In May 2007, Red Mile Entertainment acquired the rights to publish games based on Sin City graphic novels, which director Robert Rodriguez adapted into a popular 2005 film. Since then, the project has remained largely under wraps, resurfacing when the San Francisco Bay Area company announced it was restructuring last March. It made headlines again in August, when Red Mile revealed it had replaced the game's developer, Australia-based Transmission Entertainment, with a new, unnamed outfit.

　　Transmission did stay on, however, as developer of the World War II flight sim Heroes Over Europe, which Atari was to publish later this year. However, according to a filing made this morning with the Securities and Exchange Commission, both companies ended their respective deals with Red Mile last Wednesday. Red Mile admits that Transmission (referred to by its old name, IR Gurus, in the form) ended its agreement due to nonpayment of $281,000 in "software development and licensing."

　　Conversely, Red Mile is disputing the undisclosed grounds for Atari's termination of the Heroes Over Europe deal. It claims the France-based Ghostbusters publisher "ceased making milestone payments to [Red Mile] which has had a material and adverse effect on the company's ability to continue operations."

　　Unfortunately, it now appears that the Atari cancellation's effect may be so adverse that neither Sin City nor Heroes Over Europe will ever see the light of day. As part of the SEC filing, Red Mile revealed that its finances imploded during the last quarter of 2008. Its revenues plummeted from $5.7 million during the fourth quarter of 2007 to barely over $47,000 for the three months ending December 31 the following year. (On the flip side, the company's net quarterly loss shrank from $2.8 million to $500,724.)

　　Despite the smaller loss, Red Mile admits it is too broke to continue on alone. "We anticipate needing an additional $10,000,000 to finance our planned operations over the next 24 to 36 months," the company said as part of the filing's forward-looking statements. "We will be unable to complete development of Heroes Over Europe and Sin City: The Game (working title), or publish any other additional games if we are unable to receive copublishing advances on both the foregoing titles or raise additional capital through either sale of securities or issuance of debt."