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~~

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT ~~OF 1934 for the quarterly period ended September 30, 2016.~~

~~oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)~~ OF ~~THE SECURITIES~~ 1934 for the quarterly period ended March 31, 2017.

~~EXCHANGE ACT~~ o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF ~~1934 for the transition period from~~ toTHE SECURITIES EXCHANGE ACT

OF 1934 for the transition period from

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

(Registrant’s telephone number, including area code)

n/a

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or

~~13 or~~ 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period

~~shorter period~~ that the registrant was required to file such reports), and (2) has been subject to such filing requirements

~~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

~~Indicate~~site, byif ~~check~~any, ~~mark~~every ~~whether the~~Interactive ~~registrant has~~Data ~~submitted~~File ~~electronically~~required to be submitted and posted onpursuant ~~its~~to Rule 405 of

~~corporate~~Regulation ~~Web~~S-T ~~site,~~(§232.405 ifof ~~any,~~this ~~every~~chapter) ~~Interactive~~during ~~Data~~the ~~File required~~preceding to12 bemonths ~~submitted~~(or ~~and~~for ~~posted~~such ~~pursuant~~shorter period that

tothe ~~Rule~~registrant ~~405~~was ofrequired ~~Regulation~~to ~~S-T~~submit ~~(§232.405~~and ofpost ~~this~~such ~~chapter~~files). ~~during~~Yes ~~the~~þNo ~~preceding 12 months (or for such~~o

shorter period that the registrant was required to submit and post such files). Yes þ No o



Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-

accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,”

“accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. ~~Large~~

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 issuer’s classes of common stock, as of the latest

~~Indicate the~~ practicable date. The number of shares outstanding of ~~each~~ of the issuer’s ~~classes~~ of common stock, as of $0.01 par value (the only

~~latest practicable date. The number~~ class of ~~shares outstanding of the issuer’s common~~ voting stock), $0 at May 15, 2017, was 114,741,603.~~01 par~~

value (the only class of voting stock), at November 11, 2016, was 95,941,603.

TABLE OF CONTENTS

PART 1- FINANCIAL INFORMATION

~~Item 1~~Item1.

Financial Statements:

Consolidated Balance Sheets as of ~~September~~March 3031, ~~2016~~2017 (~~Unaudited~~unaudited) and December

~~December~~ 31, ~~2015~~2016

Unaudited Consolidated Statements of Comprehensive Loss (unaudited) for the

three ~~and nine~~ months ended ~~September 30~~March 31, ~~2016~~2017 and ~~September~~March 3031, ~~2015~~2016

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

~~nine~~three months ended ~~September~~March 3031, 2017 andMarch 31, 2016

Unaudited Consolidated Statements of Cash Flows (unaudited) for the ~~nine~~three

months ended ~~September~~March 3031, ~~2016~~2017 and ~~September~~March 3031, ~~2015~~2016

Notes to Unaudited Consolidated Financial Statements

Item 2.

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

3831

Operations

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

4740

Item 4.

Controls and Procedures

4840

PART II-OTHER INFORMATION

Item 1.

Legal Proceedings

4941

Item 21A.

Risk Factors

4941

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

Item 3.

Defaults Upon Senior Securities

4941

Item 4.

Mine Safety Disclosures

4941

Item 5.

Other Information

4941

Item 6.

Exhibits

4941

Signatures

5042

Index to Exhibits

5143

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

~~Form~~ 10-Q reflect all adjustments necessary for a fair presentation of the results of operations for the

~~the~~ periods presented. The results of operations for the periods presented are not necessarily indicative of

~~indicative of~~ the results to be expected for the full year.

Due to rounding, the sum of individual positions may be higher or lower than 100%.

SUNVESTA, INC.

CONSOLIDATED BALANCE SHEETS

September 30, 2016

		March 31, 2017	December 31, 2016
		(Unaudited)
Assets
Current assets
Cash and cash equivalents	$	2,557,181	806,440
Receivable from related parties		65,483	49,292
Other assets		460,977	456,099
Total current assets		3,083,641	1,311,830
Non-current assets
Property and equipment - net		67,725,234	66,216,658
Deposits related to construction work		214,545	190,549

Notes receivable		-	280,242
Restricted cash		1,669,064	1,667,052
Total non-current assets		69,608,843	68,354,502
Total assets	$	72,692,485	69,666,332

Liabilities and stockholders' deficit
Current liabilities
Accounts payable		1,979,141	3,311,512
Accrued expenses		2,810,375	3,160,723
Note payable		1,521,648	1,500,000
Notes payable to related parties		7,338,257	307,088
Other liabilities		1,641	120
Convertible CHF-Bond		-	6,202,921
EUR-Bond		-	484,463
Total current liabilities		13,651,063	14,966,826
Non-current liabilities
Convertible CHF-Bond		37,295,876	31,892,613
CHF-Bond		17,556,862	16,384,893
Liability related to conversion feature		5,336,233	5,936,378
Notes payable to related parties		53,205,093	51,473,793
Pension liabilities		187,516	184,469
Total non-current liabilities		113,581,579	105,872,146
Total liabilities	$	127,232,642	120,838,972

Stockholders' deficit
Preferred stock, $0.01 par value; 50,000,000 shares authorized, no shares issued and outstanding
Common stock, $0.01 par value; 200,000,000 shares
authorized; 101,841,603 shares issued and outstanding		1,018,416	959,416
Additional paid-in capital		23,450,566	23,238,526
Accumulated other comprehensive income / (loss)		1,717,066	2,997,562
Accumulated deficit		(80,726,195)	(78,368,143)
Total stockholders' deficit		(54,540,158)	(51,172,639)
Total liabilities and stockholders' deficit	$	72,692,485	69,666,332

December 31, 2015

(Unaudited)

Assets

Current assets

Cash and cash equivalents

2,985,698

111,830

Receivable from related parties

20,643

19,945

Other assets

549,978

158,574

Total current assets

3,556,320

290,349

Non-current assets

Property and equipment - net

65,084,427

61,271,424

Deposits related to construction work

190,577

798,874

Notes receivable

280,242

Down payment for property and equipment

2,369,816

2,972,083

Restricted cash

1,673,563

1,684,467

Total non-current assets

69,598,624

67,007,090

Total assets

73,154,944

67,297,439

Liabilities and stockholders' deficit

Current liabilities

Bank liabilities

179,313

Accounts payable

4,814,034

8,048,608

Accrued expenses

9,109,806

7,831,247

Note payable

2,660,607

2,736,912

Notes payable to related parties

6,023,048

1,130,978

Convertible CHF-Bond

5,988,898

EUR-Bond

8,728,720

8,347,717

Total current liabilities

37,325,113

28,274,775

Non-current liabilities

Convertible CHF-Bond

32,405,820

25,866,148

Liability related to conversion feature

6,760,662

6,976,322

Notes payable to related parties

48,611,633

47,198,362

Other long-term debts

36,140

Pension liabilities

215,825

210,680

Total non-current liabilities

87,993,940

80,287,652

Total liabilities

125,319,053

108,562,427

Stockholders' equity

Preferred stock, $0.01 par value; 50,000,000 shares

authorized, no shares issued and outstanding

Common stock, $0.01 par value; 200,000,000 shares

authorized; 95,941,603 shares issued and outstanding

959,416

Additional paid-in capital

23,168,285

23,403,438

Accumulated other comprehensive income / (loss)

(923,062)

1,778,961

Accumulated deficit

(75,368,748)

(67,406,803)

Total stockholders' deficit

(52,164,109)

(41,264,988)

Total liabilities and stockholders' deficit

73,154,944

67,297,439

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

SUNVESTA, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE ~~INCOME / (~~LOSS)

Three months ended

Nine months ended

		March 31, 2017	March 31, 2016
		(Unaudited)	(Unaudited)
Revenues
Revenues, net	$	-	-
Cost of revenues		-	-
Gross profit		-	-

Operating expenses
General and administrative expenses	$	(1,375,970)	(6,072,790)
Impairment expenses		(280,242)	-
Total operating expenses		(1,656,212)	(6,072,970)

Loss from operations	$	(1,656,212)	(6,072,970)

Other income / - expenses
Interest income		17170	12,123
Interest expense		(791,303)	(1,721,796)
Change in Fair Value of Conversion Feature		662,601	408,697
Exchange differences		(584,554)	(169,952)

Other income / - expenses		(5,754)	(36,614)
Total other income / - expenses	$	(701,840)	(1,507,542)

Loss before income taxes	$	(2,358,053)	(7,580,512)
Income Taxes		-	-
Net loss	$	(2,358,053)	(7,580,512)

Comprehensive income /(loss)
Foreign currency translation		(1,280,496)	(1,945,564)
Comprehensive income / (loss)	$	(3,638,549)	(9,526,075)

Loss per common share
Basic and diluted	$	(0.02)	(0.08)

Weighted average common shares
Basic and diluted		108,234,104	98,506,438

September 30,

2016

2015

2016

2015

(Unaudited)

Revenues

Revenues, net

Cost of revenues

Gross profit

Operating Expenses

General and administrative expenses

(1,071,827)

(1,117,470)

(3,998,562)

(4,343,520)

Impairment expenses

(296,663)

Total operating expenses

(1,071,827)

(1,117,470)

(4,295,224)

(4,343,520)

Income / (loss) from operations

(1,071,827)

(1,117,470)

(4,295,224)

(4,343,520)

Other income / (expenses)

Interest income

15,134

8,175

46,162

26,657

Interest expense

(1,859,825)

(2,220,004)

(5,870,982)

(6,000,005)

Change in Fair Value of Conversion

680,580

1,860,806

Feature

Exchange differences

(1,240,451)

1,014,604

322,882

309,184

Other income / (expenses)

(15,064)

(35,098)

(25,589)

(84,424)

Total other expenses

(2,419,625)

(1,232,324)

(3,666,721)

(5,748,588)

Profit/ (loss) before income taxes

(3,491,452)

(2,349,793)

(7,961,945)

(10,092,108)

Income Taxes

(1,150)

Net income / (loss)

(3,491,452)

(2,349,793)

(7,961,945)

(10,093,258)

Comprehensive income / (loss)

Foreign currency translation

119,460

1,966,597

(2,702,023)

(518,566)

Comprehensive income / (loss)

(3,371,991)

(383,197)

(10,663,968)

(10,611,824)

Earnings / (loss) per common share

Basic and diluted

(0.03)

(0.02)

(0.08)

(0.11)

Weighted average common shares

Basic and diluted

101,740,479

95,842,702

99,707,537

93,798,380

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

SUNVESTA, INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)

Common

Additional

Accumulated

Total

Stock

Paid-in

Other

Accumulated

Treasury

Stockholders’

Capital

Comprehensive

deficit

Stock

Equity

Income (Loss)

(Deficit)

December 31, 2015

959,416 $ 23,403,438 $

1,778,961 $ (67,406,803) $

- $ (41,264,988)

Translation

adjustments

(2,702,023)

Net loss

(7,961,945)

Stock based

compensation expense

(235,153)

September 30, 2016

959,416 $ 23,168,285 $

(923,062) $ (75,368,748) $

- $ (52,164,109)

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

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT

		Common Stock		Additional Paid-in Capital		Accumulated Other Comprehensive Income (Loss)		Accumulated deficit		Total Stockholders’ Deficit
December 31, 2016	$	959,416	$	23,238,526	$	2,997,562	$	(78,368,143)	$	(51,172,639)
Translation adjustments		-		-		(1,280,496)		-		(1,280,496)
Net loss		-		-		-		(2,358,052)		(2,358,052)
Stock based compensation expense		59,000		212,030		-		-		271,030
March 31, 2017	$	1,018,416	$	23,450,556	$	1,717,066	$	(80,726,195)	$	(54,540,158)

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

SUNVESTA, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

January 1, to

		January 1 to March 31, 2017	January 1 to March 31, 2016
		Unaudited	Unaudited

Cash flows from operating activities
Net loss	$	(2,358,052)	(7,580,510)
Adjustments to reconcile net loss to net cash
Depreciation and amortization		10,024	16,513
Impairment expenses		269,695	-
Amortization of debt issuance cost and commissions		374,094	349,159
Accrued interest on debt		987,398	-
Unrealized exchange differences		604,839	108,344
Stock compensation expense		271,030	127,835
Change in Fair Value of Conversion Feature, net		(702,758)	173,143
- Increase / decrease in:
Other current assets		(170,509)	601,426
Accounts payable		(1,262,470)	(328,072)
Accrued expenses		(1,334,650)	5,603,355
Other Liabilities		1,529	-
Net cash used in operating activities		(3,309,830)	(928,807)

Cash flows from investing activities
Receivables from related parties		-	1,994
Purchase of property and equipment		(628,668)	(1,247,923)
Deposits related to construction		-	(641,818)
Proceeds from sale of property and equipment		32,260	-
Restricted cash		-	20
Net cash used in investing activities		(596,408)	(1,887,727)
Cash flows from financing activities
Decrease in bank liabilities		-	(179,313)
Proceeds from notes payable related parties		7,027,584	2,192,216
Repayment of notes payable related parties		-	(1,230,691)
Proceeds from bond issuance, net of commissions and debt issuance costs		908,705	2,156,758
Repayment of bonds		(2,305,714)	-
Proceeds from note payable and other debt		525,055	-
Repayments of note payable and other debt		(500,000)	-
Net cash provided by financing activities		5,655,631	2,905,132
Effect of exchange rate changes		1,348	6,250
Net increase / - decrease in cash		1,750,742	(94,848)
Cash and cash equivalents, beginning of period		806,440	111,830
Cash and cash equivalents, end of period	$	2,557,181	206,678

Additional information
Capitalized interest and debt issuance costs for construction (non-cash)		934,955	883,000
Interest paid		-	160,000

January 1, to

September 30, 2016

September 30, 2015

(Unaudited)

Cash flow from operating activities

Net loss

(7,961,945)

(10,093,259)

Adjustments to reconcile net loss to net cash

Depreciation and amortization

29,585

50,641

Impairment on Down Payment

296,663

Amortization of debt issuance costs and commissions

1,776,231

2,540,765

Accrued interest on debt

2,696,792

Unrealized exchange differences

(411,374)

(496,382)

Stock compensation expense

(235,153)

435,608

Expenses (+) / Income (-) related to conversion feature

(386,185)

- Cash flow impact of increase / decrease in:

Other current assets

759,303

(12,761)

Accounts payable

(3,042,107)

1,694,770

Accrued expenses

424,203

2,743,294

Net cash used in operating activities

(6,053,988)

(3,137,324)

Cash flow from investing activities

Other receivables from related parties

(1,685,099)

Payments to acquire property, plant and equipment

(1,198,012)

(6,440,625)

Payments to acquire projects

(250,000)

Proceeds from sale of property, plant and equipment

36,578

Deposits related to construction

(641,818)

3,311

Down payments for property and equipment

309,023

(307,841)

Restricted cash

14,050

Net cash used in investing activities

(1,480,178)

(8,680,218)

Cash flows from financing activities

Repayments of bank liabilities

(178,053)

(153,375)

Proceeds from notes payable related parties

8,233,385

9,185,499

Repayment of notes payable related parties

(7,784,216)

Proceeds from bond issuance, net of commissions and debt

11,127,996

9,616,664

Repayment of bonds

(890,379)

(6,443,246)

Repayments of note payable and other debt

(125,769)

(174,760)

Net cash provided by financing activities

10,382,963

12,030,782

Effect of exchange rate changes

25,070

(22,005)

Net increase / - decrease in cash

2,873,867

191,235

Cash and cash equivalents, beginning of period

111,830

14,347

Cash and cash equivalents, end of period

2,985,697

205,582

Additional information

Capitalized interest and debt issuance costs for construction (non-

2,679,526

Reversal of capitalized payment obligation for construction (non-

451,816

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

7,621,345

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

1,533,150

Repayment of Specogna Holding AG loan by Aires

Interest paid

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

1,507,128

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

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2016~~2017

CORPORATE INFORMATION

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

(“SunVesta AG~~”). Until recently, SunVesta AG held five~~ has three wholly-owned subsidiaries: SunVesta Projects and Management AG, a Swiss

company; SunVesta ~~Projects and Management AG~~ Costa Rica SA, a ~~Swiss~~ Costa Rican company~~; Rich Land Investments~~ and SunVesta Holding España SL, a

~~Limitada, a Costa Rican~~ Spanish company ~~(“Rich Land”); SunVesta Costa Rica Limitada, a Costa~~.

~~Rican~~In ~~company~~January ~~(“SVCR”)~~2005, ~~Altos~~the ~~del~~Company ~~Risco~~changed ~~SA,~~its abusiness ~~Costa~~focus ~~Rican~~to ~~company~~the ~~(“AdR”)~~development of holiday resorts and

~~SunVesta Holding España SL (“España”), a Spanish company~~investments in the hospitality and related industry. The Company has one major project in Costa

~~Effective~~Rica. ~~May~~Planning ~~21,~~for ~~2016,~~this ~~the~~project ~~three~~has ~~Costa~~been ~~Rican~~fully ~~companies~~completed, all consents have been ~~merged~~granted, ~~whereby~~and

~~Altos~~excavation ~~del~~work ~~Risco~~began SAin ~~absorbed~~March ~~its~~2013. ~~two~~The ~~affiliated~~Company ~~companies~~is ~~and~~in ~~subsequently~~process ~~changed~~of ~~its~~securing financing for the

~~name~~ project and has not realized revenue to ~~SunVesta Costa Rica SA~~ date. Since the financing of the project is not complete, the

~~In January 2005, the~~ Company ~~changed its business focus~~ ’s activities are subject to ~~the development of holiday~~ significant risks and uncertainties.

resorts and investments in the hospitality and related industry. The Company has one major

project in Costa Rica. Planning for this project has been fully completed, all consents have

been granted, and excavation work began in March 2013. The Company is still in process

of securing financing for the project and has not realized revenue to date. Since the

financing of the project is not complete, the Company’s activities are subject to significant

risks and uncertainties.

These consolidated financial statements are prepared in US Dollars on the basis of generally

accepted accounting principles in the United States of America (“US GAAP”).

~~The accompanying unaudited interim consolidated financial statements have been prepared~~2.

~~by management in accordance with the instructions in Form 10-Q and, therefore, do not~~SIGNIFICANT ACCOUNTING POLICIES

~~include all information and footnotes required by generally accepted~~ New accounting ~~principles~~ standards – not adopted

~~and~~In ~~should~~January 2016, ~~therefore,~~ bethe ~~read~~Financial inAccounting ~~conjunction~~Standards ~~with~~Board ~~the~~(FASB) ~~Company’s~~issued ~~Form~~Accounting ~~10-K, for the year~~Standards

~~ended~~Update ~~December 31~~2016-01, ~~2015,~~Financial ~~filed~~Instruments—Overall ~~with~~(Subtopic ~~the~~825-10): ~~Securities~~Recognition and ~~Exchange Commission. These~~Measurement

~~statements do include all normal recurring adjustments which the Company believes~~of Financial Assets and Financial Liabilities. The update requires several changes with respect to

~~necessary for a fair presentation of the statements. The interim results of operations are not~~recognition and measurement as well as disclosure requirements with respect to financial

~~necessarily~~instruments). ~~indicative~~The ofamendments ~~the~~to ~~results~~(ASU) to2016-01 beare ~~expected~~effective for the ~~full~~annual ~~year~~period ~~ended~~ending ~~December 31,~~after

~~2016~~December 15, 2017, and for annual periods and interim periods thereafter. Early application is

~~Except~~permitted. asThe ~~indicated~~Company is in the ~~notes~~process ~~below,~~of ~~there~~evaluating ~~have~~the ~~been~~prospective noimpact ~~other~~that ~~material~~(ASU) ~~changes in the~~2016-01

~~information disclosed in the notes to the financial statements included in the Company’s~~will have on its balance sheet.

~~Form~~In ~~10-K~~February ~~for~~2016, the ~~year~~Financial ~~ended~~Accounting ~~December~~Standards ~~31,~~Board ~~2015,~~(FASB) ~~filed~~issued ~~with~~Accounting ~~the Securities and Exchange~~Standards

~~Commission~~Update 2016-02, Leases (Topic 842). The standard requires the recognition of lease assets and lease

liabilities by lessees for those leases classified as operating leases. Leases will be classified as either

finance or operating, with classification affecting the pattern of expense recognition. The standard

requires lessors to classify leases as either sales-type, finance or operating. A sales-type lease occurs

if the lessor transfers all of the risks and rewards, as well as control of the underlying asset, to the

lessee. If risks and rewards are conveyed without the transfer of control, the lease is treated as a

financing lease. If the lessor does not convey risks and rewards or control, an operating lease results.

The standard will become effective for the Company beginning January 1, 2019. The Company is

currently assessing the impact adoption of this standard will have on its consolidated results of

operations, financial condition, cash flows, and financial statement disclosures.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2016~~2017

SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

~~New accounting standard updates – not adopted yet~~In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards

InUpdates ~~February~~ASU 2016-13, ~~the~~ Financial ~~Accounting~~Instruments—Credit ~~Standards~~Losses ~~Board~~ (~~FASB~~Topic 326): ~~issued~~Measurement ~~Accounting~~of Credit

~~Standards~~Losses ~~Update~~on ~~2016-02~~Financial Instruments, ~~Leases~~requiring ~~(Topic~~certain ~~842).~~changes ~~The~~to ~~standard requires~~ the recognition ofand measurement as

~~lease~~well ~~assets~~as ~~and~~disclosure ~~lease~~of ~~liabilities~~incurred byand ~~lessees~~expected ~~for~~credit ~~those~~losses. ~~leases~~The ~~classified~~standard aswill ~~operating~~become ~~leases.~~effective for the

~~Leases~~Company ~~will~~beginning beJanuary ~~classified~~1, as2020. ~~either~~The ~~finance~~Company oris ~~operating,~~currently ~~with~~assessing ~~classification~~the ~~affecting~~impact ~~the~~adoption of

~~pattern~~this ofstandard ~~expense~~will ~~recognition.~~have ~~The~~on ~~standard~~its ~~requires~~consolidated ~~lessors~~results toof ~~classify~~operations, ~~leases~~financial ascondition, ~~either~~cash flows, and

~~sales-type, finance or operating~~financial statement disclosures. ~~A sales-type lease occurs if the lessor transfers all of the~~

~~risks~~In ~~and~~November ~~rewards~~2016, ~~as well as control of~~ the Financial ~~underlying~~Accounting Standards Board (FASB) ~~asset, to the lessee. If risks and~~issued Accounting Standards

~~rewards are conveyed without the transfer of control~~Updates ASU 2016-18, ~~the lease is treated as a financing~~ requiring that restricted cash and restricted cash equivalents be included with

~~lease. If~~ cash and cash equivalents when reconciling the ~~lessor does not convey risks~~ beginning-of-period and ~~rewards or control, an operating lease results.~~ end-of- period total cash

~~The~~amounts ~~standard~~shown ~~will~~on ~~become~~the ~~effective~~statement ~~for~~of ~~the~~cash ~~Company~~flows. ~~beginning~~Consequently, ~~January~~transfers 1,between ~~2019.~~cash ~~The~~and restricted

~~Company~~cash iswill ~~currently~~not ~~assessing~~be ~~the~~presented ~~impact~~as ~~adoption~~a ofseparate ~~this~~line ~~standard~~item ~~will~~in ~~have~~the onoperating, ~~its~~investing or financing sections of

~~consolidated~~the ~~results~~cash offlow ~~operations,~~statement. ~~financial~~The ~~condition, cash~~amendments ~~flows,~~are ~~and~~effective ~~financial~~for ~~statement~~public business entities for fiscal years

beginning after December 15, 2017, and interim periods within those fiscal years. The Company

considers that ASU 2016-18 will have a limited impact on the presentation of the statement of cash

flows.

In March 2017, the Financial Accounting Standards Board (FASB) issued Accounting Standards

Updates ASU 2017-07, requiring certain changes to the presentation of the expenses related to

postretirement benefits accounted for under Topic 715. The amendments are effective for public

business entities for fiscal years beginning after December 15, 2017, and interim periods within

those fiscal years. The Company is currently assessing the impact adoption of this standard will have

on its consolidated results of operations, financial condition, cash flows, and financial statement

disclosures.

In August 2014, the Financial Accounting Standards Board (FASB) issued Accounting

Standards Updates (ASU) 2014-15 requiring an entity’s management to evaluate whether

there are conditions or events, considered in aggregate, that raise substantial doubt about

entity’s ability to continue as a going concern within one year after the date that the

financial statements are issued (or within one year after the date that the financial

statements are available to be issued when applicable). The amendments to (ASU) 2014-

15 are effective for the annual period ending after December 15, 2016, and for annual

periods and interim periods thereafter. Early application is permitted. The Company is in

the process of evaluating the prospective impact that (ASU) 2014-15 will have on its

balance sheet.

New accounting standard updates - adopted

In ~~April~~August ~~2015~~2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards

~~Standards~~ Updates (ASU) ~~2015~~2014-0315 ~~which~~requiring ~~requires~~an ~~that~~entity’s ~~debt~~management ~~issuance~~to ~~costs~~evaluate bewhether ~~reported~~there inare conditions

~~the~~or ~~balance~~events, ~~sheet~~considered asin aaggregate, ~~direct~~that ~~deduction~~raise ~~from~~substantial ~~the~~doubt ~~face~~about ~~amount~~entity’s ofability ~~the~~to ~~related~~continue ~~liability,~~as a

~~consistent~~going ~~with~~concern ~~the~~within ~~presentation~~one ofyear ~~debt~~after ~~discounts.~~the ~~Prior~~date tothat the ~~amendments,~~financial ~~debt~~statements ~~issuance~~are issued (or within one

~~costs~~year ~~were~~after ~~presented~~the asdate athat ~~deferred~~the ~~charge~~financial ~~(i.e.,~~statements anare ~~asset)~~available onto ~~the~~be ~~balance~~issued ~~sheet~~when applicable). The ~~ASU~~

~~provides~~amendments ~~examples~~to ~~illustrating~~(ASU) ~~the~~2014-15 ~~balance~~are ~~sheet~~effective ~~presentation~~for ofthe ~~notes~~annual ~~net~~period ofending ~~their~~after ~~related~~December 15, 2016,

~~discounts~~and for annual periods and ~~debt~~interim ~~issuance~~periods ~~costs~~thereafter. ~~Further,~~Early ~~the~~application ~~amendments~~is ~~require~~permitted. ~~the~~The ~~amortization of~~Company

~~debt~~has assessed that ~~issuance~~ASU 2014-15 has no effect ~~costs~~on its financial ~~to be reported as interest expense. Similarly~~statements, ~~debt issuance costs and~~ as a note with respect to the

~~any discount or premium~~ going concern assumption is ~~considered in the aggregate when determining the effective~~ already presented.

~~interest~~In ~~rate~~March on2016, the ~~debt.~~Financial ~~The~~Accounting ~~amendments~~Standards ~~are~~Board ~~effective~~(FASB) ~~for~~issued ~~public~~Accounting ~~business entities for~~Standards

~~fiscal years beginning after December 15~~Updates ASU 2016-9, ~~2015, and interim periods within those fiscal~~ Compensation—Stock Compensation (Topic 718): Improvements to

~~years. The application of this ASU resulted in the reclassification of debt issuance cost~~ Employee Share-Based Payment Accounting, requiring certain changes to recognition and

~~the~~measurement as ~~relating~~well ~~amortization~~as disclosure of Share-Based Payments. The standard will become effective for

the Company beginning January 1, 2017. The Company ~~had unamortized debt issuance costs~~ has assessed the impact that adoption of ~~$2,375,877 and $2,995,209 as of~~ this

~~September~~standard ~~30,~~has ~~2016~~on ~~and~~its ~~December~~consolidated 31results of operations, ~~2015~~financial ~~respectively.~~condition, ~~The~~cash ~~Company~~flows, ~~reclassified~~and financial

~~amortization~~statement ofdisclosures. ~~debt~~ASU ~~issuance~~2016-9 ~~cost~~is ~~and~~part ~~commissions~~of in the ~~amount~~FASB’s ofsimplification ~~$792,583~~initiative and offers certain

~~$674,617 to interest expense for~~ accounting policy choices and simplifications. Based on the ~~three- months’ periods ended September 30~~ current stock option plans, ~~2016 and~~ there is no

~~September 30~~effect from ASU 2016-9 on the Company’s consolidated results of operations, ~~2015~~ financial condition, ~~respectively.~~

cash flows, and financial statement disclosures.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2016~~2017

SIGNIFICANT ACCOUNTING POLICIES - CONTINUED

New accounting standard updates – adopted - continued

This ASU was applied retrospectively for all periods presented.

In August 2016, the Financial Accounting Standards Board (FASB) issued Accounting

Standards Updates (ASU) 2016-15 which clarifies how certain cash receipts and cash

payments are presented and classified in the statement of cash flows. The amendments are

intended to reduce diversity in practice. As the update specifies presentation in certain

particular cases, they have no impact on the company’s financial statement as of

September 30, 2016, respectively.

GOING CONCERN

The Company is currently working on building a hotel in the Papagayo Gulf Tourism Project area of

~~Project area of~~ Guanacaste, Costa Rica. The project is expected to open in the fourth quarter of 2018. Until the

~~quarter of 2018. Until the~~ completion of the project, the following expenditures are estimated to be incurred:

~~estimated~~a. Gross toproject ~~be incurred:~~cost

Gross project cost

~~217~~242,000,000

b. Less: Proceeds from sale of villas

Less: Proceeds from sale of villas

(25,000,000)

c. Net project cost

~~Net project cost~~217,000,000

~~192,000,000~~d. Overhead expenses

Overhead expenses

20,000,000

e. Total, excluding other potential projects

Total, excluding other potential projects

~~212~~237,000,000

Seventy percent of the net project cost is intended to be financed through the issuance of secured

~~secured~~ bonds, for which negotiations have been initiated. The remaining thirty percent of the net project

~~the net project~~ cost, as well as non-recuperated overhead expenses are intended to be financed by the main

~~financed by the main~~ shareholders or lenders of the project, i.e Mr. ~~Zypam~~Hans ~~Ltd.~~Rigendinger, shareholder, Company Director and

~~related entity to the late Mr. Josef Mettler~~Chief Executive Officer, Mr Dr. ~~Hans Rigendinger~~ Max Rӧssler, controlling shareholder, of Aires International ~~Company~~Investment,

~~Director~~ Inc. and ~~interim Chief Executive Officer, Dr~~ Company Director. ~~Max Rӧssler, controlling shareholder of~~

~~Aires International Investment~~On July 16, ~~Inc. and~~ 2012, certain principal shareholders of the Company ~~Director.~~ or principal lenders to the project

~~On July 16, 2012, certain principal~~entered ~~shareholders~~ into a Guaranty Agreement in favor of the Company or. ~~principal~~The ~~lenders to~~ purpose of the guaranty is to

~~project entered into a Guaranty Agreement in favor of~~ ensure that until financing is secured for the ~~Company. The purpose of the~~ entire project that they will act as guarantors to creditors

~~guaranty is~~ to ~~ensure~~the ~~that~~extent ~~until~~of ~~financing is secured for~~ the ~~entire~~ project’s ~~that~~ongoing ~~they~~capital ~~will act as~~requirements.

~~guarantors~~On toSeptember ~~creditors~~22, to2015, the ~~extent~~signatories ofto the ~~project’s~~guaranty formally agreed ~~ongoing~~to ~~capital~~maintain ~~requirements.~~the Onguaranty, as

~~September 22~~necessary, ~~2015~~ until December 31, ~~the signatories to the guaranty formally agreed to maintain the~~ 2018.

~~guaranty~~On October 28, ~~as necessary~~ 2016, ~~until December 31, 2018, after which date the guaranty will expire~~ Hans Rigendinger and Dr. Max Rössler formally agreed to maintain the

Onguaranty, ~~October~~as 28necessary, ~~2016,~~until ~~Hans~~completion ~~Rigendinger~~of ~~and~~the ~~Dr.~~construction ~~Max~~of ~~Rössler~~Paradisus ~~formally~~Papagayo ~~agreed~~Bay toResort ~~maintain~~&

~~the guaranty~~Luxury Villas, ~~as necessary,~~ ~~until completion of~~ after which date the ~~construction~~ ~~of Paradisus Papagayo Bay~~guaranty will expire.

~~Resort~~The &Guaranty ~~Luxury~~Agreement requires ~~Villas,~~that within ~~after~~30 ~~which~~days ~~date~~of receiving ~~the~~a ~~guaranty~~demand ~~will~~notice, ~~expire.~~requested funds

~~The~~are ~~Guaranty~~made ~~Agreement~~available ~~requires~~by the ~~that~~guarantors to ~~within~~the 30Company. ~~days~~Based ofon this ~~receiving~~guaranty, amanagement ~~demand notice,~~believes

~~requested~~that available funds are ~~made~~sufficient ~~available~~to byfinance ~~the~~cash ~~guarantors~~flows tofor the ~~Company.~~twelve ~~Based~~months onsubsequent ~~this~~to March

~~guaranty~~31, ~~management believes that available~~ ~~funds~~2017 ~~are~~and ~~sufficient~~the tofiling ~~finance~~date, though future anticipated cash ~~flows~~outflows for investing activities continue

~~the twelve months subsequent~~ to ~~September 30, 2016 and~~ depend on the ~~filing date, though future~~ availability of financing.

anticipated cash outflows for investing activities continue to depend on the availability of

financing.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

CASH AND CASH EQUIVALENTS

Cash and cash equivalents are available to the Company without any restriction or limitation on

~~limitation on~~ withdrawal and/or use of these funds. The Company’s cash equivalents are placed with financial

~~placed with financial~~ institutions that maintain high credit ratings. The carrying amounts of these assets approximate their

~~of these assets approximate their~~ fair value.

Cash and cash

USD

CHF

Other

Total

Cash and cash

equivalents

~~September~~March ~~30, 2016 December~~ 31, ~~2016~~2017

~~original~~December ~~currency 52~~31,~~765 2,830,117~~ 2016

~~14,655~~original currency

16,316

2,535,861

11,599

in $

5216,~~765 2,921,140~~316

112,~~793~~529,335

211,~~985,698~~530

~~111~~2,~~830~~557,181

806,440

USD ($) =

US Dollar

EURO =

Euro

CHF

Swiss Francs

AUD

Australian Dollar

CRC

Costa Rican Colón

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

March 31, 2017

RESTRICTED CASH

As of ~~September~~March 3031, ~~2016~~2017, the Company has the following restricted cash positions:

Restricted Cash

~~September~~March 3031, ~~2016~~2017

December 31, ~~2015~~2016

Credit Suisse in favor of BVK pension fund

~~131~~127,~~911~~412

~~128~~125,~~805~~399

Banco ~~Lafise~~National de Costa Rica in favor of the Costa Rican Tourism Board

933,350

-933,350

~~HSBC~~Banco Lafise in favor of Costa Rican ~~Tourism~~Environmental ~~Board~~Agency – SETENA

370,000

Banco National de Costa Rica in favor of the Costa

Rican Tourism Board

563,350

Banco Lafise in favor Costa Rican Environmental

Agency – SETENA

608,302

-608,302

Banco Nacional de Costa Rica in favor of the Costa

Rican Environmental Agency – SETENA

622,312

Gross

1,~~673~~669,~~563~~064

1,~~684~~667,~~467~~051

Restricted cash positions in favor of Costa Rican Tourism Board and Costa Rican Environmental

~~Environmental~~ Agency – SETANA are related to the hotel project in Costa Rica and therefore their release is not

~~therefore their release is not~~ expected before finalization of the corresponding project. Due to this fact these restricted cash

~~to this fact, these restricted cash~~ positions have been classified as long term. The restricted cash position in favor of BVK pension

~~The restricted cash position in favor of BVK pension~~ fund is a rental deposit related to a long term lease contract for office space. Therefore, this restricted

~~long term lease contract for office space. Therefore, this restricted~~ cash position is also classified as long term.

classified as long term.

NOTE RECEIVABLE

On June 15, 2015, the Company ~~granted~~ loaned REP Caribbean Development Corporation~~, a third~~ (“REP

~~party~~Caribbean”), a ~~short term advance in the amount of~~ third party, $250,000 secured by a non-related Swiss individual. The ~~repayment~~ loan was due on

November 30, 2015, ~~with~~in addition to a fixed interest payment of $5,000. ~~The~~On ~~advance~~September is15, ~~secured~~2015, ~~by a~~the

~~non-related Swiss~~Company ~~individual.~~entered ~~On December 10,~~into ~~2015~~an agreement with REP Caribbean and 4f Capital, ~~the~~a ~~advance~~related ~~was~~party, ~~increased by~~netting

~~$25,000.~~receivables ~~Including~~due ~~accrued~~to ~~fixed~~the ~~interest,~~respective parties that resulted in the ~~overdue~~satisfaction ~~amount~~of atthe ~~September~~full ~~30,~~loan ~~2016~~amount ~~was~~due

~~approximately $280,000.~~from REP Caribbean to the Company and a receivable against 4f Capital in the amount of

11approximately $250,000 as of December 31, 2016 and $250,000 as of December 31, 2015. On

~~SUNVESTA~~December 10, ~~INC.~~ 2015, the Company loaned an additional unsecured amount of $25,000 to REP

~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~Caribbean. The Company erroneously reported as of December 31, 2016 and December 31, 2015,

~~September 30~~that the amount due from REP Caribbean was approximately $280, ~~2016~~000. Since 4f Capital is in

liquidation, and the likelihood that REP Caribbean will repay the unsecured $25,000 due is in doubt,

the receivable erroneously reported as approximately $280,000 has been fully impaired as of March

31, 2017.

PROPERTY & EQUIPMENT

~~September 30~~March 31, ~~2016~~2017

December 31, ~~2015~~2016

Land

19,700,000

IT Equipment

~~232~~224,~~537~~711

~~185~~221,~~846~~060

Other equipment and furniture

~~231~~223,~~142~~364

~~278~~219,~~000~~734

Leasehold improvements

7775,~~846~~226

6674,~~617~~004

Vehicles

74,000

139,000

Construction in-process

4547,~~289~~996,~~888~~808

4146,~~412~~457,~~351~~172

Gross

6568,~~605~~220,~~413~~109

6166,~~781~~745,~~814~~970

Less accumulated depreciation

(~~520~~494,~~986~~874)

(~~510~~529,~~390~~312)

Net

6567,~~084~~725,~~427~~234

6166,~~271~~216,~~424~~658

Depreciation expenses for the period ended March 31, 2017 and 2016

~~September 30~~10, ~~2016 and 2015~~024

2961,~~585~~771

~~16,802~~11

~~Property and equipment is comprised primarily of land held in Costa Rica that is~~SUNVESTA, INC.

~~currently being developed for hotels and capitalized project costs in connection with~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~the Papagayo Gulf Tourism project. The land amounts to $19.7 million related to the~~March 31, 2017

~~concessions held by SunVesta Costa Rica SA. $~~7 ~~million (~84,000 m2) and $12~~.7

~~million~~PROPERTY ~~(~120,000~~& ~~m2).~~EQUIPMENT – CONTINUED

~~The~~Property $7and ~~million~~equipment ~~concession~~ is acomprised ~~right~~primarily toof ~~use~~land ~~the~~held ~~property for~~in aCosta ~~specific~~Rica ~~period~~that ofis ~~time~~currently ofbeing

~~initially~~developed 20for ~~years~~hotels ~~from the~~and ~~date~~capitalized ofproject ~~grant,~~costs ~~which~~in ~~thereafter~~connection ~~can~~with bethe ~~renewed~~Papagayo atGulf ~~no further~~Tourism

~~cost,~~project. ifThe ~~the~~concession ~~landholder~~land isamounts up to ~~date~~$19.7 ~~with~~million ~~its~~related ~~obligations~~to ~~and~~the ifconcessions ~~there~~held isby ~~no significant~~SunVesta

~~change~~Costa inRica ~~government policies~~SA. ~~The~~$7 ~~current~~million ~~concession~~(~84,000 ~~initially~~m2) ~~expired~~and in$12.7 ~~June~~million ~~2022~~(~120,000 m2).

The $~~12.~~7 million concession is ~~also~~ a right to use the property for a specific period of time of initially 20

~~time of initially 30~~ years from the date of grant, which thereafter can be renewed at no further cost, if the landholder is

~~further cost, if the landholder is~~ up to date with its obligations and if there is no significant change in government policies. The

~~significant change in government policies. The~~ current concession initially expired in June 2022.

~~November 2036~~The $12.7 million concession is also a right to use the property for a specific period of time of

Oninitially ~~July~~30 ~~14,~~years ~~2015,~~from the ~~Consejo~~date ~~del Polo~~of degrant, ~~DesarrolloTuristico~~which ~~Papagayo~~thereafter can be renewed at ~~ICT~~no further cost, if the

~~(Council of Papagayo Tourism Development Project), unanimously approved the~~landholder is up to date with its obligations and if there is no significant change in government

~~extension~~policies. ofThe ~~both~~current ~~concessions~~concession ~~until~~initially ~~2052~~expired in November 2036.

~~The~~On July ~~construction in process through December 31~~14, 2015 ~~and September 30, 2016, is~~ the Consejo del Polo de DesarrolloTuristico Papagayo at ICT (Council of

~~represented primarily by architectural work related to~~ Papagayo Tourism Development Project), unanimously has approved the ~~hotel and apartments as well~~ extension of both

asconcessions ~~construction~~until ~~work~~2052.

The construction in process through December 31, 2015 and March 31, 2017, is represented

primarily by architectural work related to the hotel and apartments as well as construction work.

Deposit related to construction work

~~For~~During the quarter ended ~~September~~March 3031, ~~2016~~2017, the Company made deposits with several contractors for

~~contractors to initiate~~ earth moving groundwork. These deposits will be offset against invoices as such groundwork is

~~invoices for such groundwork as~~ completed. As of ~~September 30~~ March 31, ~~2016~~ 2017 and December 31, 2016, the Company has deposits of $214,545

~~December 31, 2015, the Company has deposits of~~ and $190,~~577 and $798~~549 respectively,~~874~~ which have not yet been set off.

respectively, which have not yet been set off.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2016~~2017

DOWN PAYMENTS FOR PROPERTY & EQUIPMENT

September 30, 2016

December 31, 2015

La Punta (neighboring piece of land)

2,669,816

Hotel Engadina

302,267

Gross

2,669,816

2,972,083

Value adjustement on Down Payment La Punta

(300,000)

Total (net)

2,369,816

2,972,083

Agreement to purchase neighboring pieces of land

On April 20, 2012, the Company entered into an agreement to purchase two additional

concession properties located at Polo Papagayo, Guanacaste, with a total surface of

approximately 230,000 square meters for $23,395,806 whereof fifty percent was to be

paid in cash and the other fifty percent through a combination of a 10 percent equity share

in La Punta (the concession properties in Polo Papagayo) and five percent in equity of

Paradisus Papagayo Bay Resort & Luxury Villas (currently under development). Both of

these properties are located in Costa Rica.

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

price to $17,200,200 with no equity payments. The terms and conditions of the cash

payment were to be defined. Furthermore, all payments by the Company to date and in

the future became refundable.

During the second quarter of 2013, the Company entered into a new, revised agreement

for the purchase of the said properties with a total purchase price of $17,500,000.

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

Description

Original seller

Third party

Total

USD

Total commitment

9,500,000

8,000,000

17,500,000

Payments till 30 September 2016

1,669,816

1,000,000

2,669,816

Thereof refundable:

(1,669,816)

(700,000)

(2,369,816)

thereof non-refundable

300,000

Total outstanding at 30 September 2016

7,830,184

7,000,000

14,830,184

Thereof overdue

(7,830,184)

(7,000,000)

(14,830,184)

Thereof not overdue

In light of the above situation the Company is in discussions with the Original Seller

regarding an extension and adaptation of the current agreement, which, for all practical

reasons, must be considered obsolete.

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

paid toward the purchase price. Should the Company not be successful in obtaining a time

extension for the payment of the purchase price or amendment to the purchase agreement

it will have to write-off $300,000 of that purchase price paid in 2013 for the new, revised

agreement and 5% of additional damages on the additional $1,000,000 paid for a total of

$50,000, which is not refundable as per contract terms.

Both, the $300,000 write-off (accounted for as impairment expenses) as well as the

$50,000 for additional damages (accounted for as general and administrative expenses)

have been provided for in the results year-to-date 2016.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

DOWN PAYMENTS FOR PROPERTY & EQUIPMENT - CONTINUED

Down payment for Purchase Four Hotels in the Canton of Graubünden, Switzerland

On September 19, 2015, the Company signed an option agreement to acquire four

existing hotels in the Canton of Graubünden, Switzerland with an unrelated third party.

The properties optioned comprise an aggregate of 141 rooms. The consideration for the

option was CHF 300,000, which amount was paid on October 25, 2015.

Dated May 10, 2016, the Company, QuadEquity Holdings AG and the potential Seller of

the four hotels concluded an agreement, whereby QuadEquity Holdings AG assumed all

of the Company’s rights and obligations from the original contract. In return, QuadEquity

Holdings AG would pay the Company the amount of $302,000 (CHF 300,000) before

May 30, 2016. This payment was received by the Company on June 1, 2016.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

FAIR VALUE MEASUREMENT

The guidance on fair value measurements defines fair value as the exchange price that would be

~~would be~~ received for an asset or paid to transfer a liability (an exit price) in the principal or most

~~or most~~ advantageous market for the asset or liability in an orderly transaction between market participants.

~~market participants.~~ This guidance also specifies a fair value hierarchy based upon the observability of inputs used in

~~observability of inputs used in~~ valuation techniques. Observable inputs (highest level) reflect market data obtained from

~~reflect market data obtained from~~ independent sources, while unobservable inputs (lowest level) reflect internally developed market

~~level) reflect internally developed market~~ assumptions. In accordance with this guidance, fair value measurements are classified under the

~~fair~~following ~~value measurements are classified under the followinghierarchy~~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

~~identical or similar~~ instruments in markets that are not active; and model-derived valuations in which significant inputs or

~~derived valuations in which~~ significant ~~inputs or significant~~ value drivers are observable in active markets.

observable in active markets.

Level 3

Model derived valuations in which one or more significant inputs or significant value-drivers are

~~significant value-drivers are~~ unobservable.

When available, the Company uses quoted market prices to determine fair value, and classifies such

~~classifies such~~ measurements within Level 1. In some cases, where market prices are not available, the Company

~~available, the Company~~ makes use of observable market based inputs to calculate fair value, in which case the measurements

~~value, in which case the measurements~~ are classified within Level 2. If quoted or observable market prices are not available, fair value is

~~observable~~based ~~market~~upon ~~prices~~internally ~~are~~developed ~~not~~models ~~available~~that use, ~~fair~~where ~~value~~possible, iscurrent market-based ~~upon internally developed~~parameters

~~models~~such ~~that~~as ~~use~~interest rates, ~~where~~yield ~~possible,~~curves ~~current~~and ~~market-based~~currency ~~parameters~~rates. ~~such~~These asmeasurements ~~interest~~are ~~rates,~~classified within

~~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

~~that is~~ significant to the valuation. A measurement may therefore be classified within Level 3 even though

~~Level 3 even though~~ there may be significant inputs that are readily observable.

Fair value measurement includes the consideration of nonperformance risk. Nonperformance risk

~~Nonperformance risk~~ refers to the risk that an obligation (either by counterparty or the Company) will not be fulfilled. For

~~Company) will not be fulfilled. For~~ financial assets traded in an active market (Level 1), the nonperformance risk is included in the

~~the nonperformance risk is included in the~~ market price. For certain other financial assets and liabilities (Level 2 and 3), the Company’s fair

~~and liabilities (Level 2 and 3), the Company’s fair~~ value calculations have been adjusted accordingly.

~~accordingly.~~As of March 31, 2017 and December 31, 2016, respectively, there are no financial assets or

Asliabilities ofmeasured ~~September~~on ~~30,~~a ~~2016~~recurring basis ~~and~~at ~~December~~fair ~~31,~~value with ~~2015,~~the ~~respectively,~~exception ~~there~~of ~~are~~the liability related to ~~no financial~~the

~~assets or liabilities measured on a recurring basis at fair value with the exception of the~~conversion feature.

~~liability related~~ In addition to the ~~conversion feature.~~ methods and assumptions to record the fair value of financial instruments as

~~In addition to~~ discussed above, the Company used the following methods and assumptions to ~~record~~ estimate the fair ~~value of financial~~

value of our financial instruments ~~as discussed above, the Company used the following methods and~~:

~~assumptions to estimate the fair value of our financial instruments:~~13

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2016~~2017

98.

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

~~nature~~ of the receivables.

—

Accounts Payable – carrying amount approximated fair value.

—

Note payable – carrying amount approximated fair value due to the short term nature of the note payable.

—

Bank liabilities - carrying amount approximated fair value due to the short term nature of bank liabilities.

—

Notes receivable - carrying amount approximated fair value.

—

Notes payable to related parties ~~- Dr. M. Rӧssler~~ – (current) –~~The~~ carrying amount approximated fair value ~~was calculated based on~~ due to the short term nature

~~underlying publically traded shares. However,~~ of the ~~Company records the loan at nominal value~~ notes payable. ~~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

~~bonds~~ have been determined by discounting cash flow projections discounted at the respective interest rates of 7.25% for

~~7.25% for~~ EUR bonds, which represents the current market rate based on the creditworthiness of the Company. Hence, 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

~~the bonds~~ have been determined by discounting cash flow projections discounted at the respective interest rates of 7.25% for

~~rates of 7.25% for~~ CHF bonds, which represents the current market rate based on the creditworthiness of the Company. Hence, the

~~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

~~International~~ Investments Inc. are classified as level 3. The fair values of the notes were determined by discounting cash flow

~~discounting cash flow~~ projections discounted at the respective interest rates of 7.25%, which represents the current market rate based on

~~current market rate based on~~ the creditworthiness of the Company. Hence, the carrying value approximates fair value.

fair value.

—

Convertible CHF-bonds – The fair values of the convertible bonds payable are classified as level 3 fair values. The

~~values. The~~ fair values of the convertible bonds have been determined by discounting cash flow projections discounted at the

~~discounted at the~~ respective interest rates of 6.00% for convertible CHF bonds, which represents the current market rate based on the

~~current market rate based on the~~ creditworthiness of the Company. Hence, the carrying values approximate fair value.

fair value.

—

Liability related to conversion feature - The fair value of the liability related to conversion feature is classified as

~~classified as~~ level 3 in the fair value hierarchy. The fair value of the liability is determined using a Black Scholes model to

~~Scholes model to~~ calculate the option value at each reporting date and multiplied by the number of potentially convertible shares.

~~potentially convertibleshares.~~14

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2016~~2017

98.

FAIR VALUE MEASUREMENT -– CONTINUED

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

~~September 30~~March 31, ~~2016~~ 2017

December 31, ~~2015~~ 2016

Carrying

Fair Value $

Carrying

Fair Value $

Fair

Ref-

Amount $

Value $

Amount $

Value $

~~Levels Reference~~erence

~~Cash andcash equivalents~~Levels

~~2,985,698~~Cash and cash equivalents

2,~~985~~557,~~698~~181

~~111~~2,~~830~~557,181

~~111~~806,~~830~~440

806,440

Note 4

Restricted cash

1,~~673~~669,~~563~~064

1,~~684~~667,~~467~~052

Note 5

Receivables from related parties –

~~20,643~~other (current)

2065,~~643~~483

1965,~~945~~483

1949,~~945~~292

49,292

Note 10

Accounts Payable

41,~~814~~979,~~034~~141

83,~~048~~311,~~608~~512

Bank liabilities

~~179,313~~-

Note 11

Note payable

-1,521,648

-1,500,000

Note 17 18

Notes payable to related parties –

~~4,256,580~~other (current)

47,~~256~~338,~~580~~257

-7,338,257

-307,089

307,089

Note 10

Dr. M. Rӧssler (current)

Notes payable to related parties –

2,021

1,973

Note 10

Notes payable to related parties –

1,764,447

1,129,005

Note 10

Notes receivable

280,242

Note 6

EUR-bonds

~~8,728,720~~-

8484,~~488,631~~463

Note 12

Convertible CHF-bonds

3837,~~394~~295,~~718~~876

2838,~~720~~095,~~443~~533

Note 12

CHF-bonds

17,556,862

16,384,893

Note 12

Notes payable to related parties –

~~48,611,633~~Aires (non-current)

4853,~~611~~205,~~633~~093

4753,~~198~~205,~~362~~093

4751,~~198~~473,~~362~~793

51,473,793

Note 10

Liability related to conversion feature

65,~~760~~336,~~662~~233

65,~~976~~936,~~322~~378

Note 12

The Company's financial liabilities measured at fair value on a recurring basis consisted of the

~~of the~~ liability related to conversion feature as of the following date:

Balance at December 31, ~~2015~~2016

65,~~976~~936,~~322~~378

Additions / (Decrease)

1(40,~~474,622~~158)

Change in Fair Value of Conversion Feature

(1662,~~860,806~~601)

FX Revaluation

~~170~~102,~~524~~613

Balance at ~~September~~March 3031, ~~2016~~2017

65,~~760~~336,~~662~~233

Total income (+) or expense (-) related to the conversion feature in the ~~nine~~ three months up to March 31,

~~September 30~~2017, ~~2016,~~ amounts to $~~386~~600,~~184~~145. The Company used a Black-Scholes model to value the liability related

~~value the liability related~~ to conversion feature as of ~~September~~March 3031, ~~2016~~2017 and December 31, 2016. Increase of the conversion

~~31, 2015. Increase of the conversion~~ feature due to increase of bond volume are accounted for within interest expense.

~~accounted~~The ~~for~~assumptions ~~under~~as ~~interest~~of ~~expense.~~March 31, 2017 are as follows:

The assumptions as of December 31, 2015 are as follows:

Stock Price: CHF 5.08

Annualized Risk Free Rate: 0.001%

~~Rate: 0.72%~~ Exercise Price: CHF 8

Annualized Volatility: 80%

~~Volatility: 80%~~ Time to Maturity: 21.755 years

The assumptions as of ~~September~~December 3031, 2016 are as follows:

Stock Price: CHF 5.08

Annualized Risk Free Rate: : 0.001%

~~Rate: 0.00%~~ Exercise Price: CHF 8

Annualized Volatility: 80%

~~Volatility: 80%~~ Time to Maturity: 21.75 years

1715

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2016~~2017

109.

RELATED PARTY TRANSACTIONS

The ~~notes~~advances ~~payable~~from (to) ~~and receivables from~~ related parties are composed ofas ~~the~~ follows:

Receivables

Payables

~~September~~March 3031,

December September 30,

December 31,

March 31,

December 31,

2017

2016

~~31, 2015~~2017

2016

~~2015~~1 Aires International

1 Hans Rigendinger

253,~~021~~205,093

151,~~973~~473,793

2 ~~Aires~~ Akyinyi ~~International~~Interior and Exterior

Decoration

48,611,633

47,198,362

3 Akyinyi Interior and Exterior

Decoration

290,000

4 3 Global Care AG

17,~~474~~048,~~447~~257

240,210

5 Geoffrey Long

~~19,945~~4 Late Josef Mettler

6 Sportiva participations ag

17,088

5 Turan Tokay

65,483

49,292

528,660

7 Late Josef Mettler

70,135

8 QuadEquity Holdings

9 4f capital ag

10 Dr. Max Rössler

4,256,580

11 Turan Tokay

20,643

Total excluding interest

2065,~~643~~483

1949,~~945~~292

5460,~~634~~543,~~681~~350

4851,~~329~~780,~~340~~881

Accrued interest

~~4,489,666~~-

~~6,370,579~~-

Total

2065,~~643~~483

1949,~~945~~292

5960,~~124~~543,~~348~~350

5451,~~699~~780,~~919~~881

of which non-current

4853,~~611~~205,~~633~~093

4751,~~198~~473,~~362~~793

Related party

Capacity

Interest Repayment

Rate

Terms

Security

1 ~~Hans~~ Aires ~~Rigendinger Shareholder, interim CEO and Company board~~International

Company owned by Dr. Rössler, a board member

37.25%

See below none

2 Akyinyi Interior and Company owned by the widow of the late Josef

Exterior Decoration Mettler

none

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

Akyinyi Interior

3 and Exterior

Company owned by the widow of the late Josef

Decoration

Mettler

none

3 Global Care AG

Company owned by Dr. Rössler, a board member

7.25%

none

4 ~~Global~~ Late ~~Care~~Josef AGMettler

~~Company~~Former ~~owned~~shareholder, ~~by Dr. Max Rössler~~CEO, aCFO ~~board~~and Company

board member

none

5 Geoffrey Long

Head of Accounting “The Americas”

none

6 Sportiva

participations ag

Company formerly owned by the late Josef Mettler

none

~~7 Late~~5 Turan ~~Josef Mettler Former shareholder, CEO, CFO and Company board~~Tokay

~~member~~Board Member

none

8 QuadEquity

Company formerly owned by the late Josef Mettler

Holdings

(see above)

none

9 4f capital ag

Company formerly owned by the late Josef Mettler

(see above)

none

10 Dr. Max Rössler

Company board member

7.25%

none

11 Turan Tokay

Shareholder

none

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

10.

RELATED PARTY TRANSACTIONS - CONTINUED

Loan agreement Aires International Investment Inc.

As of ~~September~~March 3031, ~~2016~~2017, the Company owes Aires International Inc. the following:

Borrower

Debt instrument Amount in CHF Amount in USD

Amount in

Annual

Repayment date *

denominated in

CHF

USD

interest

date

CHF

rate

SunVesta Inc.

Promissory note

10,044,~~370~~371

10,~~266~~018,~~118~~523 CHF 7.25 %

~~7.25~~After %Dec 31, 2020

Dec 31, 2017

SunVesta Inc.

Promissory note

10,000,000

109,~~220~~974,~~769~~266 USD 7.25 %

~~7.25~~After %Dec 31, 2020

Dec 31, 2017

SunVesta Inc.

Promissory note

10,000,000

109,~~220~~974,~~769~~266 USD 7.25 %

~~7.25~~After %Dec 31, 2020

Dec 31, 2017

SunVesta Inc.

~~Promissory~~Loan ~~note~~agreement

410,~~888~~378,~~220~~152

510,~~045~~417,~~435~~107 USD 7.25 %

~~7.25~~After %Dec 31, 2020

Dec 31, 2017

SunVesta Holding Loan agreement

12,~~458~~854,~~639~~008

12,858,542

7.25 %

After Dec 31, ~~2017~~2020

12,820,930 USD

Total

4853,~~611~~205,~~633~~093 USD

The notes may be repaid in whole or in part.

~~Loans~~Loan ~~Dr.~~due ~~Max~~to ~~Rӧssler~~Global Care AG

InDuring the ~~third~~first quarter ~~2016~~of 2017, ~~Dr.~~Global ~~Max~~Care ~~Rössler~~AG, ~~provided~~a ~~$4,202,378~~company ~~(CHF~~owned ~~4,100,000)~~by Dr. ~~Interest~~Rӧssler (a director of the

~~of $24~~Company),~~543~~ ~~was~~provided ~~recorded in this period~~$7,048,257 ~~resulting~~to inthe aCompany ~~total~~at ~~balance~~7.25% ~~of $4~~interest,~~256,580~~ asrepayable ofnot before December

~~September 30~~31, ~~2016~~2020.

~~Loan Global Care AG~~16

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).

Effective June 30, 2016, an amount of $1,440,875 (CHF 1,398,802) was transferred from

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

Payable to the late Josef Mettler

During the third quarter 2016 Josef Mettler passed away and companies formerly owned

by him are no longer related parties to the Company.

In the third quarter 2016, $17,775 was advanced to the late Josef Mettler for private

expenses, accounted for as other assets as per September 30, 2016.

Current account Sportiva participations ag (a Josef Mettler company)

During the three-month period ended September 30, the following transaction occurred on

the current account Sportive participation ag (only transactions up until the death of Josef

Mettler on September 12, 2016, are shown as Sportiva is no longer a related party after

this date):

CHF

USD

Balance June 30, 2016

(549,440)

(561,569)

Cash repaid to the Company

638,423

654,364

Interest credited to the account

(373)

(382)

Changes in foreign currency

(1,590)

Balance September 12, 2016

88,610

90,823

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2016~~2017

10.

RELATED PARTY TRANSACTIONS - CONTINUED

Service fees paid or payable to Akyinyi Interior and Exterior Decoration

During the three-month periods ended September 30, 2016, and September 30, 2015, the

Company paid or accrued fees to Akyinyi Interior and Exterior Decoration, which is a

company owned by the widow of the late Josef Mettler, related to interior design of the

Papagayo Gulf Tourism project in the amount of $0 and $30,000 respectively. These costs

have been capitalized to property and equipment.

Consulting Fees paid or payable to Cambridge Limited Corp.

During the three month periods ended September 30, 2016, and September 30, 2015, the

Company paid fees to Cambridge Limited Corporation, which is a company owned by the

father-in-law of the late Josef Mettler. These fees related to accounting and consulting

services rendered to the Company in the amount of approximately $36,589 and $48,500,

respectively.

Hans Rigendinger

There are amounts payable of $1,973 as of December 31, 2015 and $2,021 as of

September 30, 2016.

11.

BANK LIABLITIES

The bank liability of $0 and $179,313 as of September 30, 2016 and December 31, 2015,

respectively represented a temporary, secured overdraft facility, bearing an interest rate of

some 9%.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

12.

BONDS

Description

EUR (€) bond new I

EUR (€) bond new II (parallel)

(repaid)

Issuer:

SunVesta Holding AG

Type of securities:

Bond in accordance with Swiss law ~~Bond in accordance with Swiss law~~

Bond in accordance with Swiss law

Approval by SunVesta AG BOD:

October 31, 2013

May 19, 2014

Volume:

Up to EUR15,000,000

Up to EUR 15,000,000

Units:

EUR10,000

EUR 10,000

Offering period:

11/07/2013 – 03/31/2014

05/01/14 – 06/30/14

Due date:

December 2, 2016

December 02, 2016

Issuance price:

100%

100 %

Issuance day:

December 022, 2013

December 02, 2013 (retroactive)

Interest rate:

7.25% p.a.

7.25 % p.a.

Interest due dates:

December 022, 2013

December 02~~, 2016~~

Applicable law:

Swiss

EURO (€) Bond new I

EURO Bond

(New) 2017

(New) 2016

(New) 2015

Balances January 1

31,541

6,871,630

7,355,572

Cash inflows

~~281,754~~-

Cash outflows

(6,736,255)

Reclassification from / to Bond (net)

(32,271)

Foreign currency adjustments

~~191,388~~730

(~~765~~103,~~696~~834)

Sub-total

~~7,063,018~~-

631,~~871,630~~541

Discounts (commissions paid to bondholders) and

debt issuance costs

(588,613)

Accumulated amortization of discounts and

debt issuance costs

~~501~~588,~~320~~613

~~432~~563,~~128~~636

Total accumulated unamortized discounts and

debt issuance costs

~~(87,293)~~-

(~~156~~24,~~485~~977)

Balances ~~September~~March 3031 and December 31 (Carrying value)

~~6,975,725~~-

6,~~715,145~~564

~~As per date of this report the Company has realized a cumulative amount of EUR~~17

6.3 million ($6.99 million) related to the EURO Bond I.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2016~~2017

1210. BONDS -– CONTINUED

EURO (€) Bond new II

~~EURO~~ EUR Bond

~~EURO~~EUR Bond

~~New~~ new II ~~2016~~

new II ~~2015~~

2017

2016

Balances January 1

511,805

1,658,300

1,761,258

Cash inflows

Cash outflows

-(510,120)

-(159,950)

Reclassification from / to Bond (net)

(9,761)

(953,683)

Foreign currency adjustments

758,~~013~~075

(~~102~~32,~~958~~862)

Sub-total

~~1,733,313~~-

1511,~~658,300~~805

Discounts (commissions paid to bondholders) and

debt issuance costs

(174,660)

Accumulated amortization of discounts and

debt issuance costs

~~194~~174,~~342~~660

~~148~~140,~~932~~754

Reclassification from / to Bond (net)

Total accumulated unamortized discounts and

debt issuance costs

~~19,682~~-

(2533,~~728~~906)

Balances ~~September~~March 3031 and December 31 (Carrying value)

~~1,752,995~~-

1477,~~632,572~~899

AsOn ~~per~~September ~~date~~30, of2015, ~~this report~~ the Company ~~has~~approved ~~realized~~the aissuance ~~cumulative~~of ~~amount~~two ofnew ~~EUR~~Convertible 1CHF-bonds.51

~~million~~The ~~($1.67~~major ~~million)~~terms ~~related~~and toconditions are the ~~EURO Bond new II.~~following:

Description

CHF bond I (repaid)

CHF bond II parallel (repaid)

Issuer:

SunVesta Holding AG

Type of securities:

Bond in accordance with Swiss law Bond in accordance with Swiss law

Approval by SunVesta AG BOD: June 03, 2011

May 19, 2014

Volume:

CHF 15,000,000

Units:

CHF 50,000

CHF 10,000

Offering period:

09/01/2011 – 02/28/2012

05/01/2014 – 06/30/2014

Due date:

August 31, 2015

Issuance price:

100 %

Issuance day:

September 01, 2011

September 01, 2013 (retroactive)

Interest rate:

7.25 % p.a.

Interest due dates:

August 31, 2015

Applicable law:

Swiss

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

12.

BONDS - CONTINUED

On September 30, 2015, the Company approved the issuance of two new CHF-bonds. The

major terms and conditions are the following:

Description

Convertible CHF Bond I

Convertible CHF Bond II

Issuer:

SunVesta Holding AG

Type of securities:

Senior convertible bonds,

convertible into shares of the issuer, ~~convertible into shares of the issuer,~~

convertible into shares of the issuer,

in accordance with Swiss law

Approval by SunVesta AG BOD: ~~September 30, 2015~~

September 30, 2015

Volume:

Up to CHF 45,000,000

Up to CHF 15,000,000

Denomination:

CHF 5,000

Offering period:

October 01, 2015

Maturity date:

September 30, 2018

Issue price:

100 %

Redemption price:

100 %

Issuance date:

October 01, 2015

Coupon:

6.00 % p.a.

Interest due dates:

September 30 of each year, the ~~first September 30 of each year, the first~~

~~time~~ September 30 of each year, ~~2016~~the

first time September 30, 2016

Reference price:

CHF 6.50

Initial conversion price:

CHF 8.00

Applicable law:

Swiss

~~In October 2015, Sunvesta Holding AG, a wholly owned subsidiary of the Company~~18

~~settled approximately $27~~SUNVESTA,~~300,000~~ ~~worth of old CHF-Bonds which had matured on August~~INC.

~~31,~~NOTES ~~2015~~TO ~~and~~UNAUDITED ~~were extended through September 30, 2015 (i.e. unpaid). These were rolled~~CONSOLIDATED FINANCIAL STATEMENTS

~~forward/exchanged into two substantially different convertible bonds of Sunvesta~~March 31, 2017

~~Holding AG~~10. ~~One is a $45,000,000 Convertible Bond and the other a $15,000,000~~

~~Convertible Bond as presented in tables above. These new Convertible bonds are~~BONDS – CONTINUED

~~substantially different than the previous~~ Convertible CHF ~~bonds that matured in the third quarter of~~ BOND I

~~2015 and this financing is therefore accounted for as an extinguishment. The Company~~Convertible CHF

~~has recorded a loss on extinguishment equal to the fair value of the conversion feature.~~Convertible CHF

~~Third party issuance costs totaling $3,100,000 at inception have been capitalized and~~Bond I 2017

~~amortized over the life of the bonds under the effective interest rate method. Finally, the~~Bond I 2016

change of the fair value of the liability related to conversion feature was expensed in the

period.

The nominal and carrying amounts have changed as follows:

CHF Bond

CHF BOND I

2016

2015

Balances January 1

-3,648,383

102,~~999~~250,~~192~~048

Cash inflows

-1,640,887

Cash outflows

(5103,~~913,796~~008)

Foreign currency adjustments

60,262

(105,058)

Reclassification from / to Bond (net)

~~159~~(34,~~884~~486)

Reclassifications to CHF Bond II

Reclassifications to Convertible CHF Bond I

(2,005,548)

Reclassifications to Convertible CHF Bond II

(3,239,732)

Sub-total

3,708,645

3,648,383

Discounts (commissions paid to bondholders) and debt

issuance costs

(240,760)

(136,722)

Accumulated Amortization of discounts and debt issuance

costs

133,496

117,652

Reclassification from / to Bond (net)

-(104,038)

~~Discounts~~Total ~~(commissions~~Accumulated ~~paid~~Unamortized todiscounts ~~bondholders)~~and debt issuance

-costs

(~~670~~107,~~764~~264)

~~Accumulated amortization of discounts~~(123,108)

-Balances March 31 and December 31 (Carrying value)

~~670~~3,~~764~~601,381

~~Unamortized discounts~~3,525,275

-In the first quarter of 2016, the Company reclassified $634,186 from Convertible CHF Bond I.

-As per date of this report, the Company has realized a cumulative amount of CHF 3.6 million ($3.6

~~Balances~~million) ~~September~~related 30to ~~and~~the ~~December~~CHF ~~31(Carrying~~Convertible ~~value)~~Bond I.

-Convertible CHF BOND II

-Convertible CHF

23Convertible CHF

~~SUNVESTA,~~Bond ~~INC.~~II 2017

~~NOTES~~Bond TOII ~~UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~2016

September 30, 2016

12.

BONDS - CONTINUED

From the CHF Bond I issue in this roll forward, $2,005,548 was reclassified to the

Convertible CHF Bond I in the fourth quarter of 2015. Additionally, $3,239,732 was

reclassified to the Company's CHF Convertible Bond II.

CHF Bond

CHF Bond II

CHF BOND II

2016

2015

Balances January 1

-36,770,369

1526,~~304~~470,~~228~~395

Cash inflows

-20,079

107,~~819~~142,~~209~~850

Cash outflows

-(1,795,594)

(3787,~~923,675~~371)

Foreign currency adjustments

618,871

(1,187,441)

Reclassification from / to Bond (net)

~~(51~~5,~~779)~~131,937

Reclassifications from CHF Bond I

Reclassifications to Convertible CHF Bond I

(185,127)

Reclassifications to Convertible CHF Bond II

(21,962,856)

Sub-total

35,613,725

36,770,369

Discounts (commissions paid to bondholders) and debt

issuance costs

(4,788,078)

(4,890,690)

Accumulated Amortization of discounts and debt issuance

costs

2,868,848

2,586,541

Reclassification from / to Bond (net)

-104,038

~~Discounts~~Total ~~(commissions~~Accumulated ~~paid~~Unamortized todiscounts ~~bondholders)~~and debt issuance

-costs

(1,~~578~~919,~~825~~230)

~~Accumulated amortization of discounts~~(2,200,111)

-Balances March 31 and December 31 (Carrying value)

133,~~578~~694,~~825~~495

~~Unamortized discounts~~34,570,258

-In April 2016, Global Care AG (a related party controlled by Dr. Rössler, a Company board member)

-assumed a liability of CHF 4.5 million due to Aires International Investment Inc., (also a related party

~~Balances September 30 and December 31 (Carrying~~controlled by Dr. Rössler). This CHF 4.5 million was subsequently subscribed into bonds of the

-Convertible Bond II issue. As the conversion inclues a significant conversion option, the exchange is

-treated as an extinguishment of debt and an amount of $1,071,317 has been reclassified in the

~~value)~~comprehensive statements of loss from revaluation of conversion feature to extinguishment of debt.

~~From the CHF Bond II issue in this roll forward, $185,127 was reclassified to the~~19

~~Convertible CHF Bond I in the fourth quarter of 2015. Additionally~~SUNVESTA, ~~$21,962,856 was~~ INC.

~~reclassified~~NOTES toTO ~~the~~UNAUDITED ~~Company's~~CONSOLIDATED ~~CHF~~FINANCIAL ~~Convertible Bond II.~~STATEMENTS

~~Convertible~~March ~~CHF~~31, ~~BOND I~~2017

~~Convertible~~10.

~~Convertible~~BONDS – CONTINUED

As per date of this report the Company has realized a cumulative amount of CHF ~~Bond~~32.7 Imillion ($32.9

~~CHF~~million) related to the Convertible Bond III.

The Company initiated a new offering of senior unsecured CHF bonds on September 21, 2016, of up

to CHF 20,000,000 in units of CHF 5,000 that bear interest at 6.50% per annum payable each August

15, over a four-year term that matures on August 15, 2020, with the following conditions:

Description

CHF Bond III

Issuer:

SunVesta Holding AG

Type of securities:

Senior bonds

Approval by SunVesta AG BOD:

July 7, 2016

Volume:

Up to CHF 20,000,000

Denomination:

CHF 5,000

Offering period:

November 30, 2016

Maturity date:

August 15, 2020

Issue price:

100 %

Redemption price:

100 %

Issuance date:

September 21, 2016

Coupon:

6.50 % p.a.

Interest due dates:

August 15 of each year, the first

time August 15, 2017

Applicable law:

Swiss

CHF BOND III original

CHF Bond III

2017

2016

2015

Balances January 1

215,~~250~~601,~~048~~389

Cash inflows

1943,~~640,887~~704

~~100~~699,~~990~~650

Cash outflows

(103,008)

Foreign currency adjustments

64251,~~760~~571

(41290,~~617~~665)

~~Reclassifications~~Reclassification from / to ~~CHF~~Bond ~~Bonds~~(net)

~~(634,186)~~-

215,~~190~~192,~~675~~404

Sub-total

316,~~218~~796,~~502~~665

215,~~250~~601,~~048~~389

Discounts (commissions paid to bondholders) and debt

issuance costs

(~~136~~160,~~722~~270)

(~~136~~56,~~219~~643)

Accumulated Amortization of discounts and debt issuance ~~costs~~

~~92,761~~costs

5713,~~896~~835

~~Reclassification to CHF Bonds~~3,814

Reclassification from / to Bond (~~104,038~~net)

(49,975)

Total Accumulated Unamortized discounts and debt issuance

costs

(~~148~~146,~~000~~435)

(78102,~~323~~804)

Balances ~~September~~March 3031 and December 31 (Carrying value)

316,~~070~~650,~~502~~230

215,~~171~~498,~~725~~586

InDuring the ~~fourth~~year ~~quarter~~2016 an amount of ~~2015~~$15,192,404 ~~the~~(CHF ~~Company~~15.2 ~~issued~~million) ~~this~~was ~~Convertible~~subscribed ~~CHF~~into ~~Bond~~this ~~I with~~CHF

~~funds~~Bond ~~received~~III from ~~new~~loans ~~bondholders~~from ~~totaling~~related ~~$100,990~~parties. ~~Additionally,~~Since ~~$2,005,548~~the new debt was not significantly different from the

~~reclassified from CHF Bond I~~ old debt and ~~$185~~ did not include a conversion feature deemed substantive,~~127 was reclassified from CHF Bond II. In~~ the exchange was not treated as

~~first~~an ~~quarter~~extinguishment of ~~2016, the Company reclassified $634,186 to Convertible CHF Bond II~~debt.

As per date of this report, the Company has realized a cumulative amount of CHF 316.127 million ($16.8

million ~~($3.21 million~~) related to the ~~Convertible~~CHF Bond IIII original. Within the abovementioned facility, the Company

24initiated a new parallel offering of senior unsecured CHF bonds on September 21,

2016. An amount of $979,510 of which was reclassified from EUR Bond II.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2016~~2017

1210.

BONDS -– CONTINUED

~~Convertible~~ Within the CHF ~~BOND II~~ Bond III, the Company initiated a new parallel offering of senior unsecured CHF

~~Convertible~~bonds on September 21, 2016.

~~Convertible~~CHF BOND III parallel

CHF Bond III

CHF Bond IIIII

~~II 2016~~2017

~~2015~~2016

Balances January 1

26961,~~470,395~~595

Cash inflows

~~11,364,139~~-

~~1,747,122~~-

Cash outflows

(787,371)

Foreign currency adjustments

~~712~~15,~~559~~883

(~~479~~17,~~315~~915)

~~Reclassifications~~Reclassification from / to ~~CHF~~Bond ~~Bonds~~(net)

~~634,186~~-

25979,~~202,588~~510

Sub-total

38977,~~393,908~~478

26961,~~470,395~~595

Discounts (commissions paid to bondholders) and debt ~~issuance~~

issuance costs

(79,289)

Accumulated Amortization of discounts and debt issuance

costs

(48,~~853,592)~~443

(24,~~977,065)~~001

~~Accumulated~~Reclassification ~~Amortization~~from of/ ~~discounts~~to ~~and~~Bond ~~debt issuance costs~~(net)

1,679,863

201,093

Reclassification to CHF Bonds

104,038

Total Accumulated Unamortized discounts and debt issuance

costs

(370,~~069,692~~846)

(275,~~775,972~~288)

Balances ~~September~~March 3031 and December 31 (Carrying value)

35906,~~324,216~~632

23886,~~694,423~~307

~~In the fourth quarter~~ As per date of ~~2015,~~ this report the Company ~~issued this Convertible~~ has realized a cumulative amount of CHF ~~Bond II with funds~~ 0.9 million ($0.9

~~received from new bondholders totaling $1,747,122~~million) related to the CHF Bond III parallel. ~~Additionally, $3,239,732 was~~

~~reclassified~~On ~~from~~March ~~CHF~~6, ~~Bond I and $21~~2017,~~962,856 was reclassified from CHF Bond II. In~~ the Company approved the issuance of a new bond with the following conditions.

~~first quarter of 2016, the Company reclassified $634,186 from Convertible CHF Bond I.~~Description

~~As per date of this report the Company has realized a cumulative amount of~~ CHF ~~37.20~~ Bond IV

~~million ($38.24 million) related to the Convertible Bond II.~~Issuer:

~~Included in the above is~~SunVesta anHolding ~~amount of approx. $6.44 million (CHF 6.24 million), which, by~~AG

~~agreement between the Company~~Type ~~and the bondholders and as a deviation from~~of ~~the standard~~securities:

~~terms, are repayable as of February 28, 2017. As these are due within 12 months from the~~Senior bonds

~~reporting date, these funds are classified within current liabilities on the consolidated~~Approval by SunVesta AG BOD:

~~balance~~March ~~sheet.~~6, 2017

~~As of September 21, 2016, the Company has started the distribution of a new bond with a~~Volume:

~~volume~~Up ofto CHF ~~20.0 million~~50, ~~to be underwritten until November 30~~000, ~~2016.~~000

25Denomination:

CHF 1,000

Offering period:

May 1^st – November 1^st, 2017

Maturity date:

May 1, 2022

Issue price:

100 %

Redemption price:

100 %

Issuance date:

May 1, 2017

Coupon:

6.50 % p.a.

Interest due dates:

May 1^st of each year, the first

time May 1^st, 2018

Applicable law:

Swiss

There were no amounts outstanding as of March 31, 2017.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2016~~2017

1311.

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 -

~~Compensation -~~ Retirement Benefits. This model allocates pension costs over the service period of employees in the

~~period of employees in the~~ plan. The underlying principle is that employees render services ratably over this period, and

~~services ratably over this period, and~~ therefore, the income statement effects of pensions should follow a similar pattern. ASC 715

~~should follow a similar pattern. ASC 715~~ requires recognition of the funded status, or difference between the fair value of plan assets and the

~~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 ~~pension~~net ~~plan~~loss. onIf the ~~balance~~projected ~~sheet,~~benefit ~~with~~obligation aexceeds ~~corresponding~~the ~~adjustment~~fair ~~recorded~~value inof ~~the~~plan

~~net loss. If the projected benefit obligation exceeds the fair value of plan~~ assets, then that difference or unfunded status represents the pension liability.

~~difference or unfunded status represents the~~ The Company records a net periodic pension ~~liability~~ cost in the statement of comprehensive loss. The

~~The Company records a net periodic pension cost~~liabilities ~~in the statement~~and annual income or expense of ~~comprehensive loss.~~the pension plan is determined using methodologies that

~~The~~involve ~~liabilities~~several ~~and~~actuarial ~~annual~~assumptions, ~~income~~the ormost ~~expense~~significant of ~~the~~which ~~pension~~are ~~plan~~the isdiscount ~~determined~~rate ~~using~~and the

~~methodologies~~long-term ~~that~~rate ~~involve~~of ~~several~~asset ~~actuarial~~return ~~assumptions,~~(based on the ~~most~~market-related ~~significant~~value of ~~which~~assets). The fair values of plan

assets are ~~the discount rate and the long- term rate of asset return (~~ determined based on ~~the~~ prevailing market~~-related~~ prices.

value of assets). The fair values of plan assets are determined based on prevailing market

prices.

Actuarial valuation

Net periodic pension cost has been included in the Company’s results as follows:

Three months ended

Three months ~~Nine months Nine months~~ ended

ended

Pension expense

~~September 30~~March 31, 2017

~~September~~March 3031, ~~September 30, September 30,~~ 2016

2016

2015

2016

2015

Current service cost

1514,~~357~~055

1415,~~527~~607

46,070

43,582

Net actuarial (gain) loss recognized

-649

Interest cost

~~945~~577

~~1,337~~961

2,836

4,011

Expected return on assets

(1,~~916~~431)

(1,~~646~~948)

(5,749)

(4,937)

Employee contributions

(5,~~877~~020)

(5,~~914~~973)

(17,631)

(17,741)

Net periodic pension cost

8,~~509~~182

89,~~304~~297

25During the three-month periods ended March 31,~~526~~ 2017 and March 31, 2016, the Company made cash

24contributions of $27,~~011~~494 and $5,973, respectively, to its defined benefit pension plan.

~~During~~All of the ~~three-month~~assets ~~periods~~are ~~ended~~held ~~September~~under ~~30,~~a ~~2016~~collective ~~and~~contract ~~September~~by ~~30,~~the ~~2015~~plan’s ~~the~~re-insurance company and are

~~Company~~invested ~~made~~in ~~cash~~a ~~contributions~~mix of ~~$15,534~~Swiss and ~~$5,914,~~international ~~respectively,~~fixed-income toand ~~its~~equity ~~defined~~securities within the limits set

~~benefit~~out by the Swiss pension ~~plan~~law.

~~All of the assets are held under the collective contract~~ The expected future cash flows to be paid by the ~~plan’s re-insurance company~~ Company in respect to employer contributions to

~~and~~ the pension plan for the year ended December 31, 2017 are ~~invested in a mix of Swiss and international fixed-income and equity securities~~ $20,079.

~~within the limits set out by the Swiss pension law.~~22

The expected future cash flows to be paid by the Company in respect of employer

contributions to the pension plan for the year ended December 31, 2016 are $17,631.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2016~~2017

1412.

STOCK COMPENSATION

The Company has included share based compensation under the SunVesta Inc. Stock Option Plan

~~Option Plan~~ 2013 (~~the~~ “Plan”) as part of the total remuneration in certain employment and Board of Director’s

~~and Board of Director’s~~ contracts. The Company is authorized to grant up to 50,000,000 stock options under the Plan to

acquire shares ~~under~~of ~~the~~its ~~Plan~~common stock.

The purpose of the Plan is to advance the interests of the Company by encouraging its employees to

~~employees to~~ remain associated with the Company and to assist ~~the Company~~ it in building value.

~~value.~~For ~~Such~~all ~~share~~employees, ~~based~~fair ~~remuneration~~value ~~includes~~is ~~either~~estimated ~~shares~~at orthe ~~options~~grant todate. ~~acquire~~Compensation costs for unvested shares

ofare expensed over the ~~Company’s~~requisite ~~common~~service ~~stock~~period on a straight-line basis.

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 to Hans Rigendinger, valued at

$0.08 an amount equal to the share price and fair value of the shares, on the grant date ~~valued at~~in connection

$0with his employment agreement with the Company.08 His employment agreement obligates ~~an amount equal to~~ the ~~share price and fair value of the shares on the grant date.~~

~~These~~Company ~~shares~~to ~~were~~issue ~~granted~~2,500,000 common shares as a ~~signing~~retention ~~bonus~~award ~~with~~on ~~the~~each ~~Company.~~anniversary ~~Additionally,~~of the

~~Company granted 2,500,000 common shares as a retention award due on each~~employment agreement. The employment agreement has an initial term of three years with the

~~anniversary of his signing with the Company~~option to extend for an additional two years. ~~The~~ Mr. Rigendinger’s employment ~~contract~~ agreement was ~~initially for~~ renewed

~~three~~on ~~years~~January ~~with~~1, an2016. ~~additional~~Therefore, ~~bilateral~~the ~~option~~Company ~~for~~may anissue ~~additional~~up ~~two~~to ~~years.~~12,500,000 ~~Therefore~~common shares, ~~the~~of which

~~Company could be required to issue up to 12~~10,~~500~~000,000 ~~common~~have ~~shares~~been earned, through January 1, 2018.

2018.

Share Grants – Dr. Max Rössler

On July 3, 2013, the Company granted to Dr. Max Rössler 3,000,000 common shares, valued at

~~valued at~~ $0.07 an amount equal to the share price and fair value of the shares on the grant date in connection

~~grant date. These were issued in connection~~ with his appointment to the Board of Directors.

~~Directors.~~Share ~~These~~Grants ~~shares~~– ~~were~~Mr. ~~officially~~Josef ~~issued on October 15, 2013.~~Mettler

~~Share Grants – late Mr.~~ On July 4, 2013, the Company granted 5,000,000 common shares to Josef Mettler, valued at $0.07,

Onan ~~July~~amount 4,equal ~~2013,~~to the ~~Company~~share ~~granted~~price ~~5,000,000~~and ~~common~~fair value of the shares toon the ~~late~~grant ~~Josef~~date, in connection with

~~Mettler,~~his ~~valued~~employment atagreement ~~$0.07,~~with ~~an amount equal to~~ the ~~share~~Company. ~~price~~His ~~and~~employment ~~fair~~agreement ~~value~~obligated of the ~~shares~~Company

onto ~~the~~issue ~~grant date~~3,000,000 incommon ~~connection~~shares ~~with~~as ~~his~~a ~~employment~~retention ~~agreement.~~award ~~These~~on ~~shares~~each ~~were~~anniversary of the employment

~~officially~~agreement. ~~issued~~The onemployment ~~October~~agreement ~~15,~~had ~~2013.~~an ~~Additionally,~~initial term of three years with the ~~Company~~option ~~granted~~to ~~3,000,000~~extend

~~common~~for ~~shares~~two asadditional atwo-year ~~retention~~periods. ~~award~~Mr. ~~for~~Mettler’s ~~each~~employment ~~completed~~agreement ~~year~~was ofrenewed ~~employment~~on ~~(e.g.~~July ~~first~~4,

~~time as per July 4~~2016. Therefore, in total ~~2014). The employment contract is for an initial term~~ the Company could have issued up to 21,000,000 common shares, of ~~three years~~which

~~with an additional bilateral option for another two two-year periods~~9, ~~but a maximum of~~000,000 were earned prior to his death, through December 31, 2020.

~~December~~Josef ~~31,~~Mettler ~~2020.~~died ~~Therefore,~~during inthe ~~total~~third ~~the~~quarter ~~Company~~of ~~could~~2016. ~~have~~Subsequently, ~~been~~the ~~requested~~necessary toaccrual ~~issue~~up until his

~~up to 21~~death was reversed as of September 30,~~000,000 common shares through December 31, 2020 related to the retention~~ 2016.

~~bonus~~Share Grants – Mr. José María Figueres

AsOn ~~Josef~~March ~~Mettler~~10, ~~passed~~2014, ~~away during~~ the ~~third~~Company ~~quarter~~granted ~~2016~~500, 3,000~~,000~~ common shares to José María FigueresShare

~~were~~Grants ~~issued~~– ~~for~~Mr. ~~the~~, ~~last~~valued ~~time~~at on$0.10, ~~July~~an 4,amount ~~2016.~~equal ~~From~~to ~~after~~the ~~this~~share ~~date,~~price and therefore the ~~necessary~~fair ~~accrual~~value on

~~up until~~ grant date, in connection with his ~~passing away has been reversed as~~ appointment to the Board of ~~September 30, 2016~~ Directors. His appointment obligates

27the Company to issue 200,000 common shares for each fully completed year of service.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2016~~2017

1412.

STOCK COMPENSATION -– CONTINUED

~~Share~~Howard ~~Grants – Mr. José María Figueres~~Glicken

On March 10, 2014, the Company ~~authorized~~granted ~~the issuance of~~ 500,000 common shares to Howard Glicken, valued at

~~valued at~~ $0.10, an amount equal to the share price and therefore the fair value on grant date, in connection

~~date,~~with ~~and~~his aappointment ~~retention~~to ~~award~~the Board of ~~200,000~~Directors. ~~common~~His ~~shares~~appointment ~~for~~obligates ~~each~~the ~~fully~~Company ~~completed~~to ~~year of~~issue

~~service to José María Figueres in connection with his appointment to the Board~~ 200,000 common shares for each fully completed year of service.

~~Directors.~~Share Grants – Third party

~~Share~~On ~~Grants~~November –1, ~~Mr.~~2016, ~~Howard~~the M.Company ~~Glicken~~granted 10,000,000 common shares to a non-related individual,

Onvalued ~~March~~at 10a total of $240,947 ~~2014~~(CHF 240,000) the ~~Company~~fair ~~authorized~~value ~~the~~on ~~issuance~~grant ~~of 500~~date,~~000~~ ~~common~~in ~~shares,~~connection with his

~~valued at~~consulting ~~$0.10,~~services anfor ~~amount equal to~~ the ~~share~~Company. ~~price~~His ~~and~~engagement ~~therefore~~obligates the ~~fair~~Company ~~value~~to onissue ~~grant~~1,666,667

~~date, and a retention award of 200,000~~ common shares for each fully completed ~~year~~month of service. From November 1, 2016 to March 31,

~~service to Howard Glicken in connection with his appointment to~~ 2017, the ~~Board~~ individual earned a total of ~~Directors.~~ 8,333,335 shares, creating an expense for the Company in the

~~Based on these contracts~~amount of $200, ~~the Company has included the following stock-based~~789 (CHF 200,000).

Based on these contracts, the Company has included the following stock-based compensation in the ~~Company’s results:~~

Company’s results:

Stock-based compensation

Three ~~and nine~~ months

(shares)

ended ~~September~~March 3031, ~~2016~~2017

ended ~~September~~March 3031, ~~2015~~2016

Shares granted

57,200,000 shares

46,800,000 shares

46,400,000 shares

Fair Value respectively

$0.0737

$0.0744

market price on grant date

$0.0659

$0.0744

Total maximal expenses

$3,450,000

(2013-2020)

$3,770,947

$3,450,000

Shares vested

2941,~~800~~033,~~000~~335 shares

2326,~~900~~800,000 shares

Shares forfeited

12,000,000 shares

Unvested shares

174,~~000~~166,~~000~~665 shares

2220,~~900~~000,000 shares

Of the granted shares, 12,000,000 ~~have~~were ~~been~~ forfeited due to the death of Josef Mettler during the third

~~Mettler~~quarter 2016.

As of ~~September~~March 3031, ~~2016~~2017, the Company expects to record compensation expense in the future of up to

~~future up to~~ $~~420~~220,~~000~~158 as follows:

Year ending December 31,

Stock-based

Through

compensation

December 31,

(shares)

31, 2016

2017

2018

2019

2020

Unrecognized

compensation

60220,~~000~~158

210,000

expense

28Stock Options – Mr. Hans Rigendinger

The Company granted 10,000,000 stock options to Hans Rigendinger on January 1, 2013, in

connection with his employment contract. Each option entitles Mr. Rigendinger to buy one Company

share at an exercise price of $0.05. These options vest in two identical installments (Installment A

and Installment B) of 5,000,000.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2016~~2017

1412.

STOCK COMPENSATION -– CONTINUED

Stock Options – Mr. Hans Rigendinger - Continued

~~The Company granted to Hans Rigendinger, in connection~~ Installment A vesting was contingent on realizing a financing arrangement with ~~his employment contract,~~ a specific

10counterparty. As of the grant date,~~000~~ the fair value was $300,000 ~~stock options on January 1~~. As of July 4, 2013~~. Each option entitles Mr. Rigendinger to buy~~, the Company

~~one~~assessed ~~Company~~that ~~share~~this atfinancing aarrangement ~~strike~~with ~~price~~the ofspecific ~~$0.05.~~counterparty ~~These~~would ~~options~~not ~~will~~ be ~~vested in two~~completed.

~~identical installments (installment A~~ Therefore, the Company assessed the probability of completion to be zero and recognized no

~~B) of 5~~expense. On July 4,~~000~~ 2013,~~000 options.~~ the Company authorized a revised stock option agreement that removed

~~Installment A is contingent on obtaining a~~ the requirement for financing ~~arrangement~~ with a specific counterparty and updated for any counterparty. As of

~~counterparty.~~the Asdate of the ~~grant~~revised ~~date~~stock option agreement, the fair value was $~~300~~246,000. AsSince ~~of July 4, 2013,~~ the modification

~~Company~~changed ~~assessed~~the expectation that ~~this financing arrangement~~the ~~with~~options ~~the~~would ~~specific~~ultimately ~~counterparty will~~vest ~~not~~and no expense had been recognized

~~be completed. Therefore~~for the original award, the ~~Company assessed the probability~~ fair value of ~~completion to be zero~~ the modified award has been expensed on a straight line basis

~~and recognized no expense. On July 4, 2013,~~ over the ~~Company authorized a revised stock~~ recalculated expected remaining vesting period.

~~option agreement. This removed the requirement for financing with a specific~~Installment B vesting is contingent on Meliá Hotels International (“Melía”) assuming management

~~counterparty and updated~~ responsibilities for ~~any counterparty~~ the Paradisus Papagayo Bay Resort & Luxury Villas. As of the grant date of , the ~~revised stock option~~ fair

~~agreement, the fair~~ value was $~~246~~340,000~~. Installment A was modified on~~ and the Company estimated that Meliá would assume responsibility as of July 4 1, ~~2013,~~

~~since~~2015. ~~the~~As ~~initial~~of ~~performance~~March ~~condition~~6, ~~was improbable~~2014, tothe beCompany ~~met.~~assessed ~~Since~~ the ~~modification~~probability that this performance condition

~~changed~~would ~~the~~be ~~expectation~~met ~~that~~to be 100%, but the ~~options~~date ~~will~~on ~~ultimately~~which ~~vest~~the ~~and~~performance nocondition ~~expense~~would ~~had~~have ~~been~~to be

~~recognized~~achieved ~~for~~was postponed to the ~~original~~fourth ~~award~~quarter 2015, ~~the~~in ~~fair~~line ~~value~~with of the ~~modified~~expected ~~award~~opening ~~has~~date. ~~been~~As ~~expensed~~of the

~~on a straight line basis over~~ date of this report, the ~~expected vesting period.~~ estimated opening date has been postponed to the fourth quarter 2018, being

~~For installment B, it is~~ the required date of the performance condition. The Company still assesses the probability that ~~Meliá Hotels International (“Melía”) assumes~~ this

~~management~~performance ~~responsibilities~~condition ~~for~~will ~~Paradisus~~be ~~Papagayo~~met ~~Bay~~at ~~Resort~~100%. &Hence, ~~Luxury~~the ~~Villas.~~remaining Asfair value of the award has been

~~grant date,~~ expensed on a straight-line basis over the ~~fair value was $340,000 and the Company estimated that Meliá would~~ recalculated expected remaining vesting period.

assume responsibility as of July 1, 2015. As of March 6, 2014, the Company still assessed

the probability that this performance condition would be met at 100%, but the date, up to

which the performance condition would have to be achieved was postponed to the fourth

quarter 2015, as the opening date was postponed. As of the date of this report, the

estimated opening date was postponed to the fourth quarter 2018, as was the required date

of the performance condition. The Company still assessed the probability that this

performance condition will be met at 100%. Hence, the remaining fair value of the award

will be expensed on a straight-line basis over the recalculated expected remaining vesting

period.

Stock Options – Dr. Max Rӧssler

The Company granted 10,000,000 stock options to Dr. Max Rӧssler, inon ~~connection~~July ~~with~~3, ~~his~~2013, ~~appointment~~in ~~to the~~connection

~~Board~~with ofhis ~~Directors,~~appointment to ~~10,000,000~~the ~~stock~~Board ~~options on July 3, 2013~~of Directors. Each option entitles Dr. Rӧssler to buy one

~~Rӧssler to buy one~~ Company share at ~~a strike~~ an exercise price of $0.05. These options ~~will be vested~~ vest in two identical installments

~~in two identical installments~~ (~~installment~~Installment A and Installment B) of 5,000,000 options.

~~For installment~~ Installment A ~~(5,000,000 options), it~~ vesting is ~~required to complete~~ contingent on realizing a financing arrangement to complete the

~~for~~ development of the ~~Project~~ Paradisus Papagayo Bay Resort & Luxury Villas. As of the grant date, ~~the fair~~ ~~value was $249,835. The Company expensed~~ the fair

value was $249,835. The Company has expensed the total fair value of the award on a straight-line ~~basis over the expected vesting period.~~

29basis over the expected vesting period.

Installment B vesting is contingent on Meliá assuming management responsibilities for the Paradisus

Papagayo Bay Resort & Luxury Villas. As of the grant date the fair value was $258,210 and the

Company estimated that Meliá would assume responsibility as of July 1, 2015. As of March 6, 2014,

the Company assessed the probability that this performance condition would be met to be 100%, but

the date on which the performance condition would have to be achieved was postponed to the fourth

quarter 2015, in line with the expectedopening date.

As of the date of this report, the estimated opening date has been postponed to the fourth quarter

2018, being the required date of the performance condition. The Company still assesses the

probability that this performance condition will be met at 100%. Hence, the remaining fair value of

the award has been expensed on a straight-line basis over the recalculated expected remaining

vesting period.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2016~~2017

1412.

STOCK COMPENSATION -– CONTINUED

Stock Options – DrMr. ~~Max~~Josef ~~Rӧssler - Continued~~Mettler

~~For~~The ~~installment~~company Bgranted ~~(5,000,000~~several ~~options),~~installments itof isstock ~~required~~options ~~that~~in ~~Meliá~~connection ~~assumes~~with ~~management~~his employment

~~responsibilities for Paradisus Papagayo Bay Resort & Luxury Villas~~contract. ~~As of grant date the~~

~~fair value was $258~~Due to his passing away during the third quarter 2016,~~210 and~~ the ~~Company estimated~~ probability that ~~Meliá would assume~~ any of the corresponding

~~responsibility~~performance asconditions ofwill ~~July~~be 1,met ~~2015~~is 0%. ~~As of March 6~~Therefore, ~~2014~~all ~~the~~previously ~~Company~~recognized ~~still~~expenses ~~assesses~~in the

~~probability~~amount ~~that~~of ~~this~~$561,064 ~~performance~~– ~~condition~~corresponding ~~would~~to beoptions ~~met~~that athad ~~100%,~~not ~~but~~yet ~~the~~vested ~~date,~~– upwas toreversed as of

~~which the performance condition would have to be achieved was postponed to the fourth~~September 30, 2016.

quarter 2015, as the opening date was postponed. As of the date of this report, the

estimated opening date was postponed to the fourth quarter 2018, as was the required date

of the performance condition. The Company still assessed the probability that this

performance condition will be met at 100%. Hence, the remaining fair value of the award

will be expensed on a straight-line basis over the recalculated expected remaining vesting

period.

Stock Options – late Mr. Josef Mettler

The Company granted to the late Josef Mettler, in connection with his employment

contract, 12,000,000 stock options on July 4, 2013. Each option entitled the late Mr.

Mettler to buy one share at a strike price of $0.05. These options had three different

performance conditions.

For installment A (3,000,000 options), it was 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 was 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 was required that Meliá assumes management

responsibilities for Paradisus Papagayo Bay Resort & Luxury Villas. As of grant date, the

fair value was $258,000 and the Company estimated that Meliá assumes responsibility as

of July 1, 2015. As of March 6, 2014 the Company still assessed the probability that this

performance condition would be met at 100%, but the date, up to which the performance

condition would have to be achieved was postponed to the fourth quarter 2015, as the

opening date was postponed. As of the date of this report, the estimated opening date was

postponed to the fourth quarter 2018, as was the required date of the performance

condition.

Due to his passing away during the third quarter 2016, the probability that any of the

above performance condition will be met is 0%. Therefore, all previously recognized

expenses in the amount of $561,064 – corresponding to options that have not yet vested for

all installments above – have been reversed as of September 30, 2016.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

14.

STOCK COMPENSATION - CONTINUED

Stock Options – Summary

A summary of stock options outstanding as per ~~September~~March 3031, ~~2016~~2017 is as follows:

Options outstanding

Number of

Weighted

Weighted average

Options

average

remaining

exercise price

remaining

contractual life

Outstanding January 1, ~~2016~~2017

3220,000,000

$ 0.05

7.42 years

Granted

Exercised

Forfeited or expired

~~(12,000,000)~~-

Outstanding ~~September~~March 3031, ~~2016~~2017

20,000,000

$ 0.05

6.6313 years

Exercisable ~~September~~March 3031, ~~2016~~2017

The following table depicts the Company’s non-vested options as of ~~September~~March 3031, 2017 and changes

~~2016 and changes~~ during the period:

Non-vested options

Shares under Options

Weighted average grant date

fair value

Non-vested at January 1, ~~2016~~2017

3220,000,000

$ 0.~~053~~075

Non-vested-granted

Vested

Non-vested, forfeited or cancelled

(12,000,000)

~~Non~~-~~vested at September 30, 2016~~

Non-vested at March 31, 2017

20,000,000

$ 0.075

Under the provisions of ASC 718 Compensation – Stock Compensation, the Company is required to

~~required to~~ measure and recognize compensation expense related to any outstanding and unvested stock options

~~unvested stock options~~ previously granted, and thereafter recognize, in its consolidated financial statements, compensation

~~financial statements, compensation~~ expense related to any new stock options granted after implementation using a calculated fair value

~~implementation using a calculated fair value~~ based option-pricing model. The Company uses the Black-Scholes option-pricing model to calculate

~~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

~~options and its assumptions are based on historical and available~~ market information. No stock options were granted for the periods ended March 31, 2017 and March

~~stock options were granted for the periods ended September 30~~31, 2016 ~~and September 30,~~.

2015.

Assumption

~~September~~March 3031, ~~2016~~2017

~~September~~March 3031, ~~2015~~20176

Dividend yield

Risk-free interest rate used (average)

Expected market price volatility

Average expected life of stock options

n.a

The computation of the expected volatility assumption used in the Black-Scholes calculation for new

~~calculation for new~~ grants is based on historical volatilities of a peer group of similar companies in the same industry.

~~companies in the same industry.~~ The expected life assumptions are based on underlying contracts.

~~contracts.~~26

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2016~~2017

1412.

STOCK COMPENSATION -– CONTINUED

~~Stock Options – Summary - Continued~~As of March 31, 2017, the Company had unrecognized compensation expenses related to stock

~~As of September 30~~options currently outstanding, ~~2016~~ to be recognized in future quarters or years, ~~the Company had unrecognized compensation expenses~~ respectively as follows:

~~related~~ Through to ~~stock options currently outstanding~~ December 31, ~~to be recognized in future quarters or~~

~~years,~~Year ~~respectively~~ending asDecember ~~follows:~~31,

Through to

Year ending

Stock-based compensation (options)

December 31,

2016

2017

2018

Unrecognized compensation expense

40,946

30,723

~~15.~~30,723

13.

SUMMARY OF SHARE AND OPTION COMPENSATION EXPENSE

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

~~expense during~~ the periods ended ~~September~~March 3031, ~~2016,~~2017 respectively ~~September~~March 3031, ~~2015~~2016:

~~Three~~Summary of share and option based

Three months ended

~~Nine~~Three months ended

~~Nine~~compensation expense

~~Summary~~March of31, ~~share and option~~2017

~~months~~March 31, 2016

months

based compensation expense

September

30, 2016

30, 2015

30, 2016

30, 2015

$Share grants (see Note 14 for details)

$260,789

~~Share grants (see Note 14 for~~112,500

~~60,000~~Option grants (see Note 14 for details)

~~121~~10,~~728~~241

~~285~~15,~~000~~335

334,394

details)

Option grants (see Note 14 for

(550,823)

33,738

(520,153)

101,214

details)

Total

271,030

127,835

(recorded under general &

(490,823)

155,466

(235,153)

435,608

administrative expense)

1614.

FUTURE LEASE COMMITTMENTS

On December 1, 2012, the Company entered into a lease agreement for the premises for its Swiss

~~its Swiss~~ office with aan ~~third~~unrelated ~~party~~entity. The annual rental expense amounts to approximately $130,000 on a

~~$130,000 on a~~ fixed term expiring on December 31, 2017. The company has been invited by the landlord to discuss

~~September 30,~~a continuation or termination of the rental agreement. The objective is to come to a decision before

~~December~~the ~~31,~~middle of the calendar year 2017.

Future lease commitments

~~2016~~March 31, 2017

2015

2016

32,500

130,000

2017

~~130~~97,~~000~~500

~~130,000~~15.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

17.

NOTE PAYABLE

~~September~~March 3031, 2017

December 31, 2016

~~2016~~$

~~2015~~$

Promissory note

$21,000,000

~~$ 2~~1,~~000~~500,000

Specogna Holding AG

649,684

605,743

R. Weimar (private investor)

10,924

131,169

Total

21,~~660~~000,~~607~~000

21,~~736~~500,~~912~~000

Promissory Note

~~As part of the completion of the purchase of Altos del Risco on March 9~~On September 19, ~~2013~~ 2016, the Company signed an agreement with the counterparty, which stipulated

~~parties agreed that~~ payment terms of four quarterly instalments of $2500,000 each starting on November 21,~~000 of consideration is converted into a non-interest bearing~~ 2016.

~~and uncollateralized loan payable, which was originally due for payment on March 8,~~27

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.

On April 21, 2016, the Company signed a new agreement, which stipulated new

payment terms. The total amount of $2,000,000 was then repayable in four quarterly

installments of $500,000 each, starting on August 21, 2016.

On September 19, 2016, the Company signed a new agreement, which stipulated that the

first quarterly repayment of $500,000 was due on November 21, 2016, only and not on

August 21, 2016.

Loans Specogna Holding AG

On December 31, 2015, the Company entered into a short term loan agreement for

approximately $607,000 with Specogna repayable on February 29, 2016, with an

interest payment of 8 % per annum. The loan is secured personally and jointly by Dr.

Rössler and Mr. Rigendinger.

Subsequent to the reporting date, this loan has been converted into convertible bonds.

Loan R. Weimar (private investor)

On May 23, 2014, the Company entered into a short term loan agreement for

approximately $376,800 with Roland Weimar. The loan was repayable in five

installments, (four payments of $84,700, one payment of $38,000), with the initial

payment due on June 2, 2014 and the latest one due on June 1, 2015. The interest rate is

2 % per annum. The Company has repaid $22,683 during first quarter 2016, $34,015 was

transferred to another liability in the second and $66,946 was repaid in the third quarter

2016, whereas the entire loan amount should have been repaid. The agreement does not

stipulate any repercussions for late payments.

On October 4, 2016 the entire amount - including interest - was repaid.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2016~~2017

1816.

OPENING DATE “PARADISUS PAPAGAYO BAY RESORT & LUXURY VILLAS”

On June 2, 2014, the Company amended its agreement with Meliá (“Sixth addendum to the

~~the~~ management agreement of March 8, 2011”) to postpone the opening date as follows:

- The construction of the “Paradisus” ~~would~~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

~~Company would~~ will be obligated to pay Meliá a daily amount of $2,000 as liquidated damages.

~~damages.~~- Should the Company be unable to complete the construction of the “Paradisus” by February

~~- Should the~~15, ~~Company be~~2016, ~~unable to~~Meliá, ~~complete~~can terminate the ~~construction~~management ofagreement obligating the ~~“Paradisus”~~Company byto

~~February 15, 2016,~~ compensate Meliá in the amount of $5, ~~can terminate~~ 000,000 unless the ~~management agreement obligated the~~ respective parties agree to extend

~~Company to compensate Meliá in the amount of $5,000,000 unless the respective parties~~such date.

~~agree to extend such date.~~Dated April 27, 2016 a seventh addendum was signed between the Company and Melía with the

~~Dated April 27, 2016, a seventh addendum was signed between the Company and Meliá~~following major conditions:

with the following major conditions:

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

Should the completion not occur by September 15, 2018, and should the parties not have

~~not have~~ agreed in writing an extension to such date, after September 15, 2018, the Company shall

~~Company shall~~ pay ~~Meliá~~Melía a daily amount of $2,000 as liquidated damages.

Should the completion not occur by November 15, 2018, ~~the Meliá will~~ Melía shall be entitled to

~~entitled to~~ terminate the agreement unless the parties agree in writing to extend ~~such~~the completion date.

~~The~~and ~~Company~~the Company shall be obliged to pay ~~Meliá an amount of~~ Melía $5,000,000 as liquidated damages solely to

~~damages solely to~~ compensate ~~Meliá~~the Manager.

3417.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

September 30, 2016

19.

EARNINGS PER SHARE

Basic earnings per share are the result of dividing the Company’s net income (or net loss) by the

~~by the~~ weighted average number of shares outstanding for the contemplated period. Diluted earnings per

~~Diluted earnings per~~ share are calculated applying the treasury stock method. When there is a net income dilutive effect,

~~a net income dilutive effect,~~ all stock-based compensation awards or participating financial instruments are considered. When the

~~instruments are considered. When the~~ Company posts a loss, basic loss per share equals diluted loss per share. The following table depicts

~~diluted loss per share. The following table depicts~~ how the denominator for the calculation of basic and diluted earnings per share was determined

~~of basic and diluted earnings per share was determined~~ under the treasury stock method.

Three-month

Nine-month

Earnings per share

period ended

~~period~~March ~~ended~~31,

~~September 30,~~2017

September 30,

2016

2015

2016

2015

Company posted

Net loss

Basic weighted average shares

outstanding

~~101~~108,~~740~~234,~~479~~104

9598,~~842~~506,~~702~~438

99,707,537

93,798,380

Dilutive effect of common

stock equivalents

None

Dilutive weighted average

shares outstanding

~~101~~108,~~740~~234,~~479~~104

9598,~~842~~506,~~702~~438

99A total of 11,~~707~~233,~~537~~335 common shares vested have not been issued as per balance sheet date but are

~~93,798,380~~included in the basic weighted average shares outstanding.

~~A total of 5,900,000 common shares vested have not been issued as per balance sheet date~~28

~~but~~SUNVESTA, ~~are included in the basic weighted average shares outstanding~~INC.

~~The following table shows the number of stock equivalents that were excluded from the~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~computation~~March of31, ~~diluted earnings per share for the respective period because the effect would~~2017

17.

EARNINGS PER SHARE - CONTINUED

The following table shows the number of stock equivalents of SunVesta Inc. 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

Nine-month

Earnings per share

period ended

~~period ended~~March 31, 2017

~~period ended~~March 31, 2016

September 30,

2016

2015

2016

2015

Options to Hans Rigendinger

10,000,000

Options to Dr. M. Rössler

10,000,000

~~10,000,000~~Options to Josef Mettler

10,000,000

Options to the late Josef Mettler

12,000,000

Total Options

20,000,000

32,000,000

20,000,000

32,000,000

Shares to Hans Rigendinger

2,500,000

5,000,000

7,500,000

5,000,000

7,500,000

(retention bonus – non vested)

Shares to ~~the late~~ Josef Mettler (retention award)

15,000,000

~~15,000,0000~~Shares to third party

151,~~000~~666,~~000~~665

400,000

Shares to Howard Glicken and José Maria Figueres

(retention award)

Shares to Howard Glicken and

400,000

José Maria Figueres (retention

award)

Shares associated with

4,259,465

Convertible CHF Bonds

Total Shares

94,~~659~~566,~~465~~665

2220,~~900~~400,000

9,659,465

22,900,000

Total Options and Shares

2924,~~659~~566,~~465~~665

5452,~~900~~400,000

29Options related to Convertible CHF bonds: Each bond in the principal amount of CHF 5,~~659,465~~000 can be

~~54,900,000~~converted on any business day during the conversion period into 625 common shares of SunVesta

~~Options related~~ Holding AG at a conversion price equal to ~~Convertible~~ CHF ~~bonds: Each bond in the principal amount of CHF~~ 8.

~~5,000~~A ~~can~~number beof ~~converted~~4,343,840 onstock ~~any~~equivalents ~~business~~of ~~day~~SunVesta ~~during~~Holding ~~the~~AG ~~conversion~~associated ~~period~~with ~~into~~the ~~625~~Convertible

~~common shares of SunVesta Holding AG at a conversion price equal to~~ CHF 8. Bond were excluded from the computation of diluted earnings per share for the three-month

35period ended March 31, 2017 because the effect would have been anti-dilutive (3,877,625 for the

~~SUNVESTA~~three-month period ended March 31, ~~INC~~2016).

~~NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS~~18.

September 30, 2016

20.

GENERAL AND ADMINISTRATIVE EXPENSES

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

~~comprehensive loss~~ include:

Three-month

Nine-month

period ended

period ended period ended

period ended

~~September~~March 3031, ~~September~~ ~~30, September 30, September 30,~~2017

March 31, 2016

2015

2016

2015

Rental & related expenses

4939,~~031~~120

5154,~~674~~617

153,818

153,302

Audit

6399,~~698~~610

~~2,900~~(12'777)

251,338

180,430

Consulting

1695,~~022,910~~751

~~378~~211,~~692~~319

1,984,715

971,073

Marketing, Investor & public relations

3610,~~055~~500

2628,~~789~~777

77,364

70,551

Travel expenses

66133,~~053~~958

~~130~~103,~~710~~746

~~262,966~~Personnel costs including social security’s costs and

~~418,460~~share based remuneration

~~Personnel costs including social security’s~~283'533

~~costs and share based remuneration~~463,701

~~(219,192)~~Expense for penalty on management agreement

~~455,749~~-

~~686~~5,~~963~~000,000

~~2,166,779~~Office Expenses

203

Various other operating expenditures

53113,~~270~~295

70223,~~959~~588

~~581,397~~Total according statement of comprehensice loss $

~~382~~1,~~924~~375,970

~~Total according statement of~~6,072,970

$29

1,071,827

1,117,470

3,998,562

4,343,520

comprehensive loss

Termination of agreement with Concreta

In March 2013, SunVesta Holding AG, together with SunVesta Costa Rica Ltda.

concluded an agreement with Concreta S.R.L for the “Design & Execution Plans,

Logistics, Supply and Installation of all Interiors” for the “Papagayo Bay Resort & Luxury

Villas” project in Costa Rica. Over time, the project developed differently to what the

parties expected. Consequently, contract renegotiations became necessary. As these

renegotiations could not be finalized satisfactorily, the Company terminated the existing

contract effective February 3, 2016. In the meantime, a settlement agreement is being

discussed, which, if signed by the parties, is probable to settle for an estimated amount of

$600,000. This amount is accounted for as of September 30, 2016, under consulting

expenses.

21.

OTHER EVENTS

On May 9, 2016, the Company signed an agreement with “Median Trust SA”, by which

this service provider is mandated to set-up a special purpose vehicle (“SPV”), to be called

“Compartment” in accordance with Luxembourg law. The objective of the SPV is to

obtain an investment grade rating and to make a bond offering of not less than $100

million. The SPV will be the issuer, however, the responsibility to place the bonds remains

with the Company. As of the date of this report, the SPV has not yet been established.

SUNVESTA, INC.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

~~September~~March 3031, ~~2016~~2017

2219.

SUBSEQUENT EVENTS

Management has evaluated subsequent events after the balance sheet date, through the issuance of

~~issuance of~~ the financial statements, for appropriate accounting and disclosure. The Company has determined

~~Company has determined~~ that there were the following events that warrant disclosure ~~and no~~ or recognition in the financial

~~events that warrant recognition in the financial~~ statements.

~~On October 28, 2016, Hans Rigendinger and Dr. Max Rössler formally agreed to maintain the~~Litigation

~~guaranty~~The ~~described~~Company ~~under~~initiated ~~Note~~legal 3,proceedings ason ~~necessary~~April 21, ~~until~~2017, ~~completion~~against of the ~~construction~~seller of the additional

~~Paradisus~~concession ~~Papagayo~~properties ~~Bay~~in ~~Resort~~Polo &Papagayo, ~~Luxury~~Costa ~~Villas,~~Rica.The ~~after~~claim ~~which~~is ~~date~~based on the ~~guaranty~~seller’s ~~will~~alleged ~~expire.~~failure

~~On October 4, 2016~~ to perform according to the ~~entire amount~~ terms of a ~~loan described in Note 17~~ purchase and sale agreement dated April 24, 2013, pursuant to ~~R. Weimar was~~

~~repaid.~~which the seller was to return deposits in the amount of $1,669,701 on receiving notice of

37cancellation minus 5% in liquidated damages.

As of March 31, 2017, no gain has been recognized with respect to the claim against the seller of the

additional concession properties.

ITEM 2.

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

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

~~Operations and~~ other parts of this quarterly report contain forward-looking statements that involve risks and

~~involve risks and~~ uncertainties. Forward-looking statements can be identified by words such as “anticipates,” “expects,”

“~~anticipates,” “expects,” “~~believes,” “plans,” “predicts,” and similar terms. Forward-looking statements are not guarantees of

~~statements are not guarantees of~~ future performance and our actual results may differ significantly from the results discussed in the

~~significantly from the results discussed in the~~ forward-looking statements. Factors that might cause such differences include but are not limited to

~~cause~~those ~~such~~discussed ~~differences~~in ~~include~~the ~~but~~subsection ~~are~~entitled ~~not~~Forward-Looking ~~limited~~Statements toand ~~those~~Factors ~~discussed~~That inMay ~~the subsection entitled~~Affect

~~Forward-Looking~~Future ~~Statements~~Results and ~~Factors~~Financial ~~That~~Condition ~~May~~below. ~~Affect~~The ~~Future~~following ~~Results~~discussion ~~and~~should ~~Financial~~be read in

~~Condition~~conjunction ~~below.~~with ~~The~~our ~~following~~financial ~~discussion~~statements ~~should~~and benotes ~~read~~hereto included in ~~conjunction~~this ~~with~~report. ~~our~~All ~~financial~~information

~~statements~~presented ~~and~~herein ~~notes~~is ~~hereto~~based ~~included~~on inour ~~this~~three-month ~~report.~~periods ~~All~~ended ~~information~~March ~~presented~~31, ~~herein~~2017 isand ~~based~~March 31, 2016. Our

on our three and nine-month periods ended September 30, 2016 and September 30, 2015. Our

fiscal year end is December 31.

Discussion and Analysis

Business Overview

We are in the ~~process~~business of developing high-end luxury hotels and resorts ~~worldwide.~~in ~~Our~~countries ~~initial~~that are emerging

~~focus~~as ispopular ~~concentrated~~tourist ondestinations. ~~offering~~Our intention is to develop luxury hotel products located in ~~attractive, top-class coastal~~countries

~~vacation~~such ~~destinations~~as inCosta ~~countries~~Rica that are ~~fast~~ emerging as popular tourist destinations. ~~Each~~Our first hospitality

~~prospective~~ development, ~~takes~~to ~~into~~be ~~consideration~~constructed ~~country~~on ~~specific~~20.5 ~~conditions~~hectares ~~and~~of ~~general~~prime land located in Guanacaste Province, Costa

~~considerations~~Rica ~~that~~is ~~include~~ the ~~stability~~Paradisus ofPapagayo ~~local~~Bay ~~political~~Resort ~~conditions~~& Luxury Villas, ~~geologically~~a ~~useful~~five-star luxury hotel. All permitting

~~cultivability,~~for ~~and~~ the ~~types~~project ofis ~~destinations~~in ~~that~~place, ~~attract~~including apermission ~~five-star~~to ~~clientele.~~incorporate ~~Once~~the ~~identified~~beachfront asadjacent to the two

~~eligible,~~concessions ~~prospective~~into ~~developments~~the ~~are~~development ~~compared~~and ~~against~~all asignificant ~~validation~~site ~~checklist~~work ~~and~~completed. ~~then,~~Vertical ifconstruction is

~~warranted,~~expected ~~subjected~~ to acommence ~~substantial~~at ~~due~~the ~~diligence~~beginning ~~process.~~of ~~Since~~the ~~location~~second isquarter ~~the~~of ~~key~~2017, towhile the ~~success~~opening of the

ofParadisus ~~any~~Papagayo ~~tourist~~Bay ~~based~~Resort ~~luxury~~& ~~real~~Luxury ~~estate~~Villas ~~project,~~is ~~each~~scheduled ~~development~~for ~~will~~the befourth ~~carefully~~quarter ~~considered~~2018. The

~~during~~estimated ~~the~~commencement ~~eligibility~~of ~~process.~~construction and opening dates are subject to securing sufficient capital

~~Initial~~commitments ~~Development~~to complete the development.

Our initial real estate development on 20.5 hectares of prime land located in Guanacaste

Province, Costa Rica, is the Paradisus Papagayo Bay Resort & Luxury Villas project includes

two concepts; i.e. the Vista Mar (Family Concierge) and the Vista Bahia (Royal Service), a five-

star luxury hotel. All permitting for the project is in place, including permission to incorporate

the beachfront adjacent to the two concessions into the development and all significant site work

completed. Vertical construction is expected to commence in the first quarter of 2017, while the

opening of the Paradisus Papagayo Bay Resort & Luxury Villas is scheduled for the fourth

quarter 2018, subject to the procurement of the requisite financing.

Specifications

Paradisus Papagayo Bay Resort & Luxury Villas’ initial specifications are to be as follows:

— eco-luxury all-inclusive resort

— 382-keys

— direct beach access

— five restaurants and five bars

— Yhi Spa and Health Club

— Paradisus’ adults-only “Royal Service” level of accommodations

— Paradisus’ “Family Concierge” program

— 19,000 square feet of meeting facilities with the business traveler in mind

Vista Mar

Family Concierge

The Family Concierge will be a family orientated part of the Paradisus Papagayo Bay Resort &

& Luxury Villas. The accommodations will be designed to satisfy the needs of the modern family.

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,

~~bars,~~ and lounges. The planned Onyx Night Club and the Gabi Club will be located near the beach.

beach.

Vista Bahia

Royal Service

Our Royal Service will include an extensive range of services such as a butler service, private pools

~~pools~~ for each Garden Villa and/or a Jacuzzi in every suite.

The Royal Service area will include:

— 108 Junior Suites Grand Deluxe

(43-60* square meters)

— 2 Junior Suites Grand Deluxe for Handicapped Guests

(53* square meters)

— 6 Grand Master Suites

(87* square meters)

— 2 Deluxe Suites Presidential

(60 square meters)

— 1 Grand Presidential Suite (4 bedrooms)

(145* square meters)

— 20 one or two-bedroom Garden Villas

(91–212* square meters)

— Room size does not include balconies and terraces.

* Room size does not include balconies and terraces.

All ground floor suites will have direct access to swim-up pools. Each of the suites and villas will

have a full view of the sea. Royal Service guests will furthermore have access to restaurants, bars,

lounges, fitness equipment, spas and outside massage areas.

The Paradisus Papagayo Bay Resort & Luxury Villa’s will feature other highlights including:

— more than 65 private, swim up and resort pools including the world’s second largest Infinity Pool all

~~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

~~intention~~ being that these villas will be sold to individuals who will then lease them back to the resort when

~~resort when~~ not occupied by the owners.

3932

Management

Overall project development is led by Hans Rigendinger, our Chairman of the Board, ~~Chief~~and ~~Executive~~Chief

~~Officer~~Executive ~~and Chief Operating~~ Officer ~~of the Company~~, Charles Fessel, Project Director Paradisus Papagayo Bay Resort & Luxury Villas

~~Papagayo Bay Resort & Luxury Villas~~ and Ernst Rosenberger, the Company’s Corporate Controller. The lead architect is Ossenbach,

~~Controller. The lead architect is Ossenbach,~~ Pendones & Bonilla, one of Costa Rica’s largest architectural offices with over 45 architects and

~~architectural offices with over 45 architects and~~ designers. Civil engineering services are provided by DEHC Engineers and structural engineering

~~by DEHC Engineers and structural engineering~~ services by IEAC. Landscape architects are TPA and interior designers are led by Laboratorio

~~and interior designers are led by Laboratiro~~ Quattro.

Resort management is to be provided by Melía Hotels International (“Melía”). “Paradisus” is Meliá’s

~~Meliá’s~~ five- star all-inclusive luxury hotel brand that is well recognized in the hospitality industry around the

~~industry around the~~ world. Melía was founded in 1956 in Palma de Mallorca, Spain and is today one of the world’s largest

~~one of the world’s largest~~ resort hotel chains, as well as Spain’s leading hotel chain for business or leisure. Melía offers more

~~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

~~continents~~Melía, ~~under~~Innside ~~its~~by ~~Gran~~ Sol Melía, Tryp, Sol Melía, ~~ME by~~ Sol Melía, ~~Innside~~Vacation byClub, ~~Sol~~and ~~Melía,~~Paradisus ~~Tryp,~~brands. The

~~Sol~~Paradisus ~~Melía,~~brand ~~Sol~~represents ~~Melía~~all-inclusive ~~Vacation~~luxury ~~Club,~~resorts ~~and~~with ~~Paradisus~~hotels ~~brands.~~in ~~The~~Mexico ~~Paradisus~~and ~~brand~~the ~~represents all-~~Dominican

~~inclusive luxury resorts with hotels in Mexico and the Dominican~~ Republic.

Since the completion date for the Paradisus Papagayo Bay Resort & Luxury Villas development has

~~development~~been isdelayed ~~now~~to ~~anticipated for~~ the fourth quarter of 2018, the Company reached an agreement dated April 28, 2016,

~~agreement dated April 28, 2016,~~ to ~~further~~ amend the ~~management~~original agreement with Meliá dated March 8, 2011. The current agreement stipulates

~~dated March 8, 2011. The amended agreement presently stipulates that if~~ the ~~Papagayo~~following ~~Bay~~major conditions:

~~Resort & Luxury Villa’s is not completed by November 15, 2018, and if an extension date is~~a.

~~not~~New ~~agreed,~~completion ~~then~~date: ~~Meliá~~September ~~could~~15, ~~terminate~~2018 ~~the~~(subject ~~management~~to ~~agreement~~force ~~and cause the Company to~~majeure)

~~pay a penalty of $5 million~~b.

Should the completion not occur by September 15, 2018 and should the Parties not have

agreed in writing an extension to such date, after September 15, 2018 the Owner shall

pay

the Manager a daily amount of $ 2,000 as liquidated damages.

Should the completion not occur by November 15, 2018, and should the parties to the

management agreement not agree to an extension, the Company will be obligated to pay

Meliá $5,000,000 as liquidated damages.

Additional Concession Properties

OnThe ~~April~~Company ~~20,~~entered ~~2012,~~into ~~the~~a ~~Company~~Purchase ~~entered~~and ~~into~~Sale anAgreement ~~agreement~~dated April 24, 2013, with Meridian IBG ~~(“Meridian”)~~, as

~~amended~~Inc., on(“Meridian”) ~~November~~to ~~13,~~purchase ~~2012,~~Marina ~~and~~Rose ~~replaced~~Ltda. on(“Marina ~~May 7~~Rose”), ~~2013,~~a toCosta ~~purchase~~Rican ~~two~~company ~~additional~~that held

~~concession~~certain ~~properties~~concessions located in ~~Polo~~the Gulf of Papagayo, Guanacaste Province, ~~comprised~~Costa ofRica ~~approximately 230,000 square~~(“Meridian

~~meters~~Agreement”) for $17,500,000. One of the concessions lies adjacent to the ~~existing~~SunVesta ~~concessions~~Costa ~~(La~~Rica SA

concessions (La Punta) and the other is in close proximity. The toMeridian ~~the~~Agreement ~~Paradisus~~caused ~~Papagayo Bay Resort & Luxury Villas~~the

~~development.~~Company to enter into a Purchase and Sale Agreement dated April 24, 2013, with RBAT Costa Rica

~~The~~LLC, ~~Company~~an ~~had~~entity ~~paid~~controlled ~~down-payments~~by onVarde ~~the~~Investment ~~purchase~~Partners ofLP ~~these~~(“Varde”) ~~properties~~to ofpay $28,~~669~~000,~~816~~000 as of the

~~September~~purchase ~~30,~~price ~~2016,~~payable ~~and~~to isMeridian into ~~discussions~~Varde ~~with~~(“Varde ~~Meridian~~Agreement”). ~~regarding~~Varde andelivered ~~amendment~~a tonotice ~~the~~of

~~agreement.~~termination ~~Should~~of the ~~Company~~Varde ~~not~~Agreement beto ~~successful~~the inCompany ~~obtaining~~on anJanuary ~~amendment~~4, to2014, and the ~~agreement,~~Company noticed

itcancellation ~~would have to write-off $300,000~~ of ~~that~~the ~~purchase~~Meridian ~~price~~Agreement ~~already~~to ~~paid~~Meridian inon ~~addition~~February to24, ~~a 5%~~2017.

~~penalty.Both,~~The Meridian Agreement entitled the ~~$300,000~~Company ~~write-off~~to ~~(accounted~~reimbursement for asall ~~impairment~~amounts ~~expenses)~~paid as ~~well as the~~deposits

~~$50,000~~against ~~for~~the ~~additional~~purchase ~~damages~~of ~~(accounted~~Marina ~~for~~Rose asless ~~general~~a ~~and~~liquidated ~~administrative~~damages ~~expenses)~~penalty ~~have~~of 5% on providing notice of

~~been~~cancellation. ~~provided~~The ~~for~~Varde inAgreement entitled the ~~results~~Company ~~year-~~to~~-date~~ ~~2016.~~reimbursement for all amounts paid as

~~Swiss~~deposits ~~Hospitality~~minus ~~Project~~a non-refundable payment of $300,000 and a 5% liquidated damages penalty on

Onreceiving ~~September~~notice ~~19,~~of ~~2015~~termination, the ~~Company~~company ~~signed~~entered aninto ~~option~~a ~~agreement~~new Stock Purchase Agreement with RBAT Costa Rica pursuant to ~~acquire~~which ~~four~~amounts ~~existing~~refundable ~~hotels~~from the Varde Agreement were no longer refundable.

inThe ~~the~~Company ~~Canton~~delivered notice of ~~Graubünden,~~its ~~Switzerland~~claims ~~with~~for anreimbursement ~~unrelated~~to ~~third~~the ~~party.~~respective ~~The~~parties ~~properties~~and ~~optioned~~has since

~~comprise~~period anend ~~aggregate~~initiated oflegal ~~141~~proceedings ~~rooms.~~to ~~The~~recoup ~~consideration~~amounts ~~for~~it ~~the~~believes ~~option~~to ~~was~~be ~~CHF 300,000, which~~due.

~~amount was paid on October 25, 2015. Dated May 10, 2016, the Company, QuadEquity Holdings~~33

AG and the seller of the four hotels concluded an agreement, whereby QuadEquity Holdings AG

assumed all of the Company’s rights and obligations from the original contract. In return,

QuadEquity Holdings AG will pay the Company the amount of $302,000 (CHF 300,000) before

May 30, 2016. This payment was received on June 1, 2016.

Finance

The anticipated completion of the Paradisus Papagayo Bay Resort & Luxury Villas in the fourth

quarter of 2018 will require a net investment of approximately $~~212~~217 million (~~including~~excluding non-

recuperated overhead expenses), of which approximately $6067 million has been expended as of March

~~September 30~~31, ~~2016~~2017. We ~~expect~~aim to realize a minimum of $140 million in new funding over the next nine months.

~~next twelve months.~~ New funding over the next ~~twelve~~nine months is expected to be raised from debt financing through bonds,

~~financing through bonds,~~ shareholder loans and, if necessary, the guaranty agreement borne by certain principal shareholders

~~certain principal shareholders~~ and participants in management. Detailed below is a brief description of material debt obligations as

~~description~~ of ~~material debt obligations as of~~ period end.

Bonds

The Company has four bond issues outstanding, denominated in ~~Euros~~Swiss Francs (€CHF) ~~or Swiss~~.

Swiss Francs (CHF). ~~EUR~~Convertible ~~(€)~~ Bonds

The Company initiated an offering of senior unsecured ~~EUR~~CHF bonds ~~offering~~ on ~~December~~October 21, ~~2013~~2015, of up to CHF

€15,000,000 in units of ~~€10~~CHF 5,000 that bear interest at 76.2500% per annum payable each ~~December~~September 230,

over a three-year term that ~~ends~~matures on ~~December~~September 230, ~~2016.~~2018, Wewhich ~~had~~are ~~realized~~convertible ~~carrying~~into ~~values~~shares of

~~$6,715,145~~SunVesta asHolding ofAG ~~the~~at ~~year~~CHF ~~ended~~8.00. ~~December~~We ~~31,~~had ~~2015,~~realized ~~and~~ $63,~~975~~708,~~725~~645 as of ~~September~~March 3031, ~~2016,~~2017 ~~for~~and

a$3,648,383 ~~cumulative~~as ~~amount~~ of ~~$6.99~~December ~~million~~31, as2016 ofin ~~the~~connection ~~date~~with of this ~~report~~offering.

The Company initiated a parallel offering of senior unsecured ~~EUR~~CHF bonds on ~~December~~October 21, ~~2013~~2015, of up to

~~€15~~to CHF 45,000,000 in units of ~~€10~~CHF 5,000 that bear interest at 76.2500% per annum payable each ~~December 2 over~~

September 30, over a three-year term that ~~ends~~matures on ~~December~~September 230, ~~2016.~~2018, Wewhich ~~had~~are ~~realized~~convertible ~~carrying values of $1,632,572 as of~~into

~~the~~shares ~~year~~of ~~ended~~SunVesta ~~December~~Holding ~~31,~~AG ~~2015~~at ~~and~~CHF 8.00. We had realized $135,~~752~~613,~~995~~725 as of ~~September~~March 3031, ~~2016,~~2017 ~~for a cumulative~~and

~~amount of~~ $~~1.67~~36,770,369 ~~million~~ as of ~~the~~December ~~date~~31, of2016, in connection with this ~~report~~offering. Included in these amounts

was approximately $6.2 million (CHF 6.32 million) that by agreement with certain bondholders

deviated from the standard terms to provide for repayment by February 28, 2017. An amount of

$1,795,594 was repaid as of March 31, 2017. The remaining amount was rolled forward unchanged

from the original conditions of the offering.

Swiss Francs (CHF) Bonds

The Company initiated a new offering of senior ~~convertible~~unsecured CHF bonds on ~~October~~September 121, ~~2015~~2016, of up

to CHF 4520,000,000 in units of CHF 5,000 that bear interest at 6.0050% per annum payable each August

~~September 30~~15, over a ~~three~~four-year term that matures on ~~September~~August 3015, ~~2018~~2020. ~~which~~We ~~are~~had ~~convertible~~realized $16,796,665 as of March

~~into~~31, ~~shares~~2017 ofand ~~SunVesta~~$15,601,389 ~~Holding~~as AGof atDecember ~~CHF~~31, 82016.~~00. We had realized carrying values of $2,171,725~~

asThe ofCompany ~~the~~initiated ~~year~~a ~~ended~~new ~~December~~parallel ~~31,~~offering ~~2015~~of ~~and~~senior ~~$3,070,502~~unsecured asCHF ofbonds on September 3021, ~~2016, for a~~

~~cumulative~~2016, ~~amount~~ of ~~$3.21~~up ~~million~~to asCHF of20,000,000 ~~the~~in ~~date~~units of ~~this~~CHF ~~report~~5,000 that bear interest at 6.50% per annum payable

~~The~~each ~~Company~~August ~~initiated~~16, over a ~~new~~four ~~parallel~~year ~~offering~~term ofthat ~~senior~~matures ~~convertible~~on ~~CHF~~August ~~bonds~~15, on2020. We ~~October~~had 1,realized ~~2015~~$977,478 as

of upMarch to31, ~~CHF~~2017 15and $961,~~000,000~~595 ~~units~~as of ~~CHF~~December 531,~~000~~ ~~that bear interest at 6~~2016.~~00% per annum payable each~~

September 30, over a three-year term that matures on September 30, 2018 which are convertible

into shares of SunVesta Holding AG at CHF 8.00. We had realized carrying values of $23,694,423

as of the year ended December 31, 2015 and $35,324,216 as of September 30, 2016, for a

cumulative amount of $38.24 million as of the date of this report.

Aires International Investment, Inc.

On July 27, 2011, SunVesta AG entered into a line of credit agreement with Aires International

Investments Inc. (“Aires”), a company owned by Dr. Rӧssler (a director of the Company). The ~~loan~~credit

~~agreement~~line was amended ~~on May 11, 2012~~ and ~~on June 21, 2012 and~~ then replaced by a new loan agreement on December 31, 2016, that includes

~~agreement on October 31, 2013, that included~~ the following conditions:

4134

— 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~~2020 and before December 31, ~~2020~~2022.

— ~~Despite~~After ~~the~~December ~~scheduled~~31, ~~repayment dates~~2020, ~~each~~the ~~party~~lender has the option to cancel the loan agreement with a prior

~~with a prior~~ notice period of 90 days, requiring repayment of the loans in full.

— The borrower has the right to repay the loan at any time with a prior notice period of 90 days.

— Loan amounts outstanding including any additional amounts and additions are subordinated.

— Interest on the loan amounts is 7.25% per annum, which is accrued to the loan account.

The Company had borrowed $4853,~~611~~205,~~633~~093 from Aires as of ~~September~~March 3031, ~~2016~~2017 and $4751,~~198~~473,~~362~~793 as of

December 31, ~~2015~~2016.

Loans Dr. Max Rӧssler

In the third quarter 2016, Dr. Max Rössler provided $4,202,378 (CHF 4,100,000). Interest of $24,543

was recorded in this period, resulting in a total balance of $4,256,580 as of September 30, 2016.

Loan Global Care AG

During ~~2014~~the first quarter of 2017, Global Care AG, ~~loaned~~a ~~the~~company ~~Company~~owned ~~$190,270~~by ~~(CHF~~Dr. ~~185,000),~~Rӧssler ~~which~~(a ~~amount~~director ~~was~~of the

~~repayable~~Company), onprovided ~~October 31~~$7,048,257 ~~2014.~~to ~~The~~the ~~loan~~Company ~~includes~~at a7.25% ~~fixed~~ interest, ~~payment~~repayable ofnot ~~$20,570~~before ~~(CHF 20,000).~~December

~~Effective June 30~~31, ~~2016 an amount of $1,440,875 (CHF 1,398,802) was transferred from the loan~~2020.

~~account~~Loan ~~Dr.~~Blue ~~Max~~Dot ~~Rössler~~SA to(formerly ~~the~~DIA ~~loan account Global Care AG~~S.A)

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

On(formerly ~~March~~DIA 8,SA) ~~2013,~~(“Blue ~~the~~Dot”) ~~Company~~in ~~entered~~connection ~~into~~with anthe ~~interest~~purchase ~~free~~of ~~loan~~the ~~agreement~~land ~~with~~concession ~~DIA~~for ~~S.A. and his~~the

~~successor~~Paradisus ~~Blue~~Papagayo ~~Dot~~Bay SAResort ~~respectively~~& inLuxury ~~the~~Villas ~~amount of $2,000,000 payable on March 8, 2014, in~~project.

~~connection with~~ On September 21, 2016, the ~~purchase of land concession being part of~~ Company signed a new agreement, which stipulates that the ~~Paradisus Papagayo Bay Resort &~~ total

~~Luxury Villas project from Altos held~~ amount of $2,000,000 is repayable in ~~the name~~ four quarterly installments of ~~Altos del Risco S.A. The terms of the loan~~ $500,000 each, starting on

agreement were amended on March 16, 2015, to extend the due date for said payable until March 2016.

On April 21, 2016, the Company signed a new agreement, which stipulated new payment terms. The

total amount of $2,000,000 is now repayable in four quarterly installments of $500,000 each, starting on

August 21, 2016.

On May 21, 2016, the Company signed a new agreement, which stipulated new payment terms. The

total amount of $2,000,000 is now repayable in four quarterly installments of $500,000 each, starting on

November 21, 2016.

Blue Dot was due $1,000,000 as of March 31, 2017 and $1,500,000 as of December 31, 2016.

Timeline

Our expected timeline for developing the Paradisus Papagayo Bay Resort & Luxury Villas is as

follows:

— commence onsite vertical construction in the ~~first~~second quarter of 2017

— complete construction in the fourth quarter of 2018

— handover to Melía in the fourth quarter of 2018

Results of Operations

During the three-month ~~and~~period ~~nine-month periods~~ ended ~~September~~March 3031, ~~2016~~2017, our operations were focused on (i) completing

~~focused on (i) completing~~ earth work excavations on the Paradisus Papagayo Bay Resort & Luxury Villas property; (ii)

~~Villas property; (ii)~~ furthering discussions with prospective project development partners; and (iii) pursuing additional

~~additional~~ debt financing to fund the construction of the project.

The Company has been funded since inception from debt or equity placements and by shareholders or

partners in the form of loans. Capital raised to date has been allocated primarily to the development of

the Costa Rican property, including the purchase of the land and general and administrative costs.

~~The variance in losses over the comparative three- month periods is reconciled below:~~35

~~Three months July 1st to September 30, 2015~~Comprehensive Losses

~~(383,197)~~The variance in losses over the comparative three- month periods is reconciled:

Three months January to March 2016

(9,526,075)

Variances during the 3 months

Decrease in general and administrative expenses

54,~~644 There~~ 696,999 Decrease was ~~an increase~~ due to the accrual of a

~~significantly higher~~penalty ~~consulting~~in 2016.

Increase in impairment expenses~~, project-related and due to~~

~~contemplated IPO in Switzerland.~~(280,242) Impairment of REP Caribbean receivable

This increase was overcompensated

by negative personnel costs due to a

reversal of share-based payments

for the late Josef Mettler

Increase in interest income

65,~~960~~047 Increase in deposits

Decrease in interest expenses

~~360~~930,~~179~~493 ~~Significantly higher debt,~~Primarily increase in volume of

~~overcompensated by an increase~~ conversion feature in 2016 and decrease

~~capitalized~~in ~~interest~~2017.

Change in fair values of conversion features

~~680~~253,~~580~~903 Primarily decrease in time value of

conversion feature

Decrease in unrealized exchange gains

(2414,~~255,054~~602) Currency fluctuations

Decrease in other income / (expenses)

2030,~~034~~860 Not material

~~Increase~~ Decrease in foreign currency translation losses

(1665,~~847,137)~~ 068 Currency fluctuations

Total variances

(25,~~988~~887,~~795)~~526

Three months ~~July 1st~~ January to ~~September~~ ~~30, 2016~~March 2017

(3,~~371~~638,~~991~~549)

The penalty accounted for during the period ended March 31, 2016 was in respect to the management

agreement with Meliá dated March 8, 2011. The amended agreement stipulated that if the Papagayo

Bay Resort & Luxury Villa’s would not be completed by November 15, 2018, and if an extension date

is not agreed, then Meliá could terminate the management agreement and cause the Company to pay a

penalty of $5 million. Consequently, an accrual in the amount of $5 million was charged against

operating expenses. In light of the seventh addendum to the management agreement that was signed

on April 27, 2016, this accrual was reversed in the second quarter of 2016.

We did not generate revenue during this period and we expect to continue to incur losses through the

year ended December 31, ~~2016~~2017.

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~~March 3031, ~~2016~~2017, in connection with the purchase of land concessions in Costa Rica, as well as the

planning and construction of the project and expects to incur future cash outflows on capital

expenditure as discussed in the "Liquidity and Capital Resources" and the "Going Concern" ~~paragraphs~~

paragraphs below.

Liquidity and Capital Resources

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

stockholders’ equity.

~~As of September 30, 2016 and December 31, 2015, the following were working capital items:~~36

~~September~~As 30of March 31, 2017 and December 31, 2016, the following were working capital items:

~~December~~March 31, 2017

December 31, 2016

2015

Current assets

Cash and cash equivalents

2,~~985~~557,~~698~~181

~~111~~806,~~830~~440

Receivable from related parties

2065,~~643~~483

1949,~~945~~292

Other assets

~~549~~460,~~978~~977

~~158~~456,~~574~~099

Total current assets

3,~~556~~083,~~320~~641

~~290~~1,~~349~~311,830

Current liabilities

Bank liabilities

179,313

Accounts payable

41,~~814~~979,~~034~~141

83,~~048~~311,~~608~~512

Accrued expenses

92,~~109~~810,~~806~~375

73,~~831~~160,~~247~~722

Notes payable

21,~~660~~521,~~607~~648

21,~~736~~500,~~912~~000

Notes payable to related parties

67,~~023~~338,~~048~~257

1307,~~130,978~~088

Other liabilities

1,641

120

Bonds

~~14,717,618~~-

86,~~347~~687,~~717~~384

Total current ~~liability~~liabilities

3713,~~325~~651,~~113~~063

2814,~~274~~966,~~775~~825

Net working capital

(3310,~~768~~567,~~793~~422)

(2713,~~984~~654,~~426~~994)

As of ~~September~~March 3031, ~~2016~~2017, and December 31, ~~2015~~2016, the following were the items making up the total

stockholders’ deficit:

~~September~~March 3031, 2017

December 31, 2016

2016

2015

Assets

Current assets

3,~~556~~083,~~320~~641

~~290~~1,~~349~~311,830

Non-current assets

69,~~598~~608,~~624~~843

6768,~~007~~354,~~090~~502

Total assets

7372,~~154~~692,~~944~~485

6769,~~297~~666,~~439~~332

Liabilities

Current liabilities

3713,~~325~~651,~~112~~063

2814,~~274~~966,~~775~~825

Non-current liabilities

87113,~~993~~581,~~941~~579

80105,~~287~~872,~~652~~146

Total liabilities

~~125~~127,~~319~~232,~~053~~642

~~108~~120,~~562~~838,~~427~~971

Total stockholders’ deficit

(5254,~~164~~540,~~109~~158)

(4151,~~264~~172,~~988~~639)

The Company’s negative net working capital of $3310,~~768~~567,~~793~~422 is ofa concern; ~~however,~~going ~~based~~forward. ~~on the~~However,

based on the guaranty signed by certain principals, the Company is convinced that it can address ~~liquidity~~

liquidity problems.

Net cash flow used in operating activities for the ~~nine~~three-month period ended ~~September~~March 3031, ~~2016~~2017, was

$63,~~053~~309,~~988~~830, as compared to $3928,~~137,324~~807 for the ~~nine~~three-month period ended ~~September~~March 3031, ~~2015~~2016.

~~The~~We ~~Company~~expect ~~expects~~ to continue to use net cash flow in operating activities until we complete the Paradisus

~~Paradisus~~ Papagayo Bay Resort & Luxury Villas project, which completion is projected for the fourth quarter of

~~fourth quarter of~~ 2018.

44Net cash used in investing activities for the three-month period ended March 31, 2017, was $596,408

~~Net~~as ~~cash~~compared ~~used~~to in$1,887,727 ~~investing activities~~ for the ~~nine~~three-month period ended ~~September~~March 3031, 2016,. ~~was~~Net cash used in

~~$1,480,178~~investing asactivities ~~compared~~in ~~to $8,680,218 for~~ the ~~nine~~current three-month period ~~ended~~is ~~September~~comprised ~~30,~~of ~~2015.~~the ~~Net~~purchase of property and

~~cash~~equipment, ~~used~~offset inby ~~investing~~the ~~activities~~sale inof ~~the~~equipment. ~~current~~Net ~~nine-month~~cash ~~period~~used isin ~~comprised~~investing ofactivities in the ~~purchase of~~prior

~~property~~comparable ~~and~~three-month ~~equipment,~~period ~~and~~was ~~deposits~~comprised ~~related~~of tothe ~~construction,~~purchase ~~offset~~of byproperty aand ~~sale of~~ equipment, aand

~~collection~~deposits ofrelated ~~cash~~to ~~for~~construction, aoffset ~~down~~by ~~payment~~receivables from related parties and restricted cash. ~~Net cash used in investing activities in the~~

~~prior~~We ~~comparable~~expect ~~nine-month~~negative ~~period~~net ~~was~~cash ~~comprised~~flow ofin ~~the~~investing ~~purchase~~activities ofto ~~property~~continue ~~and~~while ~~equipment,~~in the process of developing

~~down~~the ~~payments~~Paradisus ~~for~~Papagayo ~~property~~Bay ~~and~~Resort ~~equipment~~& ~~offset~~Luxury ~~by receivables from related parties, deposits~~Villas.

~~related to construction and restricted cash. We expect negative net cash flow in investing activities to~~37

~~continue~~Net ~~while~~cash inprovided ~~the~~by ~~process~~financing ofactivities ~~developing~~for the ~~Paradisus~~three-month ~~Papagayo~~period ~~Bay~~ended ~~Resort~~March &31, ~~Luxury~~2017, ~~Villas.~~was

~~Net~~$5,655,631 ~~cash~~as ~~provided~~compared byto ~~financing~~$2,905,132 ~~activities~~ for the ~~nine~~three-month period ended ~~September~~March 3031, 2016,. ~~was~~Net cash

~~$10,382,963~~provided asby ~~compared~~financing toactivities ~~$12,030,782~~in ~~for~~ the ~~nine~~current three-month period ~~ended~~is ~~September~~comprised ~~30,~~of ~~2015.~~proceeds ~~Net~~from notes

~~cash~~payable ~~provided~~to byrelated ~~financing~~parties, ~~activities~~proceeds infrom ~~the~~bond ~~current~~issuances ~~nine-month~~net ~~period~~of iscommissions, ~~comprised~~and of proceeds from other

~~from~~debt, ~~notes~~offset ~~payable~~by torepayments ~~related~~of ~~parties,~~bonds and ~~proceeds~~other ~~from~~debt. ~~bond~~Net ~~issuances~~cash ~~net~~provided ofby ~~commissions,~~financing ~~offset~~activities in the

byprior acomparable ~~decrease~~three-month inperiod ~~bank~~was ~~liabilities,~~comprised ~~repayment~~ of proceeds from notes payable to related parties, ~~the payment of debt~~

~~issuance costs,~~ and ~~changes~~proceeds infrom ~~other~~bond ~~debt.~~issuances ~~Net~~net ~~cash~~of ~~provided~~commissions, offset by ~~financing~~the ~~activities~~decrease in ~~the~~bank ~~prior~~liabilities and

~~comparable~~the ~~nine-month~~repayment ~~period was comprised~~ of ~~proceeds~~other ~~from notes payable related parties, and~~debt.

~~proceeds~~We ~~from~~expect ~~bond issuances~~ net ofcash ~~commissions,~~flow ~~offset~~provided by ~~the~~financing ~~decrease~~activities into ~~bank~~continue ~~liabilities,~~due to the financing necessary to

~~payment~~complete ofthe ~~debt~~development ~~issuance~~of ~~costs,~~the ~~and~~Paradisus ~~changes~~Papagayo inBay ~~other~~Resort ~~debt.~~& WeLuxury ~~expect net cash flow provided by~~Villas.

~~financing~~Management ~~activities~~believes tothat ~~continue~~cash ~~due~~on tohand, ~~the~~related ~~financing~~party ~~necessary~~loans, tocurrent ~~complete~~bond ~~the~~offerings ~~development~~and of the assurance

~~Paradisus~~of ~~Papagayo~~the ~~Bay~~Guaranty ~~Resort~~Agreement &as ~~Luxury~~described ~~Villas.~~in the going concern paragraph below are sufficient for us to

~~Management~~conduct ~~believes~~operations ~~that~~over ~~cash on hand, related party loans and~~ the ~~assurance~~next oftwelve ~~the Guaranty~~months.

~~Agreement~~We ashad ~~described~~no informal ~~the~~lines ~~going~~of ~~concern~~credit ~~paragraph~~or ~~below~~other ~~are~~bank ~~sufficient~~financing ~~for~~arrangements usas toof ~~conduct~~March 31, 2017.

~~operations~~We ~~over~~have ~~the~~commitments ~~next~~that ~~twelve~~include ~~months.~~an award letter issued in favor of certain general contractors

Wetogether ~~had~~with nopurchase ~~formal~~orders ~~lines~~and ofrelated ~~credit~~agreements orfor ~~other~~$130 ~~bank~~million ~~financing arrangements~~ as of ~~September~~March 3031, ~~2016.~~2017, in

Weconnection ~~have~~with ~~commitments~~the ~~for~~development ~~executed~~of ~~purchase~~the ~~orders~~Paradisus ~~and~~Papagayo ~~agreements~~Bay inResort ~~the~~& ~~amount~~Luxury ofVillas, ~~$57 million~~which

ascommitments ofare ~~September~~included ~~30, 2016,~~ in ~~connection~~the ~~with~~required ~~the~~estimated ~~development~~net financing of ~~the~~$217 ~~Paradisus~~million ~~Papagayo~~to ~~Bay~~complete the

~~Resort & Luxury Villas, which commitments are included in the required estimated net financing of~~project.

$192 million (excluding overhead expenses) to complete the project. Most material commitments

are not contractually agreed as of the end of the period. We have cancellable commitments to

Meridian that are not included in the required financing for the development of the Paradisus

Papagayo Bay Resort & Luxury Villas of approximately $15,000,000 as of September 30, 2016, for

the purchase of two additional concession properties in Polo Papagayo, Guanacaste, Costa Rica.

We maintain a defined benefit plan that covers all of our Swiss employees.

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~~March 3031, ~~2016~~2017.

Future Financings

~~On May 9~~As of March 6, ~~2016~~ 2017, the Company ~~signed an agreement with “Median Trust SA”, by which this service~~ has approved issuance of a new 6.5% bond. There were no

~~provider~~amounts isoutstanding ~~mandated~~as toof ~~set-up~~March ~~a special purpose vehicle (“SPV”)~~31, ~~as a “Compartment” in~~2017.

accordance with Luxembourg law. The objective of the SPV is to obtain an investment grade rating

and to make a bond offering of not less than $100 million. The SPV will therefore be the issuer,

however, the responsibility to place the bonds remains with the Company. As of the date of this

report, the SPV has not yet been established.

As of September 21, 2016, the Company has started the distribution of a new bond in the amount of

CHF 20.0 million, to be underwritten until November 30, 2016.

Off-Balance Sheet Arrangements

As of ~~September~~March 3031, ~~2016~~2017, we had no significant off-balance sheet arrangements that have or are

reasonably likely to have a current or future effect on our financial condition, changes in financial

condition, revenues or expenses, results of operations, liquidity, capital expenditures, or capital

resources that are material to stockholders.

Going Concern

The Company intends to build a hotel in the Papagayo Gulf Tourism Project area of Guanacaste,

Costa Rica. The total net investment is estimated to be approximately $~~212~~237 million.

The project is expected to open in the fourth quarter of 2018. Until the completion of the project, the

~~project, the~~ following expenditures are estimated to be incurred:

a. Gross project cost

~~217~~242,000,000

b. Less: Proceeds from sale of villas

(25,000,000)

c. Net project cost

~~192~~217,000,000

d. Overhead expenses

20,000,000

e. Total, excluding other potential projects

~~212~~237,000,000

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

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

~~alternative~~ financing committements, i.e. ~~Zypam Ltd~~Mr. Hans Rigendinger, shareholder, ~~and~~interim ~~related~~Chief ~~entity~~Executive ~~to the late Mr.~~Officer

~~Josef~~and ~~Mettler,~~Company ~~Mr.~~Board ~~Hans~~Member ~~Rigendinger,~~and ~~shareholder,~~Dr. ~~interim~~Max ~~Chief~~Rössler, ~~Executive~~Company ~~Officer~~Board Member and ~~Company~~controlling

~~Board Member and Dr. Max Rössler, Company Board Member and controlling~~ shareholder of Aires.

Aires.

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

~~ensure~~ that until such time as financing is secured for the entire project that they will act as a guarantor to

~~guarantor to~~ creditors to the extent of the project’s ongoing capital requirements.

On September 22, 2015, the signatories to the guaranty formally agreed to maintain the guaranty, as

necessary, until December 31, 2018, after which date the guaranty will expire. ~~The guaranty~~

agreement requires that within 30 days of receiving a demand notice, the requested funds are made

available by the guarantors to the Company.

On September 12, 2016, the signatories to the guaranty formally agreed to maintain the guaranty, as

necessary, until completion of the construction of Paradisus Papagayo Bay Resort & Luxury Villas,

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.

~~Company.~~Based on this Guaranty Agreement, management believes that available funds are sufficient to finance

~~Based~~cash onflows ~~this~~for ~~Guaranty~~the ~~Agreement,~~twelve ~~management~~months ~~believes~~subsequent ~~that~~to ~~available~~March ~~funds~~31, ~~are~~2017, ~~sufficient~~and tothe filing date, though future

~~finance~~anticipated cash ~~flows~~outflows for ~~the~~investing ~~twelve~~activities ~~months~~will ~~subsequent~~continue to ~~September~~depend ~~30,~~on ~~2016, and~~ the ~~filing~~availability ~~date,~~of

~~though future anticipated cash outflows for investing activities will continue to depend on the~~financing.

availability of financing.

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

Condition

The statements contained in the section titled Management’s Discussion and Analysis of Financial

Condition and Results of Operations and elsewhere in this current report, with the exception of

historical facts, are forward-looking statements. Forward-looking statements reflect our current

expectations and beliefs regarding our future results of operations, performance, and achievements.

~~achievements.~~ These statements are subject to risks and uncertainties and are based upon assumptions and beliefs

~~assumptions and beliefs~~ that may or may not materialize. These statements include, but are not limited to, statements

~~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~~39

~~that~~We ~~could~~wish ~~cause~~to caution readers that our ~~actual~~operating results toare ~~differ~~subject ~~materially~~to ~~from~~various ~~those~~risks ~~discussed~~and oruncertainties ~~anticipated~~that

~~elsewhere~~could incause ~~this~~our ~~report.~~actual Weresults ~~also wish~~ to ~~advise~~differ ~~readers~~materially ~~not~~from tothose ~~place~~discussed ~~any~~or ~~undue~~anticipated ~~reliance~~elsewhere onin ~~the~~this

~~forward-looking~~report. ~~statements~~We ~~contained~~also inwish ~~this~~to ~~report,~~advise ~~which~~readers ~~reflect~~not ~~our~~to ~~beliefs~~place ~~and~~any ~~expectations~~undue reliance on the forward-looking

~~only~~statements ascontained ofin ~~the date of~~ this report., Wewhich ~~assume~~reflect noour ~~obligation~~beliefs toand ~~update~~expectations oronly ~~revise~~as ~~these~~of ~~forward-~~the date of

~~looking~~this ~~statements~~report. toWe ~~reflect~~assume ~~new~~no ~~events~~obligation orto ~~circumstances~~update or ~~any~~revise ~~changes~~these inforward-looking ~~our~~statements ~~beliefs~~to orreflect

new events or circumstances or any changes in our beliefs or expectations, other than as required by ~~law.~~

law.

Recent Accounting Pronouncements

Please see Note 2 to the accompanying consolidated financial statements for recent accounting

~~accounting~~ pronouncements.

ITEM 3.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET

RISK

Not applicable.

ITEM 4.

CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

In connection with the preparation of this ~~quarterly~~current report, an evaluation was carried out by the

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

officer, of the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules

~~Rules~~ 13a-15(e) under the Securities Exchange Act of 1934 (“Exchange Act”)). Disclosure controls and

~~and~~ procedures are designed to ensure that information required to be disclosed in reports filed or

submitted under the Exchange Act is recorded, processed, summarized, and reported within the time

periods specified in the Commission’s rules and forms, and that such information is accumulated and

~~and~~ communicated to management, including the chief executive officer and chief financial officer, to

to allow timely decisions regarding required disclosures.

Based on that evaluation, the Company’s management concluded, as of the end of the period covered

~~covered~~ by this report, that the Company’s disclosure controls and procedures were not effective in recording,

~~in recording,~~ processing, summarizing, and reporting information required to be disclosed, within the time periods

~~the time periods~~ specified in the Commission’s rules and forms, and that such information was not accumulated and

~~not accumulated and~~ communicated to management, including the chief executive officer and the chief financial officer, to

~~chief financial officer, to~~ allow timely decisions regarding required disclosures.

Changes in Internal Control over Financial Reporting

During the quarter ended ~~September~~March 3031, ~~2016~~2017, there has been no change in internal control over financial

~~financial~~ reporting that has materially affected, or is reasonably likely to materially affect our internal control

~~internal control~~ over financial reporting.

4840

PART II – OTHER INFORMATION

ITEM 1.

LEGAL PROCEEDINGS

~~None~~The Company initiated legal proceedings against Meridian IBG, Inc. (“Meridian”) on April 21, 2017,

in the Hennepin County District Court, Fourth Judicial District. The claim is based on Meridian’s

alleged failure to perform according to the terms of a purchase and sale agreement dated April 24,

2013, pursuant to which Meridian was to return deposits in the amount of $1,669,701 paid against the

purchase of certain properties in Guanacaste, Costa Rica on providing notice of cancellation minus

5% in liquidated damages. The Company seeks return of the deposits, interest on the deposits and

expenses accrued in pursuing its claim. Meridian is yet to respond to the Company’s complaint.

ITEM 1A.

RISK FACTORS

Not required of smaller reporting companies.

ITEM 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF

PROCEEDS

~~None.~~On November 1, 2016, the Company granted 10,000,000 shares of restricted common stock valued

at $0.024 a share to a consultant, to be earned in connection with his services to be rendered, in reliance upon the exemptions from registration provided by Section 4(2) and

Regulation S of the Securities Act of 1933, as amended (“Securities Act). His engagement obligates

the Company to issue 1,666,667 common shares for each fully completed month of service. The

consultant had earned a total of 8,333,335 shares of this grant as of March 31, 2017.

The Company complied with the exemption requirements of Section 4(2) of the Securities Act

based on the following factors: (1) the grant was an isolated private transaction which did not

involve a public offering; (2) the offeree had access to the kind of information which registration

would disclose; (3) the offeree was financially sophisticated; and (4) the offeree works directly with

the officers and directors of the Company.

The Company complied with the exemption requirements of Regulation S by having directed no

offering efforts in the United States, by offering securities only to an offeree who was outside the

United States at the time of the offering, and ensuring that the offeree to whom the securities were

offered and authorized was a non-U.S. offeree with an addresses in a foreign country.

ITEM 3.

DEFAULTS ON SENIOR SECURITIES

None

ITEM 4.

MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5.

OTHER INFORMATION

None

ITEM 6.

EXHIBITS

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

on page 5143 of this Form 10-Q, and are incorporated herein by this reference.

4941

SIGNATURES

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

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

SunVesta, Inc.

Date

/s/ Hans Rigendinger

~~November~~May 1115, ~~2016~~2017

Hans Rigendinger

Chief Executive Officer, Chief Financial Officer ~~and Chief Operating Officer Principal~~

Principal Accounting Officer and Director

5042

INDEX TO EXHIBITS

Exhibit

Description

3.1.1*

Articles of Incorporation (incorporated by reference from the Form 10-SB filed with the Commission on

on December 31, 1999).

3.1.2*

Amended Articles of Incorporation (incorporated by reference from the Form 10-KSB filed with the

Commission on April 9, 2003)

3.1.3*

Amended Articles of Incorporation (incorporated by reference from the Form 10-QSB filed with the

Commission on November 17, 2003).

3.1.4*

Amended Articles of Incorporation (incorporated by reference from the Form 8-K filed with the

Commission on September 27, 2007).

3.2.1*

Bylaws (incorporated by reference from the Form 10-SB filed with the Commission on ~~December31~~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 ~~Companyand~~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

~~(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, Jthe late osef 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 the late 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 ~~AGand~~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 ~~InternationalInvestments~~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 the late 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

~~Commission~~ on April 15, 2015).

Certification of the Chief Executive Officer and Chief Financial Officer pursuant to Rule 13a-14 of the

~~the~~ Securities and Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-

~~Sarbanes-~~Oxley Act ~~of2002~~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

~~Securities~~ Act of 1933, or deemed “furnished” and not “filed” for purposes of Section 18 of the Securities and

~~Securities and~~ Exchange Act of 1934, and otherwise is not subject to liability under these sections.

5143

Filing Compare · SUNVESTA, INC.