SilverBirch Inc. a leading digital
media company, today announced an agreement in principle to acquire all of the
outstanding shares of Red Mile Entertainment, Inc., a
California-based video game publisher with worldwide rights to established
brands and intellectual properties including the "Heroes" flight combat
franchise.
Red Mile, an NASD OTC Bulletin Board listed company, has developed and
published a number of successful console and PC titles including Heroes Of The
Pacific, which sold over 600,000 units. Current projects in development
include a sequel, Heroes Over Europe, which is anticipated to be released in
early 2009, and another highly anticipated licensed title, for which the
company will seek a co-publishing partner.
Red Mile is expected to contribute over $7 million in revenue and roughly
$2 million in EBITDA starting in 2009. SilverBirch has advanced a bridge loan
of $750,000 CAD dollars to Red Mile as part of the acquisition terms, and will
also issue seven-eighths of one SilverBirch share from treasury in exchange
for each Red Mile share, plus an earn-out based on future revenue targets.
Currently 16,544,461 Red Mile shares and warrants qualify for the transaction,
which equates to 14,476,403 new Silverbirch shares. The transaction is subject
to regulatory and exchange approvals both in Canada and the United States as
well as, in the case of Red Mile, shareholder approval.