Funds to be used for the launch of CrossFire and for general working capital purposes
TORONTO, Oct. 1 /CNW/ - SilverBirch Inc. (TSX-V: SVB), a leading digital media company, today announced that it has closed the offering of US$2 million senior secured term notes with Third Eye Capital Corporation acting as agent. US$1.3 million was advanced yesterday and an additional US$700,000 will be advanced subject to the successful acquisition of Red Mile Entertainment Inc. by the Company.
"This funding will allow us to properly launch our CrossFire game in the next 45 days which we expect to drive substantial revenues and strong cashflow for our 2009 fiscal year." commented Derek van der Plaat, CEO of SilverBirch.
The Company also provides the following general business guidance:
- Management is comfortable with analyst consensus revenue forecast of
approximately Cdn.$19 million for the fiscal year 2009; and
- Metin2 simultaneous concurrent user count now exceeds 2,500 and
CrossFire now exceeds 500,000 simultaneous users worldwide.
The net funds advanced by note holders will be held in escrow pending the completion by the Company of its Cdn. $500,000 non-brokered private placement financing. There is no assurance that the Company will be able to complete the private placement which is also subject to TSX Venture Exchange approval.
The notes offered have a term of eight months, unless extended at the option of Third Eye for an additional four months, bear interest at 1% per month during the first 6 months of their term and 1.5% per month thereafter until maturity. The notes are secured against the assets of the Company and certain subsidiaries. Agency fees of US$220,000 were paid to Third Eye on the closing of the offering of the notes. In addition, the Company has issued 3 million warrants allowing the note holders to acquire one common share in the Company for each warrant at an exercise price equal to Cdn. $0.10.
The party that introduced the Company to Third Eye will be paid a fee equal to 3% of the gross proceeds in the debt financing and granted one year broker warrants equal to 3% of the securities subscribed for in the debt financing.
About SilverBirch Inc.
Toronto-based SilverBirch Inc. is a leading digital media company operating in the fastest growing sectors of the video game and mobile markets. The company's video game operations include SilverBirch Studios, a mobile and handheld video game developer, Lighthouse Interactive, a publisher of interactive entertainment based in the Netherlands, and a co-venture with G4Box Inc. to operate licensed English language online multiplayer games. In its mobile division it provides mobile marketing services through Jambo Mobile Solutions and mobile content by way of an investment in CrossRoad Mobile. For more information see www.silverbirchinc.com.
Cautionary Notes:
As noted above, completion of the transaction is subject to a number of conditions, including but not limited to, acceptance by the TSX Venture Exchange. The transaction cannot close until the required approvals have been obtained. There can be no assurance that the transaction will be completed as proposed or at all.
The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this news release. The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of the content of this news release.
Forward-Looking Statements - Certain information set forth in this news release, including the anticipated analyst revenue forecasts, the acquisition of Red Mile Entertainment Inc. and the amount and actual completion of the private placement contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are based upon management's expectations, assumptions and beliefs, which may prove to be incorrect. These forward-looking statements are subject to numerous risks and uncertainties, which may cause actual results to differ materially from results expressed or implied by such forward-looking statements. These risks and uncertainties, certain of which are beyond management's control, include completion of the proposed transaction, the impact of general economic conditions, industry conditions, and currency fluctuations. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Readers are cautioned that the assumptions used in the preparation of such information, although considered reasonable at the time of preparation, may prove to be imprecise and, as such, undue reliance should not be placed on forward-looking statements. SilverBirch does not undertake to update any forward-looking statements contained in this document as a result of new information, future events or otherwise.
%SEDAR: 00020946E