Attached files
file | filename |
---|---|
EX-31 - SUNVESTA CERTIFICATION - SUNVESTA, INC. | exhibit31.htm |
EX-32 - SUNVESTA CERTIFICATION - SUNVESTA, INC. | exhibit32.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 September 30, 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 þNo o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of large accelerated filer, accelerated filer and
smaller reporting company in Rule 12b-2 of the Exchange Act.
Large accelerated filer o Accelerated filer o Non-accelerated filer o Smaller reporting company þ
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange
Act). Yes o No þ
Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest
practicable date. The number of shares outstanding of the issuers common stock, $0.01 par value (the only class
of voting stock), at November 23, 2015, was 95,941,603.
1
TABLE OF CONTENTS
PART 1- FINANCIAL INFORMATION
Item1.
3
Consolidated Balance Sheets as of September 30, 2015 (Unaudited) and
4
December 31, 2014
Unaudited Consolidated Statements of Comprehensive Loss (unaudited) for the
5
three and nine months ended September 30, 2015 and September 30, 2014
Unaudited Consolidated Statements of Stockholders Equity (unaudited) for the
6
nine months ended September 30, 2015
Unaudited Consolidated Statements of Cash Flows (unaudited) for the nine
7
months ended September 30, 2015 and September 30, 2014
Notes to Unaudited Consolidated Financial Statements
8
Managements Discussion and Analysis of Financial Condition and Results of
35
Operations
Quantitative and Qualitative Disclosures about Market Risk
45
Controls and Procedures
46
PART II-OTHER INFORMATION
Legal Proceedings
47
Risk Factors
47
Unregistered Sales of Equity Securities and Use of Proceeds
47
Defaults Upon Senior Securities
47
Mine Safety Disclosures
47
Other Information
47
Exhibits
47
48
49
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
September 30, 2015
December 31, 2014
(Unaudited)
Assets
Current assets
Cash and cash equivalents
$
205,582
14,347
Receivable from related parties
21,939
27,163
Other assets
557,557
289,156
Total current assets
785,078
330,666
Non-current assets
Property and equipment - net
60,056,569
51,201,352
Deposits related to construction work
817,385
820,565
Debt issuance costs - net
405,964
2,006,849
Down payment for property and equipment
2,669,816
2,369,816
Restricted cash
1,687,164
1,684,934
Total non-current assets
65,636,898
58,083,516
Total assets
$
66,421,976
58,414,182
Liabilities and stockholders' deficit
Current liabilities
Bank liabilities
-
153,375
Accounts payable
7,899,873
6,181,057
Accrued expenses
8,492,357
5,444,514
Note payable
2,168,909
3,023,759
Notes payable to related parties
1,958,091
1,162,100
Other liabilities
666,109
-
CHF-Bond
4,247,661
25,511,898
Total current liabilities
25,433,000
41,476,703
Non-current liabilities
EUR-Bond
8,678,462
9,057,986
CHF-Bond
26,596,263
-
Notes payable to related parties
38,338,003
30,299,312
Other long term debts
44,708
74,837
Pension liabilities
138,846
136,433
Total non-current liabilities
73,796,282
39,568,568
Total liabilities
$
99,229,282
81,045,271
Stockholders' deficit
Preferred stock, $0.01 par value; 50,000,000 shares
Common stock, $0.01 par value; 200,000,000 shares
authorized; 83,541,603 shares issued and
outstanding
835,416
835,416
Additional paid-in capital
23,378,094
22,942,486
Accumulated other comprehensive income / (loss)
747,024
1,265,590
Accumulated deficit
(57,767,840)
(47,674,581)
Total stockholders' deficit
(32,807,306)
(22,631,089)
Total liabilities and stockholders' deficit
$
66,421,976
58,414,182
The accompanying notes are an integral part of these consolidated financial statements.
4
SUNVESTA, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
Three months ended September 30,
Nine months ended
September 30,
2015
2014
2015
2014
(Unaudited)
(Unaudited)
(Unaudited)
(Unaudited)
Revenues
Revenues, net
$
-
-
-
-
Cost of revenues
-
-
-
-
Gross profit
-
-
-
-
Operating expenses
General and administrative
$
expenses
(1,117,470)
(1,278,941)
(4,343,520)
(4,702,296)
Total operating expenses
(1,117,470)
(1,278,941)
(4,343,520)
(4,702,296)
Loss from operations
$ (1,117,470)
(1,278,941)
(4,343,520)
(4,702,296)
Other income / - expenses
Interest income
8,175
(276)
26,657
6,713
Interest expense
(1,545,387)
(923,996)
(4,183,606)
(2,319,473)
Amortization of debt issuance
costs
(674,617)
(238,637)
(1,816,400)
(563,949)
Exchange differences
1,014,604
1,562,114
309,184
1,159,727
Other income / - expenses
(35,098)
(31,342)
(84,424)
(109,592)
Total other income / - expenses
$ (1,232,323)
367,862
(5,748,589)
(1,826,573)
Loss before income taxes
$ (2,349,793)
(911,080)
(10,092,109)
(6,528,869)
Income Taxes
-
-
(1,150)
-
Net loss
$ (2,349,793)
(911,080)
(10,093,259)
(6,528,869)
Comprehensive income /(loss)
Foreign currency translation
1,966,597
3,153,642
(518,566)
3,102,640
Comprehensive income / (loss)
$
(383,196)
2,242,562
(10,611,825)
(3,426,230)
Loss per common share
Basic and diluted
$
(0.02)
(0.01)
(0.11)
(0.07)
Weighted average common shares
Basic and diluted
95,842,702
89,942,702
93,798,380
87,746,731
s
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
Total
Stock
Paid in
Other
deficit
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
-
-
-
(10,093,259)
(10,093,259)
Translation adjustments
-
-
(518,566)
-
(518,566)
Stock based compensation
-
435,608
-
-
435,608
expense
September 30, 2015
$
835,416 $
23,378,094 $
747,024 $
(57,767,840) $
(32,807,306)
The accompanying notes are an integral part of these consolidated financial statements.
6
SUNVESTA, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
January 1 to
January 1 to
September 30,
September 30,
2015
2014
Unaudited
Unaudited
Cash flows from operating activities
Net loss
$
(10,093,259)
(6,528,869)
Adjustments to reconcile net loss to net cash
Depreciation and amortization
50,641
45,926
Amortization of debt issuance cost and commissions
2,540,765
563,949
Unrealized exchange differences
(496,382)
1,159,727
Stock compensation expense
435,608
947,398
Increase in pension fund commitments
-
(5,176)
- Increase / decrease in:
Other current assets
(12,761)
(144,472)
Accounts payable
1,694,770
(1,349,809)
Accrued expenses
2,743,294
1,733,891
Net cash used in operating activities
(3,137,324)
(3,577,435)
Cash flows from investing activities
Other receivables from related parties
(53,240)
(2,627,810)
Receivables from related parties
(1,631,859)
-
Purchase of property and equipment
(6,440,625)
(4,456,047)
Interest paid and capitalized in property and equipment
-
(682,000)
Advance payment to subconstructors
(250,000)
-
Deposits related to construction
3,311
(147,627)
Down payments for property and equipment
(307,841)
-
Restricted cash
36
-
Net cash used in investing activities
(8,680,218)
(7,913,484)
Cash flows from financing activities
Decrease in bank liabilities
(153,375)
-
Proceeds from notes payable related parties
9,185,499
-
Repayment of notes payable related parties
-
(1,036,322)
Note payable and other long term debts
-
1,689,207
Proceeds from bond issuance, net of commissions
10,557,617
20,142,000
Repayment of bonds
(6,443,246)
(5,729,712)
Payment for debt issuance costs
(940,953)
(3,977,446)
Changes in note payable
(174,760)
-
Purchase/Sale of treasury stock
-
10,300
Net cash provided by financing activities
12,030,782
11,098,026
Effect of exchange rate changes
(22,005)
(69,506)
Net increase / - decrease in cash
191,235
(462,399)
Cash and cash equivalents, beginning of period
14,347
629,673
Cash and cash equivalents, end of period
$
205,582
167,274
Additional information
Capitalized interest and debt issuance costs for construction (non-cash)
2,463,000
2,360,999
Repayment of Specogna Holding AG loan by Aires (non-cash)
707,428
-
Interest paid
1,974,000
682,000
Assumption of receivables from Josef Mettler by AIRES (non-cash)
1,507,128
-
Absorption of loans Josef Mettler and 4f capital ag by AIRES
966,455
Transfer of loan Dr. Max Rössler to AIRES loan
1,810,000
The accompanying notes are an integral part of these consolidated financial statements.
7
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 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 SunVesta Holding Espana
SL.
In January 2005, the Company changed its business focus to the development of holiday resorts
and investments in hospitality and related industries. The Company has presently one major
project in Costa Rica. Planning for this project has been fully completed and all permits have
been granted, including the permit 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 Costa Rican 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 April 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards
Updates (ASU) 2015-03 which requires that debt issuance costs be reported in the balance sheet
as a direct deduction from the face amount of the related liability, consistent with the
presentation of debt discounts. Prior to the amendments, debt issuance costs were presented as
a deferred charge (i.e., an asset) on the balance sheet. The ASU provides examples illustrating
the balance sheet presentation of notes net of their related discounts and debt issuance costs.
Further, the amendments require the amortization of debt issuance costs to be reported as
interest expense. Similarly, debt issuance costs and any discount or premium are considered in
the aggregate when determining the effective interest rate on the debt. The amendments are
effective for public business entities for fiscal years beginning after December 15, 2015, and
interim periods within those fiscal years.
8
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2015
2.
SIGNIFICANT ACCOUNTING POLICIES - Continued
In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting
Standards Updates (ASU) 2014-15 requiring an entitys management to evaluate whether there
are conditions or events, considered in aggregate, that raise substantial doubt about entitys
ability to continue as a going concern within one year after the date that the financial statements
are issued (or within one year after the date that the financial statements are available to be
issued when applicable). The amendments to (ASU) 2014-15 are effective for the annual period
ending after December 15, 2016, and for annual periods and interim periods thereafter. Early
application is permitted. The Company is in the process of evaluating the prospective impact
that (ASU) 2014-15 will have on its balance sheet.
3.
GOING CONCERN
The Company is currently working on building a hotel in the Papagayo Gulf Tourism Project
area of Guanacaste, Costa Rica. The project is expected to open in the fourth quarter of 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
27,000,000
e. Subtotal
210,000,000
f.
Less: Recuperated in gross project cost
(12,000,000)
g. Total, excluding other potential projects
$
198,000,000
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 in the event that alternative means of
financing the remainder of the project are not available, namely Zypam Ltd., shareholder and
related entity to Mr. Josef Mettler, Mr. Hans Rigendinger, shareholder, Company Director and
Chief Operating Officer, Dr. Max Rӧssler, controlling shareholder of Aires International
Investment, Inc. and Company Director, and 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 guaranty
is to ensure that until such time as financing is secured for the entire project that they will act
as a guarantor to creditors to the extent of the projects ongoing capital requirements. On
September 22, 2015, the signatories to the guaranty formally agreed to maintain the guaranty,
as necessary, until December 31, 2018, after which date the guaranty will expire.
The guaranty agreement requires that within 30 days of receiving a demand notice, the
requested funds are made available by the guarantors to the Company. Based on this guaranty
agreement, management believes that available funds are sufficient to finance cash flows for
the twelve months subsequent to September 30, 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.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 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
September 30, 2015 December 31, 2014
original currency
4,476
10,715 183,923
8,803
in $
4,476
12,047 189,042
17
205,582
14,347
USD ($) =
US Dollar
EURO =
Euro
CHF
=
Swiss Francs
CRC
=
Costa Rican Colón
5.
RESTRICTED CASH
As of September 30, 2015, the Company has the following restricted cash positions:
September 30,
December 31,
Restricted Cash
2015
2014
$
$
Credit Suisse in favor of
BVK Personalvorsorge des Cantons Zurich
131,502
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
1,687,164
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.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2015
6.
PROPERTY & EQUIPMENT
September 30, 2015
December 31, 2014
Land
$
19,700,000
19,700,000
IT Equipment
185,846
185,846
Other equipment and furniture
279,790
277,557
Leasehold improvements
66,617
66,617
Vehicles
139,000
139,000
Construction in-process
40,179,184
31,275,559
Gross
60,550,437
51,644,579
Less accumulated depreciation
(493,868)
(443,227)
Net
$
60,056,569
51,201,352
Depreciation expenses for the period ended
September 30, 2015 and 2014
50,641
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 initially
20 years from the date of grant, which thereafter can be renewed at no further cost, if the
landholder is up to date with its obligations and if there is no significant change in government
policies. The current concession initially expired in June 2022.
The AdR concession is also a right to use the property for a specific period of time of initially
30 years from the date of grant, which thereafter can be renewed at no further cost, if the
landholder is up to date with its obligations and if there is no significant change in government
policies. The current concession initially expired in November 2036.
On July 14, 2015 the Consejo del Polo de DesarrolloTuristico Papagayo at ICT (Council of
Papagayo Tourism Development Project), unanimously has approved the extension of both
concessions until 2052.
The construction in process through December 31, 2014 and September 30, 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 September 30, 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 September 30, 2015 and
December 31, 2014, the Company has deposits of $817,385 and $820,565 respectively, which
have not yet been set off.
11
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2015
7.
DOWN PAYMENTS FOR PROPERTY & EQUIPMENT
September 30, 2015
December 31, 2014
La Punta (adjacent concession) and close concession $
2,669,816
2,369,816
Gross
$
2,669,816
2,369,816
Total (net)
$
2,669,816
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
(one of the concession properties in Polo Papagayo) and a five percent in equity of Paradisus
Papagayo Bay Resort & Luxury Villas (currently under development). 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.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 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 $2,669,816 as
of September 30, 2015, of which $300,000 was paid in refundable payments during the nine
months period ended September 30, 2015. 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 or amendment to the purchase
agreement, it will have to write-off $300,000 of that purchase price already paid.
13
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 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 September 30, 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.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 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. Rӧssler (current) The fair value was calculated based on the underlying
publically traded shares. However, the Company records the loan at nominal value. The Company does not have
sufficient cash to repurchase the shares as of balance sheet date and hence repay the loans in shares.
Notes payable to related parties (current) carrying amount approximated fair value due to the short term nature
of the notes payable.
EUR bond (old) carrying amount approximated fair value due to its short term nature
EUR- bonds The fair values of the bonds payable are classified as level 3 fair values. The fair values of the bonds
have been determined by discounting cash flow projections discounted at the respective interest rates of 7.25% for
EUR bonds, which represents the current market rate based on the creditworthiness of the Company. Hence, the
carrying values approximate fair value.
CHF-bonds The fair values of the bonds payable are classified as level 3 fair values. The fair values of the bonds
have been determined by discounting cash flow projections discounted at the respective interest rates of 7.25% for
CHF bonds, which represents the current market rate based on the creditworthiness of the Company. Hence, the
carrying values approximate fair value.
Notes payable to related parties Aires (non-current) The fair values of the notes payable to Aires International
Investments Inc. are classified as level 3. The fair values of the notes were determined by discounting cash flow
projections discounted at the respective interest rates of 7.25%, which represents the current market rate based on
the creditworthiness of the Company. Hence, the carrying value approximates fair value.
The fair value of our financial instruments is presented in the table below:
September 30, 2015
December 31, 2014
Carrying
Fair Value Carrying
Fair Value
Fair Value
Amount
Amount
Reference
$
$
$
$
Levels
Cash and cash equivalents
205,582
205,582
14,347
14,347
1
Note 4
Restricted cash
1,687,164
1,687,164
1,684,934
1,684,934
1
Note 5
Receivables from related
parties other (current)
21,939
21,939
27,163
27,163
3
Note 9
Accounts Payable
7,899,873
7,899,873
6,181,057
6,181,057
1
-
Bank liabilities
-
-
153,375
153,375
1
Note11
Note payable
2,168,909
2,168,909
3,023,759
3,023,759
1
Note 17
Notes payable to related
parties Dr. M. Rӧssler
817,432
817,432
803,223
765,890
1
Note 9
(current)
Notes payable to related
parties Rigendinger
1,948
1,948
1,914
1,914
3
Note 9
(current)
Notes payable to related
parties other (current)
1,138,711
1,138,711
356,963
356,963
3
Note 9
EUR-bonds
8,678,462
8,678,462
9,057,986
9,057,986
3
Note 12
CHF-bonds
30,843,924
30,843,924
25,511,898
25,511,898
3
Note 12
Notes payable to related
parties Aires (non-
38,338,003
38,338,003 30,299,312
30,299,312
3
Note 9
current)
15
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2015
9.
RECEIVABLES FROM AND PAYABLES TO RELATED PARTIES
The advances from (to) related parties are composed as follows:
Receivables
Payables
September 30,
December 31,
September 30,
December 31,
2015
2014
2015
2014
1 Hans Rigendinger
-
-
1,948
1,914
2 Aires International
-
-
38,338,003
30,299,312
3 Dr. Max Rӧssler
-
-
817,432
803,223
4 Akyinyi Interior and
Exterior Decoration
-
-
260,000
170,000
5 Global Care AG
-
-
210,840
186,963
6 Geoffrey Long
21,939
27,163
-
-
7 Sportiva participations ag
593,358
-
8 Josef Mettler
74,513
-
Total excluding interest
21,939
27,163
40,296,094
31,461,412
Accrued interest
-
-
5,859,993
3,818,494
Total
21,939
27,163
46,156,087
35,279,906
of which non-current
-
-
38,338,003
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 Rӧssler
*** see hereinafter ***
4 Akyinyi Interior
and Exterior
Company owned by the wife of Josef Mettler
none
none
none
Decoration
5 Global Care AG
Company owned by Dr. Max Rössler
none
none
none
6 Geoffrey Long
Head of Accounting The Americas
none
none
none
7 Sportiva
participations ag
Company owned by Josef Mettler
3%
none
none
8 Josef Mettler
Shareholder, CEO, CFO and Company board member
3%
none
none
Loan agreement Aires International Investment Inc.
As of September 30, 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
10,143,053
10,431,380
7.25 %
Dec 31, 2017
SunVesta Inc.
Promissory note
10,000,000
10,284,260
7.25 %
Dec 31, 2017
SunVesta Inc.
Promissory note
10,000,000
10,284,260
7.25 %
Dec 31, 2017
SunVesta Holding
Loan agreement
7,134,838
7,338,103
7.25 %
Dec 31, 2017
Total
38,338,003
*
The notes may be repaid in whole or in part.
16
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2015
9.
RECEIVABLES FROM AND PAYABLES TO RELATED PARTIES - Continued
Loans Dr. Max Rӧssler
As of September 30, 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
439,214
*
May 30, 2016
lending
Schindler
Holding
Securities
700 shares Zug
367,741
378,218
*
May 30, 2016
lending
Estates Holding
Total
794,789
817,432
*
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 $190,270 (CHF 185,000), which amount
was repayable on October 31, 2014. The loan includes a fixed interest payment of $20,570
(CHF 20,000). As of the date of this report, both amounts are overdue. According to the
agreement, there are no penalties for late payment.
Receivable from and payable to Josef Mettler
On June 30, 2015, Aires International Investments, Inc. absorbed the Companys receivables
from Mr. Mettler in the amount of $1,507,128 (CHF 1,419,412) by crediting the amount due to
the Company against the amount due from the Company to Aires. As of September 30, 2015,
there is a payable to Mr. Mettler in the amount of $74,513 (CHF 72,449).
Current account sportiva participations ag
During the three month period ended September 30, 2015 the Company borrowed $593,358
(CHF 576,922) at 3% interest from sportiva participations ag.
17
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2015
10.
RELATED PARTY TRANSACTIONS
Commissions paid or payable to 4f Capital AG
During the three month periods ended September 30, 2015, and September 30, 2014, the
Company paid commissions to 4f Capital AG in the amount of $106,288 and $42,500,
respectively, for services related to financing the Company. During the nine months periods
ended September 30, 2015, and September 30, 2014, the Company paid commissions to 4f
Capital AG in the amount of $136,272 and $103,000, respectively. These costs have been
capitalized to debt issuance costs. 4f Capital AG is a company owned and directed by Mr.
Mettler (Board Member and CEO of the Company) that receives a commission of 1.5% for new
funds that the Company receives based on consulting services rendered by 4f Capital AG.
Hans Rigendinger
In 2013, the Company borrowed $600,000 at 3% interest from Hans Rigendinger. The amount
due to Mr. Rigendinger for this loan at September 30, 2015 was $1,948.
Mr. Rigendinger also held bonds denominated in Euros and Swiss Francs valued at
approximately $711,000 as of September 30, 2015 and December 31, 2014.
Service fees paid or payable to Akyinyi Interior and Exterior Decoration
During the three months periods ended September 30, 2015, and September 30, 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. During the
nine months periods ended September 30, 2015, and September 30, 2014, the Company paid or
accrued fees to Akyinyi Interior and Exterior Decoration in the amounts of approximately
$90,000 and $90,000 respectively. These costs have been capitalized to property and
equipment.
Consulting Fees paid or payable to Cambridge Limited Corp.
During the three months periods ended September 30, 2015, and September 30, 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 $48,500 and $43,500 respectively. During the
nine months periods ended September 30, 2015, and September 30, 2014, the Company paid
fees to Cambridge Limited Corporation in the amount of $135,000 and $130,000 respectively.
11.
BANK LIABLITIES
There is no bank liability at September 30, 2015. The bank liability at December 31, 2014,
represented a temporary, secured overdraft facility, bearing an interest rate of 8.9%.
18
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 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.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 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
(2,484,955)
-
Foreign currency adjustments
378,109
(953,513)
Reclassifications to CHF Bond II
-
(2,147,983)
Sub-total
8,695,876
10,999,192
Discounts (commissions paid to bondholders)
(670,764)
(670,764)
Accumulated amortization of discounts
670,764
474,294
Unamortized discounts
-
(196,470)
Balances September 30 and December
31(Carrying value)
8,695,876
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 2.18 million
($2.17 million) related to CHF Bond I.
20
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 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
(537,711)
(963,896)
Sub-total
7,087,038
7,355,572
Discounts (commissions paid to bondholders)
(23,752)
(17,305)
Amortization of discounts
14,148
4,729
Unamortized discounts
(9,604)
(12,576)
Balances September 30 and December
31(Carrying value)
7,077,434
7,342,995
As per date of this report the Company has realized a cumulative amount of EUR 6.30 million
($6.76 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 September 30 and December
31(Carrying value)
-
-
21
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2015
12.
BONDS - Continued
CHF Bond II
CHF Bond II
CHF BOND II
2015
2014
$
$
Balances January 1
14,709,176
-
Cash inflows
10,819,209
12,912,402
Cash outflows
(3,958,290)
-
Foreign currency adjustments
577,953
243,843
Reclassifications from CHF Bond I
-
2,147,983
Sub-total
22,148,048
15,304,228
Discounts (commissions paid to bondholders)
(1,578,825)
(1,041,917)
Accumulated amortization of discounts
1,578,825
446,864
Unamortized discounts
-
(595,052)
Balances September 30 and December
31(Carrying value)
22,148,048
14,709,176
As per date of this report the Company has realized a cumulative amount of
CHF 25.70 million ($25.57 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
(82,434)
(198,968)
Reclassification to other liabilities
-
Sub-total
1,632,557
1,761,258
Discounts (commissions paid to bondholders)
(59,740)
(59,740)
Amortization of discounts
28,211
13,473
Unamortized discounts
(31,529)
(46,266)
Balances September 30 and December
31(Carrying value)
1,601,028
1,714,991
As per date of this report the Company has realized a cumulative amount of EUR 1.44 million
($1.55 million) related to the EURO Bond new II.
22
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2015
12.
BONDS - Continued
CHF Bonds 2015
$8,695,876 (Bond I) and $22,148,048 (Bond II) were not repaid on the due date, which was
August 31, 2015. None of the bondholders have advised the Company of an event of default.
Prior to the filing date all overdue amounts haven been repaid or rolled forward.
Dated September 30, 2015 the board of director of SunVesta Holding AG, the only subsidiary
of SunVesta Inc. has approved the issuance of two new CHF-bonds. The major terms and
conditions are the following:
Description
CHF 45 million
CHF 15 million
Issuer:
SunVesta Holding AG
SunVesta Holding AG
Type of securities:
Senior convertible bonds, convertible into Senior convertible bonds, convertible into
shares of the issuer, in accordance with Swisshsares of the issuer, in accordance with
law
Swiss law
Approval by SunVesta AG BOD:
September 30, 2015
September 30, 2015
Volume:
Up to CHF 45,000,000
Up to CHF 15,000,000
Denomination:
CHF 5,000
CHF 5,000
Offering period:
October 01, 2015
October 01, 2015
Maturity date:
September 30, 2018
September 30, 2018
Issue price:
100 %
100 %
Redemption price:
100 %
100 %
Issuance date:
October 01, 2015
October 01, 2015
Coupon:
6.00 % p.a.
6.00 % p.a.
Interest due dates:
September 30 of each year, the first time September 30 of each year, the first time
September 30, 2016
September 30, 2016
Reference price:
CHF 6.50
CHF 6.50
Initial conversion price:
CHF 8.00
CHF 8.00
Applicable law:
Swiss
Swiss
As of the balance sheet date, the toal obligation for CHF bonds was USD 30.8 million. In Q4,
26.6 million of this total was settled on October 1, 2015, through being rolled into the new convertible CHF
bonds listed above; however these are still outstanding as of September 30, 2015 and reflected as an
obligation within CHF bonds in the balance sheet. Additionally, in Q3 USD 0.7 million in
prepayments were received for the new convertible CHF bonds. As these bonds were issued in
Q4, these prepayments are classified as other liabilities in current liabilities as of the balance
sheet date.
Subsequent to September 30, 2015, the CHF bond - current in the amount of USD 4.2 million was settled through being rolled into the new convertible bond in the amount of USD 0.8 million and through cash settlement in the amount of USD 3.4 million. As of the date of this report $0 including penalties and interest remained outstanding.
23
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 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 Nine months
Nine months
ended
ended
ended
ended
Pension expense
September 30, September 30, September 30, September 30,
2015
2014
2015
2014
$
$
$
$
Current service cost
14,527
14,147
43,582
42,442
Net actuarial (gain) loss recognized
-
(169)
-
(507)
Interest cost
1,337
1,494
4,011
4,481
Expected return on assets
(1,646)
(1,550)
(4,937)
(4,650)
Employee contributions
(5,914)
(5,918)
(17,741)
(17,754)
Net periodic pension cost
8,304
8,004
24,915
24,011
During the three month periods ended September 30, 2015 and September 30, 2014 the
Company made cash contributions of $5,914 and $5,918, 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 $5,914.
24
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 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 issued subsequent to the reporting date.
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 appointment to the Board of Directors. These shares were officially
issued on October 15, 2013.
Share Grants Mr. Josef Mettler
On July 4, 2013, the Company granted 5,000,000 common shares to Josef Mettler, valued at
$0.07, 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. as
per July 4, 2014 and July 4, 2015). 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
6,000,000 retention common shares vested were issued subsequent to the reporting date.
25
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 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 issued subsequent to the reporting
date.
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 issued subsequent to the reporting date.
Based on these contracts the Company has included the following stock-based compensation
in the Companys results:
Three months
Three months
Nine months
Nine months
Stock-based compensation
ended
ended
ended
ended
(shares)
September 30,
September 30,
September 30,
September 30,
2015
2014
2015
2014
Shares granted
46,800,000
46,400,000
46,800,000
46,400,000
Fair Value respectively
$0.0744
$0.0744
$0.0744
$0.0744
market price on grant date
Total maximal expenses
$3,450,000
$3,450,000
$3,450,000
$3,450,000
(2013-2020)
Shares vested
23,900,000
15,000,000
23,900,000
15,000,000
Unvested shares
22,900,000
31,400,000
22,900,000
31,400,000
26
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2015
14.
STOCK COMPENSATION Continued
As of December 31, 2015, the Company expects to record compensation expense in the future
up to $1,447,500 as follows:
Year ending December 31,
Stock-based
Through
compensation
December 31,
(shares)
2015
2016
2017
2018
2019
2020
$
$
$
$
$
$
Unrecognized
compensation
102,500
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 for the Paradisus Papagayo
Bay Resort & Luxury Villas project. 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 fourth 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.
27
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2015
14.
STOCK COMPENSATION Continued
Stock Options Dr. Max Rӧssler
The Company granted to Dr. Max Rӧssler, in connection with his appointment to the Board of
Directors, 10,000,000 options on July 3, 2013. Each option entitles Dr. Rӧssler to buy one
Company share at a strike price of $0.05. These options will be vested in two identical
installments (installment A and B) of 5,000,000 options.
For installment A (5,000,000 options), it is required to complete a financing arrangement for
the Paradisus Papagayo Bay Resort & Luxury Villas 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 fourth 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 fourth 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.
28
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2015
14.
STOCK COMPENSATION Continued
Stock Options Summary
A summary of stock options outstanding as per September 30, 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 September 30, 2015
32,000,000
$ 0.05
7.67 years
Exercisable September 30, 2015
-
The following table depicts the Companys non-vested options as of September 30, 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 September 30, 2015
32,000,000
$ 0.073
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 September 30, 2015 and September 30, 2014.
Assumption
September 30, 2015
September 30, 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.
29
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2015
14.
STOCK COMPENSATION - Continued
Stock Options Summary - Continued
As of September 30, 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
67,476
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 September 30, 2015 respectively September 30, 2014:
Three
Three
Nine
Nine
Summary of share and option
months
months
months
months
based compensation expense
September
September
September
September
30, 2015
30, 2014
30, 2015
30, 2014
$
$
$
$
Share grants (see Note 14 for
121,728
112,500
334,394
429,833
details)
Option grants (see Note 14 for
33,738
69,404
101,214
517,565
details)
Total
(recorded under general &
155,466
181,904
435,608
947,398
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
32,500
32,500
2016
130,000
130,000
2017
130,000
130,000
2018
-
-
2019
-
-
30
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2015
17.
NOTE PAYABLE
September 30, 2015
December 31, 2014
$
$
Promissory note
2,000,000
2,000,000
Specogna Holding AG
-
707,428
R. Weimar (private investor)
168,909
316,331
Total
2,168,909
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
bore a lump remuneration as interest of CHF 30,000 (approximately $32,100). 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. 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 had repaid
approximately $209,000 as of the filing date of this report. The agreement does not stipulate
any repercussions for the late payments.
31
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 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 fourth 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. The Company is confident that a further addendum to its
agreement with Meliá will be concluded. However, should the Company not be successful, in
concluding a further addendum, the penalty for not achieving the most recently agreed
completion date would be $5,000,000.
32
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 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
Nine-month
Nine-month
Earnings per share
period ended
period ended
period ended
period ended
September
September
September
September
30, 2015
30, 2014
30, 2015
30, 2014
Company posted
Net loss
Net loss
Net loss
Net loss
Basic weighted average
shares outstanding
95,842,702
89,942,702
93,798,380
87,746,731
Dilutive effect of common
stock equivalents
None
None
None
None
Dilutive weighted average
shares outstanding
95,842,702
89,942,702
93,798,380
87,746,731
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
Nine-month
Nine-month
Earnings per share
period ended
period ended
period ended
period ended
September 30,
September 30,
September 30,
September 30,
2015
2014
2015
2014
Options to Hans Rigendinger
10,000,000
10,000,000
10,000,000
10,000,000
Options to Dr. M. Rössler
10,000,000
10,000,000
10,000,000
10,000,000
Options to Josef Mettler
12,000,000
12,000,000
12,000,000
12,000,000
Total Options
32,000,000
32,000,000
32,000,000
32,000,000
Shares to Hans Rigendinger
7,500,000
10,000,000
7,500,000
10,000,000
(retention bonus non vested)
Shares to Josef Mettler (retention
15,000,000
18,000,000
15,000,000
21,000,000
award)
Shares to Howard Glicken and
200,000
200,000
200,000
200,000
José Maria Figueres (retention
award)
Figueres Olsen (retention award)
200,000
200,000
200,000
200,000
Total Shares
22,900,000
28,400,000
22,900,000
28,400,000
Total Options and Shares
54,900,000
60,400,000
54,900,000
60,400,000
33
SUNVESTA, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
September 30, 2015
20.
GENERAL AND ADMINISTRATIVE EXPENSES
General and administrative expenses according consolidated statement of comprehensive loss
include:
Three-month
Three-month
Nine-month
Nine-month
period ended
period ended
period ended
period ended
General and administrative expenses
September
September 30,
September 30,
September 30,
30, 2015
2014
2015
2014
$
$
$
Rental & related expenses
51,673
43,949
153,303
133,055
Audit
2,900
2,540
180,430
185,941
Consulting
378,692
359,038
971,073
1,391,920
Marketing, Investor & public relations
26,789
29,514
70,551
65,460
Travel expenses
130,710
164,980
418,460
347,549
Personnel costs including social securitys
costs and share based remuneration
455,749
483,423
2,166,779
1,888,503
Various other operating expenditures
70,957
195,498
382,924
689,867
Total according statements of
comprehensive loss
1,117,470
1,278,941
4,343,520
4,702,296
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:
Paradisus Papagayo Bay Resort & Luxury Villas Project Financing
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.
Option to Purchase Four Hotels in the Canton of Graubünden, Switzerland
On October 12, 2015 the Company signed an option agreement for the acquisition of four
existing hotels in the Canton of Graubünden, Switzerland. The properties comprise an
aggregate of 141 rooms. The consideration for the option is CHF 300,000, which amount was
paid on October 25, 2015. Should the transaction not close before a date that is yet to be
determined then the option consideration will not be refundable. In the even that the transaction
does close then this consideration will be allocated to the total purchase price for the hotels.
Share capital increase in SunVesta Holding AG
On November 3, 2015, the board of directors of SunVesta Holding AG approved an increase of
the companys share capital from CHF 10,000,000 par value CHF 1 each by CHF 3,500,000 par
value CHF 1 to CHF 13,500,000. The issuance price for one new share is fixed at CHF 6.50.
34
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 September 30, 2015 and September 30,
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, is the Paradisus Papagayo Bay Resort & Luxury Villas, a five-star luxury hotel. All
permitting for the project is in place, including permission to incorporate the beachfront adjacent to
the two concessions into the development and all significant site work completed. Vertical
construction is expected to commence in the third quarter of 2015, while the opening of.the Paradisus
Papagayo Bay Resort & Luxury Villas is scheduled for the fourth quarter 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
35
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.
36
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.
Since the completion date for the Paradisus Papagayo Bay Resort & Luxury Villas development is
now anticipated for the fourth quarter of 2017, the Company is in the process of reaching an
agreement to further amend the management agreement with Meliá dated August 18, 2014. The
amended agreement presently stipulates that if the Papagayo Bay Resort & Luxury Villas is not
completed by February 15, 2016, and if an extension date is not agreed, then Meliá could terminate
the management agreement and cause the Company to pay a penalty of $5 million. The Company is
confident that an agreement will be reached to extend the completion date to the fourth quarter of
2017.
Additional Concession Properties
On April 20, 2012, the Company entered into an agreement with Meridian IBG (Meridian), as
amended on November 13, 2012, and replaced on May 7, 2013, to purchase two additional concession
properties in Polo Papagayo, Guanacaste, comprised of approximately 230,000 square meters for
$17,500,000. One of the concessions lies adjacent to the existing concessions (La Punta) and the other
is in close proximity to the Paradisus Papagayo Bay Resort & Luxury Villas development.
The Company had paid down-payments on the purchase of these properties of $2,669,816 as of
September 30, 2015, and is in discussions with Meridian regarding an amendment to the agreement.
Should the Company not be successful in obtaining an amendment to the agreement, it would have to
write-off $300,000 of that purchase price already paid in addition to a 5% penalty.
Swiss Hospitality Project
Subsequent to period end, on October 12, 2015, the Company signed an option agreement to acquire
four existing hotels in the Canton of Graubünden, Switzerland with an urelated third party. The
properties optioned comprise an aggregate of 141 rooms. The consideration for the option is CHF
300,000, which amount was paid on October 25, 2015. Should the transaction not close before a date
that is yet to be determined then the option consideration will not be refundable. In the event that the
transaction does close then this consideration will be allocated to the total purchase price for the
hotels.
37
Finance
The anticipated completion of the Paradisus Papagayo Bay Resort & Luxury Villas in the fourth
quarter of 2017 will require a net investment of approximately $198 million (including non-
recuperated overhead expenses), of which approximately $60 million has been expended as of
September 30, 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, 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 six 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 matures on December 2, 2016. We had realized $7,342,995 as of the year ended December
31, 2014, and $7,077,434 as of September 30, 2015 (variance due to valuation), for a cumulative
amount of $6.76 million as of the date of this report.
The Company initiated a parallel offering of unsecured EUR bonds on December 2, 2013, of up to
15,000,000 in units of 10,000 that bear interest at 7.25% per annum payable each December 2 over
a three-year term that matures on December 2, 2016. We had realized $1,714,991 as of the year ended
December 31, 2014 and $1,601,028 as of September 30, 2015 (variance due to valuation), for a
cumulative amount of $1.55 million 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 matures on August 31, 2015. We had realized $10,802,722 as of the year
ended December 31, 2014 and $10,424,613 as of the maturity date (variance due to valuation). As of
September 30, 2015, $8,695,876 had not been redeemed in connection with this offering.
The Company initiated a parallel offering of unsecured CHF bonds on September 1, 2013, of up to
CHF 15,000,000 in units of CHF 10,000 that bear interest at 7.25% per annum payable each August
31, over a two-year term that matures on August 31, 2015. We had realized $14,709,176 as of the year
ended December 31, 2014 and $26,684,291 as of the maturity date. As of September 30, 2015,
$22,148,048 had not been redeemed in connection with this offering.
The Company initiated a new offering of senior unsecured CHF bonds on October 1, 2015, of up to
CHF 45,000,000 units of CHF 5,000 that bear interest at 6.00% per annum payable each September
30, over a three-year term that matures on September 30, 2018 which are convertible into shares of
SunVesta Holding AG at CHF 8.00.
The Company initiated a new parallel offering of senior unsecured CHF bonds on October 1, 2015, of
up to CHF 15,000,000 units of CHF 5,000 that bear interest at 6.00% per annum payable each
September 30, over a three-year term that matures on September 30, 2018 which are convertible into
shares of SunVesta Holding AG at CHF 8.00.
38
Aires International Investment, Inc.
On July 27, 2011, SunVesta AG entered into a line of credit agreement with Aires International
Investments Inc. (Aires), a company owned by Dr. Rӧssler (a director of the Company). The loan
agreement was amended on May 11, 2012 and on June 21, 2012 and then replaced by a new loan
agreement on October 31, 2013, that included the following conditions:
All existing loan agreements or credit facilities, including amendments, between SunVesta AG
and Aires were cancelled and superseded by the new loan agreement.
The loans are due after December 31, 2017 and before December 31, 2020.
Despite the scheduled repayment dates, each party has the option to cancel the loan agreement
with a prior notice period of 90 days, requiring repayment of the loans in full.
Loan amounts outstanding including any additional amounts and additions are subordinated.
Interest on the loan amounts is 7.25% per annum, which charge is accrued to the loan account.
The Company had borrowed $38,338,003 from Aires as of September 30, 2015 and $30,299,312 as of
December 31, 2014.
Dr. Max Rӧssler
Over the course of 2012 and 2013, the Company entered into a series of interest free loans with Dr.
Max Rӧssler, 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 transferred amounts due to
him under loans dated June 7, 2012 and March 1, 2013, for $1,810,000 and $50,000 respectively to
the existing loan agreement with Aires. The due dates of the remaining loans to Dr. Rӧssler were
extended to May 30, 2016.
The Company owed $817,432 to Dr. Rӧssler as of September 30, 2015 including:
Date of Agreement
Amount
Shares
Public Entity
July 24, 2012
$427,048
10,000
Schindler Holding AG
August 8, 2012
$367,741
700
Zug Estates Holding AG
Global Care AG
On September 23, 2014, the Company entered into a short term loan agreement of approximately
$190,270 (CHF 185,000) with Global Care AG (Global Care), a company owned by Dr. Rӧssler (a
director of the Company), repayable on October 31, 2014, with a fixed interest payment of $20,570
(CHF 20,000). The amounts due to Global Care had not been paid as of the filing date of this report.
According to the agreement, there are no penalties for late payments.
The Company owed Global Care $210,840 as of September 30, 2015, and $186,963 as of December
31, 2014.
DIA S.A.
On March 8, 2013, the Company entered into an interest free loan agreement with DIA S.A. in the
amount of $2,000,000 payable on March 8, 2014, in connection with the purchase of land concession
being part of the Paradisus Papagayo Bay Resort & Luxury Villas project from Altos held in the name
of Altos del Risco S.A. The terms of the loan agreement were amended on March 16, 2015, to extend
the due date for said payable until March of 2016.
39
Timeline
Our expected timeline for developing the Paradisus Papagayo Bay Resort & Luxury Villas is as
follows:
commence onsite vertical construction in the first quarter of 2016
complete construction in the fourth quarter of 2017
handover to Melía in the fourth quarter of 2017
Results of Operations
During the nine month period ended September 30, 2015, our operations were focused on (i)
completing earth work excavations on the Paradisus Papagayo Bay Resort & Luxury Villas property;
(ii) furthering discussions with prospective project development partners; (iii) pursuing additional
debt financing to fund the construction of the project; (iv) seeking approval to extend the term of the
concessions; (v) obtaining permission for an Article 21 concession for beachfront properly adjacent
to the project.; and (vi) commencing the process to create sub-concessions for prospective villa
owners within the development.
The Company has been funded since inception from debt or equity placements and by shareholders or
partners in the form of loans. Capital raised to date has been allocated primarily to the development of
the Costa Rican property, including the purchase of the land and general and administrative costs.
Comprehensive Losses/ Income
The variance in losses over the comparative three month periods is reconciled below:
Previous year 3 months
2,242,561
Variances during the 9 months
Decrease in general and administrative expenses
161,471 Decrease in consulting expenses
Increase in interest income
8,451 Increase in deposits
Increase in interest expense
(621,391) Increase in borrowings
Increase in amortization of debt issuance costs
(435,980) Increase in provisions
Decrease in exchange gains
(547,510) Lower exchange gain due to more stable
EUR and CHF currency development
against USD.
Decrease in other expenses
(3,756) Decrease in miscellaneous expenses.
Income taxes
0
Increase in foreign currency translation losses
(1,187,042) Increase in foreign currency translation
losses due to a long term intercompany
receiveable that is denominated in Swiss
Francs.
Total variances
(2,625,757)
Current year 3 months
(383,196)
40
The variance in losses over the comparative nine month period is reconciled below:
Previous year 9 months
(3,426,230)
Variances during the 9 months
Decrease in general and administrative expenses
358,776 Decrease in consulting expenses
Increase in interest income
19,944 Increase in deposits
Increase in interest expense
(1,864,133) Increase in borrowings
Increase in amortization of debt issuance costs
(1,252,451) Increase in provisions
Decrease in exchange gains
(850,543) Lower exchange gain due to more stable
EUR and CHF currency development
against USD.
Decrease in other expenses
25,168 Decrease in miscellaneous expenses.
Income taxes
(1,150)
Increase in foreign currency translation losses
(3,621,206) Increase in foreign currency translation
losses due to a long term intercompany
receiveable that is denominated in Swiss
Francs.
Total variances
(7,185,595)
Current year 9 months
(10,611,825)
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
September 30, 2015, in connection with the purchase of land concessions 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.
41
Liquidity and Capital Resources
Since inception the Company has experienced significant changes in liquidity, capital resources, and
stockholders equity.
As of September 30, 2015 and December 31, 2014, the following were working capital items:
September
December
30, 2015
31, 2014
Current assets
Cash and cash equivalents
205,582
14,347
Receivable from related parties
21,939
27,163
Other assets
557,557
289,156
Total current assets
785,078
330,666
Current liabilities
Bank liabilities
-
153,375
Accounts payable
7,899,873
6,181,057
Accrued expenses
8,492,357
5,444,514
Notes payable
2,168,909
3,023,759
Notes payable to related parties
1,958,091
1,162,100
Other liabilities
666,109
-
CHF-Bond
4,247,661
25,511,898
Total current liability
25,433,000
41,476,703
Net working capital
(24,647,922) (41,146,037)
As of September 30, 2015 and December 31, 2014, the following were the items making up the total
stockholders deficit:
September
December
30, 2015
31, 2014
Assets
Current assets
785,078
330,666
Non-current assets
65,636,898
58,083,516
Total assets
66,421,976
58,414,182
Liabilities
Current liabilities
25,433,000
41,476,703
Non-current liabilities
73,796,282
39,568,568
Total liabilities
99,229,282
81,045,271
Total stockholders deficit
(32,807,306) (22,631,089)
The Companys negative net working capital of $23,981,813 is of concern; however, based on the
guaranty signed by certain principals, the Company is convinced that it can address liquiditiy
problems.
Net cash flow used in operating activities for the nine months ended September 20, 2015, was
$3,137,324, as compared to $3,577,435 for the nine months period ended September 30, 2014. The
Company expects to continue to use net cash flow in operating activities until we complete the
Paradisus Papagayo Bay Resort & Luxury Villas project, which completion is projected for the fourth
quarter of 2017.
42
Net cash used in investing activities for the nine months ended September 30, 2015, was $8,680,218
as compared to $7,913,484 for the nine month period ended September 30, 2014. Net cash used in
investing activities in the current nine-month period is comprised of other receivables from related
parties, recievables from related parties, the purchase of property and equipment, advance payments
to subcontractors, and down payments for property and equipment, offset by deposits related to
construction activities and restricted cash. Net cash used in investing activities in the prior comparable
nine month period was comprised of other receivables from related parties, the purchase of property
and equipment, interest paid in 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 nine month period ended September 30, 2015, was
$12,030,782 as compared to $11,098,026 for the nine month period ended September 30, 2014. Net
cash provided by financing activities in the current nine month period is comprised of proceeds from
notes payable to related parties, and bond issuances net of commissions, offset by a decrease in bank
liabilities, the repayment of outstanding bonds, debt issuance costs, and changes in other debt. Net
cash provided by financing activities in the prior comparable nine month period was comprised of
proceeds from a note payable and other long term debt, 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.
We had no lines of credit or other bank financing arrangements as of September 30, 2015.
We have commitments for executed purchase orders and agreements in the amount of $57 million as
of September 30, 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 $198
million to complete the project. Most material commitments are not contractually agreed as of the end
of the period. We have cancellable commitments to Meridian that are not included in the required
financing for the development of the Paradisus Papagayo Bay Resort & Luxury Villas of
approximately $15,000,000 as of September 30, 2015, 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 September 30, 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 September 30,
2015.
43
Future Financings
A letter of engagement was executed with ISM Capital LLP (ISM), a London based investment
firm, on March 10, 2015, for the purpose of conducting a $100 million asset backed bond issuance.
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.
On October 4.,2015, the bilateral agreement with ISM was extended into a multilateral agreement, by
incorporating Stifel Ncolaus Europe Ltd (Stifel), to enlarge the territories in which the offering
could be effectively presented to include North America.
Off-Balance Sheet Arrangements
As of September 30, 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 $198 million.
The project is expected to open in the fourth quarter of 2017. Until the completion of the project, the
following expenditures are estimated to be incurred:
a. Gross project cost
$
208,000,000
b. Less: Proceeds from sale of villas
(25,000,000)
c. Net project cost
183,000,000
d. Overhead expenses
27,000,000
e. Less: Recuperated in gross project cost
(12,000,000)
f Total, excluding other potential projects
$
198,000,000
Sixty percent (60%) of the Net project cost is intended to be financed through the issuance of
secured bonds, for which negotiations have been initiated. The remaining forty percent (40% of the
Net project cost, as well as non-recuperated overhead expenses and the cost of potential other
projects are intended to be financed by the main shareholders or lenders of the project in the absence
of alternative financing committements, i.e. Zypam Ltd., shareholder and related entity to Mr. Josef
Mettler, Mr. Hans Rigendinger, shareholder, Chief Operating Officer and Company Board Member,
Dr. Max Rössler, Company Board Member and controlling shareholder of Aires, Mr Josef Mettler,
shareholder, Director and Chief Executive Officer.
On July 16, 2012, certain principal shareholders of the Company or principal lenders to the project
entered into a guaranty agreement in favor of SunVesta AG. The purpose of the guaranty is to ensure
that until such time as financing is secured for the entire project that they will act as a guarantor to
creditors to the extent of the projects ongoing capital requirements. On September 22, 2015, the
signatories to the guaranty formally agreed to maintain the guaranty, as necessary, until December 31,
2018, after which date the guaranty will expire.The guaranty agreement requires that within 30 days
of receiving a demand notice, the requested funds are made available by the guarantors to the
Company. Based on this Guaranty Agreement, management believes that available funds are
sufficient to finance cash flows for the twelve months subsequent to September 30, 2015, and the filing date, though future anticipated cash outflows for investing activities will continue to depend on the availability of financing.
44
Forward-Looking Statements and Factors That May Affect Future Results and Financial
Condition
The statements contained in the section titled Managements Discussion and Analysis of Financial
Condition and Results of Operations and elsewhere in this current report, with the exception of
historical facts, are forward-looking statements. Forward-looking statements reflect our current
expectations and beliefs regarding our future results of operations, performance, and achievements.
These statements are subject to risks and uncertainties and are based upon assumptions and beliefs
that may or may not materialize. These statements include, but are not limited to, statements
concerning:
our anticipated financial performance and business plan
the sufficiency of existing capital resources
our ability to raise additional capital to fund cash requirements for future operations
uncertainties related to our future business prospects
our ability to generate revenues to fund future operations
the volatility of the stock market
general economic conditions
We wish to caution readers that our operating results are subject to various risks and uncertainties that
could cause our actual results to differ materially from those discussed or anticipated elsewhere in this
report. We also wish to advise readers not to place any undue reliance on the forward-looking
statements contained in this report, which reflect our beliefs and expectations only as of the date of
this report. We assume no obligation to update or revise these forward-looking statements to reflect
new events or circumstances or any changes in our beliefs or expectations, other than as required by
law.
Recent Accounting Pronouncements
Please see Note 2 to the accompanying consolidated financial statements for recent accounting
pronouncements.
ITEM 3.
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
RISK
Not applicable.
45
ITEM 4.
CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
In connection with the preparation of this annual report, an evaluation was carried out by the
Companys management, with the participation of its chief executive officer and chief financial
officer, of the effectiveness of the Companys disclosure controls and procedures (as defined in Rules
13a-15(e) under the Securities Exchange Act of 1934 (Exchange Act)). Disclosure controls and
procedures are designed to ensure that information required to be disclosed in reports filed or
submitted under the Exchange Act is recorded, processed, summarized, and reported within the time
periods specified in the Commissions rules and forms, and that such information is accumulated and
communicated to management, including the chief executive officer and chief financial officer, to
allow timely decisions regarding required disclosures.
Based on that evaluation, the Companys management concluded, as of the end of the period covered
by this report, that the Companys disclosure controls and procedures were not effective in recording,
processing, summarizing, and reporting information required to be disclosed, within the time periods
specified in the Commissions rules and forms, and that such information was not accumulated and
communicated to management, including the chief executive officer and the chief financial officer, to
allow timely decisions regarding required disclosures.
Changes in Internal Control over Financial Reporting
During the quarter ended September 30, 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.
46
PART II OTHER INFORMATION
ITEM 1.
LEGAL PROCEEDINGS
None.
ITEM 1A.
RISK FACTORS
Not required of smaller reporting companies.
ITEM 2.
UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF
PROCEEDS
None.
ITEM 3.
DEFAULTS ON SENIOR SECURITIES
The Company initiated two offerings of unsecured CHF bonds on September 1, 2013, of up to CHF
30,000,000 that bore interest at 7.25% per annum payable each August 31, over a two year term that
matured on August 31, 2015. On maturity the Company had realized at total of $37,108,904 from
these offerings. As of September 30, 2015, $30,843,924 of the total amount realized had not been
redeemed and as of the date of this report $0 including penalties and interest remained outstanding.
Subsequent to September 30, 2015, the total amount of $30.8 million (of which $26.6 million on October 1, 2015) was settled through being rolled into the new convertible bond in the amount of $27.4 million and through cash settlement in the amount of $3.4 million.
ITEM 4.
MINE SAFETY DISCLOSURES
Not applicable.
ITEM 5.
OTHER INFORMATION
On July 16, 2015, the Companys board of directors unanimously adopted an audit committee charter
and appointed Josef Mettler, José Maria Figureres and Howard Glicken to the newly formed audit
committee.
On July 16, 2015, the Companys board of directors unanimously adopted a new Code of Business
Conduct and Ethics, a copy of which is incorporated hereto as Exhibit 14.
ITEM 6.
Exhibits required to be attached by Item 601 of Regulation S-K are listed in the Index to Exhibits on
page 49 of this Form 10-Q, and are incorporated herein by this reference.
47
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
November 23, 2015
Josef Mettler
Chief Executive Officer, Chief Financial Officer,
Principal Accounting Officer and Director
/s/ Hans Rigendinger
November 23, 2015
Hans Rigendinger
Chief Operating Officer and Director
48
INDEX TO EXHIBITS
Exhibit
Description
3.1.1*
Articles of Incorporation (incorporated by reference from the Form 10-SB filed with the Commission on
December 31, 1999).
3.1.2*
Amended Articles of Incorporation (incorporated by reference from the Form 10-KSB filed with the
Commission on April 9, 2003)
3.1.3*
Amended Articles of Incorporation (incorporated by reference from the Form 10-QSB filed with the
Commission on November 17, 2003).
3.1.4*
Amended Articles of Incorporation (incorporated by reference from the Form 8-K filed with the
Commission on September 27, 2007).
3.2.1*
Bylaws (incorporated by reference from the Form 10-SB filed with the Commission on December 31,
1999).
3.2.2*
Amended Bylaws (incorporated by reference from the Form 10-QSB filed with the Commission on
November 17, 2003).
10.1*
Securities Exchange Agreement and Plan of Exchange dated June 18, 2007 between the Company and
SunVesta AG (formerly ZAG Holdings AG) (incorporated by reference from the Form 8-K filed with
the Commission on June 21, 2007).
10.2*
Purchase and Sale Agreement between ZAG Holding AG and Trust Rich Land Investments, Mauricio
Rivera Lang dated May 1, 2006, for the acquisition of Rich Land Investments Limitada.
10.3*
Debt Settlement Agreement dated March 1, 2010, between the Company and Zypam, Ltd. (incorporated
by reference from the Form 8-K filed with the Commission on March 10, 2010).
10.4*
Debt Settlement Agreement dated March 1, 2010, between the Company and Hans Rigendinger
(incorporated by reference from the Form 8-K filed with the Commission on March 10, 2010).
10.5*
Guaranty Agreement dated July 16, 2012, between SunVesta AG, Josef Mettler, Hans Rigendinger and
Max Rӧssler.
10.6*
Employment Agreement dated January 1, 2013 between the Company and Hans Rigendinger
(incorporated by reference to the Form 8-K filed with the Commission on February 4, 2013.
10.7*
Employment Agreement dated July 4, 2013 between the Company and Josef Mettler (incorporated by
reference to the Form 10-Q filed with the Commission on October 10, 2013).
10.8*
Assignment of Debt Agreement dated December 31, 2012, between the Company, SunVesta AG and
Aires International Investments, Inc. (incorporated by reference to the Form 10-Q filed with the
Commission on December 13, 2013).
10.9*
Debt Settlement Agreement dated December 31, 2012, between the Company and Hans Rigendinger
(incorporated by reference to the Form 10-Q filed with the Commission on December 13, 2013).
10.10*
Loan Agreement dated October 31, 2013, between SunVesta AG and Aires International Investments,
Inc. (incorporated by reference to the Form 10-Q filed with the Commission on December 13, 2013).
10.11*
Assignment of Debt Agreement dated December 31, 2013, between the Company, SunVesta AG and
Aires International Investments, Inc.(incorporated by reference to the Form 10-Q filed with the
Commission on May 20, 2014).
10.12*
Assignment of Debt Agreement dated December 31, 2014, between the Company, SunVesta AG and
Aires International Investments, Inc. (incorporated by reference to the Form 10-Q filed with the
Commission on August 19, 2015).
10.13*
Addendum to Employment Agreement dated March 6, 2015, between the Company and Josef Mettler
(incorporated by reference to the Form 10-Q filed with the Commission on May 5, 2015).
14*
Code of Business Conduct and Ethics adopted on July 16, 2015 (incorporated by reference to the Form
10-Q filed with the Commission on August 19, 2015).
21*
Subsidiaries of the Company (incorporated by reference from the Form 10-K filed with the Commission
on April 15, 2015).
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14 of the
Securities and Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-
Oxley Act of 2002.
Certification of the Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section
1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99*
SunVesta, Inc. 2013 Stock Option Plan (incorporated by reference to the Form 10-Q filed with the
Commission on October 10, 2013).
101. INS
XBRL Instance Document
101. PRE
XBRL Taxonomy Extension Presentation Linkbase
101. LAB
XBRL Taxonomy Extension Label Linkbase
101. DEF
XBRL Taxonomy Extension Label Linkbase
101. CAL
XBRL Taxonomy Extension Label Linkbase
101. SCH
XBRL Taxonomy Extension Schema
*
Incorporated by reference to previous filings of the Company.
Pursuant to Rule 406T of Regulation S-T, these interactive data files are deemed furnished and not
filed or part of a registration statement or prospectus for purposes of Section 11 or 12 of the Securities
Act of 1933, or deemed furnished and not filed for purposes of Section 18 of the Securities and
Exchange Act of 1934, and otherwise is not subject to liability under these sections.
49