C08775-2023

SECURITIES AND EXCHANGE COMMISSIONSEC FORM 17-C

CURRENT REPORT UNDER SECTION 17
OF THE SECURITIES REGULATION CODE
AND SRC RULE 17.2(c) THEREUNDER

1. Date of Report (Date of earliest event reported)
Dec 15, 2023
2. SEC Identification Number
31168
3. BIR Tax Identification No.
002-724-446-000
4. Exact name of issuer as specified in its charter
A Brown Company, Inc.
5. Province, country or other jurisdiction of incorporation
Philippines
6. Industry Classification Code(SEC Use Only)
7. Address of principal office
Xavier Estates Uptown, Airport Road, Balulang, Cagayan de Oro City Postal Code 9000
8. Issuer's telephone number, including area code
Liaison Office --- 02-8631 8890 or (02) 8633-3135
9. Former name or former address, if changed since last report
-
10. Securities registered pursuant to Sections 8 and 12 of the SRC or Sections 4 and 8 of the RSA
Title of Each Class Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding
Common Stock 2,372,367,911 shares
Preferred Stock 13,264,900 shares
11. Indicate the item numbers reported herein
Item No. 9

The Exchange does not warrant and holds no responsibility for the veracity of the facts and representations contained in all corporate disclosures, including financial reports. All data contained herein are prepared and submitted by the disclosing party to the Exchange, and are disseminated solely for purposes of information. Any questions on the data contained herein should be addressed directly to the Corporate Information Officer of the disclosing party.

A Brown Company, Inc.BRN

PSE Disclosure Form 4-22 - Joint Ventures References: SRC Rule 17 (SEC Form 17-C) and
Section 4.4 of the Revised Disclosure Rules

Subject of the Disclosure

Amendments to the Joint Venture Agreement with GET Philippines, Inc.- Electric Shuttle Service in Cagayan de Oro
Background/Description of the Disclosure

Please be advised, further to our disclosure on February 21, 2023, that the Corporation’s Board of Directors approved today, December 12, 2023, some proposed amendments to the Joint Venture Agreement with GET Philippines, Inc. (“GET”) to create, promote, operate and manage the ABC Electric Shuttle Service as a clean, efficient, modern and green mass transport system in Cagayan de Oro (‘the Project”).

As previously disclosed, GET will incorporate and set up a new company (“JV Co.”) to be jointly owned with ABCI for the purpose of initially owning ten (10) Community Optimized Managed Electric Transport (COMET) electric vehicles that will be deployed for the Project.

The following terms of the Joint Venture Agreement will be amended:

1.) The JV Co. will now have an authorized capital stock of Thirty Million Pesos (Php30,000,000.00) divided into Thirty Million (30,000,000) shares with par value of One Peso (Php1.00), instead of One Hundred Million Pesos (Php100,000,000.00).

2.) Upon incorporation, the initial subscription to JV Co.’s shares shall be Ten Million Pesos (Php10,000,000.00), instead of the initial intended subscription of Forty-Five Million Pesos (Php45,000,000.00).

3.) GET will no longer be the sole initial subscriber to the JV Co.’s authorized capital stock upon incorporation with a subsequent transfer by GET of fifty percent (50%) of its shareholdings to ABCI immediately after incorporation, as originally intended.

4.) Thus, upon incorporation, each of GET and ABCI will now initially subscribe to Five Million (5,000,000) shares each at a subscription price of Twenty-Two Million Five Hundred Thousand Pesos (Php22,500,000,00). The additional paid-in capital (“APIC”) in the amount of Seventeen Million Five Hundred Thousand Pesos (Php17,500,000,00) shall be paid into JV Co. either upon incorporation or immediately after its incorporation.

The JV Co. will be owned upfront by GET and ABCI in equal shares of fifty percent (50%) each.

5.) GET has an option to make its equity contribution in the JV Co. in the form of new COMET electric vehicles in lieu of cash.

6.) Upon incorporation, the fifth member of the Board shall initially be vacant and the Board seat shall be reserved to be filled by an independent director, as defined under Title III Section 22 of the Revised Corporation Code, who shall be jointly nominated by ABCI and GET after incorporation.

The reduction in the capitalization of the JV Co. at incorporation has been agreed upon by ABCI and GET to reduce the filing fees and the documentary stamp taxes.
Date of Approval by Board of Directors Feb 21, 2023
Date of Approval by Stockholders, if applicable N/A
Description and nature of the transaction including the timetable for implementation, and related regulatory requirements

2.2 Upon incorporation of JV Co, the authorized capital stock will be Thirty Million Pesos (Php30,000,000.00) corresponding to Thirty Million (30,000,000) shares with a par value of One Peso (Php1.00) per share and the outstanding capital stock will be Ten Million Pesos (Php10,000,000.00) corresponding to Ten Million (10,000,000) shares and each of GET and ABCI will own fifty percent (50%) of the outstanding capital stock of JV Co.

2.3 Each of GET and ABCI will subscribe to Five Million (5,000,000) shares each at a subscription price of Twenty-Two Million Five Hundred Thousand Pesos (Php22,500,000,00). The premium or additional paid-in capital (“APIC”) in the amount of Seventeen Million Five Hundred Thousand Pesos (Php17,500,000,00) shall be paid into JV Co. either upon incorporation or immediately after its incorporation, subject to the option of GET to make its equity contribution in the JV Co. in the form of new COMET electric vehicles in lieu of cash.

3.1 Incorporation of the JV Co. Upon receipt by GET, on behalf of JV Co, of the initial investment of ABCI in the amount of Twenty Two Million Five Hundred Thousand Pesos (¿22,500,000.00), GET shall cause the incorporation of the JV Co. with the SEC. At Incorporation Date, the JV Co. shall have an authorized capital stock of Thirty Million Pesos (¿30,000,000.00) divided into Thirty Million (30,000,000) shares with a par value of (¿1.00) each (the “Shares”).

3.2 Subscription of GET and ABCI upon Incorporation. Upon incorporation, GET and ABCI shall each subscribe to Five Million (5,000,000.00) shares at at a subscription price of Twenty-Two Million Five Hundred Thousand Pesos (Php22,500,000,00), inclusive of APIC as their respective equity contributions. The equity contribution shall be applied for the purchase by JV Co. of ten (10) new COMET electric vehicles with a total value of Forty-Five Million Pesos (¿45,000,000.00) exclusive of the 12% Value Added Tax. GET has the option to make its equity contribution in the JV Co. of Twenty-Two Million Five Hundred Thousand Pesos (Php22,500,000,00), inclusive of APIC, in the form of new COMET electric vehicles in lieu of cash.

3.3 Issuance of Primary Shares. JV Co will issue to GET and to ABCI Five Million (5,000,000.00) shares each in JV Co. for a shareholding ratio of 50%-50% of the total outstanding shares in the JV Co. The premium or APIC in the amount of Seventeen Million Five Hundred Thousand Pesos (Php17,500,000,00) for each of GET and ABCI shall be paid into JV Co. either upon incorporation or immediately after its incorporation, subject to the option of GET to make its equity contribution in the JV Co. in the form of new COMET electric vehicles in lieu of cash.
Rationale for the transaction including the benefits which are expected to be accrued to the Issuer as a result of the transaction

The subscription to shares in the Joint Venture Company (JV Co.) to be incorporated for the Electric Shuttle Service will provide the commuting public of Cagayan de Oro with a clean, efficient, modern and green mass transport system. The investment will increase the portfolio of the Company and will increase revenue from the return on the investment in the future.
Terms and conditions of the joint venture
Amount of investment and/or interest by the parties involved

JV Co will issue to each of GET and ABCI Five Million (5,000,000.00) shares of JV Co. for a shareholding ratio of 50%-50% of the total outstanding shares in the JV Co. The premium or additional paid-in capital shares (“APIC”) in the amount of Seventeen Million Five Hundred Thousand Pesos (Php17,500,000,00) from each of GET and ABCI shall be paid into JV Co. either upon incorporation or immediately after its incorporation, provided, that GET has an option to make its equity contribution in the JV Co. in the form of new COMET electric vehicles in lieu of cash.
Provisions on profit-sharing, arrangements on management and operations

Unless otherwise agreed upon by the Parties, ABCI and GET shall continue to retain an equal shareholding ratio of 50%-50% in JV Co. Any dividends generated by JV Co. from available retained earnings after each fiscal year from both transport and advertising operations shall be split equally by ABCI and GET.

The JV Co. will be responsible for the provision, management, service, maintenance, and operation of the fleet of COMET electric vehicles for the ABC Electric Shuttle Service in Cagayan de Oro. The JV Co. will also offer the COMET electric vehicles as an effective marketing tool and platform for media and transit advertising for third parties. It shall make use of the GETPASS Transport Ecosystem as a fleet and passenger management and monitoring system for the ABC Electric Shuttle Service.

The officers of the JV Co. shall consist of a Chairman, a President, a Treasurer, a Corporate Secretary, and such other officers whose powers and duties shall be provided by the Board of Directors. The officers of the JV Co. shall be elected by the Board upon nomination of the Party specified below:

Chairman GET
President ABCI
Treasurer GET
Secretary ABCI
Conditions precedent to closing of transaction, if any

None
Other salient features of the joint venture agreement

None
Identity and/or corporate background of the parties to the transaction, including the following
Name Nature of Business Nature of any material relationship with the Issuer and the parties to the joint venture, their directors/officers or any of their affiliates
GET Philippines, Inc. Operator for Electric Shuttle Services None
Effect(s) on the business, financial condition and operations of the Issuer, if any

The subscription to shares by ABCI in the joint venture company (JV Co.) to be incorporated by GET for the Electric Shuttle Service will provide the commuting public of CDO with a clean, efficient, modern and green mass transport system. The investment will increase the portfolio of the Company and will increase revenue from the return on the investment in the future.
Other Relevant Information

The Amended Joint Venture Agreement was approved by the Board of Directors on December 12, 2023.

The February 21, 2023 disclosure was amended to notify the public of the amendments to the Joint Venture Agreement with GET Philippines, Inc.
Filed on behalf by:
Name Allan Ace Magdaluyo
Designation Senior Finance Manager/Corporate Information Officer/Compliance Officer