Definitive Schedule 14C Information Statement
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
SCHEDULE
14C INFORMATION
Information
Statement Pursuant to Section 14(c) of the Securities Exchange Act of
1934
Check
the
appropriate box:
o Preliminary
Information Statement
¨ Confidential,
for Use of the Commission Only (as permitted by Rule 14c-5(d)(2))
x Definitive
Information Statement
RED
MILE
ENTERTAINMENT, INC.
(Name
of
Registrant As Specified In Its Charter)
Payment
of Filing Fee (Check the Appropriate Box):
ý No
fee
required
¨ Fee
computed on table below per Exchange Act Rules 14c-5(g) and 0-11
1. Title
of
each class of securities to which transaction applies:
_________________________________________
2. Aggregate
number of securities to which transaction applies:
_________________________________________
3. Per
unit
price or other underlying value of transaction computed pursuant to Exchange
Act Rule 0-11
_________________________________________
4. Proposed
maximum aggregate value of transaction
_________________________________________
5. Total
fee
paid
_________________________________________
¨ Check
box
if any party of the fee is offset as provided by Exchange Act Rule 0-11(a)(2)
and identify the filing for which the offsetting fee was paid previously.
Identify the previous filing by registration statement number, or the Form
or
Schedule and the date of its filing.
RED
MILE
ENTERTAINMENT, INC.
4000
Bridgeway, Suite 101
Sausilito,
CA 94965
NOTICE
OF
STOCKHOLDER ACTION BY WRITTEN CONSENT
TO
ALL
STOCKHOLDERS OF RED MILE ENTERTAINMENT, INC.:
The
purpose of this letter is to inform you that our stockholders have given our
board the authority to effect a reverse stock split of each share of common
stock of Red Mile Entertainment, Inc. at a ratio of one share for every three
shares of shares of common stock outstanding.
The
holders of shares representing 54.0% of our voting power have executed a written
consent giving our board the authority to effect the reverse stock split. The
reverse stock split is described in greater detail in the information statement
accompanying this notice. The consents that we have received constitute the
only
stockholder approval required for the reverse stock split under the Delaware
Corporation Law and our articles of incorporation and bylaws. We would not
effect the stock split before February 5, 2007, and our board may elect to
effect the stock split or may elect not to take action.
WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
Because
the written consent of holders of a majority of our voting power satisfies
all
applicable stockholder voting requirements, we are not asking you for a proxy;
please do not send us one.
The
accompanying information statement is for information purposes only. Please
read
it carefully.
January
15, 2007
By
Order
of the Board of Directors
/s/
Chester Aldridge
Chester
Aldridge
President
and Chief Executive Officer
RED
MILE
ENTERTAINMENT, INC.
4000
Bridgeway, Suite 101
Sausilito,
CA 94965
INFORMATION
STATEMENT
January
15, 2007
WE
ARE
NOT ASKING YOU FOR A PROXY AND
YOU
ARE
REQUESTED NOT TO SEND US A PROXY.
This
information statement is being mailed on or about January 15, 2007 to the
stockholders of record of Red Mile Entertainment, Inc. at the close of business
on December 31, 2006. This information statement is being sent to you for
information purposes only. No action is requested or required on your part.
This
information statement constitutes notice to our stockholders of corporate action
by stockholders without a meeting, as required by Section 228 of the Delaware
Corporation Law.
This
information statement is being furnished to you to inform you that holders of
shares representing a majority of the voting power of shares of our common
stock, par value $0.0001 per share have adopted, by written consent, resolutions
authorizing us to effect a reverse stock split of each share of common stock
of
Red Mile Entertainment, Inc. at a ratio of one share for every three shares
of
common stock outstanding.
As
of the
close of business on the record date, we had 100,000,000 shares of common stock
authorized, of which 29,379,699 shares were outstanding, and 20,000,000 shares
of preferred stock authorized, of which there were no shares outstanding. Each
outstanding share of common stock is entitled to one vote per
share.
The
approval of our class of common stock is required for us to be able to effect
the proposed stock split. Under Delaware law and our organizational documents,
we are entitled to obtain that approval by written consent. We have obtained
written consents approving the proposed stock split and the proposed amendment
from stockholders holding approximately 54.0% of the voting power of our common
stock.
We
will
bear the expenses relating to this information statement, including expenses
in
connection with preparing and mailing this information statement and all
documents that now accompany or may in the future supplement it. We contemplate
that brokerage houses, custodians, nominees, and fiduciaries will forward this
information statement to the beneficial owners of our common stock held of
record by these persons and we will reimburse them for their reasonable expenses
incurred in this process.
Only
one
information statement is being delivered to multiple stockholders sharing an
address, unless we have received contrary instructions from one or more of
the
stockholders. We will undertake to deliver promptly upon written or oral request
a separate copy of the information statement to a stockholder at a shared
address to which a single copy of the information statement was delivered.
You
may make a written or oral request by sending a written notification to our
principal executive offices stating your name, your shared address, and the
address to which we should direct the additional copy of the information
statement or by calling our principal executive offices. If multiple
stockholders sharing an address have received one copy of this information
statement and would prefer us to mail each stockholder a separate copy of future
mailings, you may send notification to or call our principal executive offices.
Additionally, if current stockholders with a shared address received multiple
copies of this information statement and would prefer us to mail one copy of
future mailings to stockholders at the shared address, notification of that
request may also be made by mail or telephone call to our principal executive
offices.
TABLE
OF CONTENTS
|
VOTING
SECURITIES
|
4
|
|
DISSENTERS’
RIGHT OF APPRAISAL
|
4
|
|
STOCKHOLDER
AUTHORIZATION ONE—REVERSE STOCK SPLIT
|
4
|
|
BOARD
OF DIRECTORS’ RECOMMENDATION AND STOCKHOLDER APPROVAL
|
6
|
|
INTEREST
OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
|
6
|
|
FORWARD-LOOKING
STATEMENTS
|
7
|
|
WHERE
YOU CAN FIND MORE INFORMATION
|
7
|
|
INCORPORATION
OF FINANCIAL INFORMATION
|
7
|
VOTING
SECURITIES
As
of
December 31, 2006, there were 29,379,699 shares of our common stock outstanding
and no shares of our preferred stock were outstanding.
DISSENTERS’
RIGHT OF APPRAISAL
Under
Delaware law and our articles of incorporation and bylaws, no stockholder has
any right to dissent to the proposed reverse stock split and is not entitled
to
appraisal of or payment for their shares of our stock.
STOCKHOLDER
AUTHORIZATION
ONE—
REVERSE
STOCK SPLIT
As
of
January
2, 2007, our board of directors and stockholders holding a majority of
our voting power voted to authorize our board of directors, at its discretion,
to effect a reverse stock split of our outstanding common stock at a ratio
of
one share for every 3 shares of common stock outstanding. Should the board
of
directors elect to effect it, this reverse stock split would take effect no
sooner than February 5, 2007, for shareholders of record of our company as
of
the close of business on the date of the reverse stock split.
Purpose
We
propose to effect the reverse stock split in order to reduce the number of
outstanding shares of our common stock to a level more consistent with other
public companies with a similar anticipated market capitalization. We anticipate
that we would also issue some authorized but unissued shares to raise capital
to
fund our operations, but we have no agreement or understanding with any person
regarding any such issuance.
Our
board
of directors believes that the reverse stock split is in the best interest
of
our company and its stockholders. We can give no assurances, however, that
the
reverse stock split would have the desired benefits. Our board of directors
reserves the right to elect not to effect the reverse stock split.
Effect
on Authorized and Outstanding Shares
Immediately
following effectiveness of the reverse stock split, assuming that it is at
a
ratio of one share for every three shares of common stock outstanding, there
would be approximately 9,793,233 shares of our common stock outstanding.
With
the
exception of the number of shares of common stock outstanding, the rights and
preferences of shares of our common stock prior and subsequent to the reverse
stock split would remain the same. We do not anticipate that our financial
condition, the percentage of our stock owned by management, the number of our
stockholders, or any aspect of our current business would materially change
as a
result of the reverse stock split.
The
reverse stock split would affect all of our stockholders uniformly and would
not
affect any stockholder’s percentage ownership interests in our company, except
to the extent that the reverse stock split results in any of our stockholders
owning a fractional share. See “Exchange of Certificate and Elimination of
Fractional Share Interests.” The common stock issued and outstanding after the
reverse stock split would remain fully paid and non-assessable.
Our
common stock is currently registered under Section 12(g) of the Securities
Exchange Act of 1934, and as a result we are subject to periodic reporting
and
other requirements. The proposed reverse stock split would not affect the
registration of our common stock under the Exchange Act.
Effect
on Market Price
The
reverse stock split may cause an increase in the market price of our common
stock, but we cannot predict the actual effect of the reverse stock split on
the
market price. If the market price of our common stock does increase, it may
not
increase in proportion to the reduction in the number of shares outstanding
as a
result of the reverse stock split. Furthermore, the reverse stock split may
not
lead to a sustained increase in the market price of our common stock. The market
price of our common stock may also change as a result of other unrelated
factors, including our operating performance and other factors related to our
business, as well as general market conditions.
Accounting
Matters
The
reverse stock split would not affect the par value of our common stock. As
a
result, on the effective date of the reverse stock split the stated par value
capital on our balance sheet attributable to our common stock would be reduced
and the additional paid-in capital account would be credited with the amount
by
which the stated capital is reduced. The per-share net income or loss and net
book value per share of our common stock would be increased because there would
be fewer shares of our common stock outstanding.
We
present earnings per share (“EPS”) in accordance with Statement of Financial
Accounting Standards (“SFAS”) No. 128, “Earnings per Share,” and we will comply
with the requirements of SFAS No. 128 with respect to reverse stock splits.
In pertinent part, SFAS No. 128 says as follows: “If the number of common
shares outstanding decreases as a result of a reverse stock split, the
computations of basic and diluted EPS shall be adjusted retroactively for all
periods presented to reflect that change in capital structure. If changes in
common stock resulting from reverse stock splits occur after the close of the
period but before issuance of the financial statements, the per-share
computations for those and any prior-period financial statements presented
shall
be based on the new number of shares. If any per-share computations reflect
such
changes in the number of shares, that fact shall be disclosed.”
Exchange
of Certificate and Elimination of Fractional Share
Interests
On
the
date of the reverse stock split, each lot of a given number of shares of our
common stock—the number would depend on the ratio selected by our board of
directors—would automatically be changed into one share of common stock. No
additional action on the part of any stockholder would be required in order
to
effect the reverse stock split. Stockholders would not be required to exchange
their certificates representing shares of common stock held prior to the reverse
stock split for new certificates representing shares of common stock; please
do
not send us your stock certificates.
In
the
reverse stock split, no certificate representing any fractional share interest
in our post-split shares would be issued. Instead, all fractional shares would
be rounded up, so that a holder of pre-split shares would receive, in lieu
of
any fraction of a post-split share to which the holder would otherwise be
entitled, an entire post-split share. No cash payment would be made to reduce
or
eliminate any fractional share interest. The result of this “rounding-up”
process would increase slightly the holdings of those stockholders who currently
hold a number of pre-split shares that would otherwise result in a fractional
share after consummating the reverse stock split.
Federal
Income Tax Consequences
The
following description of federal income tax consequences of the reverse stock
split is based on the Internal Revenue Code of 1986, as amended, the applicable
Treasury Regulations promulgated thereunder, judicial authority, and current
administrative rulings and practices as in effect on the date of this
information statement. The discussion is for general information only and does
not cover any consequences that apply for special classes of taxpayers (e.g.,
non-resident aliens, broker-dealers or insurance companies). We urge all
stockholders to consult their own tax advisers to determine the particular
consequences to each of them of the reverse stock split.
We
have
not sought and will not seek an opinion of counsel or a ruling from the Internal
Revenue Service regarding the federal income tax consequences of the reverse
stock split. We believe, however, that because the reverse stock split is not
part of a plan to periodically increase or decrease any stockholder’s
proportionate interest in the assets or earnings and profits of our company,
the
reverse stock split would have the federal income tax effects described
below:
The
exchange of pre-split shares for post-split shares should not result in
recognition of gain or loss for federal income tax purposes. In the aggregate,
a
stockholder’s basis in the post-split shares would equal that stockholder’s
basis in the pre-split shares. A stockholder’s holding period for the post-split
shares would be the same as the holding period for the pre-split shares
exchanged therefor. Provided that a stockholder held the pre-split shares as
a
capital asset, the post-split shares received in exchange therefor would also
be
held as a capital asset.
As
stockholders are not receiving cash in lieu of any fractional share interest,
but instead fractional shares are being rounded up to the next whole share,
it
is unlikely that stockholders would be treated as if our company had redeemed
any fractional share interest. It is therefore unlikely that rounding up
fractional shares would result in any gain or loss recognition by
stockholders.
Our
company should not recognize gain or loss as a result of the reverse stock
split.
Potential
Anti-Takeover Effect
Although
the increased proportion of unissued authorized shares to issued shares could,
under certain circumstances, have an anti-takeover effect (for example, by
permitting issuances that would dilute the stock ownership of a person seeking
to effect a change in the composition of our board of directors or contemplating
a tender offer or other transaction for the combination of our company with
another company), we are not proposing the reverse stock split in response
to
any effort of which we are aware to accumulate any of our shares or obtain
control of our company. Our board does not currently contemplate recommending
the adoption of any other proposals that could be construed to affect the
ability of anyone to take over or change the control of our company
BOARD
OF DIRECTORS’ RECOMMENDATION
AND
STOCKHOLDER APPROVAL
As
of
December 31, 2006, our board of directors and stockholders holding a majority
of
our voting power voted to authorize our board of directors to effect a reverse
stock split of our outstanding common stock at a ratio of one share for every
three shares of common stock outstanding. In the absence of a meeting, the
affirmative consent of holders of a majority of the vote represented by our
outstanding shares of common stock was required to approve the reverse stock
split and amendment of our articles of incorporation. Because holders of
approximately 54.0% of our voting power signed a written consent in favor of
the
reverse stock split, we are authorized to effect the reverse stock
split.
The
information contained in this information statement constitutes the only notice
we will be providing stockholders.
INTEREST
OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
Except
in
their capacity as shareholders, none of our officers, directors or any of their
respective affiliates has any interest in the reverse stock split.
FORWARD-LOOKING
STATEMENTS
This
information statement may contain certain “forward-looking” statements (as that
term is defined in the Private Securities Litigation Reform Act of 1995 or
by
the U.S. Securities and Exchange Commission in its rules, regulations and
releases) representing our expectations or beliefs regarding our company. These
forward-looking statements include, but are not limited to, statements
concerning our operations, economic performance, financial condition, growth
and
acquisition strategies, investments, and future operational plans. For this
purpose, any statements contained herein that are not statements of historical
fact may be deemed to be forward-looking statements. Without limiting the
generality of the foregoing, words such as “may,” “will,” “expect,” “believe,”
“anticipate,” “intend,” “could,” “estimate,” “might,” or “continue” or the
negative or other variations thereof or comparable terminology are intended
to
identify forward-looking statements. These statements, by their nature, involve
substantial risks and uncertainties, certain of which are beyond our control,
and actual results may differ materially depending on a variety of important
factors, including uncertainty related to acquisitions, governmental regulation,
managing and maintaining growth, volatility of stock prices and any other
factors discussed in this and other of our filings with the U.S. Securities
and
Exchange Commission.
WHERE
YOU CAN FIND MORE INFORMATION
We
are
subject to the information and reporting requirements of the Securities Exchange
Act of 1934, as amended, and in accordance with the Securities Exchange Act,
we
file periodic reports, documents, and other information with the Securities
and
Exchange Commission relating to our business, financial statements, and other
matters. These reports and other information may be inspected and are available
for copying at the offices of the Securities and Exchange Commission, 100 F
Street, N.E., Washington, DC 20549. Our SEC filings are also available to the
public on the SEC’s website at http://www.sec.gov.
INCORPORATION
OF FINANCIAL INFORMATION
We
“incorporate by reference” into this proxy statement the information in certain
documents we file with the SEC, which means that we can disclose important
information to you by referring you to those documents. We incorporate by
reference into this information statement the following documents we have
previously filed with the SEC: our annual report on Form 10-KSB for the fiscal
year ended March 31, 2006, and our quarterly report on Form 10-Q for the
quarterly period ended September 30, 2006. You may request a copy of these
filings at no cost, by writing or telephoning us at the following
address:
Red
Mile
Entertainment, Inc.
4000
Bridgeway, Suite 101
Sausilito,
CA 94965
Telephone
(415) 339-4240
Facsimile
(415) 339-4249
As
we
obtained the requisite stockholder vote for the reverse stock split described
in
this information statement upon delivery of written consents from the holders
of
a majority of our outstanding shares of common stock. WE
ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A
PROXY.
This
information statement is for informational purposes only. Please read this
information statement carefully.
7