Unassociated Document
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
13D
Under
the
Securities Exchange Act of 1934
(Amendment
No. __)*
RED
MILE ENTERTAINMENT, INC.
_________________________________________________________
(Name
of
issuer)
Common
Stock, $.01 Par Value Per Share
___________________________________
(Title
of
class of securities)
75678Q402
_____________________________
(CUSIP
number)
Paul
Haber
RME
Merger Sub Corp.
150
Ferrand Drive, Suite 500
Toronto,
Ontario, Canada M3C 3E5
(416)
621-6711
_____________________________________________________________________________________
(Name,
address and telephone number of person authorized to receive notices and
communications)
October
7, 2008
__________________________________________
(Date
of
event which requires filing of this statement)
If
the
filing person has previously filed a statement on Schedule 13G to report the
acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of §§240.13d-1(e), 240.13d-1(f) or 240.13d-1(g), check the
following box o.
Note:
Schedules filed in paper format shall include a signed original and five copies
of the schedule, including all exhibits. See §240.13d-7 for other parties to
whom copies are to be sent.
*The
remainder of this cover page shall be filled out for a reporting person’s
initial filing on this form with respect to the subject class of securities,
and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The
information required on the remainder of this cover page shall not be deemed
to
be “filed” for the purpose of Section
18
of the
Securities Exchange Act of 1934 (“Act”) or otherwise subject to the liabilities
of that section of Act but shall be subject to all other provisions of the
Act
(however, see the Notes).
|
SCHEDULE
13D
CUSIP
No.
75678Q402
|
|
1
|
NAME
OF REPORTING PERSONS
RME
Merger Sub Corp.
|
|
2
|
CHECK
THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a)o
(b)o
|
|
3
|
SEC
USE ONLY
|
|
4
|
SOURCE
OF FUNDS
OO
|
|
5
|
CHECK
IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(d) OR
2(e) o
|
|
6
|
CITIZENSHIP
OR PLACE OF ORGANIZATION
Delaware
|
|
NUMBER
OF
SHARES
BENEFICIALLY
OWNED
BY
EACH
REPORTING
PERSON
WITH
|
7
|
SOLE
VOTING POWER
3,698,872
shares
(1)
|
|
8
|
SHARED
VOTING POWER
|
|
9
|
SOLE
DISPOSITIVE POWER
|
|
10
|
SHARED
DISPOSITIVE POWER
|
|
11
|
AGGREGATE
AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,698,872
shares (1)
|
|
12
|
CHECK
BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN
SHARES
o
|
|
13
|
PERCENT
OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
23%
|
|
14
|
TYPE
OF REPORTING PERSON
CO
|
(1)
Pursuant to the Voting Agreement (as defined below), RME Merger Sub Corp. (as
defined below) may be deemed to have beneficial ownership of 3,698,872 shares
of
Common Stock. As described herein, the Reporting Person has sole voting power
over these shares solely with respect to the specific matters identified in
the
Voting Agreement and the Named Shareholders (as defined below) to the Voting
Agreement retain sole voting power with respect to all other matters. Neither
the filing of this Statement nor any of its contents shall be deemed to
constitute an admission by RME Merger Sub Corp. that it is the beneficial owner
of any of the Common Stock referred to herein for purposes of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”) or for any other purpose,
and such beneficial ownership is expressly disclaimed.
| Item
1. |
Security
and Issuer.
|
This
Statement is being filed with respect to the common stock, $0.01 par value
per
share (the “Common Stock”), of Red Mile Entertainment, Inc., a Delaware
corporation (the “Company”). The address of the principal executive offices of
the Company is 223 San Anselmo Way #3, San Anselmo, CA 94960.
|
Item
2.
|
Identity
and Background.
|
| (a) |
This
Schedule 13D is filed by and on behalf of RME Merger Sub Corp. (the
“Reporting Person”).
|
| (b) |
The
address of the principal business and principal office of the Reporting
Person is 150 Ferrand Drive, Suite 500,
Toronto,
Ontario, Canada M3C 3E5.
|
| (c) |
Set
forth in Annex A to this Schedule 13D is the name, residence or business
address and present principal occupation or employment of each of
the
Reporting Person’s executive officers and directors and the name,
principal business and address of any corporation or other organization
in
which such employment is conducted.
|
| (d) |
During
the last five years, neither the Reporting Person nor, to the knowledge
of
the Reporting Person, any of the directors or executive officers
of the
Reporting Person named in Annex A to this Schedule 13D, has been
convicted
in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
|
| (e) |
During
the last five years, neither the Reporting Person nor, to the knowledge
of
the Reporting Person, any of the directors or executive officers
of the
Reporting Person named in Annex A to this Schedule 13D, has been
a party
to a civil proceeding of a judicial administrative body of competent
jurisdiction and, as a result of such proceeding, was or is subject
to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state
securities laws or finding any violation with respect to such laws.
|
| (f) |
All
of the directors and executive officers of the Reporting Person named
in
Annex A to this Schedule 13D are citizens of
Canada.
|
| Item
3. |
Source
and Amount of Funds.
|
As
described below in Item 4, the shares of Common Stock to which this Schedule
13D
relates have not been purchased by the Reporting Person, and thus no funds
were
used for that purpose. As an inducement for the Reporting Person and
SilverBirch, Inc. (“SilverBirch”), an Ontario Corporation owning 100% of the
common stock of the Reporting Person, to enter into the Merger Agreement (as
hereinafter defined in Item 4), certain of the Company’s shareholders entered
into a Voting Agreement, dated as of October 7, 2008 (the “Voting Agreement”),
with the Reporting Person. Neither SilverBirch nor the Reporting Person paid
additional consideration to those shareholders in connection with the execution
or delivery of the Voting Agreement. The Voting Agreement is more fully
described in Item 4 below.
| Item
4. |
Purpose
of Transaction.
|
Each
of
the following shareholders of the Company (the “Named Shareholders”) entered
into the Voting Agreement as an inducement for SilverBirch and the Reporting
Person to enter into the Merger Agreement: DMH Family LP, Metro Crown
Industries, Tiger Paw Capital Corporation, Joe Abrams, Joseph W. Abrams and
Patricia Abrams, Chester Aldridge, VTL Holdings Inc., Mike Hart and Fromac
Developments Inc. The purpose of the Voting Agreement is to facilitate the
consummation of the transactions contemplated by the Merger Agreement.
The
Merger Agreement
SilverBirch,
the Reporting Person, and the Company have entered into an Agreement and Plan
of
Merger, dated as of October 7, 2008 (the “Merger Agreement”), pursuant to which
Reporting Person will merge with and into the Company (the “Merger”), with the
Company continuing as the surviving corporation (the “Surviving Corporation”)
and as a wholly-owned subsidiary of SilverBirch following the
Merger.
Each
issued and outstanding share of Company Common Stock will be converted into
the
right to receive 0.875 shares of SilverBirch common stock. Any Company
stockholders who demand appraisal of their shares in accordance with Delaware
law will be entitled to seek a judicial determination of the fair value of
such
shares.
Non-management
holders of options or warrants to purchase Company Common Stock will have the
right to either net exercise such options or warrants for Company Common Stock
immediately before the closing of the merger or convert such options or warrants
into the right to receive options or warrants to purchase a number of shares
of
SilverBirch common stock equal to the number of shares of Company Common Stock
subject to such option or warrant times 0.875. The exercise price for each
share
of SilverBirch common stock will equal the exercise price of the Company Common
Stock subject to such option or warrant times 1.14286. Under the Merger
Agreement, certain officers and employees will surrender and cancel each of
their options and warrants to purchase Company Common Stock.
Under
an
earnout provision of the Merger Agreement, SilverBirch will issue additional
SilverBirch Shares (or options or warrants, as the case may be) to holders
of
the Company’s Common Stock (or options or warrants to purchase common stock) if
either or both of the following circumstances occur:
(i)
if
the Company, as the surviving company, meets certain gross revenue milestones
in
connection with the Publishing Agreement between the Company and Atari
Interactive, Inc. regarding the “Heroes over Europe” video game franchise, or
(ii)
if
the Company secures a co-publishing agreement with a third party for the Sin
City video game currently in development, provided that thirty percent of such
shares will be held back to offset certain cost overruns in the development
of
the “Sin City” game.
All
undistributed earnout shares will be available to satisfy indemnity claims
under
the Merger Agreement.
The
Merger Agreement includes customary representations, warranties and covenants
by
the parties and is subject to customary closing conditions. The shares of
SilverBirch stock to be issued in the merger will not be registered under the
Securities Act of 1933, as amended (the “Securities Act”), and will be issued in
reliance on the exemption from registration provided by Section 3(a)(10) of
the
Securities Act, relating to an exchange of securities after a hearing regarding
the fairness of the transaction. Accordingly, closing of the Merger Agreement
(the “Closing”) is conditioned on obtaining a permit for the issuance of the
SilverBirch stock from the California Commissioner of Corporations after a
hearing regarding the fairness of the transaction. The Closing is also
conditioned on approval by the Company’s stockholders as well as U.S. regulatory
approval and approval by the Toronto Venture Stock Exchange
(TSX-V).
Under
the
terms of the Merger Agreement, the Company has agreed not to solicit, discuss
or
negotiate alternative transactions regarding the acquisition of the Company
or
its assets. The parties may terminate the Merger Agreement by mutual written
consent at any time and either party may terminate the Merger Agreement if
the
transaction has not closed by January 31, 2009. The Company will be obligated
to
pay SilverBirch a termination fee equal to 1,500,000 shares of Company Common
Stock if (i) the Company’s stockholders do not approve the merger, (ii) the
Company fails to obtain any required approval from any governmental authority,
or (iii) the Company’s board of directors recommends an alternative transaction
or withdraws its recommendation in favor of the Merger Agreement.
The
Voting Agreement
As
an
inducement to SilverBirch and as a condition to SilverBirch’s entering into the
Merger Agreement, the Named Shareholders entered into a Voting Agreement with
the Reporting Person, dated October 7, 2008 (the “Voting Agreement”), whereby
the Named Shareholders agreed to vote all of the shares of the Company’s Common
Stock currently beneficially owned by them or acquired by them after such date
in favor of approval of the adoption of the Merger Agreement and approval of
the
Merger and against any Alternative Transaction (as defined in the Merger
Agreement). The Named Shareholders also granted a representative of the
Reporting Person an Irrevocable Proxy granting the right to vote such shares
in
accordance with the terms of the Voting Agreement. The Voting Agreement limits
the ability of the Named Shareholders to sell or otherwise transfer the shares
of the Company’s Common Stock beneficially owned by them. As of October 7, 2008,
the Named Shareholders beneficially owned an aggregate of approximately
3,698,872 shares of the Company’s Common Stock, or approximately 23% of the
voting power of the issued and outstanding shares of the Company. The Voting
Agreement terminates upon the earliest to occur of (i) the date of the
termination of the Merger Agreement in accordance with its terms, (ii) the
date
that the Merger Agreement shall become effective in accordance with its terms,
or (iii) upon the execution of a written agreement by all parties to the Voting
Agreement.
The
Reporting Person expects that, upon completion of the Merger, the Common Stock
will be no longer be listed on the OTC Bulletin Board and subsequently will
cease to be registered under the Exchange Act.
Except
as
set forth in this Schedule 13D, neither the Reporting Person nor, to the
knowledge of the Reporting Person, any of the directors or executive officers
listed on Annex A hereto, has any present plans or intentions which would result
in or relate to any of the actions described in subparagraphs (a) through (j)
of
Item 4 of Schedule 13D.
The
descriptions contained in this Item 4 of the transactions contemplated by the
Merger Agreement and the Voting Agreement does not purport to be complete,
and
are qualified in their entirety by the terms and conditions of the Merger
Agreement and the Voting Agreement, copies of which are filed as Exhibits 99.1
and 99.2, respectively, to this Schedule 13D and are incorporated herein by
reference.
| Item
5. |
Interest
in Securities of the
Issuer.
|
(a) –
(b) As described
in Item 4 of this Schedule 13D, as a result of the Voting Agreement, the
Reporting Person has the sole power to vote the Common Shares held by the Named
Shareholders with respect to certain matters relating to the Merger as set
forth
in the Voting Agreement (see Item 4 of this Schedule 13D for details).
The
Common Stock held by the Named Shareholders currently consists of 3,698,872
shares of Common Stock, which represents approximately 23% of the outstanding
shares of the Company’s Common Stock as of October 7, 2008. Pursuant to the
Voting Agreement, and subject to limited exceptions set forth in the Voting
Agreement, the Named Shareholders may not sell or otherwise transfer the shares
of the Company’s Common Stock beneficially owned by them.
To
the
best knowledge of the Reporting Person, no shares of the Company’s Common Stock
are beneficially owned by any of the directors or executive officers of the
Reporting Person listed on Annex A, except for such beneficial ownership, if
any, arising solely from the Voting Agreement and the related Irrevocable Proxy.
(c) Except
for the Merger Agreement, the Voting Agreement and the transactions contemplated
by such agreements, neither the Reporting Person nor, to the Reporting Person’s
knowledge, any person named on Annex A has effected any transaction in the
Common Stock during the past 60 days.
(d)
–
(e)
Not applicable.
| Item
6. |
Contracts,
Arrangements, Understanding or Relationships with Respect to Securities
of
the Issuer.
|
To
the
Reporting Person’s knowledge, other than as described in Items 3, 4 and 5 of
this Schedule 13D, which descriptions are incorporated by reference in response
to this Item 6, there is no contract, arrangement, understanding or relationship
(legal or otherwise) among any of the persons named in Item 2 and between such
persons and any other person with respect to any securities of the Company.
| Item
7. |
Material
to be Filed as Exhibits.
|
|
Exhibit
No.
|
Description
|
| |
|
|
99.1
|
Agreement
and Plan of Merger, dated October 7, 2008, by and among SilverBirch
Inc.,
RME Merger Sub Corp., Red Mile Entertainment, Inc. and Kenny Cheung,
as
representative (incorporated by reference to Exhibit 2.1 to the Current
Report on Form 8-K filed by Red Mile Entertainment, Inc. on October
14,
2008).
|
|
99.2
|
Voting
Agreement, dated October 7, 2008, by and among RME Merger Sub Corp.,
DMH
Family LP, Metro Crown Industries, Tiger Paw Capital Corporation,
Joe
Abrams, Joseph W. Abrams and Patricia Abrams, Chester Aldridge, VTL
Holdings Inc., Mike Hart and Fromac Developments Inc. (incorporated
by
reference to Exhibit 10.1 to the Current Report on Form 8-K filed
by Red
Mile Entertainment, Inc. on October 14, 2008).
|
| |
|
*
* * *
*
SIGNATURE
After
reasonable inquiry and to the best of my knowledge and belief, I certify that
the information set forth in this statement is true, complete and
correct.
Dated:
October 17, 2008
| |
|
|
| |
RME
MERGER SUB
CORP. |
|
|
|
| |
By: |
/s/ Paul
Haber |
| |
Name:
Paul Haber
Title:
Secretary and Treasurer
|
Annex
A
Directors
and Executive Officers of RME Merger Sub Corp.
The
following tables set forth the name, present principal occupation or employment,
and residence or business address of each director and executive officer of
RME
Merger Sub Corp. The business address of each person named below is RME Merger
Sub Corp., 150 Ferrand Drive, Suite 500, Toronto, Ontario, Canada M3C
3E5.
Directors
|
Name
|
Present
Principal Occupation or Employment
|
| |
|
|
Derek
van der Plaat
|
President
and Chief Executive Officer of SilverBirch, Inc.
|
| |
|
Executive
Officers
|
Name
|
Present
Principal Occupation at RME Merger Sub Corp.
|
| |
|
|
Derek
van der Plaat
|
President
|
|
Paul
Haber
|
Secretary
and Treasurer
|
| |
|