Divestiture immediately reduces debt exposure and dilution by cancelling 1.8 million issued warrants
TORONTO, Nov. 17 /CNW/ - SilverBirch Inc. (TSX-V: SVB), today announced it has completed the sale of its 60% stake in Crossroad Mobile, LLC. For nominal consideration, the assets and related liabilities have been transferred back to the purchasers. Under the agreement, the effective closing date is September 30, 2008.
The transaction will result in the elimination of just over $40K of debt in relation to a Secured Promissory Note and reduces further dilution for SVB's shareholder with the immediate cancellation of 1,800,000 warrants.
"This transaction allows SilverBirch to remain focused on our core game assets: CrossFire, Metin2, and the console games developed and marketed by SilverBirch Studios, Lighthouse, and (x)Red Mile," said Kevin Astle, SilverBirch interim President and CEO. "The new board of directors has moved swiftly and decisively to re-position the company to capitalize on the potential of these assets for the benefit of all shareholders."
The divesture of this non-core business substantially completes the Company's previously announced process of re-focusing on its core strengths in the game industry. The Company's goal is to become a premier publisher and marketer of Massive Multiplayer Online Games (MMOG) and video games for PCs and leading console platforms. This new strategic focus will build upon SilverBirch's existing operations, including video game developer SilverBirch Studios, Netherlands-based interactive entertainment publisher Lighthouse Interactive, and a co-publishing venture to operate licensed English language online multiplayer games. The company is also acquiring (x)Red Mile Entertainment, publisher of console games Sin City and Heroes Over Europe, in a deal expected to close in early 2009, subject to shareholder, legal and regulatory approvals.
SilverBirch has recently initiated a restructuring plan that is expected to deliver significant savings and drive profitable revenue and growth. SilverBirch continues to review operations to further reduce costs and improve margins to enable more strategic investment in online multiplayer games and original game content development.
About SilverBirch Inc.
Toronto-based SilverBirch Inc. is a leading interactive entertainment company operating in the fastest growing sectors of the video game market. The Company's video game operations include SilverBirch Studios, a video game developer; (x)Red Mile Entertainment , a San Francisco based publisher of console games such as Heroes Over Europe and the exclusive worldwide license holder for Sin City; Lighthouse Interactive, a Netherlands-based publisher of PC games; and a co-venture with G4Box Inc. to operate licensed English language online multiplayer games. For more information see www.silverbirchinc.com.
(x)The acquisition of Red Mile Entertainment is expected to close in early 2009, subject to shareholder, legal and regulatory approvals.
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 management's assessment of future plans, contain forward-looking statements that involve substantial known and unknown risks and uncertainties. These forward-looking statements are subject to numerous risks and uncertainties, certain of which are beyond management's control, including the impact of general economic conditions, industry conditions, and currency fluctuations. 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.
%SEDAR: 00020946E