manila house private club, inc. · manila house private club, inc. (incorporated under the laws of...

MANILA HOUSE PRIVATE CLUB, INC.(Incorporated under the laws of the Republic of the Philippines)

This Prospectus is dated as of 17 February 2017

MANILA HOUSE PRIVATE CLUB, INC.(ISSUER)

8th Floor, Net Park Park Building,5th Avenue, Bonifacio Global City

Taguig City, Metro Manila 1632 PhilippinesTel No. 02-8125767 Fax No. 02-8125791

THE SECURITIES AND EXCHANGE COMMISSION HAS NOTAPPROVED THESE SECURITIES OR DETERMINED IF THISPRELIMINARY PROSPECTUS IS ACCURATE OR COMPLETE. ANYREPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSEAND SHOULD BE REPORTED IMMEDIATELY TO THE SECURITIESAND EXCHANGE COMMISSION.

Legal CounselZAMORA POBLADOR VASQUEZ & BRETAÑA

4th and 5th Floors, Montepino Building138 Amorsolo Street, Legaspi Village

Makati City, Metro ManilaTel. 8125767 • Fax No. 8125791

Email Address: [email protected]

mailto:[email protected]

MANILA HOUSE PRIVATE CLUB, INC.8th Floor, Net Park Building5th Avenue, Bonifacio Global CityTaguig City, Metro Manila 1632 Philippines

This Prospectus relates to the offer and sale of up to 1,500 cumulative, voting,non-participating preferred shares, 600 Founding Membership Certificates, 1000Regular Membership Certificates, 600 Associate Membership Certificates and 600Junior Membership Certificates of Manila House Private Club, Inc. the “Issuer,”the “Company,” or the “Club”), a corporation duly organized and existing underPhilippine law. The offer and sale of the Preferred Shares and MembershipCertificates will be by way of a first Offer of 1,500 Preferred Shares (the “OfferShares”) and first Offer of 600 Founding Membership Certificates, 1000 RegularMembership Certificates, 600 Associate Membership Certificates and 600 JuniorMembership Certificates (collectively the “Offer Membership Certificates”).

Each Preferred Share has a par value of P100,000.00. Dividends shall be declaredat such time and in such manner as the Board of Directors shall determine. Asand if declared by the Board of Directors, dividends on the Offer Shares shall beat a fixed rate of 93% of the total amount declared from out of the unrestrictedretained earnings until the amount of investment of the stockholders owningOffer Shares plus ten percent (10%) return on the subscription amount shall havebeen fully paid. Thereafter, the owners of the Offer Shares shall be entitled to 80%of the amount declared from out of the unrestricted retained earnings. Holders ofOffer Shares shall not participate in any other or further dividends beyond thatspecifically payable on their shares. The Board of Directors shall prescribe thecumulation of dividends, the date or dates of cumulation or accrual butdividends shall be deemed to be cumulative from date of issue unless otherwisespecified by the Board of Directors. Offer Shares shall be non-participating in anyother or further dividends beyond specifically payable on the shares.

Offer Shares shall enjoy preference over holders of the Common Shares in thedistribution of corporate assets in the event of dissolution and liquidation of theCompany. Holders of Offer Shares shall be entitled to nominate such number ofindividuals as may be set by the Board of Directors to become Members of theClub upon fulfillment of the admissions, qualifications, maintenance and otherrequirements as prescribed by the Company. There are no pre-emptive rightsover any sale or issuance of any share in the Company's capital stock extended toholders of Offer Shares. Holders of Offer Shares shall have the right to use thefacilities and services of the Club.

The Membership Certificates will be offered to select members of the public

by invitation. Specifically, Founding Membership Certificates will be sold at aprice of P200,000 each to the first 600 members. Thereafter, within the firstyear of operations of the Club, up to 1,000 Regular Membership Certificateswill be sold at a price of P150,000 each, 600 Associate Membership Certificateswill be offered at P100,000 each and 600 Junior Member Certificates will beissued to persons who are below thirty (30) years of age at a price of P50,000each.

Founding, Regular and Associate Members will be charged monthly dues inthe amount of P2,500.00 per month plus Value Added Tax (“VAT”). WhileJunior Members will be charged P1,250.00 per month plus VAT.

Founding and Regular Membership Certificates are transferable after therequired lock-up period of five (5) years, but the transferor must seek theprior written approval of the Club for the transfer to be valid and enforceableas the Club will determine whether the proposed transferee is fit to be amember.

Associate and Junior Membership Certificates are non-transferable. Anycontract to the contrary shall be null and void and will not be recognized bythe Club.

The entire proceeds from the subscription of the Offer Shares and the sale ofthe Offer Membership Certificates will be used for capital expenditures(“CAPEX”), primarily for the construction of the Club including itsrestaurants, bar, and other facilities therein. There will be no commission orfee deducted from said subscription and sale proceeds.

With respect to the monthly membership fees that will be collected from themembers, and the revenue derived from the food and beverageestablishments, these revenues will be used to pay for the operating expensesof the Company. Based on financial projections and estimates, the bulk of theexpenses to be incurred will be for directing operating costs.

No dealer, salesman or any other person has been authorized to give anyinformation or to make any representation not contained in this Prospectus. Ifgiven or made, any such information or representation must not be reliedupon as having been authorized by the Company. The distribution of thisProspectus and the offer and sale of the Offer Shares and Offer MembershipCertificates may, in certain jurisdiction, be restricted by law. The Companyrequires persons into whose possession this Prospectus comes, to informthemselves of and observe all such restrictions. This Prospectus does notconstitute an offer or any securities, or any offer to sell, or a solicitation of anyoffer to buy any securities of the Company in any jurisdiction, to or from anyperson to whom it is unlawful to make such offer in such jurisdiction.Unless otherwise stated, the Company has supplied all information in thisProspectus. To the best of its knowledge and belief, the Company (which has

taken all reasonable care to ensure that such is the case) confirms that theinformation contained in this Prospectus is correct, and that there is nomaterial misstatement or omission of fact which would make any statementin this Prospectus misleading in any material respect. The Company herebyaccepts full and sole responsibility for the accuracy of the informationcontained in this Prospectus.

Unless otherwise indicated, all information in the Prospectus is as of 29September 2016. Neither the delivery of this Prospectus nor any sale madepursuant to this Prospectus shall, under any circumstances, create anyimplication that the information contained herein is correct as of any datesubsequent to the date hereof or that there has been no change in the affairs ofthe Company since such date.

Each person contemplating an investment in the Offer Shares and OfferMembership Certificates should make his own investigation and analysis ofthe credit worthiness of the Company and his own determination of thesuitability of any such investment. The risk disclosure herein does not purportto disclose all the risks and other significant aspects of investing in the OfferShares and Offer Membership Certificates. A person contemplating aninvestment in the Offer Shares and Offer Membership Certificates should seekprofessional advice if he or she is uncertain of, or has any aspect of thesecurities to invest in or the nature of risks involved in investing of securities,especially those high-risk securities. Before making an investment decision,investors should carefully consider the risk associated with an investment inthe Offer Shares and Offer Membership Certificates. Those risks include:

risks related to the market activity;risks related to economic and political factors;risks related to competition;risks related limited liquidity and potential market volatility;risks related foreign ownership limitations; andrisks related to exposure to litigation.

Please refer to the section entitled “Risk Factors” beginning on page 6 of thisProspectus, which while not intended to be an exhaustive enumeration of allrisks, must be considered in connection with a subscription and purchase ofthe Offer Shares and Offer Membership Certificates.

APPLICATION HAS BEEN MADE WITH THE SECURITIES ANDEXCHANGE COMMISSION TO REGISTER THE OFFER SHARES ANDOFFER MEMBERSHIP CERTIFICATES UNDER THE PROVISION OF THESECURITIES REGULATION CODE. A REGISTRATION STATEMENTRELATING TO THESE SECURITIES HAS BEEN FILED WITH THESECURITIES AND EXCHANGE COMMISSION BUT HAS NOT YET BEENDECLARED EFFECTIVE. NO OFFER TO BUY THE SECURITIES CAN BEACCEPTED AND NO PART OF THE PURCHASE PRICE CAN BE

ACCEPTED OR RECEIVED UNTIL THE REGISTRATION STATEMENTHAS BECOME EFFECTIVE, AND ANY SUCH OFFER MAY BEWITHDRAWN OR REVOKED, WITHOUT OBLIGATION ORCOMMITMENT OF ANY KIND, AT ANY TIME PRIOR TO NOTICE OF ITSACCEPTANCE GIVEN AFTER THE EFFECTIVE DATE. AN INDICATIONOF INTEREST IN RESPONSE HERETO INVOLVES NO OBLIGATION ORCOMMITMENT OF ANY KIND. THIS PROSPECTUS SHALL NOTCONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFERTO BUY.

Manila House Private Club, Inc.

By:

Ricardo Mariano C. Ocampo IIPresident

BRIEF SUMMARY OF THE OFFERS

I. Preferred Shares

The Issuer will offer up to 1,500 Preferred Shares (the “Offer Shares”).

Total number of Shares Outstanding after the Offering:

Total number of Authorized Shares of the Manila House Private Club, Inc. the “Issuer,”the “Company,” or the “Club”) is 200,000 Common Shares, with a par value of Ten Pesos(P10.00) per share and 2,000 Preferred Shares, with a par value of One HundredThousand Pesos (P100,000.00) per share. The total number of Outstanding Shares of theIssuer before the Offering is 100,003 Common Shares and 500 Preferred Shares.

After the Offering, assuming all the Offer Shares offered will be subscribed to, the totalnumber of Outstanding Shares of the Issuer will be 100,003 Common Shares and 2,000Preferred Shares.

II. Membership Certificates

Apart from shares of stock described above, Membership Certificates will also be offeredto select members of the public by invitation, which will entitle the holders thereof to usethe various facilities of the Club.

The Company will offer and sell up to 600 Founding Membership Certificates, 1000Regular Membership Certificates, 600 Associate Membership Certificates and 600 JuniorMembership Certificates (collectively the “Offer Membership Certificates”) of the Club.

Specifically, Founding Membership Certificates will be sold at a price of Two HundredThousand Pesos (P200,000.00) each to the first six hundred (600) members.

Thereafter, Regular Membership Certificates will be sold at a price of One Hundred FiftyThousand Pesos (P150,000.00) each. Up to one thousand (1,000) Regular MembershipCertificates will be issued within the first year of operations of the Club.

Up to six hundred (600) Associate Member Certificates will also be sold at a price of OneHundred Thousand Pesos (P100,000.00) each within the first year of operations of theClub.

Moreover, up to six hundred (600) Junior Member Certificates will be sold to personswho join the Club while below thirty (30) years of age, at a price of Fifty Thousand Pesos(P50,000.00) within the first year of operations of the Club.

Total gross proceeds to be raised by the offering of the Offer Shares and OfferMembership Certificates:

Up to a maximum of One Hundred Fifty Million Pesos (P150,000,000.00) from thesubscription of the Offer Shares. While the sale of the Offer Membership Certificates mayresult in gross proceeds of up to a maximum of Three Hundred Sixty Million Pesos(P360,000,000.00).

Thus, the total proceeds of the Offer Shares and Offer Membership Certificates can reachup to Five Hundred Ten Million Pesos (P510,000,000.00).

Brief description of the use of proceeds from the Offering:

The gross proceeds from the Offer Shares and Offer Membership Certificates, which isexpected to range from a minimum of Forty-Five Million Pesos (P45,000,000.00) to amaximum of Five Hundred Ten Million Pesos (P510,000,000.00), net of certaintransaction expenses, discounts and relevant fees and commissions, will be used for thecapital expenditure of the Issuer, primarily for the construction of the Club including itsrestaurants, bar, and other facilities therein.

TABLE OF CONTENTS

DEFINITION OF TERMS 1

EXECUTIVE SUMMARY 3

THE OFFERS 4

RISK FACTORS AND OTHER INFORMATION 5

General Risk Warning 5

Market Activity 6

Economic Factors 6

Political Factors 6

Competition 6

Limited Liquidity and Potential Market Volatility 6

Foreign Ownership Limitations 7

Contract of Lease 7

Exposure to Litigation 8

Usage Level of Facilities 8

Management of Risks 8

USE OF PROCEEDS 8

Preferred Shares and Membership Certificates 8

Membership Dues 9

DETERMINATION OF THE OFFER PRICE 10

DILUTION 10

SELLING SECURITY SHAREHOLDERS 11

PLAN OF DISTRIBUTION 11

DESCRIPTION OF SECURITIES TO BE REGISTERED 11

INTEREST OF NAMED EXPERTS AND INDEPENDENT 13COUNSELS

THE COMPANY 14

Form and Date of Organization 14

Description of Business 14

Development Concept 15

LEGAL PROCEEDINGS 17

DESCRIPTION OF SHARES 17

Classes of Shares 17

Ownership and Transfer of Shares 19

CLUB MEMBERSHIP 21

Procedure for Membership 21

Classification of Membership 22

Club Dues and Assessment 24

Other Matters 26

Termination of Membership 26

INCORPORATORS, DIRECTORS AND OFFICERS 26

Comprehensive Background 27

Executive Compensation 28

Significant Employees 29

Management 29

Security Ownership of Certain Record and Beneficial 30Owners and Management

Related Party Transaction 31

MATERIAL CONTRACTS AND AGREEMENTS 31

MARKET PRICE AND DIVIDENDS 33

PLAN OF OPERATIONS 34

PHILIPPINE TAXATION 34

Corporate Income Tax 35

Documentary Stamp Taxes on Shares 35

Tax on Disposition of Shares 36

Tax on Membership Dues 36

Tax on Dividends 36

Estate and Donor's Taxes 37

INDEX TO AUDITED INTERIM FINANCIAL 37STATEMENTS

DEFINITION OF TERMS Associate Member – a member that has the same qualifications and privileges as RegularMembers, except that the certificate of memberships of associate members are non-transferable.

Capital Expenditure – expenses incurred by a company to bring the company intooperating condition including the construction, acquisition or improvement of assetssuch as land, building, equipment, furniture and other assets.

Capital Gains Tax - tax imposed on the gains presumed to have been realized by theseller from the sale, exchange, or other disposition of capital assets located inthe Philippines, including pacto de retro sales and other forms of conditional sale.

Club – Manila House Private Club, Inc., a corporation duly organized and existing inaccordance with the laws of the Republic of the Philippines.

Common Share – shares in a corporation in which dividends are calculated uponpercentage of net profits, with distribution determined by the Board of Directors.

Cumulative Dividends – a dividend paid on cumulative preferred shares, that thecompany is liable for in the next payment period if not satisfied in the current paymentperiod.

Founding Member – a member who becomes part of the first 600 members of the Club.

Founding Patron – a member of the Club who is likewise a holder of preferred shares orcommon shares.

Junior Member – a member who has the same qualifications and privileges as RegularMembers, except that its membership shall be non-transferable and the applicant must beunder thirty (30) years of age upon submitting his/her application for membership withthe Club.

Lock Up Period – a period of five (5) years from subscription within which holders ofFounding and Regular Membership Certificates are prohibited from selling, assigning, ortransferring their certificates to any third party.

Member – a natural person who holds in its name and possession, certificate ofmemberships issued by the Club.

Membership Certificates – are certificates issued by the Club to its members that havebeen qualified by the Membership Committee and approved by the Board of Directors. Itserves as the official proof of membership to the Club.

Non-participating – in the event that dividends are declared, preferred shareholders arenot entitled to receive any other amount after receiving their stipulated dividend rate.

Offer Shares – the offering for subscription of the Preferred Shares of the Company.

1

Offer Membership Certificates – the offering for sale of Certificates of Membership tothe public, which includes Founding Membership Certificates, Regular MembershipCertificates, Associate Membership Certificates and Junior Membership Certificates. Operating Expenditure – expenses incurred by a company in relation to or arising fromthe performance of its normal business operations.

Offer Price – the Peso price at which the Offer shall be offered for sale to the public to bedetermined as of the date of such Offer are offered for sale:

P100,000.00 per Preferred Share P200,000.00 per Founding Membership Certificates

P150,000.00 each per Regular Membership CertificatesP100,000.00 each for Associate Membership Certificates

P50,000.00 each for Junior Membership Certificates

Offer Securities – includes both the Preferred Shares and the Membership Certificates.

Philippine SEC – the Philippine Securities and Exchange Commission.

Preferred Shares – a class of shares in a corporation that enjoys preference in thepayment of dividends, as well as preference over the distribution of assets of acorporation in the event of corporate liquidation.

Regular Member – a member is a person admitted to the Club after incorporation of theCompany and after the first 600 Founding members are chosen, after being qualified bythe Membership Committee and finally approved by the Board of Directors. Regularmembers shall have the following privileges: (1) unrestricted access to the Club, (2)transferable membership after the required lock-up period, (3) reciprocity with selectinternational private clubs, (4) may bring up to three (3) guests into the Club, but mustaccompany them at all times, and (5) payment on consumption, as there are no signingprivileges under this category.

VAT – Value-added Tax

2

EXECUTIVE SUMMARY

(The information in this summary should be read in conjunction with the full text of thisProspectus.)

Manila House Private Club, Inc.

Manila House Private Club, Inc. was incorporated on 15 March 2016 to carry on thebusiness and operation of an exclusive restaurant and its facilities in the City of Taguig toallow a diverse membership the opportunity to meet, interact and engage with eachother in a relaxed, discreet yet stimulating environment.

The Club will provide a sophisticated and comprehensive dining experience with social,educational and cultural activities integrated therein.

The Club has an authorized capital stock of P202,000,000.00 consisting of 200,000Common Shares and 2,000 Preferred Shares. Upon incorporation, 100,003 CommonShares and 500 Preferred Shares were subscribed.

A shareholder will be entitled to use all the recreational facilities of the Club, subject tothe terms and conditions described under the section Description of Shares, and the ClubRules, which will be from time to time prescribed by the Board. Any transfer ofownership of a Preferred Share, or any change in nominee of a Preferred Shareholder,shall not automatically transfer the privilege of membership to the transferee or newnominee.

In addition, the Club will offer for sale to select members of the public by invitation,Membership Certificates that will entitle the holder the right to use the Club's facilities.Up to 600 Founding Membership Certificates will be offered at P200,000.00 each.

Thereafter, within the first year of operations of the Club, up to 1,000 RegularMembership Certificates will be offered at P150,000.00 each. Also, up to 600 AssociateMembership Certificates will be offered at P100,000.00 each. Moreover, up to 600 JuniorMembership Certificates will be offered at P50,000.00 each.

Membership certificates are separate and distinct from shares of stock and will not grantthe holder of said certificates any rights of a stockholder of the Company.

3

THE OFFERS

I. Preferred Shares

The Issuer will be offering the Offer Shares in tranches of 50 Preferred Shares perInvestor at an issue price of P100,000.00 per share or an aggregate issue of P5,000,000.00.The details relating to the Offer Shares are summarized below as follows:

Par Value P100,000.00

Offer Price P100,000.00

Dividend Rate As and if dividends are declared by the Company's Boardof Directors, dividends on the Offer Shares shall beequivalent to 93% of the total amount declared out ofthe retained earnings until the amount of the investmentof stockholders owning Offer Shares plus 10% return onthe Offer Shares shall have been fully paid. Thereafter, theOffer Shares shall be entitled to 80% of the amountdeclared from out of the unrestricted retained earnings.

Other features The Offer Shares shall have voting rights. The Board ofDirectors shall prescribe the cumulation of dividends, thedate or dates of cumulation or accrual but dividends shallbe deemed to be cumulative from date of issue unlessotherwise specified by the Board of Directors.

Offer Shares shall be non-participating in any other orfurther dividends beyond specifically payable on theshares.

Offer Shares shall enjoy preference over holders of theCommon Shares in the distribution of corporate assets inthe event of dissolution and liquidation of the Company.

Holders of Offer Shares shall be entitled to nominate suchnumber of individuals as may be set by the Board ofDirectors to become Members of the Club uponfulfillment of the admissions, qualifications, maintenanceand other requirements as prescribed by the Company.

There are no pre-emptive rights over any sale or issuanceof any share in the Company's capital stock extended toholders of Offer Shares.

Holder of Offer Shares shall have the right to use thefacilities and services of the Club.


Apart from shares of stock above, Membership Certificates will also be offered to selectmembers of the public by invitation, that will entitle the holders thereof to use the

4

various facilities of the Club. Membership Certificates are separate and distinct fromshares of stock and will not grant the holder of said certificates any rights of astockholder of the Company.

Specifically, Founding Membership Certificates will be sold at a price of P200,000.00 eachto the first 600 members, which includes the thirty three (33) Founding Patrons.

Thereafter, within the first year of operations of the Club, up to 1,000 RegularMembership Certificates will be sold at a price of P150,000.00 each. Also, up to 600Associate Membership Certificates will be offered at P100,000.00 each. Moreover, up to600 Junior Member Certificates will be issued to persons who are below thirty (30) yearsof age at a price of P50,000.00 each.

Founding, Regular and Associate Members will be charged monthly dues in the amountof P2,500.00 per month plus VAT. While Junior Members will be charged P1,250.00 permonth plus VAT.

Founding and Regular Membership Certificates are transferable after the required lock-up period of five (5) years, but the transferor must seek the prior written approval of theClub for the transfer to be valid and enforceable as the Club will determine whether theproposed transferee is fit to be a member. If the Club declares that the proposedtransferee is unfit to be a member, the member proposing the transfer will be consideredto have simply withdrawn his/her membership.

Associate and Junior Membership Certificates are non-transferable. Any contract to thecontrary shall be null and void and will not be recognized by the Club.

RISK FACTORS AND OTHER INFORMATION

Prospective investors should carefully consider the matters addressed under “RiskFactors” before making an investment decision regarding the Offer Shares and OfferMembership Certificates. These matters include market activity, economic factors,political factors, competition, limited liquidity and potential market volatility, foreignownership limitations, information technology, and exposure to litigation for theCompany’s actions. The aforementioned enumeration is not exhaustive. The risk factorsdetailed herein should be given equal importance when making an investment decision.

General Risk Warning

An investor deals in a range of investments each of which may carry a different level ofrisk. Past performance is not a guide to future performance. The price of securities canand does fluctuate, and any individual security may experience upward or downwardmovements and may even become valueless. There is an inherent risk that losses may beincurred rather than profit made as a result of buying and selling securities. There is anextra risk of losing money when securities are bought from smaller companies. Theremay be a big difference between the buying and selling price of these securities.

The Company does not make any guarantee that the holder will generate any gainsfrom his investment.

5

Market Activity

The Company’s revenues and profitability are primarily driven by the level of marketactivity, primarily from the operation of its food and beverage establishments, as well asthe inflow of new members. Management will exert best efforts to innovate to maintainor increase club membership and foster patronage of the facilities, food and beverageestablishments of the Club, which will in turn spur substantial revenues. However, thereis no guarantee that the Club will be profitable or that the investors will be able to getany returns from or of their investments.

Economic Factors

Operations will be influenced by the general economic state of the Philippines whichinclude economic factors such as inflation. Inflation as measured by the consumer priceindex reflects the annual percentage change in the cost to the average consumer ofacquiring a basket of goods and services that may be fixed or changed at specifiedintervals, such as yearly. Based on data from the World Bank, the annual inflation rate ofthe Philippines for the years 2012, 2013 and 2014 are 3.2%, 3.0% and 4.1 %, respectively.No assurance can be given as to whether the Philippines can maintain a regular inflationrate from this point onwards. With that said, management will exert best efforts to secureprices of goods and commodities at reasonable prices without compromising the qualitythereof.

Political Factors

The Philippines has experienced military insurgencies, impeachments, massdemonstrations, and similar occurrences, which have led to political instability. Thesemay affect the financial performances of the Company. No assurance can be providedthat the political environment in the Philippines will be stable and that current or futuregovernments will adopt economic policies conducive to sustained economic growth.

Competition

Currently, the Club has no direct competitors considering that in addition to thesophisticated and comprehensive dining experience that it will provide, various social,cultural and educational activities will be integrated in the overall experience. To theClub's knowledge, its indirect competitors in Metro Manila include Manila Polo Cluband Tower Club, which are both situated in Makati City. The Company being a newplayer will exert endeavor to provide a fresh spin to the membership-only diningexperience by providing quality services at competitive prices. However, there is noassurance that the Club will be able to compete effectively with the other membership-only clubs in Metro Manila.

Limited Liquidity and Potential Market Volatility

The shares of the Company will not be listed or traded in the Philippine Stock Exchange.Accordingly, there can be no assurance that an investor in the Offer Shares will be able todispose of such shares or direct the sale of such shares at prices or at times at which theinvestor would be able to do so in other, more liquid markets, or at all.

Moreover, should original Shareholders holding both Common and/or Preferred Sharesdesire to sell, assign, transfer, or otherwise dispose of their Common and/or Preferred

6

Shares to third parties, they shall be allowed to do so only after a period of five (5) yearsfrom subscription (the “Lock-up Period”).

After the Lock-up Period, the original Common Shareholders may sell, assign, transfer,or otherwise dispose of their Common Shares to third parties without any restriction,except for the foreign equity limits defined by law.

Preferred Shares, on the other hand, may only be sold, assigned and transferred orotherwise disposed of in blocks of ten (10) shares to any third party after the Lock-upPeriod.

No transfers before the lock-up period is allowed. All transfers are considered void ab initio.Any contract to the contrary shall be null and void and will not be recognized by the Club.

Given the exclusive nature of membership in the Club, there is no guarantee that amember will be able to sell his membership certificate to a desired third-party and/orwithin a desired time frame. Any proposed transferee of membership will always besubject to the vetting process of the Club.

There is a minimal risk of price fluctuation. The only time the price of membershipcertificates will go up is when membership is closed/sold out and there is still publicdemand for more memberships.

The risk of sudden reduction of price in membership certificates is very remote.

Moreover, the Club will not control the price at which an existing member will sell hiscertificate for, whether it is below or above the issue price.

Notably, there is no exit mechanism for associate and junior membership because theClub is not proprietary.

Foreign Ownership Limitations

The Common Shares may be owned or subscribed by or transferred to any Filipinocitizen; or a partnership, association or corporation organized and existing underPhilippine laws wherein at least 60% of its outstanding shares of stock entitled to vote inthe election of directors; and the total number of outstanding shares of stock, whetherentitled to vote or not, is owned and controlled by Filipino citizens.

Contract of Lease

The Club has a lease agreement with 20-34 Property Holdings, Inc. (“Lessor”) for the use,possession and enjoyment of the Club premises. The term of the lease is for ten (10)years, renewable upon such terms and conditions acceptable to the Company and theLessor. One of major stockholders of the lessor is also an investor of the Club. Thisrelationship between the lessor and the lessee safeguards the renewal of the contractbeyond the period of ten (10) years. Notwithstanding said safeguard, other conditionssuch as the price of monthly rent, may be subject to circumstances, changes in the law orcontingencies that are not foreseeable by both parties, making the renewal of the contractimpossible to enforce.

Exposure to Litigation for the Company’s Actions

7

As a membership-only club, the Club will necessarily promulgate rules and regulationsthat will govern the members. These rules and regulations may be changed from time totime, based on the sound discretion of management. Thus, the Company may be subjectto litigation arising from the promulgation and implementation of such rules andregulations.

Usage Level of Facilities

Based on company studies, the number of membership certificates to be sold, i.e. 2,830, isthe optimal and manageable number that can be accommodated by the Club. This is inline with industry standards, wherein club use by members is less than 15% on a dailybasis.

Though there may be peak usage times, it is highly unlikely that all members will use theClub all at the same time. Research suggests that after the first six (6) months, usagefrequency also decreases and there is a natural attrition rate.

Furthermore, the company will control the sale of membership certificates based onusage and occupancy patterns, and decide whether to sell additional memberships orexpand club facilities.

Management of Risks

In light of the inherent risks of the business endeavor, management will periodicallymonitor performance of the Club, including but not limited to, revenues, expenses, cashflow, liquidity, usage by members and other key performance indicators and improveany weak areas in logistics, quality of service, marketing, as the case may be.

As mentioned, management will periodically adjust the number of membershipcertificates that will be offered for sale based on the usage and occupancy patterns, anddecide whether to sell additional memberships or expand club facilities.

USE OF PROCEEDS

Preferred Shares and Membership Certificates

The entire proceeds from the subscription of the Offer Shares and the sale of the OfferMembership Certificates will be used for capital expenditures (“CAPEX”), primarily forthe construction of the Club including its restaurants, bar, and other facilities therein.There will be no commission or fee deducted from said subscription proceeds. Theestimated capital expenditures are provided below:

MANILA HOUSE PRIVATE CLUB CAPEX FORECAST FOR 2017

(In Millions of Pesos)

Proceeds from Subscription of Preferred Shares 150

Proceeds from sale of Founding Membership Certificates 47

8

Proceeds from sale of Regular Membership Certificates 24

Proceeds from sale of Associate Membership Certificates 20

Proceeds from sale of Junior Membership Certificates 10

TOTAL PROCEEDS 251

PROPERTY, PLANT AND EQUIPMENT (“PPE”)

Construction of Club Facilities 40

Furniture and Fixtures 40

Kitchen Equipment 25

Restaurant Equipment 10

Electronic Equipment 10

Office Equipment 5

Miscellaneous assets 3

TOTAL CAPEX 133

Professional fees 15

Pre-operating costs 10

Security deposits 25

RESERVE FUND (Excess of Total Proceeds over Total CAPEX, if any)

68

Membership Dues

With respect to the monthly membership fees that will be collected from the members,and the revenue derived from the food and beverage establishments, these revenues willbe used to pay for the operating expenses of the Company. Based on financial projectionsand estimates, the bulk of the expenses to be incurred will be for directing operatingcosts which includes the cost of sales and labor. Followed by administration, marketing,maintenance, and utilities. As projection of the revenues and expenses is provided below:

MANILA HOUSE PRIVATE CLUB OPERATING FORECAST(In Millions of Pesos)

2016 2017 2018 2019 2020

GROSS REVENUE 44.2 397.3 411.0 430.7 445.5

GROSS OPERATING PROFIT -8.9 151.6 157.9 170.1 177.1

9

NET INCOME BEFORE TAX 64.9 205.9 78.8 85.9 88.3

NET INCOME AFTER TAX 45.4 144.1 55.1 60.1 61.8

The above figures are not guarantees of actual performance of the Club in the future, butare merely estimates based on available data and projections.

DETERMINATION OF THE OFFERING PRICE

I. Preferred Shares

The Company is offering to sell up to 1,500 Preferred Shares in tranches of fifty (50)shares at a par value of One Hundred Thousand Pesos (P100,000.00) per share. Theoffering price of the Offer Shares was calculated using the capital requirementsneeded to operate the Club such as the construction of the club facilities, purchase ofvarious tools and equipment. Other factors considered are the ability to generate earningand cash flow, marketability, target clientele, transferability of shares and industrystandards. The Offer Price may not have any correlation to the actual book value of theOffer Shares. Moreover, the pricing is influenced by the marketing strategy to makethe Club viable, and to be able to compete with existing establishments with similarbusiness models.


Founding Membership Certificates will be sold at a price of P200,000.00 each to the first600 members. Thereafter, within the first year of operations of the Club, the followingwill be offered:

Up to 1000 Regular Membership Certificates at P150,000.00 each.Up to 600 Associate Membership Certificates at P100,000.00 each.Up to 600 Junior Membership Certificates at P50,000.00 each.

The various factors considered in determining the offering price for the MembershipCertificates include the ability to generate earnings and cash flow, projected operatingexpenses for the operation and maintenance of the club. Other factors considered are themarketability, target clientele, growth expectations and industry standards.

DILUTION

No common equity securities will be offered to the public.

SELLING SECURITY SHAREHOLDERS

All of the securities to be registered are primary securities.

10

PLAN OF DISTRIBUTION

There will be no public offering of the offer shares. No compensation, commission or feewill be paid to any person facilitating the offer of the securities to be registered.

The only fees that will be charged will be during operations, in the form of consultancyfees at a rate of 2.75% of Gross Revenue plus 8% of Gross Operating Profit.

DESCRIPTION OF SECURITIES TO BE REGISTERED

I. Preferred Shares

Article 7 of the Articles of Incorporation of the Company provides:

The authorized capital stock of the Corporation is Two Hundred Two MillionPesos (Php202,000,000.00), Philippine Currency, consisting of Two Hundred Thousand(200,000) Common Shares with a par value of Ten Pesos (Php10.00) per share; and TwoThousand (2,000) Preferred Shares with a par value of One Hundred Thousand Pesos(Php100,000.00) per share.

x x x

The Preferred Shares shall have the following features, rights and privileges:

Issue value shall be determined by the Board of Directors at the time of the issuance of the shares;

With voting rights;

Dividend Rate equivalent to ninety-three (93%) of the total amountdeclared from out of the unrestricted retained earnings until the amount of investment ofthe stockholders owning Preferred Shares plus ten percent (10%) return on thesubscription amount shall have been fully paid. Thereafter, the owners of the PreferredShares shall be entitled to 80% of the amount declared from out of the unrestrictedretained earnings;

The Board of Directors shall prescribe the cumulation of dividends, thedate or dates of cumulation or accrual but dividends shall be deemed to be cumulativefrom date of issue unless otherwise specified by the Board of Directors.

Non-participating in any other or further dividends beyond thatspecifically payable on the shares;

Preference over holders of the Common Shares in the distribution ofcorporate assets in the event of dissolution and liquidation of the Corporation;

Non-convertible into Common Shares; and

11

Entitled to nominate such number of individuals as may be set by theBoard of Directors to become Members of the Club upon fulfillment of the admissions,qualifications, maintenance and other requirements as prescribed by the Corporation.

9. No pre-emptive rights over any sale or issuance of any share in theCorporation’s capital stock; and

10. The right to use the facilities and services of the Club.

Lock up Provision:

The subscription or ownership of Common and Preferred Shares of theCorporation shall be subject to the condition that any Shareholder owning Commonand/or Preferred Shares, desiring to sell, assign, transfer, or otherwise dispose of itsCommon and/or Preferred Shares in the Corporation shall be subject to the followingrestrictions:

1. Should original Shareholders holding both Common and/or PreferredShares desire to sell, assign, transfer, or otherwise dispose of their Common and/orPreferred Shares to third parties, they shall be allowed to do so only after a period of five(5) years from subscription (the “Lock-up Period).

2 After the Lock-up Period, the original Common Shareholders may sell,assign, transfer, or otherwise dispose of their Common Shares to third parties withoutany restriction.

3. Preferred Shares, on the other hand, may only be sold, assigned andtransferred or otherwise disposed of in blocks of ten (10) shares to any third party afterthe Lock-up Period.


Apart from shares of stock above, membership certificates will also be offered to selectmembers of the public by invitation, that will entitle the holders thereof to use thevarious facilities of Manila House Private Club, Inc. Membership certificates are separateand distinct from shares of stock and will not grant the holder of said certificates anyrights of a stockholder of the Company.

Holders of Common Shares and Preferred Shares are considered automatic members ofthe Club and for purposes of membership are classified as Founding Patrons.

Founding Patrons have the same benefits given to Founding Members, as describedhereunder.

Founding Membership Certificates will be sold at a price of P200,000.00 each to the first600 members, inclusive of the the thirty three (33) Founding Patrons.

Thereafter, within the first year of operations of the Club, up to 1,000 RegularMembership Certificates will be sold at a price of P150,000.00 each. Also, up to 600Associate Membership Certificates will be offered at P100,000.00 each. Moreover, up to600 Junior Member Certificates will be issued to persons who are below thirty (30) yearsof age at a price of P50,000.00 each.

12

Founding, Regular and Associate members will be charged monthly dues in the amountof P2,500.00 per month plus VAT. While Junior Members will be charged P1,250.00 permonth plus VAT.

Founding and Regular Membership Certificates are transferable after the required lock-up period of five (5) years, but the transferor must seek the prior written approval of theClub for the transfer to be valid and enforceable as the Club will determine whether theproposed transferee is fit to be a member. If the Club declares that the proposedtransferee is unfit to be a member, the member proposing the transfer will be consideredto have simply withdrawn his/her membership.

Associate and Junior Membership Certificates are non-transferable. Any contract to thecontrary shall be null and void and will not be recognized by the Club.

All membership certificates or shares shall be issued within sixty (60) business days fromthe date of their full payment. The Club shall qualify the prospective members before theactual sale or transfer of the share or certificate.

INTEREST OF NAMED EXPERTS AND INDEPENDENT COUNSELS

Legal Matters

The validity of the Offer Shares and Offer Membership Certificates and certain legalmatters in connection with this offer will be passed upon by the Club’s legal counselAtty. Noel Oliver E. Punzalan. The legal counsel has neither shareholdings in theCompany nor any right, whether legally enforceable or not, to nominate persons or tosubscribe for securities in use. The legal counsel will not receive any direct or indirectinterest in the Club or any of the securities pursuant to or in connection with the offer.

Certain legal matters as to Philippine taxation relating to the Offer Shares and OfferMembership Certificates will be passed upon by Cayetano Sebastian Ata Dado & Cruz.The foregoing legal counsels have neither shareholdings in the Company nor anyright, whether legally enforceable or not, to nominate persons or to subscribe forsecurities in use. None of the legal counsel will receive any direct or indirect interest inthe Club or any of the securities pursuant to or in connection with the offer.

Zamora Poblador Vasquez & Bretaña Law Offices (“ZPVB Law”)may from time totime be engaged to advise in transactions of the Company and perform legal serviceson the basis that ZPVB Law provides such services to its other clients.

Independent Auditors

The Audited Interim Financial Statement of the Club from the period of 15 March 2016(incorporation date) to 30 June 2016 have been audited by Isla Lipana & Co., independentauditors, as stated in their report appearing in this Prospectus. The audited interimfinancial statements as of 30 June 2016 was examined by Isla Lipana & Co., in accordancewith the Philippine Financial Reporting Standards as stated in the report appearingherein.

13

Isla Lipana & Co. has not been paid any fees other than the fees directly related to thisOffer. The Club has not had any disagreements on accounting and financial disclosureswith the current external auditors. Isla Lipana & Co. has neither shareholdings in theClub nor any right whether legally enforceable or not, to nominate persons to subscribeto the Club’s securities. Isla Lipana & Co. will not receive any direct or indirect interestin the Club or in any securities (including options, warrants or rights thereto) pursuant toor in connection with the Offer. The foregoing is in accordance with the Code of Ethicsfor Professional Accountants in the Philippines set by the Board of Accountancy andapproved by the Professional Regulation Commission.

THE COMPANY

Form and Date of Organization

The Club was organized as a stock corporation and was duly registered with theSecurities and Exchange Commission (“SEC”) on 15 March 2016. The Club has nopredecessors. As of the date of this Prospectus, the Club has no subsidiaries and is notyet operational. Operations are set to begin in February 2017.

The Club is not involved in any bankruptcy, receivership or similar proceedings. Neitheris the Club involved in any material reclassification, merger consolidation or purchase orsale of significant amount of assets not in the ordinary course of business.

Description of Business The Club is a private club that celebrates Filipino excellence in cuisine, service, craft andentertainment, a club that will bring together a diverse range of individuals who shareglobal views and values as well as interests in the arts, culture, travel, food, wine andentrepreneurship.

It offers the comfort of a home in the center of the city: detail without the distance,familiarity and friends without fuss, white glove service of the highest standard, art andculture within reach.

It is a place that is welcoming and discreet, a place to work as well as play, and a place toentertain and be entertained. Its ambiance of warm and intimate splendor reflects thatvery Filipino feeling of being among family and friends.

The Club will be an ideal meeting place, elegant, relaxed yet wired with all the high-speed conveniences. This beautifully designed space encompassing several diningoutlets, indoor and outdoor bars, as well as private function rooms, will lend itself wellto socializing. The Club will also have spaces to relax, read and think in a stress-free andnurturing environment away from home and work.

The Club has 3 main restaurants which will offer Japanese, Continental and Filipinocuisines. In addition, the Club will have bars and lounges offering comfort food forrelaxation and spaces for socialization, one of which transforms at night into a loungewith live music performances. In order to cater to all needs of the Members, the Club

14

will have several banquet rooms for the exclusive use of members, one of which canaccommodate up to a maximum of 120 persons. The public may have access to somefunction rooms which may be booked through a Member in good standing. At any onetime, the Club will be able accommodate about 700 persons simultaneously enjoyingdining and other services/facilities of the Club. A detailed description of the variousfacilities and dining spaces is enumerated in pages 15 to 16 hereof.

The artful, carefully considered strategy to maximize these opportunities, the collectivecapabilities, diversity and experience of the management team, and the underlyingsystems and processes that will be put into place will ensure the outstanding execution ofthe business strategy and deliver the returns promised.

Development Concept

Description and Location of the Site

The Club will be located on the eighth floor of the Net Park Tower, part of the NetMetropolis 5th Avenue complex, in Bonifacio Global City, within walking distance fromthe Bonifacio High Street. The Club shall occupy a stunning space sprawled over 2,385square meters surrounded by another 3,000 square meters of garden.

Principal Properties

The Club does not intend to acquire principal properties (such as real estate, plant andequipment, and patents) in the next 12 months.

Description of Business Strategy

The Club intends to bring together a membership selected from the business, creative,cultural and intellectual community drawn by shared interests and a longing tocontinuously learn about art, culture, food, business and politics, and from the diversityof its members. Prior to full commencement of operations, the Club intends to have 600Founding Members and 33 Founding Patrons who will have exclusive use of the facilitiesand exclusive participation in its events/activities. Members will be selected primarilythrough referrals of existing members, through private pocket events focused on aparticular interest or industry, as well as through limited media blitzes. By the time theClub opens in January 2017, the Club aims to have a total of 600 members, and graduallyincrease the total membership across all classes to 1,200. The Club aims to have a total of2,400 members by December 2017.

It intends to set itself apart from other leisure clubs in the country by providing a myriadof dining experiences and the range of events, exhibits, film showings, lectures and talksthat will be organized regularly throughout the year to inspire, stimulate, educate, amuseand entertain. These events, will target every segment of the market, and will focusalternately on culture, sports, art, food, business, fashion, lifestyle and parenting. Topromote the Club and its activities, and to inform, inspire and encourage membership, itwill also make use of soft media exposures and of social media, such as Instagram, andits website.

Facilities

15

In line with its development concept, the Club will offer the following facilities andamenities:

Bonifacio Lounge A space designed to receive 200 guests. An all-daydining lounge with serves delicious comfort foodthroughout the day.

Avenue Bar This chic, yet chilled space for hanging out during theday will transform itself into a lounge at night, with livemusical performances from top-rated local and interna-tional talents.

Anahaw Restaurant The space encompasses some 300 square meters,accommodating up to 120 guests while offeringunparalleled views of the city. Guests can enjoy Filipinocuisine prepared with the freshest and highest-qualityingredients sources from all over the country

Issho Japanese Cuisine A Japanese restaurant which features sleekcontemporary interiors with a long central table for 50guests to encourage communal dining.

The Grill A cozy, inviting restaurant serving freshly grilled classicssuch as steak and seafood for lunch every day.

Smoke A space designed to be a cigar bar, which will offer apremium selection of cigars and whiskey.

Function Rooms A total of 7 function rooms will be available for privateand commercial events. Four rooms will be reserved forthe exclusive use of members, while six rooms will be of-fered to the public for various income-generating activi-ties such as product launches, corporate seminars andfitness/yoga classes.

Members Only Rooms Rizal MabiniLunaDel Pilar

Rooms Open to the Public DayapDurianSantol

Outdoor Deck and Bar Open-air garden space

Completion Rate

The start of commercial operations is targeted in February of 2017 wherein the BonifacioLounge and the Outdoor Deck and Bar will be available for use. By the end of the 2016,the Club intends to open Smoke, The Grill, and the banquet rooms. The rest of thefacilities is targeted to be completed by the end of the 1st quarter of 2017.

Intellectual Property

As of the date of this Prospectus, the Company has registered one (1) trademark:

Name of Trademark Logo/Symbol Expiry Date

16

“Manila House PrivateMembers Club”(4-2016-006143)

4 August 2026

LEGAL PROCEEDINGS

For the past five (5) years immediately preceding the date of this Prospectus, theCompany is not a party to any litigation which would have any material or adverse effectupon its business or financial condition. The space being leased by the Company is notsubject of any legal proceedings.

To our knowledge, there is no case filed by or against the directors and officers of theCompany in such capacity.

DESCRIPTION OF SHARES

(The information in this section should be read in conjunction with the Articles of Incorporationand By-laws of the Club.)

The Club has a total authorized capital stock of 200,000 Common Shares with a par valueof P10.00 per share and 2,000 Preferred Shares with a par value of P100,000.00 per share.Only the Preferred Shares are included in the Offer. The current issue price of CommonShares is P10.00 per share and the current issue price of Preferred shares as determinedby the Board of Directors is P100,000.00 per share.

The following table details the shares of the Company:

Class Authorized Shares Current Subscribed Shares

Common Shares 200,000 100,003

Preferred Shares 2,000 500

The nature and type of the shares of the Club, the rights and privileges of the holders foreach class thereof, particularly their rights over the facilities of the Club, are discussedhereunder.

Classes of Shares

Common Shares

The Common Shares may be owned or subscribed by or transferred to any Filipinocitizen; or a partnership, association or corporation organized and existing underPhilippine laws wherein at least 60% of its outstanding shares of stock entitled to vote in

17

the election of directors; and the total number of outstanding shares of stock, whetherentitled to vote or not, is owned and controlled by Filipino citizens.

All Common Shares of stock shall enjoy the same rights and privileges, and shall beentitled to a dividend rate equivalent to seven percent (7%) of the total amount declaredfrom out of the unrestricted retained earnings until the total amount of investment of thestockholders owning Preferred Shares plus ten percent (10%) return on the subscriptionamount shall have been fully paid. Thereafter, the dividend payout rate to shareholdersholding Common shares shall be twenty percent (20%) of the total amount declared fromout of the unrestricted retained earnings.

Preferred Shares

The Preferred Shares shall be issued at a value to be determined by the Board ofDirectors at the time of the issuance of the shares. Preferred shares shall have votingrights.

Preferred Shares are entitled to a dividend Rate equivalent to ninety-three (93%) of thetotal amount declared from out of the unrestricted retained earnings until the amount ofinvestment of the stockholders owning Preferred Shares plus ten percent (10%) return onthe subscription amount shall have been fully paid. Thereafter, the owners of thePreferred Shares shall be entitled to 80% of the amount declared from out of theunrestricted retained earnings. The Board of Directors shall prescribe the cumulation ofdividends, the date or dates of cumulation or accrual but dividends shall be deemed tobe cumulative from date of issue unless otherwise specified by the Board of Directors.Preferred Shares are non-participating in any other or further dividends beyond thatspecifically payable on the shares.

Preferred Shares have preference over holders of the Common Shares in the distributionof corporate assets in the event of dissolution and liquidation of the Corporation.Preferred shares have no pre-emptive rights over any sale or issuance of any share in theCorporation’s capital stock.

Preferred Shares are non-convertible into Common Shares.

Holders of Preferred Shares are entitled to nominate such number of individuals as maybe set by the Board of Directors to become Members of the Club upon fulfillment of theadmissions, qualifications, maintenance and other requirements as prescribed by theCorporation.

Shareholders

The following are the holders of Common and Preferred Shares of the Company as of 29September 2016.

Name Nationality

No. and Class of SharesSubscribed

Amount ofCapital StockSubscribed

(P)

% ofTotal

Common

Preferred

Total

RicardoMariano C.Ocampo II

Filipino 29,999 _ 29,999 299,990.00 .59%

18

AntonioRaymundo O.

San Diego

Filipino 30,000 _ 30,000 300,000.00 .59%

Gilbert ZoiloO. Pangilinan,

Jr.

Filipino 15,001 _ 15,001 150,010.00 .29%

KatrinaPanlilio Craig

Filipino 15,000 _ 15,000 150,000.00 .29%

Pierre AngeliAddison

Filipino 10,000 _ 10,000 100,000.00 .20%

FerdinandEdwin S.Coseteng

Filipino 1 50 51 5,000,010.00 9.8%

Celestina M.Ocampo

Filipino 1 50 51 5,000,010.00 9.8%

Aissa V.Encarnacion

Filipino 1 _ 1 10.00 Nil

Doris TeresaM. Ho

Filipino _ 50 50 5,000,000.00 9.8%

Joselito D.Campos, Jr.

Filipino _ 50 50 5,000,000.00 9.8%

ChristopherPaulus T. Po

Filipino _ 50 50 5,000,000.00 9.8%

Piolo JosePascual

Filipino _ 50 50 5,000,000.00 9.8%

SharmilaHiranand

Filipino _ 50 50 5,000,000.00 9.8%

ClintonAndrew

Campos Hess

Filipino _ 50 50 5,000,000.00 9.8%

ZMG WardHowell, Inc.

Filipino _ 50 50 5,000,000.00 9.8%

Caravier, Inc. Filipino _ 50 50 5,000,000.00 9.8%

Total 100,003 500 100,503 51,000,030.00 100%

Ownership and Transfer of Shares

The Club is an exclusive club organized for the sole benefit of its shareholders. Dividendspayable out of the surplus of the Corporation shall be declared at such time and in suchmanner and in such amounts as the Board of Directors shall determine.

All Common Shareholders of the Corporation shall enjoy the same rights and privileges,and shall be entitled to a Dividend Rate equivalent to seven percent (7%) of the totalamount declared from out of the unrestricted retained earnings until the amount ofinvestment of the stockholders owning Preferred Shares plus ten percent (10%) return onthe subscription amount shall have been fully paid. Thereafter, the dividend payout rateshall be twenty percent (20%) of the total amount declared from out of the unrestrictedretained earnings.

19

All Preferred Shareholders of the Corporation shall be entitled to a Dividend Rateequivalent to ninety-three (93%) of the total amount declared from out of the unrestrictedretained earnings until the amount of investment of the stockholders owning PreferredShares plus ten percent (10%) return on the subscription amount shall have been fullypaid. Thereafter, the owners of the Preferred Shares shall be entitled to 80% of theamount declared from out of the unrestricted retained earnings. Preferred Shareholdersshall not participate in any other or further dividends beyond that specifically payable ontheir shares.

The Board of Directors shall prescribe the cumulation of dividends, the date or dates ofcumulation or accrual but dividends shall be deemed to be cumulative from date of issueunless otherwise specified by the Board of Directors.

Each Shareholder shall be entitled to one certificate upon full payment of thesubscription price. A Share Certificate shall clearly specify the class of the Share and shallcontain a précis of the basic rights, privileges, obligations and limitations of the particularclass of Share. The Share Certificates of each class of Shares shall be numberedconsecutively, shall be in such form and design as may be determined by the Board ofDirectors, and shall be signed by the President, countersigned by the CorporateSecretary, and sealed with the corporate seal.

The Common and Preferred Shares of the Corporation may, subject to the Articles ofIncorporation, be transferred, sold, ceded, assigned or pledged by delivery of the ShareCertificates duly endorsed by the Shareholder. The transfer shall be valid and binding onthe Corporation only upon (i) submission to the Corporate Secretary of an original andcertified true copy of the relevant deed of transfer together with the proper clearancefrom the relevant tax authority; (ii) surrender of the proper Share Certificate to theCorporate Secretary for cancellation, (iii) issuance of a new Share Certificate in the nameof the transferee; and (iv) recording of the transfer in the Stock and Transfer Book of theCorporation. No Shares against which the Corporation holds any unpaid claim shall betransferable in the books of the Corporation.

Should original Shareholders holding both Common and/or Preferred Shares desire tosell, assign, transfer, or otherwise dispose of their Common and/or Preferred Shares tothird parties, they shall be allowed to do so only after a period of five (5) years fromsubscription (the “Lock-up Period).

After the Lock-up Period, the original Common Shareholders may sell, assign, transfer,or otherwise dispose of their Common Shares to third parties without any restriction.

Preferred Shares, on the other hand, may only be sold, assigned and transferred orotherwise disposed of in blocks of ten (10) shares to any third party after the Lock-upPeriod.

CLUB MEMBERSHIP

Membership in the Club is a privilege, which is subject to such restrictions, limitationsand obligations as may be imposed by the Club in accordance with its By-Laws and theClub Rules.

20

Procedure for Membership

Individual and corporate shareholders shall be entitled to nominate such number ofnominees as may be set by the Board of Directors provided that they are qualified andadmitted in accordance with the Club Rules and the Company’s By-Laws.

A prospective member is invited by the Membership Committee by written notice to theprospective member. The Membership Committee shall evaluate whether theprospective member is qualified under the Membership Rules. If approved by the Board,the Membership Committee shall send a written notice to the approved Member,instructing the latter to execute the Membership Agreement and pay the applicablemembership fee. The Club will issue the appropriate Membership Certificate,Membership Card, as well as the notarized Membership Agreement, to the new Memberwithin fifteen (15) working days from the execution of the Membership Agreement. Thenew member will be entitled to use the Club and its facilities, on the date specified by theMembership Agreement.

To retain membership, a Member must remain in good standing by, inter alia, complyingwith the Club Rules, including the provisions of payment of Club Dues.

Prospective shareholders that are juridical entities must nominate natural persons whoshall cause an application for membership to be filed with the Board of Directors for theadmission of such persons as member of the Club for purposes of Article VI, Section 1 ofthe By-laws. Members are welcome to propose new applicants to join the club.Application forms are available at the Reception or at manilahouseinc.com.

The Membership Committee meets quarterly and admits new members when space isavailable.

After applications are received, Members are asked not to query the MembershipCommittee about the status of applications.

By submitting an application for membership, the Candidate Member agrees to be boundby the Club rules. He or she, however, is free to withdraw the application. In this regard,the Candidate Member must contact our Membership Team [email protected] for a cancellation form within a month of submittingthe application.

When applicable and subject to an applicable lock-up provision, members may transfer,assign and/or convey their membership certificates to another, provided that thetransferee or assignee is qualified by the Membership Committee and approved by theBoard of Directors. The Club shall qualify the prospective Club members before anyactual sale, assignment or transfer of a share in the Club is executed. Prior to any sale,assignment or transfer of a share in the Club in the manner determined in the By-lawsand the Club Rules as the Board of Directors may adopt from time to time. Onceaccepted as a member of the Club, the assignee or transferee shall be entitled to use allthe facilities of the Club, subject to the conditions prescribed by the By-laws and ClubRules. The consequences arising from the disapproval by the Board of Directors of anapplication for Club membership shall be governed by the By-laws and the Club Rules.

Classification of Membership

21

mailto:[email protected]

http://sohohouse.com/

In granting membership to the Club, the Board of Directors shall classify members of theClub as follows:

Founding Members

A Founding Member is a natural person who becomes part of the first 600 members ofthe Club after incorporation of the Company. A Founding Member is admitted as amember of the Club only after being qualified by the Membership Committee and finallyapproved by the Board of Directors and upon payment of said Founding Member of theinitial membership fee. A Founding Member who is a natural person is entitled toexercise usage rights in his personal capacity.

To qualify as a Founding Member, a person must possess the following minimumqualifications, the determination of which shall be made initially by the MembershipCommittee subject to the final approval of the Board of Directors:

(i) he must be of legal age;

(ii) he must be of good moral character and has not and is not exhibitingconduct which is inimical to the interests of the Club, its shareholders ormembers;

(iii) he must have filed an application for membership with the Club;

(iv) he must have qualified under the membership Rules; and

(v) he must be qualified by the Membership Committee and approved by theBoard of Directors (Membership Committee).

The Board of Directors shall prescribe such other requirements for qualification formembership as it may deem necessary and shall, at all times, inform the shareholders ofsuch minimum qualifications for membership.

Founding Members shall have the following privileges:

Unrestricted access to the Club

Signing privileges

Priority bookings for events and restaurants

Waived corkage for wines not stocked by the Club

Special birthday privileges including 15% discount on event bookings

Special discount of 15% on function room bookings for 12 or more people

Transferable membership after the required lock-up period

Reciprocity with select international private clubs

May bring up to three (3) guests into the Club, but must accompany them atall times

22

The offer of six hundred (600) Membership Certificates includes the thirty three (33)Founding Patrons who are holders of Preferred Shares or Common Shares. FoundingPatrons shall automatically be members of the Club and will have the same benefits asthat of Founding members.

Regular Members

A Regular Member is a natural person who shall be admitted as a member of the Clubafter incorporation of the Company and after the first 600 Founding Members are chosen,after being qualified by the Membership Committee and finally approved by the Boardof Directors and payment of the initial membership fee. A Regular Member who is anatural person is entitled to exercise usage rights in his personal capacity.

To qualify as a Regular Member, a person must possess the following minimumqualifications, the determination of which shall be made initially by the MembershipCommittee subject to the final approval of the Board of Directors:

(i) he must be of legal age;

(ii) he must be of good moral character and has not and is not exhibitingconduct which is inimical to the interests of the Club, its shareholders ormembers;

(iii) he must have filed an application for membership with the Club;

(iv) he must have qualified under the membership Rules; and

(v) he must be qualified by the Membership Committee and approved by theBoard of Directors (Membership Committee).

The Board of Directors shall prescribe such other requirements for evaluation andapproval for regular membership as it may deem necessary and shall, at all times, informthe shareholders of such minimum qualifications for membership.

Regular members shall have the following privileges:

Unrestricted access to Manila House

Transferable membership after the required lock-up period



Payment on consumption, as there are no signing privileges under thiscategory.

Associate Members

Associate Members shall have the same qualifications and privileges as RegularMembers, except that such membership shall be non-transferable.

23

Associate members shall have the following privileges:





Junior Members

Junior Members shall have the same qualifications and privileges as Regular Members,except that such membership shall be non-transferable and the applicant must be underthirty (30) years of age upon submitting his/her application for membership with theClub.

Should a Junior Member wish to become a Regular Member upon reaching thirty (30)years of age, he or she shall notify the Club at least thirty days before such date. Uponconversion to a Regular Member, he or she will be required to pay the monthly dues im-posed on Regular Members.

Junior members shall have the following privileges:





Club Dues and Assessments

For the first year of operations of the Club, Founding, Regular and Associate Memberswill be charged monthly dues in the amount of P2,500.00 plus VAT per month; whileJunior Members will be charged Club dues in the amount of P1,250.00 per month.

These monthly dues shall be in addition to fees and special assessments which the Boardof Directors may require for the actual use of the Club facilities and for the improvementof its premises and facilities. The Board of Directors shall also impose reasonable fees andcharges on activities of the Club which shall include, but not limited to, the following:

(i) evaluation and processing of applications for all types of membership inthe Club, including guest fees and visitor fees;

(ii) any transfers and changes in memberships or transfers and changes in theownership of the Club Shares; and

24

(iii) the use of the Club facilities by guests and immediate family members inaccordance with Article VII of the By-laws, provided that the fees to beimposed by the Board of Directors on immediate family membershereunder shall be in addition to regular monthly dues which shall bepayable by such family member in an amount equivalent to not morethan 100% percent of the regular monthly dues payable by the Clubmember.

The amount of the foregoing dues, fees and assessments shall be reviewed and revisedby the Board of Directors from time to time as it shall deem necessary.

Members are required to pay monthly dues on an annual or quarterly basis. The monthlydues are billed on an annual basis, from January to December of the calendar year. Ifpaying quarterly, dues must be settled by 31st March, 30th June, 30th September and 31st

December of the same year.

Members who are admitted after the start of the year or quarter shall be billed propor-tionately for the remaining period in the year of admission.

Failure to pay the annual subscription (or any installment thereof) within one month ofthe due date after being notified by management will result in the member not being ad-mitted to the Club and the membership being terminated.

Membership fees are not refundable.

The foregoing dues, fees and assessments, together with all other obligations of theholders of the shares of the Club, shall constitute a first lien on the shares, second only toany lien in favor of the national or local government. In the event that a shareholder failsto effect the payment of dues and other obligations due to the Club, his or its shares maybe sold at auction by the Board of Directors in the manner provided in the By-laws tosatisfy said dues or other obligations of such shareholder.

All members shall be obliged to pay monthly dues, fees and assessments on the date ofcommencement of the commercial operations of the Club as determined by the Board ofDirectors. The original subscribing holders of Common or Preferred Shares which arejuridical entities shall be obliged to pay the monthly dues, fees and assessments to theClub pertaining to a share upon the designation of its nominees for membership,provided that the Club shall have commenced commercial operations. Moreover, in theevent that such original corporate subscribers transfer, sell or dispose of the Common orPreferred Shares held by them following the expiry of the five (5)-year lock-up periodfrom the date of subscription, the obligation of the transferee or purchaser of suchCommon or Preferred Share to pay monthly dues, fees and assessments to the Club shallcommence upon his or upon qualification as member or its acquisition of the Common orPreferred Share, provided that the transferee or purchaser shall have qualified formembership in the Club, and provided further that the Club shall have startedcommercial operations.

Other Matters Concerning Club Dues and Assessments

A report under oath will be submitted to the SEC concerning any proposed increase inmonthly dues stating the rationale for the proposed increase, such report to be submittedwithin thirty (30) days from the approval of the Board of Directors. Members will be

25

notified of any increase in fees and such notices will be posted on the Club’s bulletinboards placed in conspicuous places for the benefit of its members and the secondarymarket.

Termination of Membership

A Founding Patron (who likewise is a Preferred Shareholder of the Club) may resign asprovided in the By-laws and the Club rules and regulations. The resigning Member shallcease to be a Member upon acceptance of such resignation by the Board of Directors,subject to payment in full of all unsettled obligations of the resigning Member.

Any pre-paid Club Dues of a resigning Member shall be forfeited in favor of the Club.

Founding and Regular Members cannot withdraw until the expiration of the lock-upperiod of five (5) years unless said member is able to find a qualified transferee of theirmembership that is approved by the Membership Committee and the Board of Directors.Absent a qualified transferee, any withdrawal during the lock-up period shall render theMember liable to pay the monthly dues.

After the expiration of the lock-up period, members who withdraw past the 30th of Juneof a calendar year shall be liable to pay for the monthly fees for the remainder of the year,unless said member is able to find a qualified transferee of their membership, that isapproved by the Membership Committee and the Board of Directors.

The Club reserves the right to terminate a Member’s membership for acts, omissions ordeclarations in violation of the Club Rules and Code of Conduct and other forms ofmisconduct. Copies of said rules shall be acknowledged and signed by the Member uponapproval of his/her membership.

INCORPORATORS, DIRECTORS AND OFFICERS

Incorporators and Board of Directors

The incorporators of the Club are as follows:

Incorporator NationalityCelestina M. Ocampo Filipino

Gilbert Zoilo O. Pangilinan, Jr. FilipinoFerdinand Edwin S. Coseteng Filipino

Antonio Raymundo O. San Diego FilipinoAissa V. Encarnacion Filipino

The members of the Board of Directors of the Club for 2016 to 2017 are as follows:

Director NationalityRicardo Mariano C. Ocampo II Filipino

Antonio Raymundo O. San Diego FilipinoFerdinand Edwin S. Coseteng Filipino

Independent Director NationalityJoseph P. San Pedro Filipino

26

Regina F. Sicat Filipino

Executive Officers

The executive officers of the Club for 2016 to 2017 are as follows:

Position OfficerChairman Ferdinand Edwin S. CosetengPresident Ricardo Mariano C. Ocampo IITreasurer Gilbert Zoilo O. Pangilinan, Jr.Corporate Secretary Aissa V. Encarnacion

Comprehensive Background

The following describes the relevant business experience of the Club’s directors andofficers for the past five (5) years.

Chairman: Ferdinand Edwin S. Coseteng, Filipino, 53, is the Executive Vice-President ofFirst Philippine Holdings Corporation, as well as President of its subsidiary, FirstPhilippine Industrial Park. He was previously based in Hong Kong, where he was anExecutive Vice-President of LF Logistics, where he headed the international logistics andfreight forwarding business with offices throughout Asia, the United States of Americaand the United Kingdom. He was also president of Mariwasa Manufacturing, Inc. andMariwasa Siam Ceramics Inc. He graduated with a degree in BS Electrical Engineeringfrom the University of the Philippines and finished his Master of BusinessAdministration (MBA) from Cornell University.

President: Ricardo Mariano C. Ocampo II, Filipino, 54, is the President of CelestinaMaynila, Inc. A visionary entrepreneur, he began his career in fashion retail while still incollege, establishing Sari-Sari Store, which sold his line of hand-painted t-shirts. Thisenterprise in turn led to a string of innovative retail concepts that embrace the mid, highand luxury end of the market. The retail group he started today includes food &restaurants, furniture and home accessories, and the Celestina range of bags andaccessories, which are sold internationally. He is a graduate of San Beda College.

Treasurer: Gilbert Zoilo O. Pangilinan, Jr., Filipino, 39, is the Chef and Co-Owner of KaiRestaurant (Modern Japanese), Cerveseria (Spanish), Isogi (Japanese comfort food) andhis catering arm, Kai Catering. He has worked at the River Restaurant, Savoy Hotel inLondon and Nobu in New York. He is a graduate of the Culinary Institute of America inNew York, United States of America, and has a Master’s Degree in Entrepreneurshipfrom the Asian Institute of Management in the Philippines.

Corporate Secretary: Aissa V. Encarnacion, Filipino, 51, is Partner at Zamora PobladorVasquez & Bretaña Law Office. She obtained her Bachelor of Laws from the University ofthe Philippines, College of Law, 1992. She was admitted to the Philippine Bar in 1993.She is the Corporate Secretary of The Philippine Stock Exchange, Inc. and various othercorporations. She is concurrently a Professorial Lecturer at the University of thePhilippines, Cesar Virata School of Business. She obtained a Bachelor of Science inBusiness Administration, Major in Finance and Marketing also from the University of thePhilippines College of Business Administration.

27

Director: Antonio Raymundo O. San Diego, Filipino, 49, is the Editor-in-Chief of ThePhilippine Tatler, the country’s premiere lifestyle, luxury and society magazine for thelast 15 years, successfully spearheading it from its maiden issue to its current iteration.The Philippine Tatler is part of the Asia TATLER group, which has publications in HongKong, China, Singapore, Indonesia, Malaysia, Thailand and Taiwan. He acquired hisdiploma from Les Roches International School of Hotel Management.

Independent Director: Joseph P. San Pedro, 50, is an independent practitioner of law. Heobtained his Master of Laws from Harvard Law School in 1996. He obtained his JurisDoctor from Ateneo de Manila University, College of Law in 1991, where he graduatedwith distinction as Class Salutatorian. He ranked first place in the 1991 Philippine Barexaminations and was admitted to the Philippine Bar in 1992.. He is currently a facultymember at the Ateneo De Manila University. Independent Director: Regina F. Sicat, is the Chief Executive Officer of LegisPro, whichprovides legal process outsourcing services in the Philippines. She obtained her Masterof Business Administration with a concentration in Marketing and Finance fromColumbia University, Graduate School of Business. She took the Art of DiscussionLeadership from Harvard Business School and obtained a Bachelor of Arts in Economicsfrom Bryn Mawr College (Cum Laude).

Executive Compensation

No remuneration shall be paid by the Club, directly or indirectly, to the directors of theClub.

The aggregate compensation estimated to be paid in the ensuing fiscal year to thefollowing officers of the Company are as follows:

Name and Principal Position Year MonthlySalary

Bonus Total

Ferdinand Edwin S. Coseteng(Chairman)

2017 n.a. n.a. n.a.

Ricardo Mariano Ocampo II(President)

2017 P200,000.00 n.a. P200,000.00

Gilbert Zoilo O. Pangilinan, Jr.(Treasurer)

2017 P100,000.00 n.a. P100,000.00

Significant Employees

The Club currently has ninety-four (94) employees: sixteen (16) from the supportdepartment, seventy-four (74) form the operations department, and four (4) from theadministrative department. The Club expects to employ approximately 120 full-timeemployees and contractual workers. Consultants may also be hired for concerns thatrequire expertise. By the end of 2016, the Club is expected to have about 200 full timeemployees.

None of the employees of the Club are subject to any Collective Bargaining Agreement.

28

When operations commence, Mr. Pierre Angeli Addison will be appointed the GeneralManager and will be responsible for managing the day-to-day operations of the Club.

Management

The Company will enter into a consultancy contract with Biennale Club Management,Inc. (“BCMI”). BCMI will be vested with the authority to guide the day to day operationsof the Club, determine the concepts, menus and events that will be implemented by theClub as well as oversee the financial management of the company.

Mr. Ricardo Mariano C. Ocampo II, President of BCMI, will be in charge of Design,Investor and Member recruitment. Mr. Ocampo and Pierre Angeli Addison will overseeconstruction, which will be managed by an appointed professional project manager.Procurement of furniture, fixtures and equipment will be undertaken by Mrs. JaneCometa, who will be under the direct control and supervision of Mr. Ocampo. Mr.Ocampo will drive membership and function/banquet sales with the help of Ms. OudineSantos and Ms. Marie Ona, who will be appointed as Membership Director and SalesDirector of the Club, respectively.

The Company will engage a consultancy firm, Hotel Solutions Partnership, that willoversee and ensure that the Club's accounting and control systems are properlyestablished and that a qualified financial director is recruited for the Club. The Club willalso engage Aura Management Consulting to prepare the Club’s standard operatingprocedures and a detailed pre-opening operational timetable.

Mr. Pierre Angeli Addison will oversee operations, particularly with respect torecruitment of key staff, organization of the administrative office and securing allnecessary permits and licenses, negotiating third party supply contracts and sourcingsuppliers for operating supplies and equipment.

Mr. Antonio Raymundo O. San Diego will be in charge of Communications, Bar salesand Events. Mrs. Bambina Olivares-Wise, who will be head of Public Relations &Marketing will report directly to him. They will be in charge of the program of events forthe members of the Club, ensure that investors and members receive regular newslettersand ensure that an attractive and informative club website is developed.

Mr. Gilbert Zoilo O. Pangilinan, Jr. will be responsible for Food & Beverage andBanquets. He will devise the menus of the Club’s outlets, prepare exclusive recipes forthe Club’s signature dishes, source suppliers, help determine the pricing of menu itemsand control food costs. He will attend to the Food & Beverage and service requirementsof members who book private functions in the Club. He will supervise the Club’s chefsand kitchen team.

29

Security Ownership of Certain Record and Beneficial Owners and Management

The table below sets forth the security ownership of certain record owners of more than5% of the Company's voting securities as of the date of this Prospectus.

Title ofClass

Name and Address of Owner Amount andnature of

ownership

Citizenship % of TotalOutstanding

Shares

CommonShares

Antonio Raymundo Oca SanDiego

30,000

(Common)

Filipino 29.85%

CommonShares

Gilbert Zoilo O. Pangilinan, Jr. 15,001

(Common)

Filipino 14.93%

CommonShares

Ricardo Mariano C. Ocampo II 29,999

(Common)

Filipino 29.85%

CommonShares

Katrina Panlilio Craig 15,000

(Common)

Filipino 14.92%

CommonShares

Pierre Angeli Addison 10,000

(Common)

Filipino 9.95%

Related Party Transactions

30

Ricardo Mariano C. Ocampo II is the husband of Celestina M. Ocampo. Both aredirectors of the Company. Mr. Ocampo is the President of the Company, the President ofBCMI and also a member of the Membership Committee.

Majority of the stockholders and directors of Biennale Club Management, Inc. (“BCMI”)are shareholders, directors and officers of the Company.

Antonio San Diego, a director of the Company, is likewise a director of BCMI. GilbertPangilinan, Jr., a director and officer of the Company, is also a director of BCMI.

Carlo S. Rufino, a stockholder of 20-34 Property Holdings, Inc., which owns Net Park, isalso an investor of the Club.

MATERIAL CONTRACTS AND AGREEMENTS

Contact with Dreammakers Phils. Const. Co., Inc.

The Company entered into an agreement with Dreammakers Phils. Const. Co., Inc.(“Dreammakers”) for the civil, finishing, electrical and plumbing works of the Club. Thescope of work of Dreammakers covers, among others, acquisition of permits and licenses,site protection, carpentry, masonry and tile works, floor finishes, steel works, paintingworks, ventilation, electrical and mechanical works. For the aforementioned services, theCompany will pay Dreammakers Twenty Eight Million Two Hundred Seventy ThreeThousand One Hundred Thirty Four and 88/100 Pesos (P28,273, 134.88), inclusive of tax(the “contract price”). Twenty percent (20%) of the contract price shall serve as downpayment and shall be deducted proportionately from the progress billings ofDreammakers. The balance of the contract price shall be paid by monthly progress billingbased on the actual work completed and the materials installed in place as per plans andspecifications. Ten percent (10%) on the amount of the progress/ accomplishment billingpayment shall be retained by the Company until the completion of the scope of works.

Contract with Aura Hotels and Resorts

The Company engaged the services of AURA Hotels and Resorts (“AURA”) to handlehuman resources management of the Club. AURA will create a new manning guidelinefor the Club to include an organizational Chart, Compensation and Benefits Matrix, JobDescriptions and a Recruitment Plan. AURA will also develop and finalize a StandardOperating Procedure for the Club and guide the Club's key staff in creating personalizedtraining modules covering all aspects of service. In exchange of its services, AURA willreceive three (3) monthly payments of Three Hundred Thousand Pesos (P300,000.00),paid fifty percent (50%) in advance payment and will be entitled to two (2) Club RegularMembership.

Consultancy Agreement with Biennale Club Management, Inc.

The Company will sign a consultancy agreement with Biennale Club Management, Inc.(“BCMI”). BCMI will provide advisory services to the Club for a period of ten (10) yearsin five key areas: concept development and planning, pre-opening technical assistance insupport of the project ream, pre-opening management, membership sales and marketingand post-opening operational management. The Company will pay BCMI consultancyfee in the amount of 2.75% of the gross revenue of the Company plus an incentive fee of

31

8% of the gross operating profit.

Contract of Lease with 20-34 Property Holdings, Inc.

The Company entered into a Contract of Lease with 20-34 Property Holdings, Inc.(“Lessor”) for the lease of the 8th floor of the Net Park, a commercial/office buildinglocated at 5th Avenue, E-Square, Crescent Park West, Bonifacio Global City, Taguig,Metro Manila. The gross leasable area is approximately 2,534.27 square meters. For thefirst year of lease, the monthly rental is Two Million Nine Hundred Sixty Thousand andFour Hundred Seventy Eight Pesos (P2,960,478.00) payable within the first five (5)calendar days of the month to which the rent corresponds. The rental fee is subject to anannual escalation rate of five percent (5%) which shall apply on the first leasecommencement anniversary date. The lease term is for ten (10) years, renewable uponsuch terms and conditions acceptable to the Company and the Lessor.

Contract of Lease with EMJ Laundry Services

On 31 May 2016, the Company entered into a Contract of Lease with EMJ LandryServices (“Lessor”) for the lease of Unit E located at the 16th Floor, Fort Palm Spring, 30th

Street corner 1st Avenue, Bonifacio Global City with a net leasable area of sixty five (65)square meters. The monthly rent is Sixty Thousand Pesos (P60,000.00) inclusive ofAssociation dues. The contract of lease is for a period of one (1) year with an option torenew subject to mutually acceptable terms and conditions between the Company andthe Lessor.

Contract with Optimus Executive Search Solutions, Inc.

On 22 April 2016, the Company hired the services of Optimus Executive SearchSolutions, Inc. (“Optimus”) for its human resource needs. Optimus is tasked to recruit,source and select individuals for certain positions in the Company. Optimus willresearch and confirm target sources and identify candidates drawn from its currentdatabase and/or sourced externally. The list of qualified candidates will be presented tothe client only after thorough screening and evaluation. The Company will pay aconsulting fee equivalent to Fifteen Percent (15%) of the guaranteed first year's annualgross compensation fee of the successful candidate. The Company will only be billed fora successful placement.

Engagement with PROPLE BPO, Inc.

On 13 May 2016, the Company engaged the services of PROPLE BPO, Inc. (“PROPLE”)to handle its Finance and & Accounting requirements. In view thereof, PROPLE willprovide services for the Company's Payroll, Finance & Accounting functions for arecurring fee of Forty Thousand Pesos (P40,000.00) per month. The Company will alsopay PROPLE an annual fee of Sixty Thousand Pesos (P60,000.00) for its finance statementcompilation and certification.

Engagement of Zamora Poblador Vasquez & Bretaña Law Offices as Legal Counsel

The Company engaged the services of Zamora Poblador Vasquez & Bretaña Law Officesas its legal counsel. The engagement of the firm for legal services covers assistance in theincorporation of the Company, registration of securities, routine consultations on legalmatters and review of contracts.

32

MARKET PRICE AND DIVIDENDS ON THE REGISTRANT’SCOMMON EQUITY AND RELATED STOCKHOLDER MATTER

Market Price

The Offer Price has been set at P100,000.00 per share Preferred Shares.

The Offer Price for Membership Certificates is as follows:

P200,000.00 per Founding Membership CertificatesP150,000.00 each per Regular Membership Certificates

P100,000.00 each for Associate Membership CertificatesP50,000.00 each for Junior Membership Certificates

Since these securities are not listed in any stock exchange, there has been no market pricefor the Club’s securities derived from day-to-day trading. The factors considered indetermining the Offer Price are, among others, the ability of the Club to generateearnings and cash flow, the short and long-term prospects, and the capital andoperational requirements. The Offer Price may not have any correlation to the actualbook value of the Securities.

Dividend and Dividend Policy

As and if dividends are declared by the Company's Board of Directors, dividends on theOffer Shares shall be equivalent to 93% of the total amount declared out of the retainedearnings until the amount of the investment of stockholders owning Offer Shares plus10% return on the Offer Shares shall have been fully paid. Thereafter, the Offer Sharesshall be entitled to 80% of the amount declared from out of the unrestricted retainedearnings.

All Common Shares of stock shall enjoy the same rights and privileges, and shall beentitled to a dividend rate equivalent to seven percent (7%) of the total amount declaredfrom out of the unrestricted retained earnings until the total amount of investment of thestockholders owning Preferred Shares plus ten percent (10%) return on the subscriptionamount shall have been fully paid. Thereafter, the dividend payout rate to Shareholdersholding Common shares shall be twenty percent (20%) of the total amount declared fromout of the unrestricted retained earnings.

The Board of Directors is authorized to declare dividends only from the Company’sunrestricted retained earnings, and the Board may not declare dividends which willimpair the Company’s capital. Dividends may be payable in either cash, shares orproperty, or a combination thereof, as the Board determines. Cash dividends are subjectto approval by a majority of the board of directors and no further approval from theCompany’s shareholders is required. The declaration of stock dividends is subject to theapproval of the Board of Directors and of stockholders representing 2/3 of theCompany’s outstanding capital stock, including Preferred Shares. The Company has notdeclared a formal dividend policy except as stated in the Subscription Agreement.

PLAN OF OPERATIONS

33

The Club is targeted to start commercial operations in February 2017. Members will beobliged to pay monthly dues, fees and assessments on the date of commencement of thecommercial operations of the Club as determined by the Board of Directors, providedthat the facilities and amenities of the Project, more particularly described in the sectionon Non-Financial Information (under the heading Facilities), are at least 60% usable.

Any increase in dues will be reported to the SEC within thirty (30) days from theapproval of the Board of Directors. The Members will be notified of such increase.Notices on the dues will also be posted on bulletin boards located in conspicuous areasfor the benefit of secondary markets.

Facilities are expected to be open for use by Members and their guests by the February2017. Revenues will be derived from monthly dues and fees, and from the sale of foodand beverages. Assessments, fees and dues collected from Members shall be for the solepurpose of meeting the operational and maintenance expenses of the Club.

Once fully operational, the Club expects to employ approximately 120 full-timeemployees and contractual workers in the course of its commercial operations and maybe managed through a management agreement by or by a professional club managementfirm to oversee its daily operations. Consultants may also be engaged for concerns thatrequire outside expertise.

The Club will create events that cater to the clienteles’ preferences such as gourmet food,art, fashion, culture, business, entrepreneurship, technology, health and wellness,lifestyle design, architecture, among others.

PHILIPPINE TAXATION

The following is a discussion of the material Philippine tax consequences of theacquisition, ownership and disposition of the Offer Shares and Offer MembershipCertificates. This general description does not purport to be a comprehensive descriptionof the Philippine tax aspects of the Offer Shares and Offer Membership Certificates andno information is provided regarding the tax aspects of acquiring, owning, holding ordisposing of the Offer Shares and Offer Membership Certificates under applicable taxlaws of other applicable jurisdictions and the specific Philippine tax consequence in lightof particular situations of acquiring, owning, holding and disposing Offer Shares andOffer Membership Certificates in such other jurisdictions. This discussion is based uponlaws, regulations, rulings, and income tax conventions or treaties in effect at the date ofthis Prospectus. The tax treatment applicable to a holder of the Preferred Shares mayvary depending upon such holder’s particular situation, and certain holders may besubject to special rules not discussed below. This summary does not purport to addressall tax aspects that may be important to a holder of the Preferred Shares. Prospectiveinvestors of the Preferred Shares are urged to consult their own tax advisors as to theparticular tax consequences of the ownership and disposition of the Preferred Shares,including the applicability and effect of any local or foreign tax laws.

Corporate Income Tax

The Company, as a domestic corporation, is subject to corporate income tax of 30% of its

34

taxable income, from all sources within or without the Philippines. The following items,however, are exempted from the imposition of income tax:

gross interest income from Philippine currency bank deposits yields from deposit substitutes, trust funds and similar arrangements, and

royalties (subject to a final withholding tax rate of 20% of the gross amount ofsuch income)

interest income from a depositor bank under the expanded foreign currencydeposit system, which is subject to a final 7.5% tax on the gross amount of suchincome.

Further, in computing the corporate income tax, the Company is given a choice to claimitemized deductions or the optional standard deductions (“OSD”), with the former beingpresumed unless specific election of OSD is signified in the tax return, which election isirrevocable for the taxable year for which the return is made. The OSD is equivalent to anamount not exceeding forty percent (40%) of the company's gross income.

The proceeds of the sale of Company's shares of stock and membership certificates willbe used for capital expenditures which will result in depreciation expense which is anallowable tax deduction to the Company's taxable income under Section 34 of the 1997National Internal Revenue Code (“NIRC”). In addition to depreciation expense, theCompany may also claim deductions from payments it made to suppliers of goodsand/or services provided it withholds and remits the applicable expanded withholdingtax due to said suppliers.

It must be noted that a minimum corporate income tax (“MCIT”) of two percent (2%) ofgross income would be applicable to the Company, beginning on the fourth taxable yearfrom commencement of business operations, whenever the MCIT is greater than theordinary corporate income tax.

Documentary Stamp Taxes on Shares

The original issue of shares is subject to documentary stamp tax of 1.00 on each 200.00,₱ ₱or fraction thereof, of the par value of the shares issued. The documentary stamp tax isimposed on the person making, signing, issuing, accepting or transferring the documentand is thus payable either by the vendor or the purchaser of the Common Shares andPreferred Shares.

Documentary stamp tax is likewise imposed on sales, exchange or dispositions of sharesof stock at the rate of 0.75 for every 200.00, or fraction thereof, of the par value of the₱ ₱shares.

A membership certificate is in the nature of a share of stock as defined in Section 22(L) ofthe NIRC, the original issuance of which is subject to the documentary stamp taximposed under Section 175 of the said Code. The membership certificate is subject todocumentary stamp tax of 1.00 on each 200.00 of the par value, or fraction thereof, of₱ ₱the membership certificates issued.

Tax on Disposition of Shares

Gains from the disposition of the shares by the shareholders will be subject to 5% or 10%

35

Capital Gains Tax if the shares are held by the shareholders as capital assets. If the sharesare held as ordinary assets the ordinary income tax applicable to corporations orindividuals will apply.

A capital gains tax of 5% shall be imposed on net capital gains realized during thetaxable year from the sale, exchange, or other disposition of membership certificates notover 100,000.00, while a rate of 10% shall be imposed on gains in excess of 100,000.00.₱ ₱

The disposition of the shares may likewise be subject to 12% VAT if the shares are heldby the shareholders as inventory or shares available for sale.

A documentary stamp tax of 0.75₱ on each 200.00₱ , or fractional part, of the par value ofthe shares will be imposed. Where the shares are without par value, the tax will beequivalent to 25% of the documentary stamp tax due on the original issuance of suchshares.

The sale of membership certificates is subject to the documentary stamp tax of 0.75 on₱each 200.00, or fractional part thereof, of the par value of such membership certificate₱pursuant to Section 176 of the NIRC.

Tax on Membership Dues

Pursuant to Revenue Memorandum Circular (“RMC”) 035-12, the income of the Clubfrom membership dues, assessment dues and service fees are subject to income tax.

In addition to income tax, membership dues, assessment dues and service fees are alsosubject to VAT pursuant to Section 108 in relation to Section 105 of the NIRC.

Tax on Dividends

Cash or property dividends actually or constructively received by citizens and residentalien from domestic corporations are subject to a final withholding tax of 10% of theamount of the dividend. Cash or property dividends received by nonresident alienindividuals engaged in trade or business in the Philippines, nonresident alien notengaged in trade or business in the Philippines, nonresident foreign corporations aresubject to a final withholding tax at the rate of 20%, 25% and 30% respectively. A lowertax or preferential tax rate applies if the recipient of the case and/or property dividendsis a resident of a country with which the Philippines has a tax treaty and a priorapplication for a tax treaty relief has been properly filed with the appropriate office ofthe Philippine tax authorities.

Stock dividends that are distributed pro-rata to any stockholder in a domesticcorporation are not subject to Philippines income tax but are subject to DST imposed onoriginal issuance of shares of stock.

Estate and Donor’s Taxes

The transfer of any of the shares, upon death of an individual to his or her heirs by wayof succession, will be subject to estate taxes. The share will form part of the total estate ofthe decedent, whether such investor was a citizen of the Philippines or a foreigner,

36

regardless of residence at the time of death. Philippines estate taxes are at progressiverates of between 5% to 20%, if the net estate is more than Two Hundred Thousand Pesos(P200,000.00).

Individual and corporate investors, whether or not citizens or residents of thePhilippines, who transfer any share by way of gift or donation are generally liable fordonor’s tax on the transfer. Donor’s taxes are at progressive rates of between 2% to 15%net gifts given during the calendar year that exceed P100,000.00. Gifts given to a stranger(i.e., one who is not a brother, sister, spouse, ancestor, lineal descendant or relative byblood within the fourth degree of relationship) are taxed at a flat rate of 30% of net gifts.

The sale, exchange or transfer of shares may be also be subject to donor’s tax when thefair market value of the shares of stock sold is greater than the amount of money receivedby the seller. In this case the excess of the fair market value of shares of stock sold overthe amount of money received as consideration shall be deemed a gift subject to thedonor’s tax.

INDEX TO AUDITED INTERIM FINANCIAL STATEMENTS

Please see Exhibit A hereof for the Independent Auditors Report and Audited InterimFinancial Statements.

37

manila house private club, inc. · manila house private club, inc. (incorporated under the laws of...

Documents