SilverBirch Acquires Red Mile Ent.

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.