SUNVESTA, INC. - FORM 10-Q - August 19, 2016

Attached files

file	filename
EX-32 - SUNVESTA CERTIFICATION - SUNVESTA, INC.	exhibit32.htm
EX-31 - SUNVESTA CERTIFICATION - SUNVESTA, INC.	exhibit31.htm

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549 FORM 10-Q

(Mark One)

r QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934

for the quarterly period ended June 30, 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

(State or other jurisdiction of incorporation or organization)

98-0211356

(I.R.S. Employer Identification No.)

Seestrasse 97, Oberrieden, Switzerland CH-8942

(Address of principal executive offices) (Zip Code)

011 41 43 388 40 60

(Registrant’s 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 þ Noo

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 oSmaller 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 issuer’s classes of common stock, as of the latest practicable date. The number of shares outstanding of the issuer’s common stock, $0.01 par value (the only class of voting stock), at August 19, 2016, was 95,941,603.

TABLE OF CONTENTS

PART 1- FINANCIAL INFORMATION

Item1.

Financial Statements:

Consolidated Balance Sheets as of June 30, 2016 (unaudited) and December 31,

2015

Unaudited Consolidated Statements of Comprehensive Loss (unaudited) for the

three and six months ended June 30, 2016 and June 30, 2015

Unaudited Consolidated Statements of Stockholders’ Equity (unaudited) for the six

months ended June 30, 2016

Unaudited Consolidated Statements of Cash Flows (unaudited) for the six months

ended June 30, 2016 and June 30, 2015

Notes to Unaudited Consolidated Financial Statements

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of

Operations

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

Item 4.

Controls and Procedures

PART II-OTHER INFORMATION

Item 1.

Legal Proceedings

Item 1A.

Risk Factors

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

Item 4.

Mine Safety Disclosures

Item 5.

Other Information

Item 6.

Exhibits

Signatures

Index to Exhibits

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.

SUNVESTA, INC.

CONSOLIDATED BALANCE SHEETS

June 30, 2016

December 31, 2015

(Unaudited)

Assets

Current assets

Cash and cash equivalents

42,927

111,830

Receivable from related parties

15,957

19,945

Other assets

389,591

158,574

Total current assets

448,475

290,349

Non-current assets

Property and equipment - net

63,678,244

61,271,424

Deposits related to construction work

642,388

798,874

Notes receivable

280,242

Down payment for property and equipment

2,369,816

2,972,083

Restricted cash

1,672,274

1,684,467

Total non-current assets

68,642,963

67,007,090

Total assets

69,091,438

67,297,439

Liabilities and stockholders' deficit

Current liabilities

Bank liabilities

219,479

179,313

Accounts payable

5,765,019

8,048,608

Accrued expenses

7,559,166

7,831,247

Note payable

2,706,861

2,736,912

Notes payable to related parties

2,287,688

1,130,978

Convertible CHF-Bond

3,754,253

EUR-Bond

8,611,940

8,347,717

Total current liabilities

30,904,404

28,274,776

Non-current liabilities

Convertible CHF-Bond

31,647,157

25,866,148

Liability related to conversion feature

7,313,982

6,976,322

Notes payable to related parties

47,288,260

47,198,362

Other long-term debts

25,210

36,140

Pension liabilities

213,716

210,680

Total non-current liabilities

86,488,325

80,287,652

Total liabilities

117,392,731

108,562,428

Stockholders' equity

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;

959,416

95,941,603 shares issued and outstanding

Additional paid-in capital

23,659,108

23,403,438

Accumulated other comprehensive income / (loss)

(1,042,522)

1,778,961

Accumulated deficit

(71,877,295)

(67,406,803)

Total stockholders' deficit

(48,301,293)

(41,264,988)

Total liabilities and stockholders' deficit

69,091,438

67,297,439

The accompanying notes are an integral part of these consolidated financial statements.

SUNVESTA, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME / (LOSS)

Three months ended June 30,

Six months ended June 30,

2016

2015

2016

2015

(Unaudited)

Revenues

Revenues, net

Cost of revenues

Gross profit

Operating Expenses

General and administrative expenses

3,146,235

(1,369,582)

(2,926,735)

(3,226,049)

Impairment expenses

(296,663)

Total operating expenses

2,849,572

(1,369,582)

(3,223,397)

(3,226,049)

Income / (loss) from operations

2,849,572

(1,369,582)

(3,223,397)

(3,226,049)

Other income / (expense s)

Interest income

18,905

11,699

31,028

18,483

Interest expense

(1,654,599)

(1,309,308)

(3,027,510)

(2,638,219)

Amortization of debt issuance costs and

(634,762)

(695,579)

(983,648)

(1,141,783)

commissions

Change in Fair Value of Conversion Feature

771,529

1,180,226

Exchange differences

1,733,284

(1,168,861)

1,563,332

(705,420)

Other income / (expenses)

26,089

(23,685)

(10,525)

(49,326)

Total other expenses

260,446

(3,185,734)

(1,247,096)

(4,516,265)

Profit/ (loss) before income taxes

3,110,018

(4,555,316)

(4,470,493)

(7,742,314)

Income Taxes

(1,152)

Net income / (loss)

3,110,018

(4,555,316)

(4,470,493)

(7,743,464)

Comprehensive income / (loss)

Foreign currency translation

(875,919)

(1,434,959)

(2,821,483)

(2,485,163)

Comprehensive income / (loss)

2,234,099

(5,990,275)

(7,291,977)

(10,228,627)

Earnings / (loss) per common share

Basic and diluted

0.03

(0.05)

(0.08)

Weighted average common shares

Basic and diluted

98,841,603

92,941,603

98.674,021

92,775,305

The accompanying notes are an integral part of these consolidated financial statements.

SUNVESTA, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

Additional

Accumulated

Total

Common

Paid-in

Other

Accumulated

Treasury

Stockholders’

Stock

Capital

Comprehensive

deficit

Stock

Equity

Income (Loss)

(Deficit)

December 31, 2015

959,416

$ 23,403,438

1,778,961

$ (67,406,803)

$ (41,264,988)

Translation adjustments

(2,821,483)

(0)

(2,821,483)

Net loss

(4,470,,493)

(4,470,493)

Stock basedcompensation expense

255,670

June 30, 2016

959,416

$ 23,659,108

(1,042,522)

$ (71,877,295)

(48,301,294)

The accompanying notes are an integral part of these consolidated financial statements.

SUNVESTA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

January 1

to June 30,

2016

2015

(Unaudited)

Cash flows from operating activities

Net loss

$ (4,470,493)

(7,743,464)

Adjustments to reconcile net loss to net cash

Depreciation and amortization

23,463

33,921

Impairment on Down Payment

296,663

Amortization of debt issuance costs and commissions

983,648

1,025,915

Accrued interest on debt

1,760,649

Unrealized exchange differences

(1,640,157)

494,736

Stock compensation expense

255,670

280,142

Expenses related to conversion feature

234,947

- Increase / decrease in:

Other current assets

695,424

(115,260)

Accounts payable

(2,356,519)

(898,510)

Accrued expenses

(183,512)

3,115,782

Net cash used in operating activities

$ (4,400,217)

(3,806,738)

Cash flow from investing activities

Other receivables from related parties

3,988

Receivables from related parties

(1,507,128)

Payments to Acquire Property, Plant and Equipment

(654,325)

(2,883,516)

Deposits related to construction

(641,818)

3,311

Down-payments and write off of non-refundable payments for property and

309,023

(307,841)

equiRestpmrictented cash

14,050

Net cash used in investing activities

(973,070)

(4,691,170)

Cash flows from financing activities

Increase/ (Decrease) in bank liabilities

42,047

(153,375)

Proceeds from notes payable related parties

4,031,006

1,344,348

Repayment of notes payable related parties

(7,112,077)

Proceeds from bond issuance, net of commissions and debt issuance costs

9,134,891

8,175,067

Repayment of bonds

(762,258)

Changes in note payable and other debt

(33,614)

(174,760)

Net cash provided by financing activities

5,299,996

9,191,280

Effect of exchange rate changes

4,388

1,109

Net increase / - decrease in cash

(68,903)

694,481

Cash and cash equivalents, beginning of period

111,830

14,347

Cash and cash equivalents, end of period

42,927

708,828

Additional information

Capitalized interest and debt issuance costs for construction (non-cash)

1,775,000

1,574,000

Assumption of payables due from AIRES by Global Care AG (non-cash)

7,621,345

Assumption of payables due from Global Care AG by Sportiva (non-cash)

1,533,150

Repayment of Specogna Holding AG loan by Aires

707,428

Interest paid

163,523

Assumption of receivables from Josef Mettler by AIRES (non-cash)

1,507,128

The accompanying notes are an integral part of these consolidated financial statements.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

CORPORATE INFORMATION

On August 27, 2007, SunVesta Inc. (“SunVesta”) acquired SunVesta Holding AG (“SunVesta AG”)

(collectively “the Company”). SunVesta AG held 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. Effective May 21, 2016, AdR absorbed Richland and SVCR and changed its name to

SunVesta Costa Rica SA.

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 Company’s

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 Company’s 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 Company’s Form 10-K for the year

ended December 31, 2015, filed with the Securities and Exchange Commission.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

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 entity’s management to evaluate whether there are conditions or

events, considered in aggregate, that raise substantial doubt about entity’s 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 $2,700,664 and $2,995,209 as of June 30, 2016

and December 31, 2015 respectively. The Company reclassified amortization of debt issuance cost and

commissions in the amount of $297,040 and $446,204 to interest expense for the periods ended June

30, 2016 and 2015, respectively.

This ASU was applied retrospectively for all periods presented.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

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

Seventy percent (70%) of the net project cost is intended to be financed through the issuance of secured

bonds, for which negotiations have been initiated. The remaining thirty percent (30%) 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 project’s 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 June 30,

2016 and the filing date, though future anticipated cash outflows for investing activities continue to

depend on the availability of financing.

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 Company’s cash equivalents are placed with financial

institutions that maintain high credit ratings. The carrying amounts of these assets approximate their

fair value.

USD

EURO

CHF

AUD

CRC

Total

Cash and cash

June 30, 2016

December 31,2015

equivalents

original currency

20,988 10,467

10,082

(0)

5,487

in $

20,988 11,624

10,305

(0)

42,927

111,830

USD ($) =

US Dollar

EURO =

Euro

CHF

Swiss Francs

AUD

Australian Dollar

CRC

Costa Rican Colón

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

RESTRICTED CASH

As of June 30, 2016, the Company has the following restricted cash positions:

Restricted Cash

June 30, 2016

December 31, 2015

Credit Suisse in favor of BVK Personalvorsorge des

Cantons Zurich

130,622

128,805

HSBC in favor of Costa Rican Tourism Board

370,000

Banco Nacional de Costa Rica in favor of the Costa Rican

Environmental Agency – SETENA

608,302

622,312

Banco National de Costa Rica in favor of the Costa Rican

Tourism Board

563,350

Gross

1,672,274

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 June 30, 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. As of the date of this report the

commitment to purchase has not been transacted.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

PROPERTY & EQUIPMENT

June 30, 2016 December 31, 2015

Land

19,700,000

IT Equipment

230,265

185,846

Other equipment and furniture

228,884

278,000

Leasehold improvements

77,085

66,617

Vehicles

139,000

Construction in-process

43,841,675

41,412,351

Gross

64,216,909

61,781,814

Less accumulated depreciation

-538,665

-510,390

Net

63,678,244

61,271,424

Depreciation expenses for the periods ending

June 30, 2016 and 2015

23,463

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 approved the extension of both concessions until 2052.

The construction in process through December 31, 2015 and June 30, 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 June 30, 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 June 30, 2016, and December 31, 2015, the Company has deposits of $642,388 and

$798,874 respectively, which have not yet been set off.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

DOWN PAYMENTS FOR PROPERTY & EQUIPMENT

June 30, 2016

December 31, 2015

La Punta (neighboring piece of land)

2,669,816

2,669.816

Hotel Engadina

302,267

Gross

2,669,816

2,972,083

Value adjustment on Down Payment La Punta

(300,000)

Total (net)

2,369,816

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 $23,395,806 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.

On November 13, 2012, the above agreement was amended to decrease the total purchase price to

$17,200,200 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 the said properties. The original contract (including amendments) 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 was outstanding as per date of the new, revised

agreement.

Since the original seller owes a third party $8,000,000, the Company was to pay $8,000,000 of the

purchase price directly to this third party instead of the original seller. The remaining $8,130,184 were

to be paid directly to the original seller. Payment schedules were defined.

As of this balance sheet day, the following is the situation:

Original seller

Third party

Total

Description

Total commitment

9,500,000

8,000,000

17,500,000

Payments till 30 June 2016

1,669,816

1,000,000

2,669,816

Thereof refundable:

-1,669,816

-700,000

-2,369,816

thereof non-refundable

300,000

Total outstanding at 30 June 2016

7,830,184

7,000,000

14,830,184

Thereof overdue

-7,830,184

-7,000,000

-14,830,184

Thereof not overdue

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

DOWN PAYMENTS FOR PROPERTY & EQUIPMENT - Continued

Agreement to purchase neighboring pieces of land - continued

In light of the above situation the Company is in discussions with the original seller regarding an

extension and adaptation of the current agreement, which, for all practical reasons, must be considered

obsolete.

Additionally, a failure to pay will lead to liquidated damages of 5% of any instalments 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.

Both, the $300,000 write-off as well as the $50,000 for additional damages have been provided for in the

results of the second quarter 2016.

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 un-related 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 Company’s rights and

obligations from the original contract. In return, QuadEquity Holdings AG will pay the Company the

amount of $302,000 (CHF 300,000) before May 30, 2016. This payment was received by the Company

on June 1, 2016.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

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 followinghierarchy:

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 Company’s fair value

calculations have been adjusted accordingly.

As of June 30, 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:

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

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 publicly 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.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

FAIR VALUE MEASUREMENT - Continued

The fair value of our financial instruments is presented in the table below:

June 30, 2016

December 31, 2015

Carrying

Fair Value $

Carrying

Fair Value $ Fair Value Reference

Amount $

Levels

Cash and cash equivalents

42,927

111,830

Note 4

Restricted cash

1,672,274

1,684,467

Note 5

Receivables from related parties –

other (current)

15,957

19,945

Note 10

Accounts Payable

5,765,020

8,048,608

Bank liabilities

219,479

179,313

Note 11

Note payable

Note 17

Notes payable to related parties – Dr.

Note 10

M. Rӧssler (current)

Notes payable to related parties –

Rigendinger (current)

2,001

1,973

Note 10

Notes payable to related parties – other

(current)

2,285,687

1,129,005

Note 10

Notes receivable

280,242

EUR-bonds

8,611,940

8,488,631

Note 12

Convertible CHF-bonds

35,401,410

28,720,443

Note 12

Notes payable to related parties –

Aires (non-current)

47,288,260

47,198,362

Note 10

Liability related to conversion feature

7,313,982

6,976,322

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

Additions

1,415,173

Change in Fair Value of Conversion Feature

(1,180,226)

FX Revaluation

102,712

Balance at June 30, 2016

7,313,982

The Company used a Black-Scholes model to value the liability related to conversion feature as of

June 30, 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 June 30, 2016 are as follows:

Stock Price: CHF 5.08

Annualized Risk Free Rate: 0.71%

Exercise Price: CHF 8

Annualized Volatility: 80%

Time to Maturity: 2.25 years

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

10.

RELATED PARTY TRANSACTIONS

The notes payable to and receivables from related parties are composed of the follows:

Receivables

Payables

December

December 31,

June 30, 2016

31, 2015

June 30, 2016

2015

1 Hans Rigendinger

2,001

1,973

2 Aires International

47,288,260

47,198,362

3 Akyinyi Interior and Exterior

Decoration

290,000

4 Global Care AG

1,434,118

240,210

5 Geoffrey Long

15,957

19,945

6 Sportiva participations ag

561,569

528,660

7 Josef Mettler

70,135

8 QuadEquity Holdings

9 4f capital ag

10 Dr. Max Rössler

Total excluding interest

15,957

19,945

49,575,948

48,329,340

Accrued interest

4,489,666

6,370,579

Total

15,957

19,945

54,065,614

54,699,919

of which non-current

47,288,260

47,198,362

Related party

Capacity

Interest Repayment

Rate

Terms

Security

1 Hans Rigendinger Shareholder, COO and Company board member

none

2 Aires International Company owned by Dr. Max Rössler, a board member

Akyinyi Interior

3 and Exterior

Company owned by the wife of Josef Mettler

none

Decoration

4 Global Care AG

Company owned by Dr. Max Rössler, a board

member

none

5 Geoffrey Long

Head of Accounting “The Americas”

none

6 Sportiva

participations ag

Company owned by Josef Mettler

none

7 Josef Mettler

Shareholder, CEO, CFO and Company board member

none

8 QuadEquity

Holdings

Company owned by Josef Mettler (see above)

none

9 4f capital ag

Company owned by Josef Mettler (see above)

none

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

10.

RELATED PARTY TRANSACTIONS - Continued

Loan agreement Aires International Investment Inc.

As of June 30, 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

10,266,118

7.25 %

Dec 31, 2017

SunVesta Inc.

Promissory note

10,000,000

10,220,769

7.25 %

Dec 31, 2017

SunVesta Inc.

Promissory note

10,000,000

10,220,769

7.25 %

Dec 31, 2017

SunVesta Inc.

Promissory note

3,985,006

4,072,982

7.25 %

Dec 31, 2017

SunVesta Holding

Loan agreement

12,237,457

12,507,622

7.25 %

Dec 31, 2017

Total

47,288,260

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.

In the second quarter 2016, Dr. Max Rössler provided $2,698,283 (CHF 2’640’000). Interest of

$16,567 was recorded in this period. Effective June 30, 2016 both amounts were transferred to the loan

account with Global Care AG.

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.

As explained in the preceding note, effective June 30, 2016, an amount of $2,714,850 (CHF 2,656,083)

was transferred from the loan account Dr. Max Rössler to the loan account Global Care AG.

Payable to Josef Mettler

As of June 30, 2016, there is neither a receivable from nor payable to Josef Mettler.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

10.

RELATED PARTY TRANSACTIONS - Continued

Current account sportiva participations ag (a Josef Mettler company)

During the three-month period ended June 30, the following transactions occurred on the current

account sportiva participations ag:

CHF

USD

Balance March 31, 2016

-268,593

-274,529

Cash received from Company

1,043,958

1,067,043

Credited to the account Josef Mettler

175,195

179,067

Amount absorbed by Global Care AG

-1,500,000 -1,533,150

Balance June 30, 2016

-549,440

-561,569

Commissions paid or payable to related parties

During the periods ended June 30, 2016, and June 30, 2015, the Company paid commissions to 4f

Capital AG in the amount of $0 and $803, 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 $2,001.

Mr. Rigendinger also held bonds denominated in Euros and Swiss Francs valued at approximately

$460,000 as of June 30, 2016 and $492,000 as of December 31, 2015.

Service fees paid or payable to Akyinyi Interior and Exterior Decoration

During the periods ended June 30, 2016, and June 30, 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 June 30, 2016, and June 30, 2015, the Company paid fees to

Cambridge Limited Corporation, which is a company owned by the father-in-law of the Chief

Executive Officer of the Company. These fees related to accounting and consulting services rendered

to the Company in the amount of approximately $44,700 and $43,500, respectively.

11.

BANK LIABLITIES

The bank liability of $219,479 and $179,313 at June 30, 2016 and December 31, 2015, respectively,

represented a temporary, secured overdraft facility, bearing an interest rate of some 9%.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

12.

BONDS

Description

EUR (€) bond new I

CHF bond II (parallel)

Issuer:

SunVesta Holding AG

Type of securities:

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

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

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 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

Type of securities:

Senior convertible bonds,

convertible into shares of the issuer,

convertible into shares of the issue

accordance with Swiss law

Approval by SunVesta AG BOD:

September 30, 2015

Volume:

Up to CHF 45,000,000

Up to CHF 15,000,000

Denomination:

CHF 5,000

Offering period:

October 01, 2015

Maturity date:

September 30, 2018

Issue price:

100 %

Redemption price:

100 %

Issuance date:

October 01, 2015

Coupon:

6.00 % p.a.

Interest due dates:

September 30 of each year, the first

September 30 of each year, the firs

September 30, 2016

Reference price:

CHF 6.50

Initial conversion price:

CHF 8.00

Applicable law:

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 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 June 30 and December 31(Carrying value)

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

12.

BONDS - Continued

From the CHF Bond I issue in this roll-forward, $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.

EURO Bond (New)

EURO Bond

EURO Bond

(New) 2016

(New) 2015

Balances January 1

6,871,630

7,355,572

Cash inflows

281,754

Cash outflows

Foreign currency adjustments

123,147

(765,696)

Sub-total

6,994,777

6,871,630

Discounts (commissions paid to bondholders) and

debt issuance costs

(597,095)

(588,613)

Accumulated Amortization of discounts and

debt issuance costs

503,411

432,128

Total Accumulated Unamortized discounts and

debt issuance costs

(93,684)

(156,485)

Balances June 30 and December 31 (Carrying value)

6,901,094

6,715,145

As per date of this report the Company has realized a cumulative amount of EUR 6.89 million ($7.65

million) related to the EURO Bond I.

CHF Bond

CHF Bond II

CHF BOND 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 June 30 and December 31(Carrying value)

From the CHF Bond II issue in this roll-forward, $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.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

12.

BONDS - Continued

EUR Bond

EURO BOND NEW II

EUR Bond

new II

2015

2016

Balances January 1

1,658,300

1,761,258

Cash inflows

Cash outflows

Foreign currency adjustments

58,262

(102,958)

Sub-total

1,716,562

1,658,300

Discounts (commissions paid to bondholders) and

debt issuance costs

(177,177)

(174,660)

Accumulated Amortization of discounts and

171,462

148,932

debt issuance costs

Total Accumulated Unamortized discounts and

debt issuance costs

(5,715)

(25,728)

Balances June 30 and December 31 (Carrying value)

1,710,846

1,632,572

As per date of this report the Company has realized a cumulative amount of EUR 1.65 million ($1.83

million) related to the EURO Bond new II.

Convertible CHF BOND I

Convertible

CHF Bond I

2016

2015

Balances January 1

2,250,048

Cash inflows

1,640,887

100,990

Cash outflows

(103,008)

Foreign currency adjustments

33,312

(41,617)

Reclassifications to CHF Bonds

(634,186)

2,190,675

Sub-total

3,187,054

2,250,048

Discounts (commissions paid to bondholders) and debt issuance

costs

(241,923)

(136,219)

Accumulated Amortization of discounts and debt issuance costs

77,050

57,896

Total Accumulated Unamortized discounts and debt issuance

costs

(164,873)

(78,323)

Balances June 30 and December 31 (Carrying value)

3,022,181

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 3.12 million

($3.19million) related to the Convertible Bond I.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

12.

BONDS – Continued

Convertible

Convertible CHF BOND II

Bond II

June 30,

December 31;

2016

2015

Balances January 1

26,470,395

Cash inflows

8,835,531

1,747,122

Cash outflows

(659,250)

Foreign currency adjustments

344,187

(479,315)

Reclassifications to CHF Bonds

634,186

25,202,588

Sub-total

35,625,049

26,470,395

Discounts (discounts to bondholders) and debt issuance costs)

(4,256,315)

(2,977,065)

Accumulated Amortization of discounts and debt issuance costs

1,010,496

201,093

Total Accumulated Unamortized discounts and debt issuance costs

(3,245,819)

(2,775,972)

Balances June 30 and December 31 (Carrying value)

32,379,230

23,694,423

In the 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 35.39 million ($36.17

million) related to the Convertible Bond II.

Included in the above is an amount of approx. $4.3 Mio. (CHF 4,2 Mio.), which, by agreement between

the Company and the bondholders and as a deviation from the standard terms, are repayable as of

February 28, 2017. As these are due within 12 months from the reporting date, these funds are classified

within current liabilities on the consolidated balance sheet.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 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 Company’s results as follows:

Three months

Six months

Three months

Six months

Pension expense

ended

ended June 30,

ended

June 30, 2016

2015

June 30, 2015

Current service cost

15,357

30,713

14,648

29,296

Net actuarial (gain) loss recognized

Interest cost

945

1,891

1,348

2,696

Expected return on assets

(1,916)

(3,833)

(1,659)

(3,318)

Employee contributions

(5,877)

(11,754)

(5,963)

(11,926)

Net periodic pension cost

9,148

18,295

8,374

16,748

During the three month’ periods ended June 30, 2016 and June 30, 2015 the Company made cash

contributions of $5,877 and $6,104, respectively, to its defined benefit pension plan.

All of the assets are held under the collective contract by the plan’s 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 $11,754.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 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 Director’s 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 Company’s 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.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

14.

STOCK COMPENSATION - Continued

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.

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

Company’s results:

Stock-based compensation

Three months

Six months

Three months

Six months

(shares)

ended June 30,

2016

2015

Shares granted

46,800,000 shares 46,800,000 shares 46,400,000 shares 46,400,000 shares

Fair Value respectively

$0.0767

$0.0744

market price on grant date

Total maximal expenses

$3,590,000

$3,450,000

(2013-2020)

Shares vested

26,800,000 shares 26,800,000 shares 20,900,000 shares 20,900,000 shares

Unvested shares

20,000,000 shares 20,000,000 shares 25,900,000 shares 25,900,000 shares

As of December 31, 2016, the Company expects to record compensation expense in the future up to

$1,140,000 as follows:

Year ending December 31,

Stock-based

Through

compensation

December 31,

(shares)

2016

2017

2018

2019

2020

Unrecognized

compensation

205,000

410,000

210,000

105,000

expense

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 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. Asof

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.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

14.

STOCK COMPENSATION – Continued

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.

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.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

14.

STOCK COMPENSATION – Continued

Stock Options – Summary

A summary of stock options outstanding as per June 30, 2016 is as follows:

Options outstanding

Number of

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 June 30, 2016

32,000,000

$ 0.05

6.92 years

Exercisable June 30, 2016

The following table depicts the Company’s non-vested options as of June 30, 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 June 30, 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 June 30, 2016 and June 30, 2015.

Assumption

June 30, 2016

June 30, 2015

Dividend yield

Risk-free interest rate used (average)

Expected market price volatility

Average expected life of stock options

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.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

14.

STOCK COMPENSATION - Continued

Stock Options – Summary - Continued

As of June 30, 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

Stock-based compensation (options)

December 31,

2016

2017

2018

Unrecognized compensation expense

30,670

61,340

46,005

15.

SUMMARY OF SHARE AND OPTION COMPENSATION EXPENSE

The Company recorded the following amounts related to stock based compensation expense during

the periods ended June 30, 2016 respectively June 30, 2015:

Three

Six months

Three

Summary of share and option

months June

June 30,

months

Six months

based compensation expense

30, 2016

2016

June 30,

2015

Share grants (see Note 14 for

112,500

225,000

102,500

212,666

details)

Option grants (see Note 14 for

15,335

30,670

33,738

67,476

details)

Total

(recorded under general &

127,835

255,670

136,238

280,142

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 31,

Future lease commitments

2016

2015

2016

65,000

130,000

2017

130,000

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

17.

NOTE PAYABLE

June 30, 2016

December 31, 2015

Promissory note

2,000,000

Specogna Holding AG

630,859

605,743

R. Weimar (private investor)

76,002

131,169

Total

2,706,861

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 August 21, 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 $30,482 in the second quarter 2016, whereas the entire loan amount should have

been repaid. The agreement does not stipulate any repercussions for late payments.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 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:

New completion date: September 15, 2018 (subject to force majeure)

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.

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 the first quarter 2016. In light of the signed seventh

addendum, this accrual has been reversed in the second quarter of 2016 under general and

administrative expenses within the statement of comprehensive loss.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

19.

EARNINGS PER SHARE

Basic earnings per share are the result of dividing the Company’s 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

Six-month

Three-month

Six-month

Earnings per share

period ended

June 30, 2016

June 30, 2015

Company posted

Net profit

Net loss

Basic weighted average shares

outstanding

98,841,603

98,674,021

92,941,603

92,775,305

Dilutive effect of common stock

equivalents

None

Dilutive weighted average shares

outstanding

98,841,603

98,674,021

92,941,603

92,775,305

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

Six-month

Three-month

Six-month

Earnings per share

period ended

June 30, 2016

June 30, 2015

Options to Hans Rigendinger

10,000,000

Options to Dr. M. Rössler

10,000,000

Options to Josef Mettler

12,000,000

Total Options

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

José Maria Figueres (retention

award)

Shares associated with

4,746,720

Convertible CHF Bonds

Total Shares

25,146,720

25,900,000

Total Options and Shares

57,146,720

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.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

June 30, 2016

20.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses according to the consolidated statement of comprehensive loss

include:

Three month

Six month

Three month

Six month

period ended period ended

June 30, 2016

June 30, 2015

Rental & related expenses

50,171

104,787

49,951

101,629

Audit

200,416

187,639

127,720

177,530

Consulting

750,486

961,805

317,042

592,381

Marketing, Investor & public relations

12,531

41,309

29,121

43,762

Travel expenses

93,166

196,913

112,818

287,751

Personnel costs including social security costs

and share based remuneration

442,454

906,155

509,862

1,711,031

Expense for penalty on management agreement

(5,000,000)

Various other operating expenditures

304,539

528,127

223,068

311,965

Total according statement of

(3,146,235)

2,926,735

1,369,582

3,226,049

comprehensive loss

21.

OTHER EVENTS

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”), to be 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 SPV will be the issuer, however, the

responsibility to place the bonds remains with the Company. As of the date of this report, the SPV has

not yet been established.

22.

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.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION

AND RESULTS OF OPERATIONS

This Management’s 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 and six month periods ended

June 30, 2016 and June 30, 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

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

(91–212* 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 Villa’s will feature other highlights including:

— more than 65 private, swim up and resort pools including the world’s 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.

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 Company’s Corporate Controller. The

lead architect is Ossenbach, Pendones & Bonilla, one of Costa Rica’s 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 Meliá’s 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 world’s largest resort hotel

chains, as well as Spain’s 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 Villa’s 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 June 30,

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 was 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 June 30,

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.

Both, the $300,000 write-off as well as the $50,000 for additional damages have been provided for in the

results of the second quarter 2016.

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 unrelated 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 Company’s rights and

obligations from the original contract. In return, QuadEquity Holdings AG will pay the Company the amount

of $302,000 (CHF 300,000) before May 30, 2016. This payment was received on June 1, 2016.

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 June 30, 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 carrying values of $6,715,145 as of the year ended

December 31, 2015, and $6,901,094 as of June 30, 2016, for a cumulative amount of $7.65 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 carrying values of $1,632,572 as of the

year ended December 31, 2015 and $1,710,846 as of June 30, 2016, for a cumulative amount of $1.83

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 carrying values of $2,171,725 as of the year ended December 31, 2015

and $3,022,180 as of June 30, 2016, for a cumulative amount of $3.19 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 carrying values of $23,694,423 as of the year ended December 31, 2015

and $32,379,230 as of June 30, 2016, for a cumulative amount of $35.39 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:

— 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 $46,266,183 from Aires as of June 30, 2016 and $47,198,362 as of December

31, 2015.

During the second quarter of 2016 Aires assigned the amount of approximately $4.6 million of its

receivable from SunVesta to Global Care AG. Global Care AG, also a related party of Dr. Max Rössler,

acquired with this amount convertible bonds in the same amount (CHF 4,5 Mio.)

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.

In the second quarter 2016, Dr. Max Rössler provided $2,698,283 (CHF 2,640,000). Interest of $16,567 was

recorded in this period. Effective June 30, 2016 both amounts were transferred to the loan account with

Global Care AG.

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.

As explained in the preceding note, effective June 30, 2016 an amount of $2,714,850 (CHF 2,656,083) was

transferred from the loan account Dr. Max Rössler to the loan account Global Care AG.

Payable to Josef Mettler

As of June 30, 2016, there is neither a receivable from nor payable to Josef Mettler.

Current account sportiva participations ag (a Josef Mettler company)

During the three-month period ended June 30, 2016, the following transactions occurred on the current

account sportiva participations ag:

CHF

USD

-268,958

-274,529

Cash received from Company

1,043,958

1,067,043

Credited to the account Josef Mettler

175,195

179,067

Amount absorbed by Global Care AG

-1,500,000 -1,533,150

Balance June 30, 2016

-549,440

-561,569

DIA S.A. and his successor Blue Dot S

On March 8, 2013, the Company entered into an interest free loan agreement with DIA S.A. and his

successor Blue Dot SA respectively 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 and six-month periods ended June 30, 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.

Comprehensive Losses

The variance in losses over the comparative three- month periods is reconciled below:

Three months April 1 to June 30, 2015

(5,990,275)

Variances during the 3 months

Decrease in general and administrative expenses

4,515,817 Prima rily:

Reversal of previous quarters accruals

Increase in impa irme nt expenses

(296,663) Prima rily on down payments "La

Punta"

Increase in interest income

7,206 Increase in deposits

Increase in interest expenses

(345,291) Significantly higher debt

Decrease in amor tization of debt issuance

60,816 Reclassification

Change in fair values of conversion features

771,529 Prima rily periodic amor tization

Increase in unrealized exchange gains

2,902,145 Currency fluctuations

Decrease in other income / (expenses)

49,774 Prima rily reversal of previous

quarters

accrual for penalty on ma nageme nt

Income Taxes

Decrease in foreign currency translation

559,039 Currency fluctuations

Total varian ces

8,224,374

Three months April 1 to June 30, 2016

2,234,099

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 June

30, 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.

Liquidity and Capital Resources

Since inception the Company has experienced significant changes in liquidity, capital resources, and

stockholders’ equity.

As of June 30, 2016 and December 31, 2015, the following were working capital items:

June 30,

December 31

2016

2015

Current assets

Cash and cash equivalents

42,927

111,830

Receivable from related parties

15,957

19,945

Other assets

389,591

158,574

Accounts receivable

Total current assets

448,475

290,349

Current liabilities

Bank liabilities

219,479

179,313

Accounts payable

5,765,019

8,048,608

Accrued expenses

7,559,166

7,831,247

Notes payable

2,706,861

2,736,912

Notes payable to related parties

2,287,688

1,130,978

Bonds

12,366,193

8,347,717

Total current liability

30,904,404

28,274,775

Net working capital

(30,455,930)

(27,984,426)

As of June 30, 2016 and December 31, 2015, the following were the items making up the total stockholders’

deficit:

June 30,

December 31

2016

2015

Assets

Current assets

448,475

290,349

Non-current assets

68,642,963

67,007,090

Total assets

69,091,438

67,297,439

Liabilities

Current liabilities

30,904,405

28,274,775

Non-current liabilities

86,488,325

80,287,652

Total liabilities

117,392,731

108,562,427

Total stockholders,

deficit

(48,301,293)

(41,264,988)

The Company’s negative net working capital of $30,904,404 is of concern; however, based on the guaranty

signed by certain principals, the Company believes that it can address liquidity problems.

Net cash flow used in operating activities for the six-month period ended June 30, 2016, was $6,499,363, as

compared to $3,806,738 for the six-month period ended June 30, 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.

Net cash used in investing activities for the six-month period ended June 30, 2016, was $973,070 as

compared to $4,691,170 for the six-month period ended June 30, 2015. Net cash used in investing activities

in the current six-month period is comprised of the purchase of property and equipment, and deposits related

to construction, offset by receivables from related party’s collection of cash for a down payment and

restricted cash. Net cash used in investing activities in the prior comparable six-month period was comprised

of the purchase of property and equipment, down-payments 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 six-month period ended June 30, 2016, was $7,399,141 as

compared to $9,191,280 for the six-month period ended June 30, 2015. Net cash provided by financing

activities in the current six-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 repayment of notes

payable to related parties, the payment of debt issuance costs, and changes in other debt. Net cash provided

by financing activities in the prior comparable six-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 formal lines of credit or other bank financing arrangements as of June 30, 2016. However, the

Company’s main bank allowed a short term overdraft.

We have commitments for executed purchase orders and agreements in the amount of $57 million as of June

30, 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

June 30, 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 June 30, 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 June 30, 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 has been prepared and a termination fee of

$100,000 was agreed by the parties and charged to the consolidated statements of comprehensive loss.

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 SPV will therefore be the issuer, however, the responsibility to

place the bonds remains with the Company.

Off-Balance Sheet Arrangements

As of June 30, 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

Seventy percent (70%) of the “Net project cost” is intended to be financed through the issuance of secured

bonds, for which negotiations have been initiated. The remaining thirty percent (30% 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

commitments, 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 project’s 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 June 30, 2016, and the filing date, though future anticipated cash

outflows for investing activities will continue to depend on the availability of financing.

Forward-Looking Statements and Factors That May Affect Future Results and Financial Condition

The statements contained in the section titled Management’s 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.

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 Company’s

management, with the participation of its chief executive officer and chief financial officer, of the

effectiveness of the Company’s 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 Commission’s 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 Company’s management concluded, as of the end of the period covered by this

report, that the Company’s 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

Commission’s 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 June 30, 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.

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

Exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits on page 51

of this Form 10-Q, and are incorporated herein by this reference.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report

to be signed on its behalf by the undersigned, thereunto duly authorized.

SunVesta, Inc.

Date

/s/ Hans Rigendinger

August 19, 2016

Hans Rigendinger

Chief Executive Officer, Chief Financial Officer,

Principal Accounting Officer Chief Operating

Officer and Director

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 December31, 1999).

3.2.2*

Amended Bylaws (incorporated by reference from the Form 10-QSB filed with the Commission onNovember

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 Rigendingerand 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 andHans 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 theForm 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 of2002.

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.

Attached files

Stock widget

Investing forum

SUNVESTA, INC. Reports