Luxury Villas will feature other highlights including:
more than 65 private, swim up and resort pools including the worlds second largest Infinity Pool
all within idyllic landscaped grounds
a wedding chapel with a stunning ocean view
rain forest walkways that permit guests to experience the flora and fauna of the rain forest
a multipurpose convention hall with over 2,000 square meters of space that can be utilized as a
whole or divided to create smaller meeting rooms
a full service spa committed to providing for the wellbeing of our guests. The spa will be located
with a 180-degree sea view within approximately 1,000 square meters that will include 12 large
treatment rooms, a hairdresser, relaxation areas, pools, saunas and steam rooms
the 20 private villas will be located within the Royal Service area of the resort. The present
intention being that these villas will be sold to individuals who will then lease them back to the
resort when not occupied by the owners.
38
Management
Overall project development is led by Josef Mettler, our Chief Executive Officer, Charles Fessel,
Project Director Paradisus Papagayo Bay Resort & Luxury Villas, Hans Rigendinger, Chairman of the
Board and Chief Operating Officer of SunVesta AG and Ernst Rosenberger, the Companys
Corporate Controller. The lead architect is Ossenbach, Pendones & Bonilla, one of Costa Ricas
largest architectural offices with over 45 architects and designers. Civil engineering services are
provided by DEHC Engineers and structural engineering services by IEAC. Landscape architects are
TPA and interior designers are led by Laboratiro Quattro.
Resort management is to be provided by Melía Hotels International (Melía). Paradisus is Meliás
five-star all-inclusive luxury hotel brand that is well recognized in the hospitality industry around the
world. Melía was founded in 1956 in Palma de Mallorca, Spain and is today one of the worlds largest
resort hotel chains, as well as Spains leading hotel chain for business or leisure. The company
currently offers more than 300 hotels in 26 countries over four continents under its Gran Sol Melía,
Sol Melía, ME by Sol Melía, Innside by Sol Melía, Tryp, Sol Melía, Sol Melía Vacation Club, and
Paradisus brands. The Paradisus brand represents all-inclusive luxury resorts with hotels in Mexico
and the Dominican Republic.
Since the completion date for the Paradisus Papagayo Bay Resort & Luxury Villas development is
now anticipated for the fourth quarter of 2018, the Company reached an an agreement dated April 28,
2016, to further amend the management agreement with Meliá dated March 8, 2011. The amended
agreement presently stipulates that if the Papagayo Bay Resort & Luxury Villas is not completed by
November 15, 2018, and if an extension date is not agreed, then Meliá could terminate the
management agreement and cause the Company to pay a penalty of $5 million. As the seventh
addendum was not in place at March 31, 2016, the provisions of the sixth addendum had to be taken
into consideration. Consequently, an accrual in the amount of $5 million was charged against
operating expenses. In light of the seventh addendum to the management agreement, this accrual will
be reversed in the second quarter of 2016.
Additional Concession Properties
On April 20, 2012, the Company entered into an agreement with Meridian IBG (Meridian), as
amended on November 13, 2012, and replaced on May 7, 2013, to purchase two additional concession
properties in Polo Papagayo, Guanacaste, comprised of approximately 230,000 square meters for
$17,500,000. One of the concessions lies adjacent to the existing concessions (La Punta) and the other
is in close proximity to the Paradisus Papagayo Bay Resort & Luxury Villas development.
The Company had paid down-payments on the purchase of these properties of $2,669,816 as of March
31, 2016, and is in discussions with Meridian regarding an amendment to the agreement. Should the
Company not be successful in obtaining an amendment to the agreement, it would have to write-off
$300,000 of that purchase price already paid in addition to a 5% penalty.
Swiss Hospitality Project
On September 19, 2015, the Company signed an option agreement to acquire four existing hotels in
the Canton of Graubünden, Switzerland with an urelated third party. The properties optioned comprise
an aggregate of 141 rooms. The consideration for the option is CHF 300,000, which amount was paid
on October 25, 2015.
Dated May 10, 2016, the Company, QuadEquity Holdings AG and the potential Seller of the four
hotels concluded an agreement, whereby QuadEquity Holdings AG assumed all of the Companys
rights and obligations from the original contract. In return, QuadEquity Holdings AG will pay the
Company the amount of USD $302,000 (CHF 300,000) before May 30, 2016. This payment was
received on June 1, 2016.
39
Finance
The anticipated completion of the Paradisus Papagayo Bay Resort & Luxury Villas in the fourth
quarter of 2018 will require a net investment of approximately $212 million (including non-
recuperated overhead expenses), of which approximately $60 million has been expended as of March
31, 2016. We expect to realize a minimum of $140 million in new funding over the next twelve
months. New funding over the next twelve months is expected to be raised from debt financing
through bonds, shareholder loans and, if necessary, the guaranty agreement borne by certain principal
shareholders and participants in management. Detailed below is a brief description of material debt
obligations as of period end.
Bonds
The Company has four bond issues outstanding, denominated in EUR () or Swiss Francs (CHF).
EUR () Bonds
The Company initiated an unsecured EUR bonds offering on December 2, 2013, of up to 15,000,000
in units of 10,000 that bear interest at 7.25% per annum payable each December 1 over a three-year
term that matures on December 2, 2016. We had realized $6,715,145as of the year ended December
31, 2015, and $7,053,075 as of March 31, 2016 (variance due to valuation), for a cumulative amount
of $7.82 million as of the date of this report.
The Company initiated a parallel offering of unsecured EUR bonds on December 2, 2013, of up to
15,000,000 in units of 10,000 that bear interest at 7.25% per annum payable each December 2 over
a three-year term that matures on December 2, 2016. We had realized $1,632,572 as of the year ended
December 31, 2015 and $1,730,605 as of March 31, 2016 (variance due to valuation), for a
cumulative amount of $1.87 million as of the date of this report.
Swiss Francs (CHF) Bonds
The Company initiated a new offering of senior unsecured CHF bonds on October 1, 2015, of up to
CHF 45,000,000 units of CHF 5,000 that bear interest at 6.00% per annum payable each September
30, over a three-year term that matures on September 30, 2018 which are convertible into shares of
SunVesta Holding AG at CHF 8.00. We had realized $2,171,725 as of the year ended December 31,
2015 and $2,591,604 as of March 31, 2016, for a cumulative amount of $2.67 million as of the date of
this report.
The Company initiated a new parallel offering of senior unsecured CHF bonds on October 1, 2015, of
up to CHF 15,000,000 units of CHF 5,000 that bear interest at 6.00% per annum payable each
September 30, over a three-year term that matures on September 30, 2018 which are convertible into
shares of SunVesta Holding AG at CHF 8.00. We had realized $23,694,423 as of the year ended
December 31, 2015 and $26,531,367 as of March 31, 2016, for a cumulative amount of $29.54
million as of the date of this report.
Aires International Investment, Inc.
On July 27, 2011, SunVesta AG entered into a line of credit agreement with Aires International
Investments Inc. (Aires), a company owned by Dr. Rӧssler (a director of the Company). The loan
agreement was amended on May 11, 2012 and on June 21, 2012 and then replaced by a new loan
agreement on October 31, 2013, that included the following conditions:
40
All existing loan agreements or credit facilities, including amendments, between SunVesta AG
and Aires were cancelled and superseded by the new loan agreement.
The loans are due after December 31, 2017 and before December 31, 2020.
Despite the scheduled repayment dates, each party has the option to cancel the loan agreement
with a prior notice period of 90 days, requiring repayment of the loans in full.
Loan amounts outstanding including any additional amounts and additions are subordinated.
Interest on the loan amounts is 7.25% per annum, which charge is accrued to the loan account.
The Company had borrowed $50,928,320 from Aires as of March 31, 2016 and $47,198,362 as of
December 31, 2015.
Global Care AG
On September 23, 2014, the Company entered into a short term loan agreement of approximately
$190,270 (CHF 185,000) with Global Care AG (Global Care), a company owned by Dr. Rӧssler (a
director of the Company), repayable on October 31, 2014, with a fixed interest payment of $20,570
(CHF 20,000). The amounts due to Global Care had not been paid as of the filing date of this report.
According to the agreement, there are no penalties for late payments.
The Company owed Global Care $252,124 as of March 31, 2016, and $240,210 as of December 31,
2015.
DIA S.A.
On March 8, 2013, the Company entered into an interest free loan agreement with DIA S.A. in the
amount of $2,000,000 payable on March 8, 2014, in connection with the purchase of land concession
being part of the Paradisus Papagayo Bay Resort & Luxury Villas project from Altos held in the name
of Altos del Risco S.A. The terms of the loan agreement were amended on March 16, 2015, to extend
the due date for said payable until March of 2016.
On April 21, 2016, the Company signed a new agreement, which stipulated new payment terms. The
total amount of $2,000,000 is now repayable in four quarterly instalments of $500,000 each, starting
on August 21, 2016.
Timeline
Our expected timeline for developing the Paradisus Papagayo Bay Resort & Luxury Villas is as
follows:
commence onsite vertical construction in the first quarter of 2017
complete construction in the fourth quarter of 2018
handover to Melía in the fourth quarter of 2018
Results of Operations
During the three-month period ended March 31, 2016, our operations were focused on (i) completing
earth work excavations on the Paradisus Papagayo Bay Resort & Luxury Villas property; (ii)
furthering discussions with prospective project development partners; (iii) pursuing additional debt
financing to fund the construction of the project.
The Company has been funded since inception from debt or equity placements and by shareholders or
partners in the form of loans. Capital raised to date has been allocated primarily to the development of
the Costa Rican property, including the purchase of the land and general and administrative costs.
41
Comprehensive Losses
The variance in losses over the comparative three month periods is reconciled below:
Previous year 3 months
(4,238,353)
Variances during the 3 months
Decrease in general and administrative expenses
783,497 Decrease in bonus payments
Increase in accrual for penalty on management
(5,000,000) Extraordinary expense to be reversed
agreement
during the next quarter
Increase in interest income
5,339 Increase in deposits
Decrease in interest expense
53,318 New accounting principle
Increase in fair values change of conversion features
408,697 New provision for increase in fair values
Increase in exchange differences
(633,393) Currency fluctuations
Increase in other expenses
(10,971) Decrease in miscellaneous expenses.
Income taxes
1,151 Foreign tax liability
Increase in foreign currency translation losses
(895,358) Currency fluctuations
Total variances
(5,287,720)
Current year 3 months
(9,526,073)
We did not generate revenue during this period and we expect to continue to incur losses through the
year ended December 31, 2016.
Income Tax Expense (Benefit)
The Company has a prospective income tax benefit resulting from a net operating loss carry-forward
and startup costs that will offset future operating profits.
Capital Expenditures
The Company expended a significant amount on capital expenditures for the period from inception to
March 31, 2016, in connection with the purchase of land concessions in Costa Rica, as well as the
planning and construction of the project and expects to incur future cash outflows on capital
expenditure as discussed in the "Liquidity and Capital Resources" and the "Going Concern"
paragraphs below.
42
Liquidity and Capital Resources
Since inception the Company has experienced significant changes in liquidity, capital resources, and
stockholders equity.
As of March 31, 2016 and December 31, 2015, the following were working capital items:
March 31,
December
2016
31, 2015
Current assets
Cash and cash equivalents
206,678
111,830
Receivable from related parties
17,951
19,945
Other assets
442,062
158,574
Total current assets
666,691
290,349
Current liabilities
Bank liabilities
-
179,313
Accounts payable
7,855,443
8,048,608
Accrued expenses
11,608,001
7,831,247
Notes payable
2,736,293
2,736,912
Notes payable to related parties
777,377
1,130,978
Bonds
8,783,680
8,347,717
Total current liability
31,760,794
28,274,775
Net working capital
(31,094,103) (27,984,426)
As of March 31, 2016 and December 31, 2014, the following were the items making up the total
stockholders deficit:
March 31,
December
2016
31, 2015
Assets
Current assets
666,691
290,349
Non-current assets
68,097,411
67,007,090
Total assets
68,764,102
67,297,439
Liabilities
Current liabilities
31,760,794
28,274,775
Non-current liabilities
87,666,534
80,287,652
Total liabilities
119,427,328 108,562,427
Total stockholders deficit
(50,663,226) (41,264,988)
The Companys negative net working capital of $31,094,103 is of concern; however, based on the
guaranty signed by certain principals, the Company is convinced that it can address liquiditiy
problems.
Net cash flow used in operating activities for the three months ended March 31, 2016, was $928,807,
as compared to $2,469,730 for the three-month period ended March 31, 2015. The Company expects
to continue to use net cash flow in operating activities until we complete the Paradisus Papagayo Bay
Resort & Luxury Villas project, which completion is projected for the fourth quarter of 2018.
43
Net cash used in investing activities for the three months ended March 31, 2016, was $1,887,727 as
compared to $862,623 for the three-month period ended March 31, 2015. Net cash used in investing
activities in the current three-month period is comprised of the purchase of property and equipment,
and deposits related to construction, offset by receivables from related parties and restricted cash. Net
cash used in investing activities in the prior comparable three-month period was comprised of the
purchase of property and equipment, downpayments for property and equipment offset by receivables
from related parties, deposits related to construction and restricted cash. We expect negative net cash
flow in investing activities to continue while in the process of developing the Paradisus Papagayo Bay
Resort & Luxury Villas.
Net cash provided by financing activities for the three-month period ended March 31, 2016, was
$2,905,132 as compared to $3,425,275 for the three-month period ended March 31, 2015. Net cash
provided by financing activities in the current three-month period is comprised of proceeds from notes
payable to related parties, and proceeds from bond issuances net of commissions, offset by a decrease
in bank liabilities, the payment of debt issuance costs, and changes in other debt. Net cash provided
by financing activities in the prior comparable three-month period was comprised of proceeds from
notes payable related parties, and proceeds from bond issuances net of commissions, offset by the
decrease in bank liabilities, the payment of debt issuance costs, and changes in other debt. We expect
net cash flow provided by financing activities to continue due to the financing necessary to complete
the development of the Paradisus Papagayo Bay Resort & Luxury Villas.
Management believes that cash on hand, related party loans and the assurance of the Guaranty
Agreement as described in the going concern paragraph below are sufficient for us to conduct
operations over the next twelve months.
We had no lines of credit or other bank financing arrangements as of March 31, 2016.
We have commitments for executed purchase orders and agreements in the amount of $57 million as
of March 31, 2016, in connection with the development of the Paradisus Papagayo Bay Resort &
Luxury Villas, which commitments are included in the required estimated net financing of $192
million (excluding overhead expenses) to complete the project. Most material commitments are not
contractually agreed as of the end of the period. We have cancellable commitments to Meridian that
are not included in the required financing for the development of the Paradisus Papagayo Bay Resort
& Luxury Villas of approximately $15,000,000 as of March 31, 2016, for the purchase of two
additional concession properties in Polo Papagayo, Guanacaste, Costa Rica.
We maintain a defined benefit plan that covers all of our Swiss employees and have employment
agreements with our Chief Executive Officer and Chief Operating Officer as of March 31, 2016.
We have no current plans for significant purchases or sales of plant or equipment, except in
connection with the planned construction of the Paradisus Papagayo Bay Resort & Luxury Villas.
We have no current plans to make any changes in the number of our employees as of March 31, 2016.
Future Financings
A letter of engagement was executed with ISM Capital LLP (ISM), a London based investment
firm, on March 10, 2015, for the purpose of conducting a $100 million asset backed bond issuance.
On October 4, 2015 the bilateral agreement with ISM was extended into a multilateral agreement, by
incorporating Stifel Ncolaus Europe Ltd, to enlarge the territories in which the offering could be
effectively presented to include North America.In June 2016, the respective parties agreed to
terminate the cooperation, which did not provide the anticipated results. A formal termination letter is
presently being preparded.
44
On May 9, 2016, the Company signed an agreement with Median Trust SA, by which this service
provider is mandated to set-up a special purpose vehicle (SPV), as a Compartment in accordance
with Luxembourg law. The objective of the SPV is to obtain an investment grade rating and to make a
bond offering of not less than $100 million. The SPVwill therefore be the issuer, however, the
responsibility to place the bonds remains with the Company.
Off-Balance Sheet Arrangements
As of March 31, 2016, we had no significant off-balance sheet arrangements that have or are
reasonably likely to have a current or future effect on our financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital
resources that are material to stockholders.
Going Concern
The Company intends to build a hotel in the Papagayo Gulf Tourism Project area of Guanacaste,
Costa Rica. The total net investment is estimated to be approximately $212 million.
The project is expected to open in the fourth quarter of 2017. Until the completion of the project, the
following expenditures are estimated to be incurred:
a. Gross project cost
$
217,000,000
b. Less: Proceeds from sale of villas
(25,000,000)
c. Net project cost
192,000,000
d. Overhead expenses
20,000,000
e. Total, excluding other potential projects
$
212,000,000
Sixty percent (60%) of the Net project cost is intended to be financed through the issuance of
secured bonds, for which negotiations have been initiated. The remaining forty percent (40% of the
Net project cost, as well as non-recuperated overhead expenses and the cost of potential other
projects are intended to be financed by the main shareholders or lenders of the project in the absence
of alternative financing committements, i.e. Zypam Ltd., shareholder and related entity to Mr. Josef
Mettler, Mr. Hans Rigendinger, shareholder, Chief Operating Officer and Company Board Member,
Dr. Max Rössler, Company Board Member and controlling shareholder of Aires, Mr Josef Mettler,
shareholder, Director and Chief Executive Officer.
On July 16, 2012, certain principal shareholders of the Company or principal lenders to the project
entered into a guaranty agreement in favor of SunVesta AG. The purpose of the guaranty is to ensure
that until such time as financing is secured for the entire project that they will act as a guarantor to
creditors to the extent of the projects ongoing capital requirements.
On September 22, 2015, the signatories to the guaranty formally agreed to maintain the guaranty, as
necessary, until December 31, 2018, after which date the guaranty will expire. The guaranty
agreement requires that within 30 days of receiving a demand notice, the requested funds are made
available by the guarantors to the Company.
Based on this Guaranty Agreement, management believes that available funds are sufficient to finance
cash flows for the twelve months subsequent to March 31, 2016, and the filing date, though future
anticipated cash outflows for investing activities will continue to depend on the availability of
financing.
45
Forward-Looking Statements and Factors That May Affect Future Results and Financial
Condition
The statements contained in the section titled Managements Discussion and Analysis of Financial
Condition and Results of Operations and elsewhere in this current report, with the exception of
historical facts, are forward-looking statements. Forward-looking statements reflect our current
expectations and beliefs regarding our future results of operations, performance, and achievements.
These statements are subject to risks and uncertainties and are based upon assumptions and beliefs
that may or may not materialize. These statements include, but are not limited to, statements
concerning:
our anticipated financial performance and business plan
the sufficiency of existing capital resources
our ability to raise additional capital to fund cash requirements for future operations
uncertainties related to our future business prospects
our ability to generate revenues to fund future operations
the volatility of the stock market
general economic conditions
We wish to caution readers that our operating results are subject to various risks and uncertainties that
could cause our actual results to differ materially from those discussed or anticipated elsewhere in this
report. We also wish to advise readers not to place any undue reliance on the forward-looking
statements contained in this report, which reflect our beliefs and expectations only as of the date of
this report. We assume no obligation to update or revise these forward-looking statements to reflect
new events or circumstances or any changes in our beliefs or expectations, other than as required by
law.
Recent Accounting Pronouncements
Please see Note 2 to the accompanying consolidated financial statements for recent accounting
pronouncements.
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Not applicable.
46
ITEM 4.
CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
In connection with the preparation of this annual report, an evaluation was carried out by the
Companys management, with the participation of its chief executive officer and chief financial
officer, of the effectiveness of the Companys disclosure controls and procedures (as defined in Rules
13a-15(e) under the Securities Exchange Act of 1934 (Exchange Act)). Disclosure controls and
procedures are designed to ensure that information required to be disclosed in reports filed or
submitted under the Exchange Act is recorded, processed, summarized, and reported within the time
periods specified in the Commissions rules and forms, and that such information is accumulated and
communicated to management, including the chief executive officer and chief financial officer, to
allow timely decisions regarding required disclosures.
Based on that evaluation, the Companys management concluded, as of the end of the period covered
by this report, that the Companys disclosure controls and procedures were not effective in recording,
processing, summarizing, and reporting information required to be disclosed, within the time periods
specified in the Commissions rules and forms, and that such information was not accumulated and
communicated to management, including the chief executive officer and the chief financial officer, to
allow timely decisions regarding required disclosures.
Changes in Internal Control over Financial Reporting
During the quarter ended March 31, 2016, there has been no change in internal control over financial
reporting that has materially affected, or is reasonably likely to materially affect our internal control
over financial reporting.
47
PART II OTHER INFORMATION
ITEM 1.
LEGAL PROCEEDINGS
None.
ITEM 1A.
RISK FACTORS
Not required of smaller reporting companies.
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
None.
ITEM 3.
DEFAULTS ON SENIOR SECURITIES
None
ITEM 4.
MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5.
OTHER INFORMATION
None
ITEM 6.
Exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits on
page 50 of this Form 10-Q, and are incorporated herein by this reference.
48
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.
SunVesta, Inc.
Date
_/s/ Josef Mettler____________
June 15, 2016
Josef Mettler
Chief Executive Officer, Chief Financial Officer,
Principal Accounting Officer and Director
_/s/ Hans Rigendinger________
June 15, 2016
Hans Rigendinger
Chief Operating Officer and Director
49
INDEX TO EXHIBITS
Exhibit
Description
3.1.1*
Articles of Incorporation (incorporated by reference from the Form 10-SB filed with the Commission on
December 31, 1999).
3.1.2*
Amended Articles of Incorporation (incorporated by reference from the Form 10-KSB filed with the
Commission on April 9, 2003)
3.1.3*
Amended Articles of Incorporation (incorporated by reference from the Form 10-QSB filed with the
Commission on November 17, 2003).
3.1.4*
Amended Articles of Incorporation (incorporated by reference from the Form 8-K filed with the
Commission on September 27, 2007).
3.2.1*
Bylaws (incorporated by reference from the Form 10-SB filed with the Commission on December 31,
1999).
3.2.2*
Amended Bylaws (incorporated by reference from the Form 10-QSB filed with the Commission on
November 17, 2003).
10.1*
Securities Exchange Agreement and Plan of Exchange dated June 18, 2007 between the Company and
SunVesta AG (formerly ZAG Holdings AG) (incorporated by reference from the Form 8-K filed with
the Commission on June 21, 2007).
10.2*
Purchase and Sale Agreement between ZAG Holding AG and Trust Rich Land Investments, Mauricio
Rivera Lang dated May 1, 2006, for the acquisition of Rich Land Investments Limitada.
10.3*
Debt Settlement Agreement dated March 1, 2010, between the Company and Zypam, Ltd. (incorporated
by reference from the Form 8-K filed with the Commission on March 10, 2010).
10.4*
Debt Settlement Agreement dated March 1, 2010, between the Company and Hans Rigendinger
(incorporated by reference from the Form 8-K filed with the Commission on March 10, 2010).
10.5*
Guaranty Agreement dated July 16, 2012, between SunVesta AG, Josef Mettler, Hans Rigendinger and
Max Rӧssler.
10.6*
Employment Agreement dated January 1, 2013 between the Company and Hans Rigendinger
(incorporated by reference to the Form 8-K filed with the Commission on February 4, 2013.
10.7*
Employment Agreement dated July 4, 2013 between the Company and Josef Mettler (incorporated by
reference to the Form 10-Q filed with the Commission on October 10, 2013).
10.8*
Assignment of Debt Agreement dated December 31, 2012, between the Company, SunVesta AG and
Aires International Investments, Inc. (incorporated by reference to the Form 10-Q filed with the
Commission on December 13, 2013).
10.9*
Debt Settlement Agreement dated December 31, 2012, between the Company and Hans Rigendinger
(incorporated by reference to the Form 10-Q filed with the Commission on December 13, 2013).
10.10*
Loan Agreement dated October 31, 2013, between SunVesta AG and Aires International Investments,
Inc. (incorporated by reference to the Form 10-Q filed with the Commission on December 13, 2013).
10.11*
Assignment of Debt Agreement dated December 31, 2013, between the Company, SunVesta AG and
Aires International Investments, Inc.(incorporated by reference to the Form 10-Q filed with the
Commission on May 20, 2014).
10.12*
Assignment of Debt Agreement dated December 31, 2014, between the Company, SunVesta AG and
Aires International Investments, Inc. (incorporated by reference to the Form 10-Q filed with the
Commission on August 19, 2015).
10.13*
Addendum to Employment Agreement dated March 6, 2015, between the Company and Josef Mettler
(incorporated by reference to the Form 10-Q filed with the Commission on May 5, 2015).
14*
Code of Business Conduct and Ethics adopted on July 16, 2015 (incorporated by reference to the Form
10-Q filed with the Commission on August 19, 2015).
21*
Subsidiaries of the Company (incorporated by reference from the Form 10-K filed with the Commission
on April 15, 2015).
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14 of the
Securities and Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section
1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99*
SunVesta, Inc. 2013 Stock Option Plan (incorporated by reference to the Form 10-Q filed with the
Commission on October 10, 2013).
101. INS
XBRL Instance Document
101. PRE
XBRL Taxonomy Extension Presentation Linkbase
101. LAB
XBRL Taxonomy Extension Label Linkbase
101. DEF
XBRL Taxonomy Extension Label Linkbase
101. CAL
XBRL Taxonomy Extension Label Linkbase
101. SCH
XBRL Taxonomy Extension Schema
*
Incorporated by reference to previous filings of the Company.
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed furnished and not
filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities
Act of 1933, or deemed furnished and not filed for purposes of Section 18 of the Securities and
Exchange Act of 1934, and otherwise is not subject to liability under these sections.
50