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EXCEL - IDEA: XBRL DOCUMENT - SUNVESTA, INC. | Financial_Report.xls |
EX-31 - CERTIFICATION SUNVESTA - SUNVESTA, INC. | exhibit31.htm |
EX-32 - CERTIFICATION SUNVESTA - SUNVESTA, INC. | exhibit32.htm |
EX-10.12 - EMPLOYMENT AGREEMENT - SUNVESTA, INC. | exhibit1012.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 for the quarterly period ended March 31, 2015.
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF
1934 for the transition period from
to
.
Commission file number: 000-28731
SUNVESTA, INC.
(Exact name of registrant as specified in its charter)
Florida
98-0211356
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization)
Identification No.)
Seestrasse 97, Oberrieden, Switzerland CH-8942
(Address of principal executive offices) (Zip Code)
011 41 43 388 40 60
(Registrants telephone number, including area code)
n/a
(Former name, former address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or
15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports), and (2) has been subject to such filing requirements for the
past 90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web
site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation
S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
was required to submit and post such files). Yes þ No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and
smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes o No þ
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest
practicable date. The number of shares outstanding of the issuers common stock, $0.01 par value (the only
class of voting stock), at May 20, 2015, was 83,541,603.
1
TABLE OF CONTENTS
PART 1- FINANCIAL INFORMATION
Item1.
Financial Statements:
3
Consolidated Balance Sheets as of March 31, 2015 (Unaudited) and December 31,
4
2014
Unaudited Consolidated Statements of Operations and Comprehensive Loss
5
(unaudited) for the three months ended March 31, 2015 and March 31, 2014
amounts
Unaudited Consolidated Statements of Stockholders Equity (unaudited) for the
6
three months ended March 31, 2015
Unaudited Consolidated Statements of Cash Flows (unaudited) for the three months
7
ended March 31, 2015 and March 31, 2014
Notes to Unaudited Consolidated Financial Statements
8
Managements Discussion and Analysis of Financial Condition and Results of
34
Operations
Quantitative and Qualitative Disclosures about Market Risk
44
Controls and Procedures
44
PART II-OTHER INFORMATION
Legal Proceedings
45
Risk Factors
45
Unregistered Sales of Equity Securities and Use of Proceeds
45
Defaults Upon Senior Securities
46
Mine Safety Disclosures
46
Other Information
46
Exhibits
46
47
48
2
PART I FINANCIAL INFORMATION
ITEM 1.
FINANCIAL STATEMENTS
As used herein, the terms Company, we, our, and us refer to SunVesta, Inc., a Florida
corporation, and its predecessors and subsidiaries, unless otherwise indicated. In the opinion of
management, the accompanying unaudited, consolidated financial statements included in this Form 10-Q
reflect all adjustments (consisting only of normal recurring accruals) necessary for a fair presentation of
the results of operations for the periods presented. The results of operations for the periods presented are
not necessarily indicative of the results to be expected for the full year.
3
SUNVESTA, INC.
CONSOLIDATED BALANCE SHEETS
March 31, 2015
December 31, 2014
(Unaudited)
Assets
Current assets
Cash and cash equivalents
$
106,445 $
14,347
Receivable from related parties
25,927
27,163
Other assets
278,698
289,156
Total current assets
411,070
330,666
Non-current assets
Property and equipment - net
52,718,276
51,201,352
Deposits related to construction work
817,389
820,565
Debt issuance costs - net
1,458,452
2,006,849
Down payment for property and equipment
2,469,816
2,369,816
Restricted cash
1,688,297
1,684,934
Total non-current assets
59,152,230
58,083,516
Total assets
$
59,563,300
58,414,182
Liabilities and stockholders' equity (deficit)
Bank liabilities
-
153,375
Accounts payable
5,535,450
6,181,057
Accrued expenses
6,842,622
5,444,514
Note payable
2,195,551
3,023,759
Notes payable to related parties
1,239,545
1,162,100
CHF-Bond
28,729,655
25,511,898
Total current liabilities
44,542,823
41,476,703
Non-current liabilities
EUR-Bond
8,355,929
9,057,986
Notes payable to related parties
33,085,285
30,299,312
Other long term debts
64,803
74,837
Pension liabilities
139,998
136,433
Total non-current liabilities
41,646,015
39,568,568
Total liabilities
86,188,838
81,045,271
Stockholders' equity (deficit)
Preferred stock, $0.01 par value;
50,000,000 share authorized no shares issued
and outstanding
-
-
Common stock, $0.01 par value;
200,000,000 shares authorized; 75,541,600 and
83,541,603 shares issued and outstanding
835,416
835,416
Additional paid-in capital
23,186,390
22,942,486
Accumulated other comprehensive income /loss
215,385
1,265,590
Accumulated deficit
(50,862,729)
(47,674,581)
Total stockholders' equity (deficit)
(26,625,538)
(22,631,089)
Total liabilities and stockholders' equity (deficit) $
59,563,300
58,414,182
The accompanying notes are an integral part of these consolidated financial statements.
4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Three months ended March 31,
| 2015 |
| 2014 |
|
|
|
|
| ||
| (Unaudited) |
| (Unaudited) |
|
|
|
|
| ||
| Revenues |
|
|
|
|
|
|
|
|
|
| Revenues, net | $ | - |
| - |
|
|
|
|
|
| Cost of revenues |
| - |
| - |
|
|
|
|
|
| Gross profit |
| - |
| - |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating expenses |
|
|
|
|
|
|
|
|
|
| General and administrative expenses | $ | (1,856,467) |
| (2,051,992) |
|
|
|
|
|
| Total operating expenses |
| (1,856,467) |
| (2,051,992) |
|
|
|
|
|
|
|
|
|
|
|
|
| |||
| Loss from operations | $ | (1,856,467) |
| (2,051,992) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other income / - expenses |
|
|
|
|
|
|
|
|
|
| Interest income |
| 6,784 |
| - |
|
|
|
|
|
| Interest expense |
| (1,328,911) |
| (554,626) |
|
|
|
|
|
| Amortization of debt issuance costs and commissions |
|
(446,204) |
| (73,797) |
|
|
|
|
|
| Exchange differences |
| 463,442 |
| (157,157) |
|
|
|
|
|
| Other income / - expenses |
| (25,641) |
| (58,523) |
|
|
|
|
|
| Total other income / - expenses | $ | (1,330,530) |
| (844,103) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss before income taxes | $ | (3,186,997) |
| (2,896,095) |
|
|
|
|
|
| Income Taxes |
| (1,151) |
| - |
|
|
|
|
|
| Net loss | $ | (3,188,148) |
| (2,896,095) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Comprehensive income /(loss) |
|
|
|
|
|
|
|
|
|
| Foreign currency translation |
| (1,050,205) |
| (204,812) |
|
|
|
|
|
| Comprehensive income / (loss) | $ | (4,238,353) |
| (3,100,907) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Loss per common share |
|
|
|
|
|
|
|
|
|
| Basic and diluted | $ | (0.03) |
| (0.03) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Weighted average common shares |
|
|
|
|
|
|
|
|
|
| Basic and diluted |
| 92,607,159 |
| 86,247,159 |
|
|
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
5
SUNVESTA, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
Common
Additional
Accumulated
Accumulated
Treasury
Total
Stock
Paid in
Other
deficit
Stock
Stockholders
Capital
Comprehensive
Equity
Income (Loss)
(Deficit)
December 31, 2014
$
835,416 $
22,942,486 $
1,265,590 $
(47,674,581) $
- $
(22,631,089)
Net loss
-
-
-
(3,188,148)
-
(3,188,148)
Translation adjustments
-
-
(1,050,205)
-
-
(1,050,205)
Stock based compensation
-
243,904
-
-
-
243,904
expense
March 31, 2015
$
835,416 $
23,186,390 $
215,385 $
(50,862,729) $
- $
(26,625,538)
The accompanying notes are an integral part of these consolidated financial statements.
6
SUNVESTA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
| January 1 to March 31, 2015 |
| January 1 to March 31, 2014 |
| |
| Unaudited |
| Unaudited |
| |
|
|
|
| ||
Cash flows from operating activities |
|
|
|
|
|
Net loss | $ | (3,188,148) |
| (2,896,095) |
|
Adjustments to reconcile net loss to net cash |
|
|
|
|
|
Depreciation and amortization |
| 16,802 |
| 14,194 |
|
Amortization of debt issuance cost and commissions |
| 446,204 |
| 73,797 |
|
Unrealized exchange differences |
| (551,593) |
| 157,157 |
|
Stock compensation expense |
| 243,904 |
| 583,592 |
|
Increase in pension fund commitments |
| - |
| 1,010 |
|
- Increase / decrease in: |
|
|
|
|
|
Other current assets |
| 11,590 |
| (38,660) |
|
Accounts payable |
| (771,197) |
| (377,411) |
|
Accrued expenses |
| 1,322,708 |
| 1,495,718 |
|
Net cash used in operating activities |
| (2,469,730) |
| (986,698) |
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
Receivables from related parties |
| 1,994 |
| - |
|
Purchase of property and equipment |
| (765,999) |
| (2,198,136) |
|
Deposits related to construction |
| 3,311 |
| 42,461 |
|
Down payments for property and equipment |
| (101,945) |
| - |
|
Restricted cash |
| 16 |
| - |
|
Net cash used in investing activities |
| (862,623) |
| (2,155,675) |
|
Cash flows from financing activities |
|
|
|
|
|
Decrease in bank liabilities |
| (153,375) |
|
|
|
Proceeds from notes payable related parties |
| 1,294,163 |
| 644,767 |
|
Repayment of notes payable related parties |
| - |
| (594,045) |
|
Proceeds from notes payable |
| - |
| 2,818,172 |
|
Proceeds from bond issuance, net of commissions |
| 2,660,356 |
| 5,803,055 |
|
Repayment of bonds |
| - |
| (4,989,073) |
|
Payment for debt issuance costs |
| (256,268) |
| (945,934) |
|
Changes in other debt |
| (119,601) |
| - |
|
Purchase/Sale of treasury stock |
| - |
| 10,300 |
|
Net cash provided by financing activities |
| 3,425,275 |
| 2,747,242 |
|
Effect of exchange rate changes |
| (824) |
| 8,318 |
|
Net increase / - decrease in cash |
| (92,098) |
| (386,813) |
|
Cash and cash equivalents, beginning of period |
| 14,347 |
| 629,673 |
|
Cash and cash equivalents, end of period | $ | 106,445 |
| 242,860 |
|
|
|
|
| ||
Additional information |
|
|
|
| |
Capitalized interest and debt issuance costs for construction (non-cash) |
| 765,000 |
| 597,999 |
|
Repayment of Specogna Holding AG loan by Aires |
| 707,428 |
| - |
|
Interest paid |
| 160,000 |
|
|
|
The accompanying notes are an integral part of these consolidated financial statements.
7
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
1.
CORPORATE INFORMATION
On August 27, 2007, SunVesta Inc. (SunVesta) acquired SunVesta Holding AG (SunVesta
AG) (collectively the Company). SunVesta AG holds five wholly-owned subsidiaries:
SunVesta Projects and Management AG, a Swiss company; Rich Land Investments Limitada,
a Costa Rican company (Rich Land); SunVesta Costa Rica Limitada, a Costa Rican
company (SVCR), Altos del Risco SA, a Costa Rican company (AdR) and Profunda
Capital Partners LLC (Profunda), a US company.
In January 2005, the Company changed its business focus to the development of holiday
resorts and investments in the hospitality and related industry. The Company has one major
project in Costa Rica. Planning for this project has been fully completed, all consents have
been granted, except that consent required under Article 21 in connection with access to the
beachfront associated with the project. Excavation work began in March 2013 and site work
continues. The Company is still in process of completing the financing of the project and has
not realized revenue to date. Since the financing of the project is not complete, the Companys
activities are subject to significant risks and uncertainties.
These consolidated financial statements are prepared in US Dollars on the basis of generally
accepted accounting principles in the United States of America (US GAAP).
The accompanying unaudited interim consolidated financial statements have been prepared by
management in accordance with the instructions in Form 10-Q and, therefore, do not include
all information and footnotes required by generally accepted accounting principles and
should, therefore, be read in conjunction with the Companys Form 10-K, for the year ended
December 31, 2014, 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, 2015.
Except as indicated in the notes below, there have been no other material changes in the
information disclosed in the notes to the financial statements included in the Companys Form
10-K for the year ended December 31, 2014, filed with the Securities and Exchange
Commission.
2.
SIGNIFICANT ACCOUNTING POLICIES
New accounting standard updates
In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting
Standards Updates (ASU) 2014-15 requiring an entitys management to evaluate whether
there are conditions or events, considered in aggregate, that raise substantial doubt about
entitys ability to continue as a going concern within one year after the date that the financial
statements are issued (or within one year after the date that the financial statements are
available to be issued when applicable). The amendments to (ASU) 2014-15 are effective for
the annual period ending after December 15, 2016, and for annual periods and interim periods
thereafter. Early application is permitted. The Company is in the process of evaluating the
prospective impact of (ASU) 2014-15 will have on its balance sheet.
8
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
3.
GOING CONCERN
The Company is currently working on building a hotel in the Papagayo Gulf Tourism Project
area of Guanacaste, Costa Rica. The project is expected to open in the first quarter of 2017.
Until the completion of the project, the following expenditures are estimated to be incurred:
a. Gross project cost
$
208,000,000
b. Less: Proceeds from sale of villas
(25,000,000)
c. Net project cost
183,000,000
d. Overhead expenses
24,000,000
e. Less: Recuperated in gross project cost
(12,000,000)
f
Total, excluding other potential projects
$
195,000,000
Sixty percent (60%) of the net project cost is intended to be financed through the issuance of
secured bonds, for which negotiations have been initiated. The remaining forty percent (40%)
of the net project cost, as well as non-recuperated overhead expenses are intended to be
financed by the main shareholders or lenders of the project, i.e. Zypam Ltd., shareholder and
related entity to Mr. Josef Mettler, Mr. Hans Rigendinger, shareholder, Company Director
and Chief Operating Officer, Dr. Max Rössler, 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 SunVesta AG. The purpose of the
guarantee is to ensure that until such time as financing is secured for the entire project that
they will act as a guarantor to creditors to the extent of the projects ongoing capital
requirements. 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. The
guaranty may not be terminated until such time as SunVesta AG has secured financing for the
completion of the project. Based on this guaranty agreement, management believes that
available funds are sufficient to finance cash flows for the twelve months subsequent to
March 31, 2015 and the filing date, though future anticipated cash outflows for investing
activities will continue to depend on the availability of financing.
9
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
4.
CASH AND CASH EQUIVALENTS
Cash and cash equivalents are available to the Company without any restriction or limitation
on withdrawal and/or use of these funds. The Companys cash equivalents are placed with
financial institutions that maintain high credit ratings. The carrying amounts of these assets
approximate their fair value.
Cash & cash
USD ($)
EURO
CHF
CRC
Total
Total
equivalents
March 31, 2015
December 31, 2014
original currency
18,491
10,955
73,202
84,135
in $
18,491
11,887
75,912
155
106,445
14,347
USD ($) =
US Dollar
EURO =
Euro
CHF
=
Swiss Francs
CRC
=
Costa Rican Colón
5.
RESTRICTED CASH
As of March 31, 2015, the Company has the following restricted cash positions:
March 31,
December 31,
Restricted Cash
2015
2014
$
$
Credit Suisse in favor of
BVK Personalvorsorge des Cantons Zurich
132,635
129,272
HSBC in favor of
Costa Rican Tourism Board
370,000
370,000
Banco Nacional de Costa Rica in favor of the
Costa Rican Environmental Agency SETENA
622,312
622,312
Banco National de Costa Rica in favor of the Costa
Rican Tourism Board
563,350
563,350
Gross
1,688,297
1,684,934
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.
10
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
6.
PROPERTY & EQUIPMENT
March 31, 2015
December 31, 2014
Land
$
19,700,000
19,700,000
IT Equipment
185,846
185,846
Other equipment and furniture
280,284
277,557
Leasehold improvements
66,617
66,617
Vehicles
139,000
139,000
Construction in-process
32,806,558
31,275,559
Gross
53,178,305
51,644,579
Less accumulated depreciation
(460,029)
(443,227)
Net
$
52,718,276
51,201,352
Depreciation expenses for the period ended
March 31, 2015 and 2014
16,802
14,194
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 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 expires in June 2022. The AdR concession is
also a right to use the property for a specific period of time of 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 expires in November 2036. For both properties concession extension requests for
30 years (Rich Land) and 15.5 years (AdR) were filed during third quarter 2013, which
requests have since been updated to request an additional 50 years for each. These extension
requests have not been answered as of date of this report.
The construction in process through December 31, 2014 and March 31, 2015, is represented
primarily by architectural work related to the hotel and apartments as well as site work on the
respective properties.
Deposit related to construction work
During the quarter ended March 31, 2015, most of the main earthmoving groundwork has
been completed for which work the Company has paid several deposits to contractors. These
deposits will be offset against invoices for such groundwork. As of March 31, 2015 and
December 31, 2014, the Company has deposits of $817,389 and $820,565 respectively, which
have not yet been set off.
Guaranty Retention
During the quarter ended March 31, 2015, most of the main earthmoving groundwork has
been completed. Due to this development, the Company has received several invoices from
contractors. The Company has retained some amounts related to construction work. As soon
as the Company releases the corresponding work retention the retention will be paid. As of
March 31, 2015 and December 31, 2014, the Company had guaranty retention in the amount
of $70,551 and $0, which is stated in accrued expenses.
11
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
7.
DOWN PAYMENTS FOR PROPERTY & EQUIPMENT
March 31, 2015
December 31, 2014
La Punta (neighboring piece of land)
$
2,469,816
2,369,816
Hotel Project Atlanta
$
-
-
Altos del Risco
$
-
-
Gross
$
2,469,816
2,369,816
Write off Hotel Project Atlanta
$
-
-
Total (net)
$
2,469,816
2,369,816
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, Costa Rica with a total surface
of approximately 230,000 square meters for $22,895,806, whereof fifty percent was to be paid
in cash and the other fifty percent through a combination of a 10 percent equity share in La
Punta (the concession properties in Polo Papagayo) and a five percent in equity of Paradisus
Papagayo Bay Resort & Luxury Villas (currently under construction). The payment schedule
was as follows:
-
$0.5 million is required as a cash payment by May 16, 2012
-
$5.0 million is required as a cash payment by August 31, 2012
-
$5.698 million is required as a cash payment by January 31, 2013
-
Equity is required to be transferred upon final payment
On November 13, 2012, the above agreement was amended to decrease the total purchase
price to $17.2 million with no equity shares. The terms and conditions of the cash payment
were to be defined. Furthermore, all payments by the Company to date and in the future were
to be refundable in the event the Company did not complete the purchase. During the second
quarter of 2013, the Company entered into a new agreement for the purchase of the two
additional concession properties. The original contract as described above was cancelled and
replaced by a new contract, which included the following clauses:
-
The total purchase price is $17,500,000 of which $1,369,816 has been paid as of date of the new agreement
and therefore $16,130,184 remained outstanding as per date of the new agreement.
-
Since the original seller of these two additional concession properties at Polo Papagayo, Guanacaste owed 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 was to be paid directly to the original seller of the
concession properties.
-
The payment schedule for these two additional concession properties at Polo Papagayo Guanacaste was as
is detailed hereinafter:
Third Party
-
$300,000 on May 4, 2013 which was paid on May 3, 2013 and is non-refundable
-
$1,000,000 on June 30, 2013, which is refundable and $700,000 of this $1,000,000 was paid on October 29,
2013. The remaining $300,000 has not been paid as of the date of this report.
-
$1,000,000 on July 31, 2013, which is refundable and has not been paid as of the date of this report.
-
$1,000,000 on August 31, 2013 which is refundable and has not been paid as of the date of this report.
-
$1,500,000 on September 30, 2013, which is refundable and has not been paid as of the date of this report.
-
$1,500,000 on October 31, 2013, which is refundable and has not been paid as of the date of this report.
-
$1,700,000 on November 30, 2013, which is refundable and has not been paid as of the date of this report.
$8,000,000 in total to Third Party
12
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
7.
DOWN PAYMENTS FOR PROPERTY & EQUIPMENT - Continued
Original Seller
-
$1,000,000 on January 31, 2014 which has not been paid as of the date of this report and is non-refundable.
-
$1,000,000 on February 28, 2014 which has not been paid as of the date of this report and is non-
refundable.
-
$1,000,000 on March 31, 2014 which has not been paid as of the date of this report and is non-refundable.
-
$1,000,000 on April 30, 2014 which has not been paid as of the date of this report and is non-refundable.
-
$1,000,000 on May 31, 2014 which has not been paid as of the date of this report and is non-refundable.
-
$1,000,000 on June 30, 2014 which has not been paid as of the date of this report and is non-refundable.
-
$1,000,000 on July 31, 2014 which has not been paid as of the date of this report and is non-refundable.
$1,130,184 on August 31, 2014 which has not been paid as of the date of this report and is non-refundable.
$8,130,184 in total to Original Seller
The Company had paid down-payments on the purchase of these properties of $2,469,816 as
of March 31, 2015 and has made an additional refundable payment of $100,000 subsequent to
period end against the purchase price. The Company is in discussions with the Original Seller
regarding an extension of the agreement. Should the Company not be successful in obtaining
a time extension for the payment of the purchase price, it will have to write-off $300,000 of
that purchase price already paid.
13
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
8.
FAIR VALUE MEASUREMENT
The guidance on fair value measurements defines fair value as the exchange price that would
be received for an asset or paid to transfer a liability (an exit price) in the principal or most
advantageous market for the asset or liability in an orderly transaction between market
participants. This guidance also specifies a fair value hierarchy based upon the observability
of inputs used in valuation techniques. Observable inputs (highest level) reflect market data
obtained from independent sources, while unobservable inputs (lowest level) reflect internally
developed market assumptions. In accordance with this guidance, fair value measurements are
classified under the following hierarchy:
Level 1
Quoted prices for identical instruments in active markets.
Level 2
Quoted process for similar instruments in active markets, quoted prices for identical or similar
instruments in markets that are not active; and model-derived valuations in which significant
inputs or significant value drivers are observable in active markets.
Level 3
Model derived valuations in which one or more significant inputs or significant value-drivers are
unobservable.
When available, the Company uses quoted market prices to determine fair value, and classify
such measurements within Level 1. In some cases where market prices are not available, the
Company makes use of observable market based inputs to calculate fair value, in which case
the measurements are classified within Level 2. If quoted or observable market prices are not
available, fair value is based upon internally developed models that use, where possible,
current market-based parameters such as interest rates, yield curves and currency rates. These
measurements are classified within Level 3.
Fair value measurements are classified according to the lowest level input or value-driver that
is significant to the valuation. A measurement may therefore be classified within Level 3 even
though there may be significant inputs that are readily observable.
Fair value measurement includes the consideration of nonperformance risk. Nonperformance
risk refers to the risk that an obligation (either by counterparty or the Company) will not be
fulfilled. For financial assets traded in an active market (Level 1), the nonperformance risk is
included in the market price. For certain other financial assets and liabilities (Level 2 and 3),
the Companys fair value calculations have been adjusted accordingly.
As of March 31, 2015 and December 31, 2014, respectively, there are no financial assets or
liabilities measured on a recurring basis at fair value.
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:
14
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
8.
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 payable to related parties - Dr. M. Rössler (current) The fair value was calculated based on the underlying
publically traded shares. However, the Company records the loan at nominal value. The Company does not have
sufficient cash to repurchase the shares as of balance sheet date and hence repay the loans in shares.
Notes payable to related parties (current) carrying amount approximated fair value due to the short term nature
of the notes payable.
EUR bond (old) carrying amount approximated fair value due to its short term nature
EUR- bonds The fair values of the bonds payable are classified as level 3 fair values. The fair values of the bonds
have been determined by discounting cash flow projections discounted at the respective interest rates of 7.25% for
EUR bonds, which represents the current market rate based on the creditworthiness of the Company. Hence, the
carrying values approximate fair value.
CHF-bonds The fair values of the bonds payable are classified as level 3 fair values. The fair values of the bonds
have been determined by discounting cash flow projections discounted at the respective interest rates of 7.25% for
CHF bonds, which represents the current market rate based on the creditworthiness of the Company. Hence, the
carrying values approximate fair value.
Notes payable to related parties Aires (non-current) The fair values of the notes payable to Aires International
Investments Inc. are classified as level 3. The fair values of the notes were determined by discounting cash flow
projections discounted at the respective interest rates of 7.25%, which represents the current market rate based on
the creditworthiness of the Company. Hence, the carrying value approximates fair value.
The fair value of our financial instruments is presented in the table below:
March 31, 2015
December 31, 2014
Carrying
Fair Value Carrying
Fair Value
Fair Value
Amount
Amount
Reference
$
$
$
$
Levels
Cash and cash equivalents
106,445
106,445
14,347
14,347
1
Note 4
Restricted cash
1,688,297
1,688,297
1,684,934
1,684,934
1
Note 5
Receivables from related
parties other (current)
25,927
25,927
27,163
27,163
3
Note 9
Accounts Payable
5,535,450
5,535,450
6,181,057
6,181,057
1
-
Bank liabilities
-
-
153,375
153,375
1
Note10
Note payable
2,195,551
2,195,551
3,023,759
3,023,759
1
Note 16
Notes payable to related
parties Dr. M. Rössler
824,213
824,213
803,223
765,890
1
Note 9
(current)
Notes payable to related
parties Rigendinger
1,964
1,964
1,914
1,914
3
Note 9
(current)
Notes payable to related
parties other (current)
413,368
413,368
356,963
356,963
3
Note 9
EUR-bonds
8,355,929
8,355,929
9,057,986
9,057,986
3
Note 11
CHF-bonds
28,729,655
28,729,655
25,511,898
25,511,898
3
Note 11
Notes payable to related
parties Aires (non-
33,085,285
33,085,285 30,299,312
30,299,312
3
Note 9
current)
15
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
9.
RECEIVABLES FROM AND PAYABLES TO RELATED PARTIES
The advances from (to) related parties are composed as follows:
Receivables
Payables
March 31,
December 31,
March 31,
December 31,
2015
2014
2015
2014
1 Hans Rigendinger
-
-
1,964
1,914
2 Aires International
-
-
33,085,285
30,299,312
3 Dr. Max Rössler
-
-
824,213
803,223
4 4f capital ag
-
-
777
-
5 Akyinyi Interior and
Exterior Decoration
-
-
200,000
170,000
6 Global Care AG
-
-
212,589
186,963
7 Geoffrey Long
25,927
27,163
-
-
Total excluding interest
25,927
27,163
34,324,828
31,461,412
Accrued interest
-
-
4,550,817
3,818,494
Total
25,927
27,163
38,875,645
35,279,906
of which non-current
-
-
33,085,285
30,299,312
Related party
Capacity
Interest Repayment
Rate
Terms
Security
1 Hans Rigendinger Shareholder, COO and Company board member
3%
none
none
2 Aires International
*** see hereinafter ***
3 Dr. Max Rössler
*** see hereinafter ***
4 4f capital ag
Company owned by Josef Mettler, CEO, CFO and
Company board member
none
none
none
Akyinyi Interior
5 and Exterior
Company owned by the wife of Josef Mettler
none
none
none
Decoration
6 Global Care AG
Company owned by Dr. Max Rössler
none
none
none
7 Geoffrey Long
Head of Accounting The Americas
none
none
none
Loan agreement Aires International Investment Inc.
As of March 31, 2015 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
10,439,832
7.25 %
Dec 31, 2017
SunVesta Inc.
Promissory note
10,000,000
10,439,832
7.25 %
Dec 31, 2017
SunVesta Inc.
Promissory note
10,000,000
10,439,832
7.25 %
Dec 31, 2017
SunVesta Holding
Loan agreement
1,691,395
1,765,788
7,25%
Dec 31, 2017
Total
33,085,285
*
The notes may be repaid in whole or in part.
16
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
9.
RECEIVABLES FROM AND PAYABLES TO RELATED PARTIES - Continued
Loans Dr. Max Rössler
As of March 31, 2015 the Company owes Dr. Max Rössler the following:
Debt instrument Securities
Amount in
Amount in Annual interest Repayment date
CHF
USD
rate
Securities
10,000 shares
427,048
442,858
*
May 30, 2015
lending
Schindler
Holding
Securities
700 shares Zug
367,741
381,355
*
May 30, 2015
lending
Estates Holding
Total
794,789
824,213
May 30, 2015
*
The Company is not required to pay any interest and can repay the loans either in
cash or with the delivery of the respective shares.
Loan Global Care AG
During 2014, Global Care AG loaned the Company $191,849 (CHF 185,000), which amount
was repayable on October 31, 2014. The loan includes a fixed interest payment of $20,740
(CHF 20,000). As of the date of this report, both amounts are overdue. According to the
agreement, there are no penalties for late payments.
17
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
10.
RELATED PARTY TRANSACTIONS
Commissions paid or payable to related parties
During the periods ended March 31, 2015, and March 31, 2014, the Company paid
commissions to 4f capital ag in the amount of $29,181 and $60,300, respectively, for services
related to financing the Company. 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.
These costs have been capitalized to debt issuance costs.
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, 2015 was $1,964.
Mr. Rigendinger also held bonds denominated in Euros and Swiss Francs valued at
approximately $3,853,000 as of March 31, 2015 and December 31, 2014.
Service fees paid or payable to Akyinyi Interior and Exterior Decoration
During the periods ended March 31, 2015, and March 31, 2014, the Company paid or accrued
fees to Akyinyi Interior and Exterior Decoration, which is a company owned by Mr. Mettlers
wife, for services related to interior design plans for the Papagayo Gulf Tourism project in the
amounts of approximately $30,000 and $30,000 respectively. These costs have been
capitalized to property and equipment.
Consulting Fees paid or payable to Cambridge Limited Corp.
During the periods ended March 31, 2015, and March 31, 2014, the Company paid fees to
Cambridge Limited Corporation, which is a company owned by Mr. Mettlers father-in-law.
These fees related to accounting and consulting services rendered in Costa Rica for the
Company in the amount of $43,500 and $43,500 respectively.
11.
BANK LIABLITIES
There is no bank liability at March 31, 2015. The bank liability at December 31, 2014,
represented a temporary, secured overdraft facility, bearing an interest rate of 8.9%.
18
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
12.
BONDS
Description
EUR () bond old (repaid)
CHF bond I
Issuer:
SunVesta Holding AG
SunVesta Holding AG
Type of securities:
Bond in accordance with Swiss law
Bond in accordance with Swiss law
Approval by SunVesta AG BOD:
May 12, 2010
June 3, 2011
Volume:
Up to 25,000,000
Up to CHF 15,000,000
Units:
1,000
CHF 50,000
Offering period:
11/10/2010 04/30/2011
09/01/2011 02/28/2012
Due date:
November 30, 2013
August 31, 2015
Issuance price:
100 %
100%
Issuance day:
December 1, 2010
September 1, 2011
Interest rate:
8.25% p.a.
7.25% p.a.
Interest due dates:
November 30 of each year,
August 31 of each year,
the first time November 30, 2011
the first time August 31, 2012
Applicable law:
Swiss
Swiss
Description
EUR () bond new I
CHF bond II (parallel)
Issuer:
SunVesta Holding AG
SunVesta Holding AG
Type of securities:
Bond in accordance with Swiss law
Bond in accordance with Swiss law
Approval by SunVesta AG BOD:
October 31, 2013
May 19, 2014
Volume:
Up to 15,000,000
CHF 15,000,000
Units:
10,000
CHF 10,000
Offering period:
11/07/2013 03/31/2014
05/01/2014 06/30/2014
Due date:
December 2, 2016
August 31, 2015
Issuance price:
100%
100 %
Issuance day::
December 2, 2013
September 01, 2013 (retroactive)
Interest rate:
7.25% p.a.
7.25 % p.a.
Interest due dates:
December 2, 2013
August 31
Applicable law:
Swiss
Swiss
19
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
12.
BONDS - continued
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
The nominal amounts have changed as follows:
CHF Bond
CHF Bond
CHF BOND I
2015
2014
$
$
Balances January 1
10,802,722
8,558,443
Cash inflows
-
5,542,245
Cash outflows
-
-
Foreign currency adjustments
478,058
(953,513)
Reclassifications to CHF Bond II
-
(2,147,983)
Sub-total
12,280,780
10,999,192
Discounts (commissions paid to bondholders)
(670,764)
(670,764)
Accumulated amortization of discounts
536,737
474,294
Unamortized discounts
(134,027)
(196,470)
Balances March 31 and December 31(Carrying
value)
11,146,753
10,802,722
The reclassification was made from CHF bond I to CHF bond II. As CHF bond II has
identical terms as CHF bond I, this reclassification is neither an extinguishment nor a
modification.
As per date of this report the Company has realized a cumulative amount of CHF 10,850,000
million ($10,999,192 million) related to CHF Bond I.
20
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
12.
BONDS - continued
EUR-Bond
EUR-Bond
(new)
(new)
2015
2014
$
$
Balances January 1
7,342,995
6,757,065
Cash inflows
281,754
1,562,402
Cash outflows
-
-
Foreign currency adjustments
(786,771)
(963,896)
Sub-total
6,837,978
7,355,572
Discounts (commissions paid to bondholders)
(23,753)
(17,305)
Amortization of discounts
6,259
4,729
Unamortized discounts
(17,494)
(12,576)
Balances March 31 and December 31(Carrying
value)
6,820,484
7,342,995
As per date of this report the Company has realized a cumulative amount of EUR 6,300,000
million ($7,657,650 million) related to the EURO Bond I.
EUR-Bond
EUR-Bond
EURO BOND I
old
old
2015
2014
$
$
Balances January 1
-
5,786,248
Cash inflows
-
-
Cash outflows
-
(5,729,712)
Foreign currency adjustments
-
(56,536)
Sub-total
-
-
Discounts (commissions paid to bondholders)
-
(248,195)
Amortization of discounts
-
248,195
Unamortized discounts
-
-
Balances March 31 and December 31(Carrying
value)
-
-
21
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
12.
BONDS - Continued
CHF Bond II
CHF Bond II
CHF BOND II
2015
2014
$
$
Balances January 1
14,709,176
-
Cash inflows
2,386,697
12,912,402
Cash outflows
-
-
Foreign currency adjustments
950,459
243,843
Reclassifications from CHF Bond I
-
2,147,983
Sub-total
18,046,332
15,304,228
Discounts (commissions paid to bondholders)
(1,121,793)
(1,041,917)
Accumulated amortization of discounts
658,362
446,864
Unamortized discounts
(463,431)
(595,052)
Balances March 31 and December 31(Carrying
value)
17,582,902
14,709,176
As per date of this report the Company has realized a cumulative amount of
CHF 20,526,203 million ($20,809,464 million) related to CHF Bond II.
EUR-Bond
EUR-Bond
EURO BOND NEW II
new II
new II
2015
2014
$
$
Balances January 1
1,714,991
-
Cash inflows
-
1,960,226
Cash outflows
-
-
Foreign currency adjustments
(138,191)
(198,968)
Sub-total
1,576,800
1,761,258
Discounts (commissions paid to bondholders)
(59,740)
(59,740)
Amortization of discounts
18,385
13,473
Unamortized discounts
(41,355)
(46,266)
Balances March 31 and December 31(Carrying
value)
1,535,445
1,714,991
As per date of this report the Company has realized a cumulative amount of EUR 1,444.000
million ($1,833,000 million) related to the EURO Bond new II.
22
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
13.
PENSION PLAN
The Company maintains a pension plan covering all employees in Switzerland. The plan is
considered a defined benefit plan and accounted for in accordance with ASC 715
Compensation - Retirement Benefits. This model allocates pension costs over the service
period of employees in the plan. The underlying principle is that employees render services
ratably over this period, and therefore, the income statement effects of pensions should follow
a similar pattern. ASC 715 requires recognition of the funded status, or difference between
the fair value of plan assets and the projected benefit obligations of the pension plan on the
balance sheet, with a corresponding adjustment recorded in the net loss. If the projected
benefit obligation exceeds the fair value of plan assets, then that difference or unfunded status
represents the pension liability.
The Company records a net periodic pension cost in the statement of comprehensive loss. The
liabilities and annual income or expense of the pension plan is determined using
methodologies that involve several actuarial assumptions, the most significant of which are
the discount rate and the long-term rate of asset return (based on the market-related value of
assets). The fair values of plan assets are determined based on prevailing market prices.
Actuarial valuation
Net periodic pension cost has been included in the Companys results as follows:
Three months
Three months
Pension expense
ended
ended
March 31, 2015 March 31, 2014
$
$
Current service cost
14,648
14,147
Net actuarial (gain) loss recognized
-
(169)
Interest cost
1,348
1,494
Expected return on assets
(1,659)
(1,550)
Employee contributions
(5,963)
(5,918)
Net periodic pension cost
8,374
8,004
During the three months periods ended March 31, 2015 and March 31, 2014 the Company
made cash contributions of $5,914 and $5,915, respectively, to its defined benefit pension
plan.
All of the assets are held under the collective contract by the plans re-insurer Company and
are invested in a mix of Swiss and international bond and equity securities within the limits
prescribed by the Swiss Pension Law.
The expected future cash flows to be paid by the Company in respect of employer
contributions to the pension plan for the year ended December 31, 2015 are $17,889.
23
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
14.
STOCK COMPENSATION
The Company has included share based compensation based on the Companys SunVesta Inc.
Stock Option Plan 2013 (the Plan) as part of the total remuneration in certain new
employment and Board of Directors contracts. The Company is authorized up to 50,000,000
shares under the Plan.
The purpose of the Plan is to advance the interests of the Company by encouraging its
employees to remain associated with the Company and assist the Company in building value.
Such share based remuneration includes either shares or options to acquire shares of the
Companys common stock.
For all employees, fair value is estimated at the grant date. Compensation costs for unvested
shares are expensed over the requisite service period on a straight-line basis.
Share Grants Mr. Hans Rigendinger
On January 1, 2013, the Company granted to Hans Rigendinger 3,500,000 common shares,
valued at $0.08 which was 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. The 5,000,000 retention
common shares vested were not issued as of March 31, 2015 and the date of this filing.
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 which was the share price and fair value of the shares on the grant date. These were
issued in connection with his election 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, which was the share price and fair value of the shares on the grant date. These shares
were issued in connection with his employment agreement.. 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.
The 3,000,000 retention common shares vested were not issued as of March 31, 2015 and the
date of this filing.
24
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
14.
STOCK COMPENSATION - Continued
Share Grants Mr. José María Figueres Olsen
On March 10, 2014, the Company authorized the issuance of 500,000 common shares, valued
at $0.10 which was the share price and therefore the fair value on grant date, to José María
Figueres Olsen in connection with his appointment to the Board of Directors. Additionally, on
March 10, 2014, the Company agreed to a retention award of 200,000 common shares for
each fully completed year of service. The 700,000 shares were not issued as of March 31,
2015, and at the date of this report.
Share Grants Mr. Howard M. Glicken
On March 10, 2014, the Company authorized the issuance of 500,000 common shares, valued
at $0.10, which was the share price and therefore the fair value on grant date, to Howard M.
Glicken in connection with his appointment to the Board of Directors. Additionally, on March
10, 2014, the Company agreed to a retention award of 200,000 common shares for each fully
completed year of service. The 700,000 shares were not issued as of March 31, 2015, and at
the date of this report.
Based on these contracts the Company has included the following stock-based compensation
in the Companys results:
Stock-based compensation
Three months
Three months
(shares)
ended March 31, 2015
ended March 31, 2014
Shares granted
46,400,000 shares
46,400,000 shares
Fair Value respectively
$0.0744
$0.0744
market price on grant date
Total maximal expenses
$3,450,000
$3,450,000
(2013-2020)
Shares vested
20,900,000 shares
15,000,000 shares
Unvested shares
25,900,000 shares
31,400,000 shares
A total of 9,400,000 retention common shares vested were not issued as of March 31, 2015.
25
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
14.
STOCK COMPENSATION Continued
As of December 31, 2015, the Company expects to record compensation expense in the future
up to $1,762,666 as follows:
Year ending December 31,
Stock-based
Through
compensation
December 31,
(shares)
2015
2016
2017
2018
2019
2020
$
$
$
$
$
$
Unrecognized
compensation
307,500
410,000
410,000
210,000
210,000
105,000
expense
Stock Options Mr. Hans Rigendinger
The Company granted to Hans Rigendinger, in connection with his employment contract,
10,000,000 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) assume
management responsibilities for the Paradisus Papagayo Bay Resort & Luxury Villas on the
opening date. As of the grant date, the fair value was $340,000 and the Company had
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 wiould be met at 100%, but
the actual date on which this performance condition is expected to be achieved has been
postponed.. As of April 14, 2015, the estimated opening date was postponed to the first
quarter 2017. The Company still assesses that the probability that this performance condition
will be met at 100% as of the new opening date. Hence, the remaining fair value of the award
will be expensed on a straight-line basis over the recalculated expected remaining vesting-
period.
26
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
14.
STOCK COMPENSATION Continued
Stock Options Dr. Max Rössler
The Company granted to Dr. Max Rössler, in connection with his appointment to the Board of
Directors, 10,000,000 options on July 3, 2013. Each option entitles Dr. Rössler 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 on the opening date. As
of the grant date the fair value was $258,210 and the Company had 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 wiould be met at 100%, but the actual date on
which this performance condition is expected to be achieved was postponed. As of April 14,
2015 the estimated opening date was postponed to the first quarter 2017. The Company still
assesses the probability that this performance condition will be met at 100% as of the new
opening date. 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 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 on the opening date. As
of the grant date, the fair value was $258,000 and the Company had estimated that Meliá
assumes responsibility as of July 1, 2015. As of March 6, 2014 the Company assessed the
probability that this performance condition would be met at 100%, but the actual date on
which this performance condition is expected to be achieved was postponed. As of April 14,
2015 the estimated opening date was postponed to the first quarter 2017. The Company still
assesses the probability that this performance condition will be met at 100% as of the opening
date. Hence, the remaining fair value of the award will be expensed on a straight-line basis
over the recalculated expected remaining vesting-period.
27
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
14.
STOCK COMPENSATION Continued
Stock Options Summary
A summary of stock options outstanding as per March 31, 2015 is as follows:
Options outstanding
Number of
Weighted average
Weighted average
Options
exercise price
remaining
contractual life
Outstanding January 1, 2015
32,000,000
$ 0.05
8.42 years
Granted
-
Exercised
-
Forfeited or expired
-
Outstanding March 31, 2015
32,000,000
$ 0.05
8.17 years
Exercisable March 31, 2015
-
The following table depicts the Companys non-vested options as of March 31, 2015 and
changes during the period:
Non-vested options
Shares under Options
Weighted average grant date
fair value
Non-vested at December 31, 2014
32,000,000
$ 0.053
Non-vested-granted
-
-
Vested
-
-
Non-vested, forfeited or cancelled
-
-
Non-vested at March 31, 2015
32,000,000
$ 0.053
Under the provisions of ASC 718 Compensation Stock Compensation, the Company is
required to measure and recognize compensation expense related to any outstanding and
unvested stock options previously granted, and thereafter recognize, in its consolidated
financial statements, compensation expense related to any new stock options granted after
implementation using a calculated fair value based option-pricing model. The Company uses
the Black-Scholes option-pricing model to calculate the fair value of all of its stock options
and its assumptions are based on historical and available market information. No stock
options were granted for the periods ended March 31, 2015 and March 31, 2014.
Assumption
March 31, 2015
March 31, 2014
Dividend yield
Risk-free interest rate used (average)
Expected market price volatility
Average expected life of stock options
n.a
n.a
The computation of the expected volatility assumption used in the Black-Scholes calculation
for new grants is based on historical volatilities of a peer group of similar companies in the
same industry. The expected life assumptions are based on underlying contracts.
28
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
14.
STOCK COMPENSATION - Continued
Stock Options Summary - Continued
As of March 31, 2015, the Company had unrecognized compensation expenses related to
stock options currently outstanding, to be recognized in future quarters respectively years as
follows:
Through to
Year ending
Year ending
Stock-based compensation (options)
December 31,
December 31,
December 31,
2015
2016
2017
$
$
$
Unrecognized compensation expense
101,214
134,956
33,739
15.
SUMMARY OF SHARE AND OPTION COMPENSATION EXPENSE
The Company recorded the following amounts related to stock based compensation expense
during the periods ended March 31, 2015 respectively March 31, 2014:
Three
Three
Summary of share and option
months
months
based compensation expense
March 31,
March 31,
2015
2014
$
$
Share grants (see Note 13 for
210,166
204,834
details)
Option grants (see Note 13 for
33,738
378,758
details)
Total
(recorded under general &
243,904
583,592
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,
December 31,
Future lease commitments
2015
2014
$
$
2015
97,500
97,500
2016
130,000
130,000
2017
130,000
130,000
2018
-
-
2019
-
-
29
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
17.
NOTE PAYABLE
March 31, 2015
December 31, 2014
$
$
Promissory note
2,000,000
2,000,000
Specogna Holding AG
-
707,428
R. Weimar (private investor)
219,500
316,331
Total
2,195,551
3,023,759
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 the purchase price would be 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 to March 16, 2016.
Loans Specogna Holding AG
On May 15, 2014 the Company entered into a short term loan agreement for CHF 1.0 million
($1.01 million) with Specogna Holding AG. This loan was repayable on July 31, 2014, and
beared a lump remuneration as interest of CHF 30,000 (approximately $30,300). This loan
was repaid in 2014.
On September 16, 2014, the Company entered into a short term loan agreement for
approximately $736,000 with Specogna Holding AG (Specogna) repayable on October 31,
2014, with a fixed interest payment of approximately $32,000. The loan was secured
personally and jointly by Dr. Max Rössler, Mr. Josef Mettler and Mr. Hans Rigendinger. The
amounts due to Specogna were repaid on March 24, 2015 by Aires on behalf of SunVesta
AG, with no penalties incurred.
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 (Weimar). The loan was repayable in five instalments, (four
payments of $84,700, one payment of $38,000), with the initial payment due on June 2, 2014
and the latest paymentdue on June 1, 2015. The interest rate is 2 % per annum. The Company
repaid $157,300 as of the filing date of this report, whereas $290,000 should have been
repaid. The agreement does not stipulate any repercussions for the late payments.
30
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
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.
Since the completion date for the Paradisus Papagayo Bay Resort & Luxury Villas
development is now anticipated for the first quarter of 2017, the Company is in discussions
with Meliá regarding another addendum that would allow an extension of the deadlines
stipulated in the Sixth Addendum. Should the Company not be successful, the penalty would
be $5,000,000.
31
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
19.
EARNINGS PER SHARE
Basic earnings per share are the result of dividing the Companys net income (or net loss) by
the weighted average number of shares outstanding for the contemplated period. Diluted
earnings per share are calculated applying the treasury stock method. When there is a net
income dilutive effect all stock-based compensation awards or participating financial
instruments are considered. When the Company posts a loss, basic loss per share equals
diluted loss per share. The following table depicts how the denominator for the calculation of
basic and diluted earnings per share was determined under the treasury stock method.
Three-month
Three-month
Earnings per share
period ended
period ended
March 31, 2015 March 31, 2014
Company posted
Net loss
Net loss
Basic weighted average shares
outstanding
92,607,159
86,247,159
Dilutive effect of common stock
equivalents
None
None
Dilutive weighted average shares
outstanding
92,607,159
86,247,159
A total of 9,400,000 common shares vested were not issued as per balance sheet date and
included in the basic weighted average shares outstanding.
The following table shows the number of stock equivalents that were excluded from the
computation of diluted earnings per share for the respective period because the effect would
have been anti-dilutive.
Three-month
Three-month
Earnings per share
period ended
period ended
March 31, 2015 March 31, 2014
Options to Hans Rigendinger
10,000,000
10,000,000
Options to Dr. M. Rössler
10,000,000
10,000,000
Options to Josef Mettler
12,000,000
12,000,000
Total Options
32,000,000
32,000,000
Shares to Hans Rigendinger
7,500,000
10,000,000
(retention bonus non vested)
Shares to Josef Mettler (retention
18,000,000
21,000,000
award)
Shares to Howard Glicken and
400,000
1,000,000
José Maria Figueres (retention
award)
Total Shares
25,900,000
32,000,000
Total Options and Shares
57,900,000
64,000,00
32
SUNVESTA, INC.
(A Development Stage Company)
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
March 31, 2015
20.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses according consolidated statement of comprehensive loss
include:
Three-month
period ended
Three-month
General and administrative expenses
March 31,
period ended
2015
March 31, 2014
$
$
Rental & related expenses
(51,682)
(44,636)
Audit
(49,809)
(90,112)
Consulting
(275,338)
(602,106)
Marketing, Investor & public relations
(14,641)
(7,863)
Travel expenses
(174,932)
(104,759)
Personnel costs including social securitys
costs and share based remuneration
(1,201,168)
(898,478)
Various other operating expenditures
(88,897)
(304,038)
Total according statements of
comprehensive loss
(1,856,467)
(2,051,992)
21.
SUBSEQUENT EVENTS
Management has evaluated subsequent events after the balance sheet date, through the
issuance of the financial statements, for appropriate accounting and disclosure. The Company
has determined that there were no such events that warrant disclosure or recognition in the
financial statements, except for the below:
The status of financing the project is as follows:
On March 10, 2015, the Company executed a letter of engagement with ISM Capital LLP, a
London based investment firm, for the purpose of conducting a $100 million asset backed
bond issuance. Despite the firms commitment to identify investors, the success of this
proposed bond issuance for the amount contemplated or any lesser amount, does not
guarantee that all or part of the amount offered will be subscribed.
The Company is also in negotiations to secure a $40 million credit facility from certain
general contractors that would be involved in the construction of the Paradisus Papagayo Bay
Resort & Luxury Villas. The terms of this credit facility are being discussed and would
complement amounts realized through ISM.
We are also in process of determining the means by which the Company can retire the current
CHF-bond that matures on August 31, 2015, which may include additional debt or equity
financings.
33
ITEM 2.
MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This Managements Discussion and Analysis of Financial Condition and Results of Operations and
other parts of this quarterly report contain forward-looking statements that involve risks and
uncertainties. Forward-looking statements can be identified by words such as anticipates, expects,
believes, plans, predicts, and similar terms. Forward-looking statements are not guarantees of
future performance and our actual results may differ significantly from the results discussed in the
forward-looking statements. Factors that might cause such differences include but are not limited to
those discussed in the subsection entitled Forward-Looking Statements and Factors That May Affect
Future Results and Financial Condition below. The following discussion should be read in
conjunction with our financial statements and notes hereto included in this report. All information
presented herein is based on our three month periods ended March 31, 2015 and March 31, 2014. 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 such as Costa Rica 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, to be constructed in two phases as Vista Mar (Family Concierge)
and Vista Bahia (Royal Service), on 20.5 hectares of prime land located in Guanacaste Province,
Costa Rica, will comprise the Paradisus Papagayo Bay Resort & Luxury Villas, a five star luxury
hotel. The determination to split the project into phases was taken in response to unanticipated delays
associated with earth movement, an unrelated environmental dispute with a neighbor at the Vista
Bahia location and availability of financing to complete the development. The Paradisus Papagayo
Bay Resort & Luxury Villas is scheduled to open in the first quarter of 2017, 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
34
Vista Mar
Family Concierge
The Family Concierge will be a family orientated part of the Paradisus Papagayo Bay Resort &
Luxury Villas. The accommodations will be designed to satisfy the needs of the modern family.
The Family Concierge area will include:
166 Junior Suites Deluxe
(47* square meters)
34 Suites Deluxe
(87* square meters)
33 Suites Premium
(93* square meters)
6 Handicapped Junior Suites Deluxe
(47* square meters)
1 Bridal Suites
(93* square meters)
2 Deluxe Suites Presidential
(88* square meters)
1 Presidential Suite
(194* square meters)
*
Room size does not include balconies and terraces.
All ground floor suites will have direct access to swim-up pools. Each of the suites and villas will
have a full view of the sea. Family Concierge guests will furthermore have access to restaurants, bars,
and lounges. The planned Onyx Night Club and the Gabi Club will be located near the beach.
Vista Bahia
Royal Service
Our Royal Service will include an extensive range of services such as a butler service, private pools
for each Garden Villa and/or a Jacuzzi in every suite.
The Royal Service area will include:
108 Junior Suites Grand Deluxe
(43-60* square meters)
2 Junior Suites Grand Deluxe for Handicapped Guests
(53* square meters)
6 Grand Master Suites
(87* square meters)
2 Deluxe Suites Presidential
(60 square meters)
1 Grand Presidential Suite (4 bedrooms)
(145* square meters)
20 one or two bedroom Garden Villas
(91212* square meters)
Room size does not include balconies and terraces.
* Room size does not include balconies and terraces.
All ground floor suites will have direct access to swim-up pools. Each of the suites and villas will
have a full view of the sea. Royal Service guests will furthermore have access to restaurants, bars,
lounges, fitness equipment, spas and outside massage areas.
The Paradisus Papagayo Bay Resort & Luxury Villas will feature other highlights including:
more than 65 private, swim up and resort pools including the worlds second largest Infinity Pool
all within idyllic landscaped grounds
a wedding chapel with a stunning ocean view
rain forest walkways that permit guests to experience the flora and fauna of the rain forest
a multipurpose convention hall with over 2,000 square meters of space that can be utilized as a
whole or divided to create smaller meeting rooms
a full service spa committed to providing for the wellbeing of our guests. The spa will be located
with a 180 degree sea view within approximately 1,000 square meters that will include 12 large
treatment rooms, a hairdresser, relaxation areas, pools, saunas and steam rooms
the 20 private villas will be located within the Royal Service area of the resort. The present
intention being that these villas will be sold to individuals who will then lease them back to the
resort when not occupied by the owners.
35
Management
Overall project development is led by Josef Mettler, our Chief Executive Officer, Charles Fessel,
Project Director Paradisus Papagayo Bay Resort & Luxury Villas, Hans Rigendinger, Chairman of the
Board and Chief Operating Officer of SunVesta AG and Ernst Rosenberger, the Companys
Corporate Controller. The lead architect is Ossenbach, Pendones & Bonilla, one of Costa Ricas
largest architectural offices with over 45 architects and designers. Civil engineering services are
provided by DEHC Engineers and structural engineering services by IEAC. Landscape architects are
TPA and interior designers are led by Concreta Srl.
Resort management is to be provided by Melía Hotels International (Melía). Paradisus is Meliás
five star all-inclusive luxury hotel brand that is well recognized in the hospitality industry around the
world. Melía was founded in 1956 in Palma de Mallorca, Spain and is today one of the worlds largest
resort hotel chains, as well as Spains leading hotel chain for business or leisure. The company
currently offers more than 300 hotels in 26 countries over four continents under its Gran Sol Melía,
Sol Melía, ME by Sol Melía, Innside by Sol Melía, Tryp, Sol Melía, Sol Melía Vacation Club, and
Paradisus brands. The Paradisus brand represents all-inclusive luxury resorts with hotels in Mexico
and the Dominican Republic.
Our Paradisus Papagayo Bay Resort & Luxury Villas development is intended to replace Paradisus
Resorts former Paradisus Playa Conchal in Guanacaste, Costa Rica which property was operated by
Melía until April 30, 2011. Our project is part of Meliás master expansion plan, which includes the
opening of two resorts in Playa del Carmen, Mexico. Melía aims to solidify Paradisus Resorts as a
leader in the luxury all-inclusive market segment.
An amendment to the Companys management agreement with Meliá dated August 18, 2014,
stipulates that should the Papagayo Bay Resort & Luxury Villas not be completed by November 15,
2015, and should an extension date not be agreed, subsequent to November 15, 2015, that Meliá will
be entitled to receive a daily amount of $2,000 as liquidated damages. Should the completion of the
construction not occur by February 15, 2016, Meliá will be entitled to terminate the management
agreement and to receive a termination amount of $5 million unless the parties agree in writing to
extend such date.
Since the completion date for the Paradisus Papagayo Bay Resort & Luxury Villas development is
now anticipated for the first quarter of 2017, the Company is in discussions with Meliá regarding
another addendum that will allow an extension of the deadlines stipulated in Sixth Addendum. Should
the Company not be successful in obtaining an additional amendment to the agreement, the penalty
due to Meliá would be $5,000,000.
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.
The Company paid down-payments on the purchase of these properties of $2,469,816 as of March 31,
2015 and has since made another refundable payment of $100,000 against the purchase price. The
Company is in discussions with Meridian regarding an extension of the agreement. Should the
Company not be successful in obtaining a time extension for the payment of the purchase price, it
would have to write-off $300,000 of that purchase price already paid.
36
Hotel and Entertainment Complex (Atlanta, Georgia, U.S.A)
On September 19, 2012, the Company entered into an agreement, as amended, with Fundus America
(Atlanta) Limited Partnership (Fundus) to purchase a hotel and entertainment complex in Atlanta,
Georgia (United States of America). The entire purchase amount of $26 million for the assets had no
firm financing commitment. On March 28, 2014, the Company decided not to continue with the
project due to the changes in the conditions related to the acquisition and an inability to adjust a
financing package to the new conditions. As part of the termination and to avoid potential litigation,
the Company agreed to pay the counterparty EUR 100,000 (approximately $124,500) to settle any
further obligation. On April 7, 2014, the Company paid the EUR 100,000 settlement amount to
Fundus which amount has been expensed and included in other operating expenses.
Finance
The anticipated completion of the Paradisus Papagayo Bay Resort & Luxury Villas in the first quarter
of 2017 will require a net investment of approximately $195 million (excluding non-recuperated
overhead expenses), of which approximately $55 million has been expended as of March 31, 2015.
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, a
credit facililty from construction contractors, 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 bond 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 expires on December 2, 2016. We had realized $7,342,995 as of the year ended December
31, 2014, and $6,820,484 as of March 31, 2015 (decrease due to foreign currency adjustments), for a
cumulative amount of $7,657,650 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 expires on December 2, 2016. We had realized $1,714,991 as of the year ended
December 31, 2014 and $1,535,445 as of March 31, 2015 (decrease due to foreign currency
adjustments), for a cumulative amount of $1,761,258 as of the date of this report.
Swiss Francs (CHF) Bonds
The Company initiated an unsercured CHF bond offering on September 1, 2011, of up to CHF
15,000,000 in units of CHF 50,000 that bear interest at 7.25% per annum payable each August 31
over a four year term that expires on August 31, 2015. We had realized $10,802,722 as of the year
ended December 31, 2014 and $11,146,753 as of March 31, 2015, for a cumulative amount of
$10,999,192 as of the date of this report (decrease due to foreign currency adjustments).
The Company initiated a new offering of unsecured CHF bonds on September 1, 2013, of up to CHF
10,000,000 in units of CHF 10,000 that bear interest at 7.25% per annum payable each August 31,
over a two year term that expires on August 31, 2015. We had realized $14,709,176 as of the year
ended December 31, 2014 and $17,582,902 as of March 31, 2015, for a cumulative amount of
$18,472,160 as of the date of this report (decrease due to foreign currency adjustments).
37
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. Rössler (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 $33,085,285 from Aires as of March 31, 2015 and $30,299,312 as of
December 31, 2014.
Dr. Max Rössler
Over the course of 2012 and 2013, the Company entered into a series of interest free loans with Dr.
Max Rössler, a director of the Company and a principal of Aires. The loans were originally due either
on predetermined dates or on demand, repayable in cash or in a fixed number of shares of certain
publically traded entities. On April 19, 2013, the Company and Dr. Rössler concluded on an act of
transfer under which the loans from June 7, 2012 and March 1, 2013 were transferred to Aires
International and the balances of $1,810,000 and $50,000 added to the existing loan agreement with
Aires. On June 4, 2014, the due dates of the remaining loans to Dr. Rössler were extended to May 30,
2015.
The Company had borrowed $824,213 from Dr. Rössler as of March 31, 2015 as follows:
Date of Agreement
Amount
Shares
Public Entity
July 24, 2012
$442,858
10,000
Schindler Holding AG
August 8, 2012
$381,355
700
Zug Estates Holding AG
DIA S.A.
On March 8, 2013, the Company entered into an interest free loan agreement with DIA S.A. in the
amount of $2,000,000 payable on March 8, 2014, in connectionwith the purchase of land adjacent to
the Paradisus Papagayo Bay Resort & Luxury Villas 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.
Specogna Holding AG
On September 16, 2014, the Company entered into a short term loan agreement for approximately
$736,000 with Specogna Holding AG (Specogna) repayable on October 31, 2014, with a fixed
interest payment of approximately $32,000. The loan was secured personally and jointly by Dr. Max
Rössler, Mr. Josef Mettler and Mr. Hans Rigendinger. The amounts due to Specogna were repaid on
March 24, 2015 by Aires on behalf of the Company, with no penalties incurred.
38
Roland Weimar
On May 23, 2014, the Company entered into a short term loan agreement for approximately $376,800
with Roland Weimar (Weimar). The loan was repayable in five instalments, (four payments of
$84,700, one payment of $38,000), with the initial payment due on June 2, 2014 and the latest
payment due on June 1, 2015. The interest rate is 2 % per annum. The Company repaid $157,300 as
of the filing date of this report, whereas $290,000 should have been repaid. The agreement does not
stipulate any repercussions for the late payments.
The Company owed Mr. Weimar $219,500 as of March 31, 2015 and $316,331 as of December 31,
2014.
Global Care AG
On September 23, 2014, the Company entered into a short term loan agreement of approximately
$191,849 (CHF 185,000) with Global Care AG (Global Care), a company owned by Dr. Rössler (a
director of the Company), repayable on October 31, 2014, with a fixed interest payment of $20,740
(CHF 20,000). The amounts due to Global Care had not been paid as of the filing date of this report.
According to the agreement, there are no penalties for late payments.
The Company owed Global Care $212,589 as of March 31, 2015 and $186,963 as of December 31,
2014.
Timeline
Our expected timeline for developing the Paradisus Papagayo Bay Resort & Luxury Villas is as
follows:
commence onsite vertical construction in the second quarter of 2015
complete construction in the fourth quarter of 2016
handover to Melía in the first quarter of 2017
Results of Operations
During the three month period ended March 31, 2015, our operations were focused on (i) continuing
earth work excavations on the Paradisus Papagayo Bay Resort & Luxury Villas property; (ii)
discussions with prospective project development partners; and (iii) pursuing additional debt
financing to fund the construction of the project and procuring loans from related parties.
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 to the development of the Costa
Rican property including the purchase of the land and general and administrative costs.
Comprehensive Losses
Comprehensive losses for the three month period ended March 31, 2015 were $4,238,353 as
compared to $3,100,907 for the three month period ended March 31, 2014. The increase in
comprehensive losses over the comparative three month period periods can be attributed primarily to
higher foreign currency translation losses as a result of long term intercompany receivables
denominated in Swiss Francs and an increase in interest expenses associated with outstanding debt
issues offset by a relatively stronger US Dollar and lower general and administrative expenses. The
variance over the comparative periods is reconciled below:
39
Comprehensive loss March 31, 2014
3,100,907
Variances
Lower general and administrative expenses
(195,525) Decrease in consulting expenses
Higher interest income
(6,784) Increase in deposits
Higher interest expense
774,285 Increase in interest expensed to outstanding debt issues.
Higher amortization of debt issuance costs
372,407 Increase in expenses associated with financing activities
and related expenses (commission).
Higher exchange gains
(620,599) Foreign currency gain on EUR bond due to
strengthening of CHF against the EUR. Foreign
currency losses on Aires loan due to strentheing of CHF
against the USD.
Lower other expenses
(31,731) Decrease in miscellaneous expenses.
Higher foreign currency translation losses
845,393 Increase in foreign currency translation losses due to a
long term intercompany receiveable that is denominated
in Swiss Francs.
Total variances
1,137,446
Comprehensive loss March 31, 2015
4,238,353
We did not generate revenue during this period and we expect to continue to incur losses through the
year ended December 31, 2015.
Income Tax Expense (Benefit)
The Company has a prospective income tax benefit resulting from a net operating loss carry-forward
and startup costs that will offset future operating profits.
Capital Expenditures
The Company expended a significant amount on capital expenditures for the period from inception to
March 31, 2015, in connection with the purchase of land that includes a hotel concession in Costa
Rica 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 March 31, 2015 and December 31, 2014, the following were working capital items:
March 31, December 31,
2015
2014
Current assets
Cash and cash equivalents
106,445
14,347
Receivable from related parties
25,927
27,163
Other assets
278,698
289,156
Total current assets
411,070
330,666
Current liabilities
Bank liabilities
-
153,375
Accounts payable
5,535,450
6,181,057
Accrued expenses
6,842,622
5,444,514
Notes payable
2,195,551
3,023,759
Notes payable to related parties
1,239,545
1,162,100
CHF-Bond
28,729,655
25,511,898
Total current liability
44,542,823
41,476,703
Net working capital
(44,131,753)
(41,146,037)
40
As of March 31, 2015 and December 31, 2014, the following were the items making up the total
stockholders deficit:
March 31,
December 31,
2015
2014
Assets
Current assets
411,070
330,666
Non-current assets
59,152,230
58,083,516
Total assets
59,563,300
58,414,182
Liabilities
Current liabilities
44,542,823
41,476,703
Non-current liabilities
41,646,015
39,568,568
Total liabilities
86,188,838
81,045,271
Total stockholders deficit
(26,625,538)
(22,631,089)
The Companys negative net working capital of $44,131,753 is of immediate concern and will require
significant action to meet anticipated cash needs, including the upcoming maturity on August 31,
2015, of CHF-bonds in the aggregate amount of $28,729,655. Management is in the process of
considering the replacement of this bond issue with a new bond issue as a means to satisfy these
bonds.
We expect negative net cash in operating activities to continue until such time as net losses transition
to net income, which transition is not anticipated until we complete the Paradisus Papagayo Bay
Resort & Luxury Villas project, which completion is projected for the first quarter of 2017.
Net cash used in investing activities for the three months ended March 31, 2015, was $862,623 as
compared to $2,155,675 for the three month period ended March 31, 2014. Net cash used in investing
activities in the current three month period is comprised of the purchase of property and equipment,
interest paid and down payments for property and equipment, offset by receivables from related
parties, desposits related to construction activities and restriced cash. Net cash used in investing
activities in the prior comparable three month period was comprised of the purchase of property and
equipment and deposits related to construction.
We expect negative net cash flow in investing activities to continue while in the process of developing
the Paradisus Papagayo Bay Resort & Luxury Villas.
Net cash provided by financing activities for the three month period ended March 31, 2015, was
$3,425,275 as compared to $2,747,242 for the three month period ended March 31, 2014. Net cash
provided by financing activities in the current three month period is comprised of proceeds from notes
payable to related parties and proceeds from bond issuances net of commissions, offset by a decrease
in bank liabilities, the payment of debt issuance costs and changes in other debt. Net cash provided by
financing activities in the prior comparable three month period was comprised of proceeds from notes
payable to related parties, proceeds from notes payable, proceeds from bond issuances net of
commissions and the sale of treasury stock, offset by the repayment of notes payable to related
parties, the repayment of outstanding bonds and debt issuance costs.
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.
41
We had no lines of credit or other bank financing arrangements as of March 31, 2015.
We have commitments for executed purchase orders and agreements in the amount of $57 million as
of March 31, 2015, in connection with the development of the Paradisus Papagayo Bay Resort &
Luxury Villas, which commitments are included in the required estimated net financing of $195
million to complete the project. Most material commitments are not contractually agreed as of the end
of the period.
The sixth addendum (dated August 18, 2014) to the management agreement with Melía stipulates that
should the completion of the construction not occur by November 15, 2015, and should an extension
date not be agreed, subsequent to November 15, 2015, Melía would be entitled to receive a daily
amount of $2,000 as liquidated damages. Should the completion of the construction not occur by
February 15, 2016, at that point in timeMelía could terminate the management agreement and be
entitled to a termination amount of $5 million unless the parties agree in writing to extend such date.
Since the completion date for the Paradisus Papagayo Bay Resort & Luxury Villas development is
now anticipated for the first quarter of 2017, the Company is in discussions with Meliá regarding
another addendum that would allow an extension of the deadlines stipulated in Sixth Addendum.
Should the Company not be successful, the penalty would be $5,000,000. Melía has indicated that it
would consider another extension once vertical construction on the project has commenced.
We have cancellable commitments that are not included in the required financing for the development
of the Paradisus Papagayo Bay Resort & Luxury Villas of approximately $15,000,000 as of March 31,
2015, to Meridian for the purchase of two additional concession properties in Polo Papagayo,
Guanacaste, Costa Rica.
We maintain a defined benefit plan that covers all of our Swiss employees and have employment
agreements with our Chief Executive Officer and Chief Operating Officer as of March 31, 2015.
We have no current plans for significant purchases or sales of plant or equipment, except in
connection with the planned construction of the Paradisus Papagayo Bay Resort & Luxury Villas.
We have no current plans to make any changes in the number of our employees as of March 31, 2015.
Future Financings
A letter of engagement was executed with ISM Capital LLP, a London based investment firm, on
March 10, 2015, for the purpose of conducting a $100 million asset backed bond issuance. Despite the
firms commitment to identify investors, the success of this proposed bond issuance for the amount
contemplated or any lesser amount, does not guarantee that all or part of the amount offered will be
subscribed.
The Company is in negotiations to secure a $40 million credit facility from certain general contractors
that would be involved in the construction of the Paradisus Papagayo Bay Resort & Luxury Villas.
The terms of this credit facility are being evaluated and would complement amounts realized through
ISM.
We are also in process of determining the means by which the Company can retire the current CHF-
bond that matures on August 31, 2015, which will require additional debt or an equity financing.
The Company will further continue to rely on the terms of the Guaranty Agreement to meet shortfalls
in development financing.
42
Off-Balance Sheet Arrangements
As of March 31, 2015, 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 $195 million.
The project is expected to open in the first quarter of 2017. Until the completion of the project, the
following expenditures are estimated to be incurred:
a. Gross project cost
$
208,000,000
b. Less: Proceeds from sale of villas
(25,000,000)
c. Net project cost
183,000,000
d. Overhead expenses
24,000,000
e. Less: Recuperated in gross project cost
(12,000,000)
f Total, excluding other potential projects
$
195,000,000
Sixty percent (60%) of the Net project cost is intended to be financed through the issuance of
secured bonds, for which negotiations have been initiated. The remaining forty percent (40% of the
Net project cost, as well as non-recuperated overhead expenses and the cost of potential other
projects are intended to be financed by the main shareholders or lenders of the project, 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, Mr. Mettler, Mr. Rigendinger and Dr. Rössler entered into a Guaranty Agreement
in favour of the Company. The purpose of the guarantee is to ensure that until such time as financing
is secured for the entire project that they will act as a guarantor to creditors to the extent of the
projects ongoing capital requirements. The Guaranty Agreement requires that within 30 days of
receiving a demand notice, the guarantors are required to pay to the Company that amount required
for ongoing capital requirements, until such time as financing of the project is secured. The guaranty
may not be terminated until such time as the Company has secured financing for the completion of the
project.
Based on this Guaranty Agreement, management believes that available funds are sufficient to finance
cash flows for the twelve months subsequent to March 31, 2015, 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 Managements Discussion and Analysis of Financial
Condition and Results of Operations and elsewhere in this current report, with the exception of
historical facts, are forward-looking statements. We are ineligible to rely on the safe-harbor provision
of the Private Litigation Reform Act of 1995 for forward looking statements made in this current
report. 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
43
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
Companys management, with the participation of its chief executive officer and chief financial
officer, of the effectiveness of the Companys disclosure controls and procedures (as defined in Rules
13a-15(e) under the Securities Exchange Act of 1934 (Exchange Act)). Disclosure controls and
procedures are designed to ensure that information required to be disclosed in reports filed or
submitted under the Exchange Act is recorded, processed, summarized, and reported within the time
periods specified in the Commissions rules and forms, and that such information is accumulated and
communicated to management, including the chief executive officer and chief financial officer, to
allow timely decisions regarding required disclosures.
Based on that evaluation, the Companys management concluded, as of the end of the period covered
by this report, that the Companys disclosure controls and procedures were ineffective in recording,
processing, summarizing, and reporting information required to be disclosed, within the time periods
specified in the Commissions rules and forms, and that such information was not accumulated and
communicated to management, including the chief executive officer and the chief financial officer, to
allow timely decisions regarding required disclosures.
Changes in Internal Control over Financial Reporting
During the quarter ended March 31, 2015, 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.
44
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
On March 10, 2015, the Company was obligated to issue 200,000 shares of restricted common stock
to Mr. José Maria Figueres, for a retention award earned in connection with his appointment to the
board of directors, in reliance upon the exemptions from registration provided by Section 4(2) and
Regulation S of the Securities Act of 1933, as amended (Securities Act). The shares were not issued
as of the filing date of this report.
The Company complied with the exemption requirements of Section 4(2) of the Securities Act based
on the following factors: (1) the issuance and grant was an isolated private transaction by the
Company which did not involve a public offering; (2) the offeree had access to the kind of
information which registration would disclose; and (3) the offeree was financially sophisticated and a
director of the Company, and the exemption requirements of Regulation S of the Securities Act based
on the following factors: (1) no directed offering efforts in the US; (2) shares offered only to an
offeree who was outside the US at the time of the offering; (3) ensuring that the offeree to whom the
common shares were offered was a non-US offeree with addresses in a foreign country.
On March 10, 2015, the Company was obligated to issuance of 200,000 shares of restricted common
stock to Mr. Howard Glicken, for a retention award earned in connection with his appointment to the
board of directors in reliance upon the exemption from registration provided by Section 4(2) of the
Securities Act. The shares were not issued as of the filing date of this report.
The Company complied with the exemption requirements of Section 4(2) of the Securities Act based
on the following factors: (1) the issuance and grant was an isolated private transaction by the
Company which did not involve a public offering; (2) the offeree had access to the kind of
information which registration would disclose; and (3) the offeree was financially sophisticated and a
director of the Company.
On January 1, 2015, the Company was obligated to issue 2,500,000 shares of restricted common stock
to Mr. Hans Rigendinger, for a retention award earned in connection with his employment agreement,
in reliance upon the exemptions from registration provided by Section 4(2) and Regulation S of the
Securities Act. The shares were not issued as of the filing date of this report.
The Company complied with the exemption requirements of Section 4(2) of the Securities Act based
on the following factors: (1) the issuance and grant was an isolated private transaction by the
Company which did not involve a public offering; (2) the offeree had access to the kind of
information which registration would disclose; and (3) the offeree was financially sophisticated and a
director of the Company, and the exemption requirements of Regulation S of the Securities Act based
on the following factors: (1) no directed offering efforts in the US; (2) shares offered only to an
45
offeree who was outside the US at the time of the offering; (3) ensuring that the offeree to whom the
common shares were offered was a non-US offeree with addresses in a foreign country.
ITEM 3.
DEFAULTS ON SENIOR SECURITIES
None.
ITEM 4.
MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5.
OTHER INFORMATION
None.
ITEM 6.
Exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits on
page 48 of this Form 10-Q, and are incorporated herein by this reference.
46
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned, thereunto duly authorized.
SunVesta, Inc.
Date
/s/ Josef Mettler
May 20, 2015
Josef Mettler
Chief Executive Officer, Chief Financial Officer,
Principal Accounting Officer and Director
/s/ Hans Rigendinger
May 20, 2015
Hans Rigendinger
Chief Operating Officer and Director
47
INDEX TO EXHIBITS
Exhibit
Description
3.1.1*
Articles of Incorporation (incorporated by reference from the Form 10-SB filed with the Commission on
December 31, 1999).
3.1.2*
Amended Articles of Incorporation (incorporated by reference from the Form 10-KSB filed with the
Commission on April 9, 2003)
3.1.3*
Amended Articles of Incorporation (incorporated by reference from the Form 10-QSB filed with the
Commission on November 17, 2003).
3.1.4*
Amended Articles of Incorporation (incorporated by reference from the Form 8-K filed with the
Commission on September 27, 2007).
3.2.1*
Bylaws (incorporated by reference from the Form 10-SB filed with the Commission on December 31,
1999).
3.2.2*
Amended Bylaws (incorporated by reference from the Form 10-QSB filed with the Commission on
November 17, 2003).
10.1*
Securities Exchange Agreement and Plan of Exchange dated June 18, 2007 between the Company and
SunVesta AG (formerly ZAG Holdings AG) (incorporated by reference from the Form 8-K filed with
the Commission on June 21, 2007).
10.2*
Purchase and Sale Agreement between ZAG Holding AG and Trust Rich Land Investments, Mauricio
Rivera Lang dated May 1, 2006, for the acquisition of Rich Land Investments Limitada.
10.3*
Debt Settlement Agreement dated March 1, 2010, between the Company and Zypam, Ltd. (incorporated
by reference from the Form 8-K filed with the Commission on March 10, 2010).
10.4*
Debt Settlement Agreement dated March 1, 2010, between the Company and Hans Rigendinger
(incorporated by reference from the Form 8-K filed with the Commission on March 10, 2010).
10.5*
Guaranty Agreement dated July 16, 2012, between SunVesta AG, Josef Mettler, Hans Rigendinger and
Max Rössler.
10.6*
Employment Agreement dated January 1, 2013 between the Company and Hans Rigendinger
(incorporated by reference to the Form 8-K filed with the Commission on February 4, 2013.
10.7*
Employment Agreement dated July 4, 2013 between the Company and Josef Mettler (incorporated by
reference to the Form 10-Q filed with the Commission on October 10, 2013).
10.8*
Assignment of Debt Agreement dated December 31, 2012, between the Company, SunVesta AG and
Aires International Investments, Inc. (incorporated by reference to the Form 10-Q filed with the
Commission on December 13, 2013).
10.9*
Debt Settlement Agreement dated December 31, 2012, between the Company and Hans Rigendinger
(incorporated by reference to the Form 10-Q filed with the Commission on December 13, 2013).
10.10*
Loan Agreement dated October 31, 2013, between SunVesta AG and Aires International Investments,
Inc. (incorporated by reference to the Form 10-Q filed with the Commission on December 13, 2013).
10.11*
Assignment of Debt Agreement dated December 31, 2013, between the Company, SunVesta AG and
Aires International Investments, Inc.(incorporated by reference to the Form 10-Q filed with the
Commission on May 20, 2014).
10.12
Addendum to Employment Agreement dated March 6, 2015, between the Company and Josef Mettler.
14*
Code of Ethics adopted March 1, 2004 (incorporated by reference from the 10-KSB filed with the
Commission on April 14, 2004).
21*
Subsidiaries of the Company (incorporated by reference from the Form 10-K filed with the Commission
on April 15, 2015).
31
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14 of the
Securities and Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.
32
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.
48