As filed with the Securities and Exchange Commission on August 10, 2012

Registration No. 333-180714

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

 

AMENDMENT NO. 4 TO
FORM S-4

REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933

 

RLJ Entertainment, Inc.

(Exact name of registrant as specified in its charter)

Nevada		7822		45-4950432
(State or other jurisdiction of incorporation or organization)		(Primary Standard Industrial Classification Code Number)		(I.R.S. Employer Identification No.)

RLJ Entertainment, Inc.
3 Bethesda Metro Center, Suite 1000
Bethesda, Maryland 20814
(301) 280-7737

(Address, including zip code, and telephone number,
including area code, of registrant’s principal executive offices)

 

H. Van Sinclair
President and Chief Executive Officer
c/o RLJ Entertainment, Inc.

3 Bethesda Metro Center, Suite 1000
Bethesda, Maryland 20814
(301) 280-7737

(Name, address, including zip code, and telephone number,
including area code, of agent for service)

 

With copies to:

Alan I. Annex Greenberg Traurig, LLP MetLife Building 200 Park Avenue New York, New York 10166 (212) 801-9200 (212) 801-6400 — Facsimile		David J. Katz Perkins Coie LLP 1888 Century Park East, Suite 1700 Los Angeles, California 90067 (310) 788-9900 (310) 788-3399 — Facsimile

 

Approximate date of commencement of proposed sale of securities to the public: As soon as practicable after this Registration Statement is declared effective and all other conditions to the business combination described in the enclosed Proxy Statement/Prospectus, have been satisfied or waived.

If the securities being registered on this form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. o

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer o		Accelerated filer o		Non-accelerated filer x		Smaller reporting company o

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The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

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PRELIMINARY — SUBJECT TO COMPLETION — DATED AUGUST 10, 2012

The information in this preliminary joint proxy statement/prospectus is not complete and may be changed. The registrant may not sell the securities described herein until the registration statement filed with the Securities and Exchange Commission is declared effective. This joint proxy statement/prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

RLJ ACQUISITION, INC.		IMAGE ENTERTAINMENT, INC.

To the Stockholders of RLJ Acquisition, Inc. and Image Entertainment, Inc.:

The respective boards of directors of RLJ Acquisition, Inc. (“RLJ”) and Image Entertainment, Inc. (“Image”) have unanimously approved an agreement and plan of merger by and between RLJ and Image (the “Image merger agreement”) providing for the combination of RLJ and Image under a new holding company named RLJ Entertainment, Inc. (“New RLJ”). Current RLJ stockholders and warrantholders will receive shares of New RLJ common stock and warrants to purchase shares of New RLJ common stock to replace their existing shares of RLJ common stock and existing RLJ warrants. Current holders of Image common stock will receive shares of New RLJ common stock. Immediately following the consummation of the transactions contemplated by the Image merger agreement, RLJ will acquire all of the outstanding shares of Acorn Media Group, Inc. (“Acorn”) pursuant to the terms of a stock purchase agreement by and among RLJ, Acorn, the shareholders of Acorn and the shareholder representative (the “Acorn stock purchase agreement”).

•

New RLJ is a wholly owned subsidiary of RLJ formed solely to effect the transactions contemplated by the Image merger agreement and has not conducted any business. Under the Image merger agreement, RLJ and Image will survive as wholly owned subsidiaries of New RLJ;

•

RLJ stockholders will exchange their existing shares of RLJ common stock for an equal number of shares of common stock in New RLJ;

•

All of the warrants to purchase RLJ common stock expected to be outstanding at the closing of the Image merger agreement will represent the right to purchase an equal number of shares of New RLJ common stock on the same terms and conditions as the original warrants;

•

All of the outstanding shares of common stock of Image will be exchanged for a total of up to 2,289,000 shares of New RLJ common stock, subject to adjustment as described in the Image merger agreement;

•

All of the outstanding shares of Image’s Series B Preferred Stock will be purchased by New RLJ for an aggregate purchase price of $22.6 million, consisting of cash and subordinated notes of New RLJ;

•

All of the outstanding shares of Acorn will be purchased by RLJ for a total of $101,818,343 in cash, subject to adjustment as described in the Acorn purchase agreement, one million shares of New RLJ common stock and warrants to purchase one million shares of New RLJ common stock;

•

JH Partners Evergreen Fund, L.P., JH Investment Partners III, L.P., and JH Investment Partners GP Fund III, LLC, which we refer to collectively as the JH Entities, and certain other Image stockholders have collectively agreed to contribute to Image for no consideration up to an aggregate of up to 35,401,977 shares of Image common stock to be cancelled immediately prior to the consummation of the transactions contemplated by the Image merger agreement;

•

Warrants to purchase one million shares of RLJ common stock and 792,739 shares of RLJ common stock held by RLJ SPAC Acquisition, LLC, RLJ’s sponsor, will be contributed by RLJ’s sponsor for no consideration to RLJ immediately prior to the consummation of the transactions contemplated by the Image merger agreement;

•

Robert L. Johnson, the current Chairman of the Board of RLJ, Theodore S. Green, the current Chief Executive Officer and Chairman of the Board of Image, Peter Edwards, the current Chairman of the Board of Acorn, Miguel Penella, the current Chief Executive Officer of Acorn, H. Van Sinclair, the current President and Chief Executive Officer of RLJ, and John W. Hyde, the current Vice Chairman of Image, will be named members of the New RLJ board of directors after the consummation of the transactions contemplated by the Image merger agreement; and

•

New RLJ has applied to list its common stock and warrants to purchase its common stock on The NASDAQ Stock Market under the symbols “RLJE” and “RLJEW,” respectively.

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The JH Entities, which hold approximately 70% of the outstanding shares of Image common stock, have agreed to vote their shares FOR the approval and adoption of the Image merger agreement. In addition, RLJ’s sponsor, William S. Cohen and Morris Goldfarb, who we refer to collectively as RLJ’s initial stockholders and who hold approximately 21.7% of the outstanding shares of RLJ common stock, have agreed to vote all the shares they own FOR the approval and adoption of the Image merger agreement. Completion of the business combination requires, among other things, the separate approvals of both RLJ stockholders and Image stockholders. To obtain these required approvals, RLJ will hold a special meeting of RLJ stockholders on September 20, 2012 and Image will hold a special meeting of Image stockholders on September 20, 2012.

RLJ is providing its stockholders with the opportunity to redeem their public shares of RLJ common stock for cash equal to their pro rata share of the aggregate amount then on deposit in a trust account holding the proceeds of RLJ’s initial public offering (the “trust account”), less franchise and income taxes payable, upon the consummation of the transactions contemplated by the Image merger agreement, subject to certain limitations. Without taking into account interest, if any, earned on the trust account, net of franchise and income taxes payable and net of up to $2.0 million, subject to adjustment, in interest income on the trust account balance previously released to us to fund working capital requirements, the per-share redemption amount received by RLJ stockholders would be $9.95. There will be no redemption rights upon the consummation of the Image merger agreement with respect to outstanding RLJ warrants. RLJ’s initial stockholders have agreed to waive their redemption rights with respect to their founder shares and any public shares they may hold in connection with the consummation of a business combination, and the founder shares will be excluded from the pro rata calculation used to determine the per-share redemption price.

RLJ and Image will consummate the transactions contemplated by the Image merger agreement only if holders of a majority of the outstanding shares of common stock of RLJ and Image are voted in favor of the approval and adoption of the Image merger agreement. Each public stockholder of RLJ common stock may elect to redeem his, her or its public shares irrespective of whether he, she or it votes for or against the approval and adoption of the Image merger agreement. RLJ has no specified maximum redemption threshold. However, RLJ will not close the business combination unless it has at least $92.0 million of cash held either in or outside the trust account. RLJ’s public stockholders will be able to redeem their shares up to two business days prior to the vote on the proposal to approve and adopt the Image merger agreement.

A public stockholder of RLJ, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming his, her or its shares with respect to more than an aggregate of 15% of the shares sold in RLJ’s initial public offering.

RLJ may enter into privately negotiated transactions to purchase public shares from stockholders after consummation of the transactions contemplated by the Image merger agreement with proceeds released from the trust account immediately following consummation of the transactions contemplated by the Image merger agreement. Although permitted under RLJ’s amended and restated articles of incorporation, RLJ will not, prior to consummation of the transactions contemplated by the Image merger agreement, release amounts from the trust account to purchase in the open market up to 25% of the shares sold in its initial public offering.

RLJ’S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO APPROVE AND ADOPT THE IMAGE MERGER AGREEMENT.

IMAGE’S BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO APPROVE AND ADOPT THE IMAGE MERGER AGREEMENT.

Information about the special meetings, the transactions contemplated by the Image merger agreement and the other business to be considered by RLJ stockholders and Image stockholders is contained in this document and the documents incorporated by reference, which we urge you to read carefully. In particular, see “Risk Factors” beginning on page 36 .

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Your vote is very important. Whether or not you plan to attend the special meeting of RLJ stockholders or the special meeting of Image stockholders, as applicable, please submit a proxy to vote your shares as soon as possible to make sure your shares are represented at the applicable special meeting. Your failure to vote will have the same effect as voting against the proposal to approve and adopt the Image merger agreement.

Sincerely,		Sincerely,
H. Van Sinclair Chief Executive Officer and President RLJ Acquisition, Inc.		Theodore S. Green Chief Executive Officer and Chairman of the Board Image Entertainment, Inc.

Neither the Securities Exchange Commission nor any state securities commission has approved or disapproved of these securities or passed upon the adequacy or accuracy of this joint proxy statement/prospectus. Any representation to the contrary is a criminal offense.

The accompanying joint proxy statement/prospectus is dated August 10, 2012 and is first being mailed or otherwise delivered to RLJ stockholders and Image stockholders on or about August 13, 2012.

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RLJ ACQUISITION, INC.
3 Bethesda Metro Center, Suite 1000
Bethesda, Maryland 20814

 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To be held on September 20, 2012

To Our Stockholders:

A special meeting of stockholders of RLJ Acquisition, Inc. (“RLJ”) will be held at the offices of Greenberg Traurig, LLP, located at 200 Park Avenue, New York, NY 10166 on September 20, 2012, at 10:00 a.m., Eastern time (the “special meeting”). The purposes of the special meeting are to vote on the following matters and to transact such other business that may properly come before the special meeting:

1.  Approve and adopt the Agreement and Plan of Merger, dated as of April 2, 2012, between RLJ and Image Entertainment, Inc. (“Image”), as it may be amended (the “Image merger agreement”), a copy of which is attached to the accompanying joint proxy statement/prospectus as Annex A. The board of directors of RLJ (the “RLJ board”) recommends a vote “ FOR ” this proposal.

2.  Approve and adopt the 2012 Incentive Compensation Plan (an equity-based incentive plan) of RLJ Entertainment, Inc., a copy of which is attached to the accompanying joint proxy statement/prospectus as Annex L. The RLJ board recommends a vote “ FOR ” this proposal.

3.  Approve one or more adjournments of the special meeting, if necessary, to permit further solicitation of proxies because there are not sufficient votes at the RLJ special meeting to approve and adopt the Image merger agreement. The RLJ board recommends a vote “ FOR ” this proposal.

4.  Transact any other business that may properly come before the special meeting.

The RLJ board has fixed August 9, 2012 as the record date for the determination of stockholders entitled to notice of, and to vote at, the special meeting or one or more adjournments thereof. Only holders of record of shares of RLJ common stock at the close of business on August 9, 2012 are entitled to notice of, and to vote at, the special meeting or one or more adjournments or postponements thereof.

RLJ IS PROVIDING ITS STOCKHOLDERS WITH THE OPPORTUNITY TO REDEEM THEIR PUBLIC SHARES OF RLJ COMMON STOCK FOR CASH EQUAL TO THEIR PRO RATA SHARE OF THE AGGREGATE AMOUNT THEN ON DEPOSIT IN A TRUST ACCOUNT HOLDING THE PROCEEDS OF RLJ’S INITIAL PUBLIC OFFERING (THE “TRUST ACCOUNT”), LESS FRANCHISE AND INCOME TAXES PAYABLE, UPON THE CONSUMMATION OF THE TRANSACTIONS CONTEMPLATED BY THE IMAGE MERGER AGREEMENT, SUBJECT TO CERTAIN LIMITATIONS. THERE WILL BE NO REDEMPTION RIGHTS UPON THE CONSUMMATION OF THE IMAGE MERGER AGREEMENT WITH RESPECT TO OUTSTANDING RLJ WARRANTS. RLJ’S INITIAL STOCKHOLDERS HAVE AGREED TO WAIVE THEIR REDEMPTION RIGHTS WITH RESPECT TO THEIR FOUNDER SHARES AND ANY PUBLIC SHARES THEY MAY HOLD IN CONNECTION WITH THE CONSUMMATION OF A BUSINESS COMBINATION, AND THE FOUNDER SHARES WILL BE EXCLUDED FROM THE PRO RATA CALCULATION USED TO DETERMINE THE PER-SHARE REDEMPTION PRICE.

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As set forth in RLJ’s amended and restated articles of incorporation, a public stockholder of RLJ, together with any of his, her or its affiliates or any other person with whom it is acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended), will be restricted from redeeming his, her or its shares with respect to more than an aggregate of 15% of the shares sold in RLJ’s initial public offering.

RLJ may enter into privately negotiated transactions to purchase public shares from stockholders after consummation of the transactions contemplated by the Image merger agreement with proceeds released from the trust account immediately following consummation of the Image merger agreement.

For more information about the proposals and the special meeting, please review carefully the accompanying joint proxy statement/prospectus.

Your vote is important. Whether or not you expect to attend the special meeting in person, please submit a proxy by telephone or over the internet as instructed in these materials, or complete, date, sign and return the enclosed proxy card, as promptly as possible in order to ensure that we receive your proxy with respect to your shares of RLJ common stock. Instructions are shown on the enclosed proxy card and a return envelope (postage pre-paid if mailed in the United States) is enclosed for your convenience. If your shares of RLJ common stock are held in a stock brokerage account or by a bank or other nominee, please follow the instructions that you receive from your broker, bank or other nominee to vote your shares.

If you sign, date and mail your proxy card without indicating how you wish to vote, your proxy will be voted in favor of the adoption of the Image merger agreement and in favor of the proposal to adjourn the meeting if necessary to solicit additional proxies. If you fail to return your proxy card or fail to submit your proxy by telephone or over the internet, or fail to instruct your broker how to vote, and do not attend the special meeting in person, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and, if a quorum is present, will have the same effect as a vote against the adoption of the Image merger agreement. If you are a stockholder of record and you attend the special meeting and wish to vote in person, you may withdraw your proxy and vote in person.

Please do not send documents or certificates representing your ownership of RLJ common stock at this time. If the transactions contemplated by the Image merger agreement are consummated, we will notify you of the procedures for exchanging your shares of RLJ common stock.

By Order of the Board of Directors,

  
Secretary

Bethesda, Maryland
August 10, 2012

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IMAGE ENTERTAINMENT, INC.
20525 Nordhoff Street, Suite 200
Chatsworth, California 91311

 

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
To be held on September 20, 2012

To Our Stockholders:

A special meeting of stockholders of Image Entertainment, Inc. (“Image”) will be held at the offices of Perkins Coie LLP, located at 30 Rockefeller Plaza, New York, NY 10112 on September 20, 2012, at 10:00 a.m., Eastern time (the “special meeting”). The purposes of the special meeting are to vote on the following matters and to transact such other business that may properly come before the special meeting:

1.  Approve and adopt the Agreement and Plan of Merger, dated as of April 2, 2012, between RLJ Acquisition, Inc. and Image, as it may be amended (the “Image merger agreement”), a copy of which is attached to the accompanying joint proxy statement/prospectus as Annex A. The board of directors of Image (the “Image board”) recommends a vote “ FOR ” this proposal.

2.  Approve and adopt the 2012 Incentive Compensation Plan (an equity-based incentive plan) of RLJ Entertainment, Inc., a copy of which is attached to the accompanying joint proxy statement/prospectus as Annex L. The Image board recommends a vote “ FOR ” this proposal.

3.  Approve one or more adjournments of the special meeting, if necessary, to permit further solicitation of proxies because there are not sufficient votes at the Image special meeting to approve and adopt the Image merger agreement. The Image board recommends a vote “ FOR ” this proposal.

4.  Approve, by non-binding, advisory vote, the compensation arrangements of Image’s named executive officers in connection with the transactions contemplated by the Image merger agreement. The Image board recommends a vote “ FOR ” this proposal.

5.  Transact such other business that may properly come before the special meeting.

The Image board has fixed August 9, 2012 as the record date for the determination of stockholders entitled to notice of, and to vote at, the special meeting or one or more adjournments thereof. Only holders of record of shares of Image common stock at the close of business on August 9, 2012 are entitled to notice of, and to vote at, the special meeting or one or more adjournments or postponements thereof.

RLJ and Image will consummate the transactions contemplated by the Image merger agreement only if holders of a majority of the outstanding shares of common stock of RLJ and Image are voted in favor of the approval and adoption of the Image merger agreement.

JH Partners Evergreen Fund, L.P., JH Investment Partners III, L.P. and JH Investment Partners GP Fund III, LLC, which we refer to collectively as the JH Entities, have entered into a support agreement, dated April 2, 2012, which we refer to as the support agreement, with RLJ. Pursuant to the support agreement, each of the JH Entities has agreed to vote its shares of Image common stock in favor of the proposal to approve and adopt the Image merger agreement. The JH Entities own approximately 70% of the outstanding shares of Image common stock, and therefore have enough shares to approve and adopt the Image merger agreement and the Image merger without the vote of any other Image stockholder.

For more information about the proposals and the special meeting, please review carefully the accompanying joint proxy statement/prospectus.

Your vote is important. Whether or not you expect to attend the special meeting in person, please submit a proxy by telephone or over the internet as instructed in these materials, or complete, date, sign and return the enclosed proxy card, as promptly as possible in order to ensure that we receive your proxy with respect to your shares of Image common stock. Instructions are shown on the enclosed proxy card and a return envelope (postage pre-paid if mailed in the United States) is enclosed for your convenience. If your shares are held in a stock brokerage account or by a bank or other nominee, please follow the instructions that you receive from your broker, bank or other nominee to vote your shares.

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If you sign, date and mail your proxy card without indicating how you wish to vote, your proxy will be voted in favor of the adoption of the Image merger agreement, in favor of the proposal to adjourn the meeting and in favor of the non-binding, advisory proposal to approve the merger-related executive compensation arrangements. If you fail to return your proxy card or fail to submit your proxy by telephone or over the internet, or fail to instruct your broker how to vote, and do not attend the special meeting in person, the effect will be that your shares will not be counted for purposes of determining whether a quorum is present at the special meeting and, if a quorum is present, will have the same effect as a vote against the adoption of the Image merger agreement. If you are a stockholder of record and you attend the special meeting and wish to vote in person, you may withdraw your proxy and vote in person.

Please do not send documents or certificates representing your ownership of Image common stock at this time. If the transactions contemplated by the Image merger agreement are completed, we will notify you of the procedures for exchanging your shares of Image common stock.

By Order of the Board of Directors,

Secretary

Chatsworth, California
August 10, 2012

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REFERENCES TO ADDITIONAL INFORMATION

The accompanying joint proxy statement/prospectus incorporates important business and financial information about RLJ and Image from other documents that are not included in or delivered with this joint proxy statement/prospectus. This information is available for you to review at the Securities and Exchange Commission’s, or SEC’s, public reference room located at 100 F Street, N.E., Room 1580, Washington, DC 20549, and through the SEC’s website, www.sec.gov . You can also obtain those documents incorporated by reference in this joint proxy statement/prospectus by requesting them in writing, by telephone or by email from the appropriate company at the following addresses, telephone numbers and email addresses:

RLJ Acquisition, Inc. 3 Bethesda Metro Center, Suite 1000 Bethesda, Maryland 20814 (301) 280-7737 Attention: Lisa W. Pickrum Email: RLJA@rljcompanies.com		Image Entertainment, Inc. 20525 Nordhoff Street, Suite 200 Chatsworth, California 91311 (818) 407-9100 Attention: Dawn Martens Email: info@image-entertainment.com

In addition, if you have questions about the transactions described herein or the special meetings, or if you need to obtain copies of the accompanying joint proxy statement/prospectus, proxy cards, election forms or other documents incorporated by reference in the joint proxy statement/prospectus, you may contact the appropriate contact listed below. You will not be charged for any of the documents you request.

If you are an RLJ stockholder:

Morrow & Co., LLC
470 West Avenue
Stamford, CT 06902
Telephone: (800) 662-5200

If you are an Image stockholder:

Image Entertainment, Inc.
20525 Nordhoff Street, Suite 200
Chatsworth, California 91311
(818) 407-9100
Attention: Dawn Martens
Email: info@image-entertainment.com

If you would like to request documents, please do so by September 18, 2012,
in order to receive them before the special meetings.

For a more detailed description of the information incorporated by reference in the accompanying joint proxy statement/prospectus and how you may obtain it, see “Where You Can Find More Information” beginning on page 265 of the accompanying joint proxy statement/prospectus.

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		Page
FORWARD-LOOKING STATEMENTS			i
QUESTIONS AND ANSWERS			1
General Questions and Answers			1
Questions and Answers for RLJ Stockholders			5
Questions and Answers for Image Stockholders			11
SUMMARY			16
Parties to the Business Combination			16
The Proposed Business Combination			17
Merger Consideration Received by RLJ Stockholders			19
Merger Consideration Received by Image Stockholders			19
Consideration to be Received by Holders of Image Series B Preferred Stock			19
Consideration to be Received by Acorn Shareholders			19
Total New RLJ Shares to be Issued			20
Comparative Per Share Market Price			20
New RLJ Subordinated Notes			20
Proposed Senior Credit Facility			21
RLJ Special Meeting			21
Recommendation of the RLJ Board			22
Image Special Meeting			23
Recommendation of the Image Board			24
RLJ’s Financial Advisor			24
Financial Advisors to Image and the Image Special Committee			25
Interests of Officers and Directors in the Business Combination			25
Material U.S. Federal Income Tax Consequences			26
Officers and Directors of New RLJ			27
Listing of New RLJ Common Stock			27
Comparison of Stockholder Rights			27
SELECTED HISTORICAL FINANCIAL DATA OF RLJ			28
SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF IMAGE			29
SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF ACORN			30
SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION			31
COMPARATIVE PER SHARE DATA			33
MARKET PRICE AND DIVIDEND INFORMATION			35
RISK FACTORS			36
Risks Factors Relating to RLJ			36
Risks Factors Relating to Image’s Business			39
Risks Related to Acorn’s Business			46
Risk Factors Relating to the Business Combination			52
INFORMATION ABOUT RLJ			61
Overview			61
Trust Account			61
Fair Market Value of Target Business			61

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		Page
Opportunity for Stockholder Approval of Business Combination			62
Liquidation If No Business Combination			62
Competition			63
Employees			63
Properties			63
Legal Proceedings			63
Periodic Reporting and Financial Information			63
Management’s Discussion and Analysis of Financial Condition and Results of Operations			64
Quantitative and Qualitative Disclosures about Market Risk			67
Directors and Executive Officers			68
Number and Terms of Office of Directors and Officers			69
Committees of the RLJ Board			69
Code of Ethics			70
Conflicts of Interest			70
Section 16(a) Beneficial Ownership Reporting Compliance			72
Executive Compensation			73
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			73
Certain Relationships, Related Transactions and Director Independence			77
Director Independence			79
INFORMATION ABOUT IMAGE			80
Overview			80
Strategy			80
General			85
Competition			89
Industry Trends			89
Trademarks			90
Employees			91
Properties			91
Legal Proceedings			91
Management’s Discussion and Analysis of Financial Condition and Results of Operations			91
Quantitative and Qualitative Disclosures About Market Risk			104
Directors, Executive Officers And Corporate Governance			105
Executive Officers			107
Section 16(a) Beneficial Ownership Reporting Compliance			107
Code of Ethics and Governance Guidelines			107
Committees of the Image Board			108
Executive Compensation			109
Director Compensation			113
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters			113
Change in Control			114
Equity Compensation Plan Information			115
Certain Relationships, Related Transactions and Director Independence			115
INFORMATION ABOUT ACORN			118
Overview			118
Acorn Media Brands			118
Brand Summary			121

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Strategic Plan			121
New Initiatives			122
Acorn Operations and Facilities			123
Trademarks			123
Competition			123
Management’s Discussion and Analysis of Financial Condition and Results of Operations			124
Quantitative and Qualitative Disclosures About Market Risk			133
THE SPECIAL MEETING OF RLJ STOCKHOLDERS			135
Date, Time and Place of the RLJ Special Meeting			135
Purpose of the RLJ Special Meeting			135
Record Date; Outstanding Shares Entitled to Vote			135
Ownership of RLJ Shares			135
Quorum			135
Vote Required			136
Recommendation of the RLJ Board			136
Voting by RLJ’s Directors, Executive Officers and Initial Stockholders			136
How to Vote			137
Attending the RLJ Special Meeting			137
Voting of Proxies			137
Voting of RLJ Shares Held in Street Name			137
Revoking your Proxy			138
Proxy Solicitations			138
Other Business			138
Adjournments and Postponements			138
PROPOSAL NO. 1 — APPROVAL AND ADOPTION OF THE IMAGE MERGER AGREEMENT			140
Vote Required for Approval			140
Recommendation of the RLJ Board			140
PROPOSAL NO. 2 — APPROVAL AND ADOPTION OF 2012 INCENTIVE COMPENSATION PLAN OF NEW RLJ			141
Vote Required for Approval			141
Recommendation of the RLJ Board			141
PROPOSAL NO. 3 — ADJOURNMENT OF SPECIAL MEETING			142
Vote Required for Approval			142
Recommendation of the RLJ Board			142
THE SPECIAL MEETING OF IMAGE STOCKHOLDERS			143
Date, Time and Place of the Image Special Meeting			143
Purpose of the Image Special Meeting			143
Record Date; Outstanding Shares Entitled to Vote			143
Ownership of Image Shares			143
Quorum			143
Vote Required			143
Recommendation of the Image Board			144
Voting by Image’s Directors and Officers and the JH Entities			145
How to Vote			145
Attending the Image Special Meeting			145
Voting of Proxies			145

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		Page
Voting of Image Shares Held in Street Name			146
Revoking your Proxy			146
Proxy Solicitations			146
Other Business			146
Adjournments and Postponements			146
PROPOSAL NO. 1 — APPROVAL AND ADOPTION OF THE IMAGE MERGER AGREEMENT			148
Vote Required for Approval			148
Recommendation of the Image Board			148
PROPOSAL NO. 2 — APPROVAL AND ADOPTION OF 2012 INCENTIVE COMPENSATION PLAN OF NEW RLJ			149
Vote Required for Approval			149
Recommendation of the Image Board			149
PROPOSAL NO. 3 — ADJOURNMENT OF SPECIAL MEETING			150
Vote Required for Approval			150
Recommendation of the Image Board			150
PROPOSAL NO. 4 — ADVISORY VOTE ON MERGER-RELATED EXECUTIVE COMPENSATION ARRANGEMENTS			151
Vote Required for Approval			151
Recommendation of the Image Board			151
THE BUSINESS COMBINATION			152
General Description of the Business Combination			152
Background of the Business Combination			152
Recommendation of the RLJ Board; RLJ’s Reasons for the Business Combination			159
Consequences to RLJ if the Image Merger Agreement Is Not Approved and Adopted			161
RLJ’s Financial Advisor			161
Redemption Rights of RLJ Stockholders			162
Recommendation of the Image Board; Image’s Reasons for the Business Combination			162
Financial Advisors to Image and the Image Special Committee			165
Interests of Officers and Directors in the Business Combination			178
Accounting Treatment of the Business Combination			184
Listing of New RLJ Common Stock			184
New RLJ Subordinated Notes			184
Proposed Senior Credit Facility			185
MATERIAL U.S. FEDERAL TAX CONSEQUENCES			187
THE AGREEMENTS			191
Description of the Image Merger Agreement			191
Structure of the Mergers			191
Closing and Effective Time of the Mergers			191
Merger Consideration			191
No Fractional Shares			192
Treatment of Stock Options, Stock Appreciation Rights and Restricted Stock and Warrants			192
Appraisal Rights/Dissenting Shares			193
Exchange of Certificates			196
Representations and Warranties			197
Conduct of Business Pending Consummation of the Mergers			198
Additional Agreements			199

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		Page
Conditions to the Closing of the Mergers			200
Termination			201
Expenses and Termination Fees			202
Amendment and Waiver			202
Description of the Image Preferred Stock Purchase Agreement			202
Description of the New RLJ Subordinated Notes			204
Description of the Acorn Stock Purchase Agreement			204
Structure of the Acorn Acquisition			204
Purchase Price			205
Closing and Effective Time of the Stock Purchase			205
Representations and Warranties			205
Materiality and Material Adverse Effect			207
Interim Operations of RLJ and Acorn			207
Access to Information			209
No Alternative Transaction			209
Notification; Reasonable Efforts; HSR Filings; Other Agreements			210
Confidentiality and Publicity			210
Conditions to the Closing of the Acorn stock purchase agreement			210
Noncompetition and Nonsolicitation			212
Severance and Incentive Payment Obligations			212
Board of Directors and Management of New RLJ			212
Survival and Indemnification			213
Employment Arrangements			213
Release of Claims			213
Warrant Exercise Payments			213
Warrant Transfer Restrictions			213
Termination of Stock Option Plan and Other Stock Purchase Rights			214
Discharge of Affiliated Obligations			214
Payments Under Prior Transactions			214
Expenses			214
Working Capital Adjustments			214
Amendment			215
Extension; Waiver			215
Termination and Termination Fee			215
Effect of Termination			215
Image Stockholder Support Agreement			215
POST-TRANSACTION PRO FORMA SECURITY OWNERSHIP BY CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF NEW RLJ			217
NEW RLJ EXECUTIVE OFFICERS AND DIRECTORS			219
Biographical Information			219
Committees of the New RLJ Board			223
Audit Committee			221
Compensation Committee			222
Compensation Committee Interlocks and Insider Participation			222
Nominating and Corporate Governance Committee			222
Code of Conduct and Ethics			222
Compensation of the New RLJ Board and Executive Officers			223
2012 Incentive Compensation Plan			223

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		Page
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION			231
DESCRIPTION OF NEW RLJ SECURITIES			250
Common Stock			250
Preferred Stock			250
Warrants			250
Dividends			252
Transfer Agent and Warrant Agent			252
Registration Rights			252
COMPARISON OF STOCKHOLDER RIGHTS			253
LEGAL MATTERS			265
EXPERTS			265
WHERE YOU CAN FIND MORE INFORMATION			265
ANNEXES			266
INDEX TO FINANCIAL STATEMENTS			F-1

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QUESTIONS AND ANSWERS

The following questions and answers are intended to address briefly some commonly asked questions regarding the transactions contemplated by the Image merger agreement, the Image preferred stock purchase agreement, the Acorn stock purchase agreement and the special meetings of RLJ and Image. These questions and answers may not address all questions that may be important to you as a stockholder. To better understand these matters, and for a description of the legal terms governing the transactions contemplated by the Image merger agreement and the Acorn stock purchase agreement, you should carefully read this entire joint proxy statement/prospectus, including the annexes, as well as the documents that have been incorporated by reference in this joint proxy statement/prospectus. See “Where You Can Find More Information” beginning on page 265 . All references in this joint proxy statement/prospectus to “RLJ” refer to RLJ Acquisition, Inc., a Nevada blank check corporation; all references in this joint proxy statement/prospectus to “Image” refer to Image Entertainment, Inc., a Delaware corporation; All references in this joint proxy statement/prospectus to “Acorn” refer to Acorn Media Group, Inc., a District of Columbia corporation; all references in this joint proxy statement/prospectus to “New RLJ” refer to RLJ Entertainment, Inc., a Nevada corporation and a direct wholly owned subsidiary of RLJ; all references in this joint proxy statement/prospectus to “RLJ Merger Sub” refer to RLJ Merger Sub I, Inc., a Nevada corporation and a direct wholly owned subsidiary of New RLJ; all references in this joint proxy statement/prospectus to “Image Merger Sub” refer to RLJ Merger Sub II, Inc., a Delaware corporation and a direct wholly owned subsidiary of New RLJ; all references in this joint proxy statement/prospectus to the “Merger Subs” refer to the RLJ Merger Sub and the Image Merger Sub, collectively; unless otherwise indicated or as the context requires, all references in this joint proxy statement/prospectus to “we” refer to RLJ and Image; all references to the “Image merger agreement” refer to the Agreement and Plan of Merger, dated as of April 2, 2012, as it may be amended from time to time, between RLJ and Image, a copy of which is attached as Annex A to this joint proxy statement/prospectus; all references to the “Image preferred stock purchase agreement” refer to the Preferred Stock Purchase Agreement, dated as of April 2, 2012, as it may be amended from time to time, by and among RLJ and each of the beneficial owners of Series B Preferred Stock, par value $0.0001 per share, of Image, a copy of which is attached as Annex B to this joint proxy statement/prospectus; and all references to the “Acorn stock purchase agreement” refer to the Stock Purchase Agreement, dated as of April 2, 2012, as it may be amended from time to time, by and among RLJ, Acorn, the shareholders of Acorn and the Acorn shareholder representative, a copy of which is attached as Annex C to this joint proxy statement/prospectus. On April 10, 2012, New RLJ, RLJ, Image, Acorn and the Acorn shareholder representative entered into a joinder agreement pursuant to which New RLJ became a party to the Image merger agreement, the Image preferred stock purchase agreement and the Acorn stock purchase agreement.

General Questions and Answers

Q:  Why am I receiving this joint proxy statement/prospectus?

A:   RLJ is proposing to acquire (i) Image pursuant to the Image merger agreement and the Image preferred stock purchase agreement and (ii) Acorn pursuant to the Acorn stock purchase agreement. RLJ and Image have entered into the Image merger agreement providing for the combination of RLJ and Image under New RLJ. Pursuant to the Image merger agreement, RLJ Merger Sub will be merged with and into RLJ and Image Merger Sub will be merged with and into Image. As a result, RLJ and Image will each become wholly owned subsidiaries of New RLJ. Immediately following these mergers, RLJ will acquire all the shares of capital stock of Acorn pursuant to the Acorn stock purchase agreement. Under the terms of the Image preferred stock purchase agreement, immediately prior to the mergers, New RLJ will acquire all of the outstanding Series B Preferred Stock of Image for an aggregate purchase price of $22.6 million consisting of cash and subordinated notes of New RLJ. As a result of these transactions, former Image, RLJ and Acorn shareholders will own stock in New RLJ, which New RLJ has applied to list on The NASDAQ Stock Market. We refer to the merger of Image and Image Merger Sub as the Image merger and the merger of RLJ and RLJ Merger Sub as the RLJ merger, and collectively as the mergers. We refer to RLJ’s acquisition of Acorn’s outstanding shares of common stock as the Acorn acquisition and, collectively with the mergers and New RLJ’s purchase of the Series B Preferred Stock of Image, the business combination.

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RLJ is holding a special meeting of stockholders, which we refer to as the RLJ special meeting, in order to obtain the stockholder approval necessary to approve and adopt the Image merger agreement and the RLJ merger contemplated thereby, which we refer to as the RLJ business combination approval. In addition, RLJ stockholders will be asked to (i) approve and adopt the 2012 Incentive Compensation Plan of New RLJ and (ii) approve the adjournment of the RLJ special meeting (if it is necessary or appropriate to solicit additional proxies because there are not sufficient votes to approve and adopt the Image merger agreement).

Image is holding a special meeting of stockholders, which we refer to as the Image special meeting, in order to obtain the stockholder approval necessary to approve and adopt the Image merger agreement and the Image merger contemplated thereby, which we refer to as the Image business combination approval. In addition, Image stockholders will be asked to (i) approve and adopt the 2012 Incentive Compensation Plan of New RLJ, (ii) approve the adjournment of the Image special meeting and (iii) approve the non-binding, advisory proposal to approve the merger-related executive compensation arrangements.

We will be unable to complete the business combination unless both the RLJ business combination approval and the Image business combination approval are obtained at the respective special meetings.

We have included in this joint proxy statement/prospectus important information about the business combination, the Image merger agreement (a copy of which is attached as Annex A), the Image preferred stock purchase agreement (a copy of which is attached as Annex B), the Acorn stock purchase agreement (a copy of which is attached as Annex C) and the RLJ and Image special meetings. You should read this information carefully and in its entirety. The enclosed voting materials allow you to vote your shares without attending the applicable special meeting.

Your vote is important. You are encouraged to vote as soon as possible after carefully reviewing this joint proxy statement/prospectus.

Q:  What equity stake will former Image stockholders, RLJ stockholders and Acorn shareholders hold in New RLJ?

A:   After consummation of the business combination, it is anticipated that the RLJ public stockholders and RLJ’s founders, on the one hand, and Image stockholders, on the other hand, will hold approximately 84% and 11%, respectively, of the shares of common stock of New RLJ issued and outstanding immediately after the consummation of the mergers, assuming that no RLJ public stockholders exercise their redemption rights. It is also anticipated that the former shareholders of Acorn will hold approximately 5% of the issued and outstanding shares of common stock of New RLJ after consummation of the Acorn acquisition, assuming that no RLJ public stockholders exercise their redemption rights.

Q:  What conditions must be satisfied to complete the business combination?

A:   RLJ and Image are not required to complete the mergers unless a number of conditions are satisfied or waived. These conditions include, among others: (i) receipt of both the RLJ business combination approval and Image business combination approval; (ii) the continued effectiveness of, and the satisfaction of all conditions to the transactions contemplated by, the Acorn stock purchase agreement; (iii) absence of any injunctions, orders or laws that would prohibit, restrain or make illegal the mergers; (iv) effectiveness of the registration statement on Form S-4, of which this joint proxy statement/prospectus forms a part, and the absence of any stop order; and (v) RLJ’s having at least $92.0 million of cash held either in or outside the trust account. Additionally, RLJ is not required to complete the mergers unless, among other requirements: (i) the number of dissenting Image shares is less than five percent (5%) of the total outstanding shares of Image stock; (ii) JH Partners Evergreen Fund, L.P., JH Investment Partners III, L.P. and JH Investment Partners GP Fund III, LLC, which we refer to collectively as the JH Entities, and certain other Image stockholders surrender up to an aggregate of up to 35,401,977 shares of Image’s common stock to Image; and (iii) the transactions contemplated by the Image preferred stock purchase agreement have been consummated by each holder of the Series B Preferred Stock of Image. Image is not required to complete the merger unless, among other requirements: (i) RLJ SPAC Acquisition, LLC, which we refer to as RLJ’s sponsor, has surrendered 792,739 shares of RLJ common stock and warrants to purchase 1,000,000 shares of RLJ common stock held by it to RLJ; and (ii) the transactions contemplated by the Image preferred stock purchase agreement have been consummated.

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For a more complete summary of the conditions that must be satisfied or waived prior to completion of the mergers, see “The Agreements — Description of the Image Merger Agreement — Conditions to the closing of the Mergers” beginning on page 200 .

RLJ and Acorn are not required to complete the Acorn acquisition unless a number of conditions are satisfied or waived. These conditions include, among others: (i) receipt of certain regulatory approvals and the completion of certain regulatory filings, including expiration or termination of the waiting period (and any extensions thereof) under the Hart-Scott-Rodino Antitrust Improvement Act of 1976, as amended, and the rules and regulations promulgated thereunder, which we refer to as the HSR Act; (ii) the transactions contemplated by the Image merger agreement having been consummated; (iii) the employment letter to be entered into between RLJ and Miguel Penella not being terminated or revoked by Mr. Penella; (iv) Acorn’s nonqualified stock option plan being terminated, and all stock purchase rights thereunder have been exercised or terminated; (v) the option scheme of Acorn Media UK Limited, or Acorn UK, Acorn’s United Kingdom subsidiary, having been terminated, and there being no outstanding stock purchase rights existing thereunder; (vi) no person having revoked any release of claims; (vii) RLJ maintaining adequate aggregate cash reserves; and (viii) Acorn maintaining net working capital in an amount not more than $5.0 million less than the agreed upon working capital target amount.

For a more complete summary of the conditions that must be satisfied or waived prior to completion of the mergers, see “The Agreements — Description of the Acorn Stock Purchase Agreement” beginning on page 204 .

Q:  When do you expect the business combination to be completed?

A:   RLJ, Image and Acorn are working to complete the business combination as quickly as possible, and we anticipate that it will be completed in the third quarter of 2012. However, the business combination is subject to various regulatory approvals and other conditions which are described in more detail in this joint proxy statement/prospectus, and it is possible that factors outside the control of RLJ, Image and Acorn could result in the business combination being completed at a later time, or not at all.

Q:  What are my U.S. Federal income tax consequences as a result of the business combination?

A:   It is anticipated that the RLJ merger and the Image merger will qualify as part of an exchange described in Section 351 of the Internal Revenue Code of 1986, as amended, which we refer to as the Code. It is a condition to RLJ’s obligation to complete the RLJ merger that New RLJ receive an opinion of its counsel, Greenberg Traurig, LLP, which we refer to as Greenberg Traurig, to the effect that the RLJ merger and the Image merger should qualify as part of an exchange described in Section 351 of the Code. It is a condition to Image’s obligation to complete the Image merger that Image receive a written opinion of its counsel, Perkins Coie LLP, which we refer to as Perkins Coie, to the effect that the RLJ merger and the Image merger should qualify as part of an exchange described in Section 351 of the Code. If the RLJ merger and the Image merger qualify as part of an exchange described in Section 351, then:

You are strongly urged to consult with a tax advisor to determine the particular U.S. federal, state or local or foreign income or other tax consequences of the business combination to you. See “Material U.S. Federal Income Tax Consequences” on page 187 .

Q:  What happens if I sell my shares of RLJ common stock or Image common stock before the applicable special meeting?

A:   The record dates for the Image special meeting, which we refer to as the Image record date, and for the RLJ special meeting, which we refer to as the RLJ record date, are earlier than the date of the special meetings and the date that the business combination is expected to be completed. If you transfer your shares

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after the applicable record date, but before the applicable special meeting, unless the transferee requests a proxy, you will retain your right to vote at such special meeting, but will have transferred the right to receive the Image merger consideration or the RLJ merger consideration, as applicable, in the mergers. In order to receive the Image merger consideration or the RLJ merger consideration, as applicable, you must hold your shares through completion of the business combination. In addition, if you are a stockholder of RLJ, you will only be able to exercise redemption rights for the shares of RLJ common stock for which you are the stockholder of record as of the RLJ record date.

Q:  What happens if I sell my shares of RLJ common stock or Image common stock after the applicable special meeting, but before the applicable effective time?

A:   If you transfer your shares after the applicable special meeting, but before the applicable effective time, you will have transferred the right to receive Image merger consideration or RLJ merger consideration, as applicable, in the mergers. In order to receive the Image merger consideration or the RLJ merger consideration, you must hold your shares of Image or RLJ, as applicable, through completion of the mergers.

Q:  What if I hold shares in both RLJ and Image?

A:   If you are a stockholder of both RLJ and Image, you will receive two separate packages of proxy materials. A vote as an Image stockholder for the proposal to approve and adopt the Image merger agreement will not constitute a vote as an RLJ stockholder for the proposal to approve and adopt the Image merger agreement, or vice versa. THEREFORE, PLEASE MARK, SIGN, DATE AND RETURN ALL PROXY CARDS THAT YOU RECEIVE, WHETHER FROM RLJ OR IMAGE, OR SUBMIT A PROXY AS BOTH AN RLJ AND IMAGE STOCKHOLDER OVER THE INTERNET OR BY TELEPHONE.

Q:  My shares are held in “street name” by my broker. Will my broker automatically vote my shares for me?

A:   No. If your shares are held in a stock brokerage account or by a bank or other nominee, you are considered the “beneficial holder” of the shares held for you in what is known as “street name.” If this is the case, this joint proxy statement/prospectus has been forwarded to you by your brokerage firm, bank or other nominee, or its agent. As the beneficial holder, you have the right to direct your broker, bank or other nominee as to how to vote your shares. If you do not provide voting instructions to your broker on a particular proposal on which your broker does not have discretionary authority to vote, your shares will not be voted on that proposal. This is called a “broker non-vote.”

RLJ believes that under the Nevada Revised Statutes, or the NRS, broker non-votes should be counted for purposes of determining both (i) the presence or absence of a quorum and (ii) the total number of votes cast with respect to a proposal (other than the election of directors). Furthermore, under the rules of the New York Stock Exchange, or NYSE, brokers, banks and other nominees that are members of the NYSE do not have discretionary authority to vote on the proxy statement proposals. Accordingly, to the extent that there are any broker non-votes, a broker non-vote will have the same effect as a vote “AGAINST” the proposal to approve and adopt the Image merger agreement but will have no effect on the other proposals.

Image believes that under the Delaware General Corporation Law, or the DGCL, broker non-votes will be counted for purposes of determining the presence of a quorum at the Image special meeting. As noted in the previous paragraph, however, brokers, banks and other nominees that are members of the NYSE do not have discretionary authority to vote on the proxy statement proposals. To the extent that there are any broker non-votes, a broker non-vote will have the same effect as a vote “AGAINST” the proposal to approve and adopt the Image merger agreement but will have no effect on the other proposals.

Q:  What do I need to do now?

A:   Read and consider the information contained in this joint proxy statement/prospectus carefully, and then please vote your shares as soon as possible so that your shares may be represented at your special meeting.

Q:  How do I vote?

A:   You can vote by proxy before the special meeting or you can vote in person by completing a ballot at the special meeting. Even if you plan to attend your company’s special meeting, we encourage you to vote your shares by proxy as soon as possible. After carefully reading and considering the information contained in

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this joint proxy statement/prospectus, please submit your proxy by telephone or over the Internet in accordance with the instructions set forth on the enclosed proxy card (if you are a beneficial holder), or mark, sign and date the proxy card, and return it in the enclosed postage-paid envelope as soon as possible so that your shares may be voted at your company’s special meeting. For detailed information, see “The Special Meeting of RLJ Stockholders — How to Vote” beginning on page 137 and “The Special Meeting of Image Stockholders — How to Vote” beginning on page 145 . YOUR VOTE IS VERY IMPORTANT.

Q:  Can I change my vote after I have submitted a proxy by telephone or over the Internet or submitted my completed proxy card?

A:   Yes. If you are a stockholder of record, you can change your vote by revoking your proxy at any time before it is voted at the RLJ or Image special meeting, as applicable. You can do this in one of four ways: (1) submit a proxy again by telephone or over the Internet prior to midnight on the night before the special meeting; (2) sign another proxy card with a later date and return it by mail prior to midnight on the night before the special meeting; (3) attend the applicable special meeting and complete a ballot; or (4) send a written notice of revocation to the secretary of RLJ or Image, as applicable, so that it is received prior to midnight on the night before the RLJ or Image special meeting.

If you have instructed a broker to vote your shares, you must follow directions received from your broker to change your vote.

Q:  What should stockholders do if they receive more than one set of voting materials for a special meeting?

A:   You may receive more than one set of voting materials for a special meeting, including multiple copies of this joint proxy statement/prospectus and multiple proxy cards or voting instruction cards. Please complete, sign, date and return each proxy card and voting instruction card that you receive. For example, if you hold your shares in more than one brokerage account, you will receive a separate voting instruction card for each brokerage account in which you hold shares. If you are a holder of record and your shares are registered in more than one name, you will receive more than one proxy card.

Q:  Who should I call if I have questions about the proxy materials or voting procedures?

A:   If you have questions about the merger, or if you need assistance in submitting your proxy or voting your shares or need additional copies of this joint proxy statement/prospectus or the enclosed proxy card, you should contact the company in which you hold shares as follows:

If you are an RLJ stockholder, you should contact Morrow & Co., LLC, or Morrow, by mail at 470 West Avenue, Stamford, CT 06902, or by telephone at (800) 662-5200.

If you are an Image stockholder, you should contact Image by mail at 20525 Nordhoff Street, Suite 200, Chatsworth, CA 91311, Attention: Dawn Martens, by telephone at (818) 407-9100, or by email at info@image-entertainment.com.

If your shares are held in a stock brokerage account or by a bank or other nominee, you should contact your broker, bank or other nominee for additional information.

Questions and Answers for RLJ Stockholders

Q:  Why is RLJ proposing the business combination?

A:   RLJ is proposing to acquire Image pursuant to the Image merger agreement and the Image preferred stock purchase agreement and Acorn pursuant to the Acorn stock purchase agreement.

RLJ is a Nevada blank check company formed on November 12, 2010 for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. RLJ’s business plan is not limited to a particular industry, geographic region or minimum transaction value for purposes of consummating an initial business combination, except that it will not, under its amended and restated articles of incorporation, be permitted to effect a business combination with a blank check company or a similar type of company with nominal operations.

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In November 2010, RLJ’s sponsor and two of its directors, William S. Cohen and Morris Goldfarb, purchased an aggregate of 3,593,750 shares of RLJ common stock, which we refer to throughout this joint proxy statement/prospectus as the founder shares, for an aggregate purchase price of $25,000, or approximately $0.007 per share. We refer to RLJ’s sponsor and Messrs. Cohen and Goldfarb as RLJ’s initial stockholders throughout this joint proxy statement/prospectus.

RLJ consummated its initial public offering on February 22, 2011 and received net proceeds of $140,156,250, before deducting deferred underwriting compensation of $3,593,750, plus $5,000,000 received for the purchase of 6,666,667 warrants by RLJ’s sponsor. The net proceeds were deposited in a trust account, which we refer to throughout this joint proxy statement/prospectus as the trust account, and will be part of the funds distributed to RLJ’s public stockholders in the event RLJ is unable to complete a business combination. As of the date hereof, approximately $143,000,000 was held in the trust account. RLJ intends to use the funds held in the trust account to consummate the transactions contemplated by the Image merger agreement and the Acorn stock purchase agreement, pay certain transaction expenses, finders’ fees, tax obligations and deferred underwriter compensation. The balance of the funds will be released to New RLJ after the closing of the business combination to pay RLJ stockholders who properly exercise their redemption rights and for working capital and general corporate purposes.

RLJ has identified several criteria and guidelines it believes are important for evaluating acquisition opportunities. These criteria and guidelines include: sound historical financial performance; strong, stable free cash flow generation; strong competitive industry position; an experienced management team; and a diversified customer and supplier base. Based on its due diligence investigations of Image and Acorn and the industry in which they operate, including the financial and other information provided by Image and Acorn in the course of their negotiations, RLJ believes that Image and Acorn meet many of the criteria and guidelines listed above. See “The Business Combination — Recommendation of the RLJ Board; RLJ’s Reasons for the Business Combination.”

In accordance with RLJ’s amended and restated articles of incorporation, if RLJ is unable to complete a business combination by November 22, 2012, its corporate existence will automatically terminate and it will be required to liquidate. Each of the Image merger agreement, the Image preferred stock purchase agreement and the Acorn stock purchase agreement provides that either party thereto may terminate such agreement if the business combination is not consummated by the date RLJ is required to be liquidated.

Q:  What will RLJ stockholders receive in the RLJ merger?

A:   Upon completion of the RLJ merger, each share of common stock of RLJ, par value $0.001 per share, which we refer to as RLJ common stock, will be converted into one share of New RLJ common stock, par value $0.001 per share, which we refer to as the RLJ merger consideration. Shares held by RLJ as treasury stock or that are owned by RLJ, RLJ Merger Sub or any other wholly owned subsidiary of RLJ, which we refer to as the RLJ excluded shares, will not receive the RLJ merger consideration and will be canceled.

Q:  What will RLJ warrantholders receive in the RLJ merger?

A:   Upon completion of the RLJ merger, all of the Warrants to purchase RLJ common stock will represent the right to purchase an equal number of shares of New RLJ common stock on the same terms and conditions as the original Warrants to purchase RLJ common stock.

Q:  What interests do RLJ’s current officers and directors have in the business combination?

A:   RLJ’s directors and executive officers may have interests in the business combination that are different from, or in addition to or in conflict with, yours. These interests include the continued employment of certain executive officers of RLJ by New RLJ, the continued service of certain directors of RLJ as directors of New RLJ, and the indemnification of former RLJ directors and officers by New RLJ and the surviving corporations.

In addition, certain of RLJ’s executive officers and directors have financial interests in the business combination that are different from, or in addition to, the interests of RLJ’s stockholders, other than RLJ’s initial stockholders. With respect to RLJ’s executive officers and directors, these interests include, among other things:

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Mr. Robert L. Johnson, who controls RLJ’s sponsor and is a member of RLJ’s board of directors, has agreed that, if RLJ dissolves prior to the consummation of a business combination, he will personally indemnify RLJ for any and all loss, liability, claim, damage and expense which it may become subject to as a result of a claim by any vendor, prospective target business or other entity that is owed money by RLJ for services rendered or products sold to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount of funds held in RLJ’s trust account.

The members of the RLJ board were aware of and considered the interests summarized above, among other matters, in evaluating and negotiating the Image merger agreement and the transactions contemplated thereby and in recommending to RLJ stockholders, that the Image merger agreement be approved and adopted. These interests are described in more detail in the sections of this document entitled “The Business Combination — Interests of RLJ Directors and Officers in the Business Combination” beginning on page 173. You should be aware of these interests when you consider the RLJ board’s recommendation that you vote in favor of the approval and adoption of the Image merger agreement and the consummation of the transactions contemplated thereby.

Q:  Should I send in my share certificates now for the exchange?

A:   No. RLJ stockholders should keep any share certificates they hold at this time. After the business combination is completed, RLJ stockholders holding RLJ share certificates will receive from New RLJ’s exchange agent a letter of transmittal and instructions on how to obtain the RLJ merger consideration.

Each holder of record of one or more book entry shares of RLJ common stock whose shares will be converted into the right to receive the RLJ merger consideration will automatically, upon the effective time of the RLJ merger, be entitled to receive, and New RLJ will cause the exchange agent to deliver to such holder as promptly as practicable after the effective time, the cash and New RLJ common stock to which such holder is entitled under the Image merger agreement. Holders of book entry shares will not be required to deliver a certificate or an executed letter of transmittal to the exchange agent in order to receive the RLJ merger consideration.

Q:  When and where will the RLJ special meeting be held?

A:   The RLJ special meeting will be held at the offices of Greenberg Traurig, LLP, located at 200 Park Avenue, New York, NY 10166, on September 20, 2012, at 10:00 a.m., Eastern time, unless the special meeting is adjourned or postponed.

Q:  Who is entitled to vote at the RLJ special meeting?

A:   RLJ has fixed August 9, 2012 as the RLJ record date. If you were an RLJ stockholder at the close of business on the RLJ record date, you are entitled to vote on matters that come before the RLJ special meeting.

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However, an RLJ stockholder may only vote his or her shares if he or she is present in person or is represented by proxy at the RLJ special meeting.

Q:  How many votes do I have?

A:   RLJ stockholders are entitled to one vote at the RLJ special meeting for each share of RLJ common stock held of record as of the RLJ record date. As of the close of business on the RLJ record date, there were 17,968,750 outstanding shares of RLJ common stock.

Q:  What constitutes a quorum?

A:   Holders of a majority in voting power of the RLJ common stock issued and outstanding and entitled to vote at the RLJ special meeting, present in person or represented by proxy, constitute a quorum. In the absence of a quorum, a majority of the RLJ stockholders, present in person or represented by proxy, will have power to adjourn the special meeting. As of the RLJ record date, 8,984,376 shares of RLJ common stock would be required to achieve a quorum.

Q:  What vote is required to approve each RLJ proposal?

A:    Proposal to Approve and Adopt the Image Merger Agreement by RLJ Stockholders :  The proposal to approve and adopt the Image merger agreement and the RLJ merger contemplated thereby, which we refer to as the RLJ merger proposal, requires the affirmative vote of holders of a majority of the shares of RLJ common stock outstanding and entitled to vote. Accordingly, an RLJ stockholder’s failure to submit a proxy card or to vote in person at the special meeting, an abstention from voting, or the failure of an RLJ stockholder who holds his or her shares in “street name” through a broker or other nominee to give voting instructions to such broker or other nominee, will have the same effect as a vote “AGAINST” the RLJ merger proposal.

Proposal to Approve and Adopt the 2012 Incentive Compensation Plan of New RLJ by RLJ Stockholders :  The proposal to approve and adopt the 2012 Incentive Compensation Plan of New RLJ requires the affirmative vote of holders of a majority of the shares of RLJ common stock present, in person or represented by proxy, at the special meeting and entitled to vote on the proposal. Accordingly, abstentions will have the same effect as a vote “AGAINST” the proposal to approve and adopt the 2012 Incentive Compensation Plan of New RLJ, while broker non-votes and shares not in attendance at the special meeting will have no effect on the outcome of such vote.

Proposal to Adjourn the RLJ Special Meeting by RLJ Stockholders :  Approving the adjournment of the special meeting (if it is necessary or appropriate to solicit additional proxies because there are not sufficient votes to approve and adopt the Image merger agreement) requires the affirmative vote of holders of a majority of the shares of RLJ common stock present, in person or represented by proxy, at the special meeting and entitled to vote on the adjournment proposal, regardless of whether a quorum is present. Accordingly, abstentions will have the same effect as a vote “AGAINST” the proposal to adjourn the special meeting, while broker non-votes and shares not in attendance at the special meeting will have no effect on the outcome of any vote to adjourn the special meeting.

Q:  How do RLJ’s initial stockholders intend to vote their shares?

A:   Each of RLJ’s initial stockholders has agreed to vote all the shares they own, which constitute approximately 21.7% of RLJ’s outstanding shares of common stock, for the RLJ merger proposal. To the extent any RLJ insider or officer or director of RLJ has acquired shares of RLJ common stock in, or subsequent to, RLJ’s initial public offering, he, she or it has agreed to vote these acquired shares in favor of the proposal to approve and adopt the Image merger agreement.

Q:  Why are RLJ stockholders not being asked to approve the acquisition of Acorn?

A:   Neither RLJ’s amended and restated articles of incorporation nor applicable state law require a stockholder vote of the RLJ stockholders to approve the acquisition of Acorn by RLJ.

Q:  What are the recommendations of RLJ’s board of directors?

A:   RLJ’s board of directors, or the RLJ board, has unanimously (i) approved the Image merger agreement and the consummation of the transactions contemplated thereby upon the terms and subject to the conditions

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set forth in the Image merger agreement, (ii) determined that the terms of the business combination are fair to, and in the best interests of, RLJ and its stockholders, (iii) directed that the Image merger agreement be submitted to RLJ stockholders for adoption, (iv) recommended that RLJ stockholders approve and adopt the Image merger agreement and (v) declared the advisability of the Image merger agreement, the Image preferred stock purchase agreement, the RLJ merger and the Acorn acquisition.

The RLJ board unanimously recommends that RLJ stockholders vote:

See “The Business Combination — Recommendation of the RLJ Board; RLJ’s Reasons for the Business Combination” beginning on page 159 .

Q:  Do RLJ stockholders have redemption rights?

A:   Yes. RLJ is providing its stockholders with the opportunity to redeem their public shares of RLJ stock for cash equal to their pro rata share of the aggregate amount then on deposit in the trust account, less franchise and income taxes payable, upon the consummation of the business combination, subject to certain limitations. Only stockholders of record as of the RLJ record date may exercise redemption rights for their shares of RLJ common stock. Consequently, shares of RLJ common stock transferred after the RLJ record date cannot be redeemed. There will be no redemption rights upon the consummation of the business combination with respect to RLJ warrants. RLJ’s initial stockholders have agreed to waive their redemption rights with respect to their founder and any public shares they may hold in connection with the consummation of the business combination, and the founder shares will be excluded from the pro rata calculation used to determine the per-share redemption price.

Each public shareholder of RLJ common stock may elect to redeem his, her or its public shares irrespective of whether he, she or it votes for or against the approval of the RLJ merger proposal. RLJ has no specified maximum redemption threshold. However, RLJ will not close the business combination unless it has at least $92.0 million of cash held either in or outside the trust account. RLJ’s public stockholders will be able to redeem their shares up to two business days prior to the vote on the RLJ merger proposal.

RLJ stockholders, together with any of their affiliates or any other person with whom they are acting in concert or as a “group” (as defined under Section 13 of the Securities Exchange Act of 1934, as amended, which we refer to as the Exchange Act), will be restricted from redeeming their shares with respect to more than an aggregate of 15% of the shares sold in RLJ’s initial public offering. RLJ may enter into privately negotiated transactions to purchase public shares from stockholders after consummation of the business combination with proceeds released from the trust account immediately following consummation of the mergers.

Q:  Will how I vote affect my ability to exercise redemption rights?

A:   No. You may exercise your redemption rights whether you vote your shares of RLJ common stock for or against the RLJ merger proposal.

Q:  How do I exercise my redemption rights?

A:   If you wish to exercise your redemption rights, you must:

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You may elect to redeem your public shares irrespective of whether you vote for or against the approval of the RLJ merger proposal.

Q:  What are the federal income tax consequences of exercising my redemption rights?

A:   RLJ stockholders who exercise their redemption rights to receive cash from the trust account in exchange for their shares of RLJ common stock generally will be required to treat the transaction as a sale of such shares and recognize gain or loss upon the conversion in an amount equal to the difference, if any, between the amount of cash received and the tax basis of the shares of RLJ common stock converted. Such gain or loss should be treated as capital gain or loss if such shares were held as a capital asset on the date of the conversion. A stockholder’s tax basis in his, her or its shares of RLJ common stock generally will equal the cost of such shares. A stockholder who purchased RLJ units will have to allocate the cost between the shares of common stock and the warrants comprising the units based on their relative fair market values at the time of the purchase. See “Material U.S. Federal Income Tax Consequences.”

Q:  If I am an RLJ warrantholder, can I exercise redemption rights with respect to my warrants?

A:   No. There are no redemption rights with respect to RLJ’s warrants.

Q:  If I am an RLJ warrantholder, will my warrants become exercisable for shares of New RLJ common stock if the business combination is consummated?

A:   Yes. Pursuant to the Image merger agreement and the terms of the RLJ warrants, each RLJ warrant will automatically become a warrant to purchase shares of New RLJ common stock. However, in the event that RLJ does not consummate the business combination by November 22, 2012, RLJ will be required to liquidate and any RLJ warrants you own will expire without value.

Q:  Are RLJ stockholders entitled to appraisal or dissenters’ rights?

A:   Yes. Under Chapter 92A of the NRS, RLJ public stockholders will have dissenters’ rights in connection with the business combination. To exercise dissenters’ rights, RLJ stockholders must strictly follow the procedures prescribed by Nevada law. These procedures are summarized under the section entitled “The Agreements — Description of the Image Merger Agreement — Appraisal Rights/Dissenting Shares” beginning on page 193 , and Sections 92A.300 through 92A.500 of the NRS are attached to this joint proxy statement/prospectus as Annex K. Holders of shares of RLJ common stock are encouraged to read these provisions carefully and in their entirety. Due to the complexity of the procedures for exercising the right to seek appraisals, holders of shares of RLJ common stock who are considering exercising such rights are encouraged to seek the advice of legal counsel. Failure to strictly comply with these provisions will result in the loss of dissenters’ rights.

In order to avoid the time and potential cost of the share appraisal process which follows the exercise of dissenters’ rights, RLJ stockholders may opt instead to exercise their redemption rights, as described in the above questions and answers and in the section entitled “The Business Combination — Redemption Rights of RLJ Stockholders” beginning on page 162 .

Q:  What happens to the funds deposited in the trust account after completion of the business combination?

A:   Upon consummation of the business combination, the funds deposited in the trust account will be released (i) to pay RLJ public stockholders who properly exercise their redemption rights, (ii) to pay the

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cash consideration under the Image preferred stock purchase agreement, (iii) to pay the cash consideration under the Acorn stock purchase agreement, (iv) to pay transaction fees and expenses associated with the business combination, and (v) for working capital and general corporate purposes of New RLJ following the business combination.

Q:  If the business combination is completed, when can I expect to receive the New RLJ common stock for my shares of RLJ common stock?

A:    Certificated Shares :  As soon as reasonably practicable after the effective time of the business combination, New RLJ will cause an exchange agent to mail to each holder of certificated shares of RLJ common stock a form of letter of transmittal and instructions for use in effecting the exchange of RLJ common stock for the RLJ merger consideration. After receiving the proper documentation from a holder of RLJ common stock, the exchange agent will deliver to such holder the cash and New RLJ common stock to which such holder is entitled under the Image merger agreement.

Book Entry Shares :  Each holder of record of one or more book entry shares of RLJ common stock whose shares will be converted into the right to receive the RLJ merger consideration will automatically, upon the effective time of the RLJ merger, be entitled to receive, and New RLJ will cause the exchange agent to deliver to such holder as promptly as practicable after the effective time, the cash and New RLJ common stock to which such holder is entitled under the Image merger agreement. Holders of book entry shares will not be required to deliver a certificate or an executed letter of transmittal to the exchange agent in order to receive the RLJ merger consideration.

Q:  What happens if the business combination is not consummated or is terminated?

A:   If RLJ does not effect the business combination or any other business combination before November 22, 2012, it will liquidate the trust account and distribute the amount held in the trust account, including interest but net of franchise and income taxes payable and less up to $100,000 of such net interest that may be released to RLJ from the trust account to pay liquidation expenses, to RLJ’s public stockholders, subject in each case to RLJ’s obligations under Nevada law to provide for claims of creditors and the requirements of other applicable law. After distributing the proceeds of the trust account, RLJ will promptly distribute the balance of its net assets to its remaining stockholders according to RLJ’s plan of dissolution.

Q:  How will the solicitation of proxies be handled?

A:   RLJ is soliciting proxies for the RLJ special meeting from RLJ stockholders. RLJ will bear the cost of soliciting proxies from RLJ stockholders, except that RLJ and Image have each agreed to share equally the costs incurred in connection with the printing and mailing of this joint proxy statement/prospectus. In addition to this mailing, RLJ’s directors, officers and employees (who will not receive any additional compensation for such services) may solicit proxies by telephone or in-person meeting.

RLJ has also engaged the services of Morrow to assist in the solicitation and distribution of the proxies, for an initial fee of $12,500 plus out-of-pocket expenses. RLJ will pay Morrow an additional fee of $25,000 upon successful completion of the business combination.

RLJ will reimburse brokerage houses and other custodians, nominees and fiduciaries for their reasonable out-of-pocket expenses for forwarding proxy and solicitation materials to the beneficial owners of RLJ common stock.

Questions and Answers for Image Stockholders

Q:  Why is Image proposing to combine with New RLJ?

A:   In reaching its decision to recommend the Image merger agreement for adoption by Image stockholders, the Image board of directors, or the Image board, consulted with Image’s management, as well as its financial and legal advisors, and considered a number of factors that the board members believe supported their decision. In particular, the Image board believes the business combination would provide Image stockholders with the potential to participate in a newly capitalized public company that could take advantage of potential growth opportunities and synergies resulting from combining Image with Acorn. The Image board reviewed the strategic alternatives available to the company, including remaining as a stand-alone public company, and

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concluded that it is an appropriate time to sell Image and that the Image merger consideration reflected the highest value reasonably attainable for Image public stockholders at this time. See “The Business Combination — Recommendation of the Image Board; Image’s Reasons for the Business Combination” beginning on page 162 .

Q:  What will Image stockholders receive in the Image merger?

A:   Upon completion of the Image merger, the outstanding shares of common stock of Image, par value $0.0001 per share, which we refer to as Image common stock, will be converted into an aggregate of up to 2,289,000 shares of validly issued, fully paid and non-assessable New RLJ common stock, par value $0.001 per share, subject to adjustment as set forth in the Image merger agreement, which we refer to as the Image merger consideration. However, shares held by Image as treasury stock or that are owned by New RLJ, Image, Image Merger Sub or any wholly owned subsidiary of Image and shares with respect to which appraisal rights are properly exercised and not withdrawn, which we collectively refer to as the Image excluded shares, will not receive the Image merger consideration. Any Image excluded shares will be canceled.

Image stockholders will not receive any fractional shares of New RLJ common stock in the Image merger. Instead of receiving any fractional shares, each holder of Image common stock will be paid an amount in cash, without interest, rounded down to the nearest cent, equal to the product of (i) the amount of the fractional share interest in a share of New RLJ common stock to which such holder would otherwise be entitled (rounded to three decimal places) and (ii) an amount equal to the average of the closing sale prices of RLJ common stock on the Over-The-Counter Bulletin Board, which we refer to as the OTCBB, for each of the ten (10) consecutive trading days immediately preceding the date on which the closing of the mergers takes place, which we refer to as the closing date.

Pursuant to the Image preferred stock purchase agreement, New RLJ will acquire all of the outstanding Series B Preferred Stock of Image for an aggregate purchase price of $22.6 million consisting of cash and subordinated notes of New RLJ.

Q:  Should I send in my share certificates now for the exchange?

A:   No. Image stockholders should keep any share certificates they hold at this time. After the business combination is completed, Image stockholders holding Image share certificates will receive from New RLJ’s exchange agent a letter of transmittal and instructions on how to obtain the Image merger consideration.

Each holder of record of one or more book entry shares of Image common stock whose shares will be converted into the right to receive the Image merger consideration will automatically, upon the effective time of the Image merger, be entitled to receive, and New RLJ will cause the exchange agent to deliver to such holder as promptly as practicable after the effective time, the cash and New RLJ common stock to which such holder is entitled under the Image merger agreement. Holders of book entry shares will not be required to deliver a certificate or an executed letter of transmittal to the exchange agent in order to receive the Image merger consideration.

Q:  When and where will the Image special meeting be held?

A:   The Image special meeting will be held at the offices of Perkins Coie LLP, located at 30 Rockefeller Plaza, New York, NY 10112, on September 20, 2012, at 10:00 a.m., Eastern time, unless the special meeting is adjourned or postponed.

Q:  Who is entitled to vote at the Image special meeting?

A:   Image has fixed August 9, 2012 as the Image record date. If you were an Image stockholder at the close of business on the Image record date, you are entitled to vote on matters that come before the Image special meeting. However, an Image stockholder may only vote his or her shares if he or she is present in person or is represented by proxy at the Image special meeting.

Q:  How many votes do I have?

A:   Image stockholders are entitled to one vote at the Image special meeting for each share of Image common stock held of record as of the Image record date. As of the close of business on the Image record date, there were 256,402,133 outstanding shares of Image common stock.

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Q:  What constitutes a quorum?

A:   Holders of a majority of the voting power of the outstanding shares of Image common stock entitled to vote at the Image special meeting, present in person or represented by proxy, constitutes a quorum. In the absence of a quorum, the majority of the Image stockholders, present in person or represented by proxy, will have the power to adjourn the special meeting. As of the Image record date, 128,201,067 shares of Image common stock would be required to achieve a quorum.

Q:  What vote is required to approve each Image proposal?

A:    Proposal to Approve and Adopt the Image Merger Agreement by Image Stockholders :  The proposal to approve and adopt the Image merger agreement and the Image merger contemplated thereby, which we refer to as the Image merger proposal, requires the affirmative vote of holders of a majority of the shares of Image common stock outstanding and entitled to vote. Accordingly, an Image stockholder’s failure to submit a proxy card or to vote in person at the special meeting, an abstention from voting, or the failure of an Image stockholder who holds his or her shares in “street name” through a broker or other nominee to give voting instructions to such broker or other nominee, which we refer to as a broker non-vote, will have the same effect as a vote “AGAINST” the Image merger proposal.

Proposal to Approve and Adopt the 2012 Incentive Compensation Plan of New RLJ by Image Stockholders:   The proposal to approve and adopt the 2012 Incentive Compensation Plan of New RLJ requires the affirmative vote of holders of a majority of the shares of Image common stock present, in person or represented by proxy, at the special meeting and entitled to vote on the proposal. Accordingly, abstentions will have the same effect as a vote “AGAINST” the proposal to approve and adopt the 2012 Incentive Compensation Plan of New RLJ, while broker non-votes and shares not in attendance at the special meeting will have no effect on the outcome of such vote.

Proposal to Adjourn the Image Special Meeting by Image Stockholders:   Approving the adjournment of the special meeting requires the affirmative vote of holders of a majority of the shares of Image common stock present, in person or represented by proxy, at the special meeting and entitled to vote on the adjournment proposal. Accordingly, abstentions will have the same effect as a vote “AGAINST” the proposal to adjourn the special meeting, while broker non-votes and shares not in attendance at the special meeting will have no effect on the outcome of any vote to adjourn the special meeting.

Non-Binding, Advisory Proposal to Approve the Merger-Related Compensation Arrangements of Image’s Named Executive Officers by Image Stockholders:   The proposal to approve, on a non-binding, advisory basis, the merger-related compensation arrangements of Image’s named executive officers requires the affirmative vote of holders of a majority of the shares of Image common stock present, in person or represented by proxy, at the special meeting and entitled to vote on the proposal. Accordingly, abstentions will have the same effect as a vote “AGAINST” the proposal to approve the merger-related executive compensation arrangements, while broker non-votes and shares not in attendance at the special meeting will have no effect on the outcome of the vote.

Q:  How do the Image insiders intend to vote their shares?

A:   The JH Entities have entered into a support agreement, dated April 2, 2012, which we refer to as the support agreement, with RLJ. Pursuant to the support agreement, each of the JH Entities has agreed to vote its shares of Image common stock in favor of the proposal to approve and adopt the Image merger agreement. The JH Entities own approximately 70% of the outstanding shares of Image common stock, and therefore have enough shares to approve and adopt the Image merger agreement and the Image merger without the vote of any other Image stockholder.

As a condition to the obligation of RLJ to consummate the mergers, the JH Entities and certain other Image stockholders must contribute for no consideration an aggregate of up to 35,401,977 shares of Image common stock held by him, her or it prior to the consummation of the mergers.

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Q:  Why am I being asked to cast a non-binding, advisory vote to approve the merger-related executive compensation payable to Image’s named executive officers in connection with the Image merger?

A:  The SEC recently adopted rules that are applicable to Image in connection with the Image merger and require Image to seek a non-binding, advisory vote with respect to payments that will or may be made to our named executive officers in connection with the Image merger.

Q:  What are the recommendations of the Image board?

A:   The Image board has unanimously (i) approved the Image merger agreement and consummation of the Image merger upon the terms and subject to the conditions set forth in the Image merger agreement, (ii) determined that the terms of the Image merger agreement, the Image merger and the other transactions contemplated by the Image merger agreement are fair to, and in the best interests of, Image and its stockholders, (iii) directed that the Image merger agreement be submitted to Image stockholders for adoption at the Image special meeting, (iv) recommended that Image’s stockholders adopt the Image merger agreement and (v) declared the advisability of the Image merger agreement and the Image merger.

The Image board unanimously recommends that Image stockholders vote:

See “The Business Combination — Recommendation of the Image Board; Image’s Reasons for the Business Combination” beginning on page 162 .

Q:  Are Image stockholders entitled to appraisal or dissenters’ rights?

A:   Yes. Under both Delaware and California law, Image common stockholders have the right not to consent to the Image merger and to instead exercise appraisal rights in connection with the Image merger so as to receive cash in lieu of the consideration otherwise proposed pursuant to the Image merger agreement. Holders of Image common stock who elect to exercise such appraisal rights and who perfect those rights under Delaware and California law will be entitled to the appraised fair market value of their shares of Image common stock paid to them in cash. The appraised fair value of any holder’s Image common stock may be more or less than the amount that would be paid to such holder pursuant to the merger agreement. To exercise appraisal rights, a stockholder must follow carefully the requirements of Delaware and California law, including not consenting to, or voting in favor of, the adoption and approval of the merger agreement and giving the required written notice to Image. These procedures are summarized under the section entitled “The Agreements — Description of the Image Merger Agreement — Appraisal Rights/Dissenting Shares” beginning on page 193 . A copy of the relevant provisions of the Delaware General Corporation Law, which we refer to as Delaware law, and the California General Corporation Law, which we refer to as the California law, addressing appraisal rights is attached as Annex I and Annex J to this joint proxy statement/prospectus. Image common stockholders intending to exercise appraisal rights should read the statutory provisions carefully and consult with their own legal advisors, as any deviation from the statutory requirements may result in a forfeiture of appraisal rights otherwise available to such stockholder.

Q:  If the business combination is completed, when can I expect to receive the Image merger consideration for my shares of Image common stock?

A:    Certificated Shares :  As soon as reasonably practicable after the effective time of the business combination, New RLJ will cause an exchange agent to mail to each holder of certificated shares of Image common stock a form of letter of transmittal and instructions for use in effecting the exchange of Image common stock for the Image merger consideration. After receiving the proper documentation from a holder of Image common stock, the exchange agent will deliver to such holder the cash and New RLJ common stock to which such holder is entitled under the Image merger agreement.

Book Entry Shares :  Each holder of record of one or more book entry shares of Image common stock whose shares will be converted into the right to receive the Image merger consideration will automatically,

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upon the effective time of the Image merger, be entitled to receive, and New RLJ will cause the exchange agent to deliver to such holder as promptly as practicable after the effective time, the cash and New RLJ common stock to which such holder is entitled under the Image merger agreement. Holders of book entry shares will not be required to deliver a certificate or an executed letter of transmittal to the exchange agent in order to receive the Image merger consideration.

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the works of Agatha Christie. Acorn’s founder and chairman is Peter Edwards. Acorn’s principal executive offices are located at 8515 Georgia Avenue, Suite 650, Silver Spring, Maryland 20910, and its telephone number is (301) 686-2115.

RLJ Entertainment, Inc.

RLJ Entertainment, Inc., which we refer to as New RLJ, is a Nevada corporation and a direct wholly owned subsidiary of RLJ. New RLJ was organized on April 2, 2012, solely for the purpose of effecting the business combination. Pursuant to the Image merger agreement, Image Merger Sub will be merged with and into Image, and RLJ Merger Sub will be merged with and into RLJ. RLJ will acquire Acorn pursuant to the Acorn stock purchase agreement. As a result of these transactions, Image and RLJ will each become wholly owned subsidiaries of New RLJ and Acorn will become a wholly-owned subsidiary of RLJ. As a result of the business combination, New RLJ will become a publicly traded corporation, and former RLJ stockholders, Image stockholders and Acorn shareholders will own stock in New RLJ. New RLJ has not carried on any activities other than in connection with the business combination. New RLJ’s principal executive offices are located at 3 Bethesda Metro Center, Suite 1000, Bethesda, Maryland 20814.

RLJ Merger Sub I, Inc.

RLJ Merger Sub I, Inc., which we refer to as RLJ Merger Sub, will be a Nevada corporation and a direct wholly owned subsidiary of New RLJ. RLJ Merger Sub will be organized solely for the purpose of effecting the business combination. RLJ Merger Sub will be merged with and into RLJ and, as a result, RLJ will become a wholly owned subsidiary of New RLJ. RLJ Merger Sub will not carry on any activities other than in connection with the business combination. RLJ Merger Sub’s principal executive offices will be located at 3 Bethesda Metro Center, Suite 1000, Bethesda, Maryland 20814.

RLJ Merger Sub II, Inc.

RLJ Merger Sub II, Inc., which we refer to Image Merger Sub, will be a Delaware corporation and a direct wholly owned subsidiary of New RLJ. Image Merger Sub will be organized solely for the purpose of effecting the business combination. Image Merger Sub will be merged with and into Image and, as a result, Image will become a wholly owned subsidiary of New RLJ. Image Merger Sub will not carry on any activities other than in connection with the business combination. Image Merger Sub’s principal executive offices will be located at 3 Bethesda Metro Center, Suite 1000, Bethesda, Maryland 20814.

The Proposed Business Combination

RLJ and Image have entered into the Image merger agreement providing for the combination of RLJ and Image under a new holding company, New RLJ. As a result of the transactions contemplated by the Image merger agreement, former holders of Image common stock and former RLJ stockholders will own stock in New RLJ, which New RLJ has applied to list on The NASDAQ Stock Market. Pursuant to the Image merger agreement, Image Merger Sub will be merged with and into Image, and RLJ Merger Sub will be merged with and into RLJ. Immediately prior to the mergers, New RLJ will acquire all of the outstanding Series B Preferred Stock of Image pursuant to the Image preferred stock purchase agreement. As a result, RLJ and Image will each become wholly owned subsidiaries of New RLJ. In addition, RLJ will acquire all of the outstanding shares of capital stock of Acorn pursuant to the Acorn stock purchase agreement.

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The organization of RLJ, Image, Acorn and New RLJ before and after the business combination is illustrated in the following chart.

Prior to the business combination

The mergers

Prior to the Acorn acquisition

The Acorn acquisition

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For additional information on the mergers, see “The Business Combination” beginning on page 152 , and for additional information on the Image merger agreement and the related transaction documents, see “The Agreements” beginning on page 191 .

Merger Consideration Received by RLJ Stockholders

As a result of the RLJ merger, each outstanding share of RLJ common stock, other than RLJ excluded shares, will be converted into one share of common stock of New RLJ, par value $0.001 per share, which we refer to as New RLJ common stock. A description of the New RLJ common stock to be issued in connection with the RLJ merger is set forth in the section entitled “Description of New RLJ Securities” beginning on page 250 .

Merger Consideration Received by Image Stockholders

As a result of the Image merger, the outstanding shares of Image common stock, other than Image excluded shares, will be converted into an aggregate of up to 2,289,000 shares of validly issued, fully paid and non-assessable shares of New RLJ common stock, less up to 150,000 shares of common stock of New RLJ depending on the expenses incurred by Image in connection with the Image merger agreement (up to a maximum of $1.5 million of such expenses). Image stockholders will not receive any fractional shares of New RLJ common stock pursuant to the Image merger. Instead of receiving any fractional shares, each holder of Image common stock will be paid an amount in cash, without interest, rounded down to the nearest cent, equal to the product of (i) the amount of the fractional share interest in a share of New RLJ common stock to which such holder would otherwise be entitled (rounded to three decimal places) and (ii) an amount equal to the average of the closing sale prices of RLJ common stock on the OTCBB for each of the ten (10) consecutive trading days ending on and including the trading day immediately prior to the effective time of the Image merger. Shares of Image Series B Preferred Stock, which will have been acquired by New RLJ pursuant to the Image preferred stock purchase agreement immediately prior to the mergers, will be canceled without consideration in the Image merger. It is anticipated that the holders of Image common stock will receive aggregate consideration of approximately 2.14 million shares of New RLJ common stock valued at approximately $21.4 million as a result of the Image merger. The value of the New RLJ common stock to be received as consideration is based on a fair value of $10.00 per share of New RLJ common stock, which is the negotiated price among RLJ, Image and Acorn and closely approximates the per share redemption amount of $9.95 and the trading price of RLJ common stock of $9.75 on March 30, 2012, the last trading day for RLJ common stock prior to the announcement of the proposed business combination. A description of the New RLJ common stock to be issued in connection with the Image merger is set forth under the section entitled “Description of New RLJ Securities” beginning on page 250 .

Consideration to be Received by Holders of Image Series B Preferred Stock

Pursuant to the terms of the Image preferred stock purchase agreement, all of the outstanding shares of Image’s Series B Preferred Stock will be purchased by New RLJ for an aggregate purchase price of $22.6 million consisting of cash and subordinated notes of New RLJ. The mix of cash and subordinated notes of New RLJ will be determined based on the amount of cash available to RLJ at the closing of the Image preferred stock purchase agreement. The holders of Image’s Series B Preferred Stock will receive aggregate consideration valued at $22.6 million as a result of the transactions contemplated by the Image preferred stock purchase agreement.

Consideration to be Received by Acorn Shareholders

Pursuant to the terms of the Acorn stock purchase agreement, all of the outstanding shares of Acorn’s capital stock will be purchased by RLJ for (i) $101,818,343 in cash, plus an amount equal to the aggregate transaction costs incident to the negotiation, preparation or consummation of the acquisition by Acorn Productions Limited, a wholly owned subsidiary of Acorn, of ACL (except for those transaction costs funded from working capital of Acorn or any Acorn subsidiary), (ii) one million shares of New RLJ common stock and (iii) one million newly issued warrants to purchase New RLJ common stock at an exercise price of $12.00 per share. The cash portion of the purchase price to be paid to the Acorn shareholders at closing will be reduced by the (i) transaction costs incurred by Acorn and Acorn’s subsidiaries since January 1, 2012 in connection with the business combination, including the payments required to be made to cancel the

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outstanding options to purchase shares of capital stock of Acorn’s subsidiaries and to buy out the minority holders of Acorn’s subsidiaries; (ii) the amount required to repay Acorn’s SunTrust Bank senior term loan and the principal amount of certain subordinated notes issued by Acorn; and (iii) $5.0 million for indemnification escrow. The holders of Acorn’s capital stock will receive aggregate consideration valued at approximately $118 million as a result of the transactions contemplated by the Acorn stock purchase agreement. The value of the New RLJ common stock to be received as consideration is based on a fair value of $10.00 per share of New RLJ common stock, which is the negotiated price among RLJ, Image and Acorn and closely approximates the per share redemption amount of $9.95 and the trading price of RLJ common stock of $9.75 on March 30, 2012, the last trading day for RLJ common stock prior to the announcement of the proposed business combination. The cash purchase price will be subject to a post-closing adjustment based upon the closing net working capital of Acorn.

Total New RLJ Shares to be Issued

The number of shares of New RLJ common stock to be issued to Image stockholders will not change based upon the number of shares of Image common stock outstanding at the effective time of the mergers. Therefore, based on the number of shares of RLJ common stock outstanding as of August 9, 2012, the latest practicable date before the printing of this joint proxy statement/prospectus, and assuming no shares of RLJ common stock are redeemed between August 9, 2012 and the effective times of the mergers, the total number of shares of New RLJ common stock will be approximately 20,315,011. Upon consummation of the business combination and assuming no redemptions by RLJ stockholders, current RLJ stockholders (including RLJ’s founders) will own approximately 84% of New RLJ, Image stockholders will own approximately 11% of New RLJ and Acorn shareholders will own approximately 5% of New RLJ.

Comparative Per Share Market Price

RLJ common stock is quoted on the OTCBB under the symbol “RLJA.OB.” Image common stock is quoted on the OTCQB under the symbol “DISK.PK.” The following table shows the closing prices of RLJ common stock and Image common stock as reported on March 30, 2012, the last trading day before the business combination was publicly announced, and on August 9, 2012, the last practicable trading day before the date of this joint proxy statement/prospectus. This table also shows the value of the Image merger consideration per share of Image common stock (after giving effect to the shares of Image common stock contributed to Image prior to the effective time of the Image merger and any unvested restricted shares of Image common stock cancelled prior to the effective time of the Image merger and less 150,000 shares of New RLJ common stock relating to expenses incurred by Image in connection with the Image merger agreement), which was calculated by multiplying the closing price of RLJ common stock as of the specified date multiplied by the quotient obtained by dividing the aggregate merger consideration payable to holders of Image common stock by the number of shares of Image common stock outstanding immediately prior to the effective time of the Image merger.

		Image Common Stock				RLJ Common Stock				Value Per Share of Image Common Stock
March 30, 2012		$	0.08			$	9.75			$	0.095
August 9, 2012		$	0.04			$	9.95			$	0.097

The market prices of RLJ common stock and Image common stock will fluctuate prior to the consummation of the business combination. You should obtain current market quotations for the shares.

Neither RLJ nor Image currently pays a quarterly dividend on its common stock. Under the terms of the Image merger agreement, during the period before the effective times of the mergers, Image is prohibited from paying any dividends on its common stock, unless Image has received prior written consent from RLJ.

New RLJ Subordinated Notes

The subordinated promissory notes of New RLJ to be issued pursuant to the Image preferred stock purchase agreement will constitute unsecured subordinated obligations of New RLJ. The subordinated promissory notes will bear interest at the rate of 12.0% per annum (increasing to 14.0% per annum during the continuance of an event of default), and accrued interest for each calendar year will be due and payable on May 15 of the following calendar year, and on the maturity date described below. A minimum of 5.4% per

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annum of interest will be payable in cash on each interest payment date, and additional cash interest may be payable, at New RLJ’s discretion, under certain circumstances. Any interest which is not paid in cash will be payable through the issuance of additional subordinated promissory notes, or, at the holder’s option, in shares of common stock of New RLJ valued at their market price at or about the time of issuance. The principal of the subordinated promissory notes will be due and payable in a single payment on the earlier of the sixth anniversary of issuance or one year from the original stated maturity date of New RLJ’s senior secured debt, or upon a change of control of New RLJ. The subordinated promissory notes will be subordinated to the prior payment in full of New RLJ’s senior secured debt and may be further subordinated to additional indebtedness which New RLJ may incur from time to time, subject to satisfaction of certain financial tests.

Pursuant to the Image preferred stock purchase agreement, $22.0 million of the purchase price thereunder will consist of $7.2 million in cash, which we refer to as the cash portion, and $14.8 million in principal amount of the subordinated promissory notes described above, which we refer to as the notes portion; provided that (i) at closing, the cash portion will be increased, and the notes portion decreased, by an amount equal to any additional vendor financing delivered into the transactions contemplated by the Image merger agreement; and (ii) if immediately prior to closing, after giving effect to any redemptions or capital related transactions as may be necessary in order to consummate the transactions contemplated by the Image merger agreement, RLJ has greater than $92.0 million in cash (excluding (a) any amounts drawn under the SunTrust or other senior line of credit and (b) any cash held by RLJ outside of the trust account immediately prior to closing), which we refer to as the cash amount, then the cash portion will be increased, dollar for dollar, in an amount equal to 50% of the difference between the actual amount of cash (excluding (a) any amounts drawn under the SunTrust or other senior line of credit and (b) any cash held by RLJ outside of the trust account immediately prior to closing) and the cash amount; provided further, that the cash portion will not be more than $22.0 million under any circumstances. The notes portion will be reduced, dollar for dollar, by an amount equal to any increase in the cash portion.

Proposed Senior Credit Facility

To finance a portion of the purchase price and related costs of the business combination, New RLJ anticipates entering into a senior credit facility, which we refer to as the SunTrust senior credit facility, with a group of lenders headed by SunTrust Bank as Administrative Agent. The SunTrust senior credit facility will initially include a $20.0 million revolving credit facility and a $22.0 million term loan, with the right of New RLJ to increase such facilities (in the form of an increased revolver and/or an additional term loan, as determined by New RLJ prior to the closing) by up to an aggregate of $30.0 million, which we refer to as the incremental facility, provided that any portion of such increase which is designated to be in the form of a term loan must be borrowed on or before the first anniversary of the closing. The SunTrust senior credit facility will be guaranteed by Image, Acorn and their subsidiaries (other than ACL and its subsidiaries), and will be secured by substantially all of the assets of New RLJ and the guarantors (other than Acorn Media Australia Pty, Ltd., or Acorn Australia, Acorn’s Australian subsidiary). In addition to those commitments, New RLJ may further increase the lending commitments under the SunTrust senior credit facility by up to a total of $25 million (of which no more than $5 million may be in the form of a revolver increase) subject to the approval of each lender whose commitment is to be increased and subject to certain other conditions. A description of the SunTrust senior credit facility is set forth in the section entitled “The Business Combination — Proposed Senior Credit Facility” beginning on page 185 . The closing of the SunTrust senior credit facility is subject to a number of customary conditions and there can be no assurance that New RLJ will enter into the SunTrust senior credit facility.

RLJ Special Meeting

Date, Time and Place

A special meeting of the stockholders of RLJ will be held at the offices of Greenberg Traurig, LLP, located at 200 Park Avenue, New York, NY 10166, on September 20, 2012, at 10:00 a.m., Eastern time, unless the special meeting is adjourned or postponed.

Purposes of the Special Meeting

At the special meeting, RLJ stockholders will be asked to consider and vote upon the following matters and to transact such other business that may properly come before the meeting:

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Record Date; Shares Entitled to Vote

Holders of shares of RLJ common stock as of the close of business on August 9, 2012, or the RLJ record date, are entitled to notice of, and to vote at, the special meeting or one or more adjournments thereof. Each share of RLJ common stock is entitled to one vote.

As of the RLJ record date, 17,968,750 shares of RLJ common stock were outstanding and entitled to vote at the RLJ special meeting.

Vote Required

Proposal to Approve and Adopt the Image merger agreement by RLJ stockholders:   Approving and adopting the Image merger agreement requires the affirmative vote of holders of a majority of the shares of RLJ common stock outstanding and entitled to vote. Accordingly, an RLJ stockholder’s failure to submit a proxy card or to vote in person at the special meeting, an abstention from voting, or the failure of an RLJ stockholder who holds his or her shares in “street name” through a broker or other nominee to give voting instructions to such broker or other nominee, will have the same effect as a vote “AGAINST” the proposal to approve and adopt the Image merger agreement.

Proposal to Approve and Adopt the 2012 Incentive Compensation Plan of New RLJ by RLJ stockholders:   Approving and adopting the 2012 Incentive Compensation Plan of New RLJ requires the affirmative vote of holders of a majority of the shares of RLJ common stock present, in person or represented by proxy, at the special meeting and entitled to vote on the proposal. Accordingly, abstentions will have the same effect as a vote “AGAINST” the proposal to approve and adopt the 2012 Incentive Compensation Plan of New RLJ, while broker non-votes and shares not in attendance at the special meeting will have no effect on the outcome of such vote.

Proposal to Approve the Adjournment of the RLJ Special Meeting by RLJ stockholders:   Approving the adjournment of the special meeting (if it is necessary or appropriate to solicit additional proxies because there are not sufficient votes to approve and adopt the Image merger agreement) requires the affirmative vote of holders of a majority of the shares of RLJ common stock present, in person or represented by proxy, at the special meeting and entitled to vote on the adjournment proposal, regardless of whether a quorum is present. Accordingly, abstentions will have the same effect as a vote “AGAINST” the proposal to adjourn the special meeting, while broker non-votes and shares not in attendance at the special meeting will have no effect on the outcome of any vote to adjourn the special meeting.

Recommendation of the RLJ Board

The RLJ board has unanimously (i) approved the Image merger agreement and the consummation of the transactions contemplated thereby upon the terms and subject to the conditions set forth in the Image merger agreement, (ii) determined that the terms of the business combination are fair to, and in the best interests of, RLJ and its stockholders, (iii) directed that the Image merger agreement be submitted to RLJ stockholders for approval and adoption, (iv) recommended that RLJ stockholders approve and adopt the Image merger agreement, and (v) declared the advisability of the Image merger agreement, the Image preferred stock purchase agreement, the RLJ merger and the Acorn acquisition.

THE RLJ BOARD UNANIMOUSLY RECOMMENDS THAT RLJ STOCKHOLDERS VOTE:

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We refer to the recommendation that RLJ stockholders vote “FOR” the proposal to approve and adopt the Image merger agreement as the RLJ recommendation. See “The Business Combination —  Recommendation of the RLJ Board; RLJ’s Reasons for the Business Combination” beginning on page 159 .

Image Special Meeting

Date, Time and Place

A special meeting of the stockholders of Image will be held at the offices of Perkins Coie LLP, located at 30 Rockefeller Plaza, New York, NY 10112, on September 20, 2012, at 10:00 a.m., Eastern time, unless the special meeting is adjourned or postponed.

Purposes of the Special Meeting

At the special meeting, Image stockholders will be asked to consider and vote upon the following matters and to transact such other business that may properly come before the meeting:

Record Date; Shares Entitled to Vote

Only holders of record of shares of Image common stock at the close of business on the Image record date will be entitled to notice of, and to vote at, the special meeting or one or more adjournments thereof. Each outstanding share of Image common stock entitles its holder to cast one vote.

As of the Image record date, there were 256,402,133 shares of Image common stock outstanding and entitled to vote at the Image special meeting.

Vote Required

Proposal to Approve and Adopt the Image merger agreement by Image stockholders :  Adopting the Image merger agreement requires the affirmative vote of holders of a majority of the shares of Image common stock outstanding and entitled to vote. Accordingly, an Image stockholder’s failure to submit a proxy card or to vote in person at the special meeting, an abstention from voting, or the failure of an Image stockholder who holds his or her shares in “street name” through a broker, bank or other nominee to give voting instructions to such broker or other nominee, will have the same effect as a vote “AGAINST” the proposal to approve and adopt the Image merger agreement.

Proposal to Approve and Adopt the 2012 Incentive Compensation Plan of New RLJ by Image stockholders :  Approving and adopting the 2012 Incentive Compensation Plan of New RLJ requires the affirmative vote of holders of a majority of the shares of Image common stock present, in person or represented by proxy, at the special meeting and entitled to vote on the proposal. Accordingly, abstentions will have the same effect as a vote “AGAINST” the proposal to approve and adopt the 2012 Incentive Compensation Plan of New RLJ, while broker non-votes and shares not in attendance at the special meeting will have no effect on the outcome of such vote.

Proposal to Approve the Adjournment of the Image Special Meeting by Image stockholders :  Approving the adjournment of the special meeting requires the affirmative vote of holders of a majority of the shares of Image common stock present, in person or represented by proxy, at the special meeting and entitled to vote on the adjournment proposal. Accordingly, abstentions will have the same effect as a vote “AGAINST” the proposal to adjourn the special meeting, while broker non-votes and shares not in attendance at the special meeting will have no effect on the outcome of any vote to adjourn the special meeting.

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Non-Binding, Advisory Proposal to Approve the Merger-Related Compensation Arrangements of Image’s Named Executive Officers by Image stockholders:   Approving on a non-binding, advisory basis the merger-related compensation arrangements of Image’s named executive officers requires the affirmative vote of holders of a majority of the shares of Image common stock present, in person or represented by proxy, at the special meeting and entitled to vote on the proposal. Accordingly, abstentions will have the same effect as a vote “AGAINST” the proposal to approve the merger-related executive compensation arrangements, while broker non-votes and shares not in attendance at the special meeting will have no effect on the outcome of the vote.

The JH Entities have entered into the support agreement with RLJ, pursuant to which each of the JH Entities has agreed to vote its shares of Image common stock in favor of the proposal to approve and adopt the Image merger agreement. The JH Entities own approximately 70% of the outstanding shares of Image common stock, and therefore have enough shares to approve and adopt the Image merger agreement and the Image merger without the vote of any other Image stockholder.

Recommendation of the Image Board

The Image board has unanimously (i) approved the Image merger agreement and consummation of the Image merger upon the terms and subject to the conditions set forth in the Image merger agreement, (ii) determined that the terms of the Image merger agreement, the Image merger and the other transactions contemplated by the Image merger agreement are fair to, and in the best interests of, Image and its stockholders, (iii) directed that the Image merger agreement be submitted to Image stockholders for adoption at the Image special meeting, (iv) recommended that Image’s stockholders adopt the Image merger agreement and (v) declared the advisability of the Image merger agreement and the Image merger.

THE IMAGE BOARD UNANIMOUSLY RECOMMENDS THAT IMAGE STOCKHOLDERS VOTE:

We refer to the recommendation that Image stockholders vote “FOR” the proposal to approve and adopt the Image merger agreement as the Image recommendation. See “The Business Combination — Recommendation of the Image Board; Image’s Reasons for the Business Combination” beginning on page 162 .

RLJ’s Financial Advisor

RLJ engaged Lazard Middle Market LLC, or Lazard Middle Market, as its exclusive financial advisor to assist with the business combination. Upon consummation of the business combination, Lazard Middle Market is entitled to receive a fee of $1,000,000 from RLJ. Lazard Middle Market is also entitled to reimbursement from RLJ of certain of its expenses in connection with its engagement as RLJ’s financial advisor. The RLJ board did not request, and therefore will not receive, a fairness opinion from Lazard Middle Market in connection with the business combination. Lazard Capital Markets LLC, or Lazard Capital Markets, served as lead underwriter of RLJ’s initial public offering and RLJ paid to Lazard Capital Markets and the other underwriter of RLJ’s initial public offering underwriting discounts and commissions equal to approximately $3,600,000 upon consummation of the offering. Lazard Capital Markets and the other underwriter of RLJ’s initial public offering are entitled to receive deferred underwriting discounts and commissions equal to approximately $3,600,000 upon consummation of the business combination. Additionally, RLJ has engaged Lazard Capital Markets as capital markets advisor in connection with the business combination. No fee is payable to Lazard Capital Markets in connection with its engagement by RLJ. Lazard Capital Markets is,

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however, entitled to reimbursement from RLJ of certain of its expenses in connection with its engagement as RLJ’s capital markets advisor. The relationship between Lazard Middle Market and Lazard Capital Markets, which we refer to collectively as the Lazard Representatives, is governed by a business alliance agreement between their respective parent companies.

Financial Advisors to Image and the Image Special Committee

EarlyBirdCapital, Inc., which we refer to as EarlyBirdCapital, acted as financial advisor to Image in connection with the transactions contemplated by the Image merger agreement. Salem Partners LLC, which we refer to as Salem Partners, acted as financial advisor to the special committee of the Image board, which we refer to as the special committee, in connection with the transactions contemplated by the Image merger agreement. Salem Partners has provided the special committee with an opinion that concluded that, as of the date of such opinion, and based upon and subject to the qualifications, limitations and assumptions set forth therein, the merger consideration to be received by the holders of Image common stock, other than the JH entities and certain officers, directors and other stockholders, who we refer to collectively as the insider stockholders, was fair, from a financial point of view, to such holders of Image common stock in the Image merger. We have attached a copy of the Salem Partners fairness opinion to this joint proxy statement/prospectus as Annex D. We have also provided a description of the analyses undertaken by Salem Partners. See “The Business Combination — Opinion of Image’s Special Committee Financial Advisor” beginning on page 165 .

Interests of Officers and Directors in the Business Combination

Certain of Image’s and RLJ’s executive officers and directors have financial interests in the business combination that are different from, or in addition to, the interests of RLJ’s stockholders and Image’s stockholders, other than the insider stockholders.

With respect to RLJ’s executive officers and directors, these interests include, among other things:

Mr. Johnson, who controls RLJ’s sponsor and is a member of RLJ’s board of directors, has agreed that, if RLJ dissolves prior to the consummation of a business combination, he will personally indemnify RLJ for any and all loss, liability, claim, damage and expense which it may become subject to as a result of a claim by any vendor, prospective target business or other entity that is owed money by RLJ for services rendered or products sold to the extent necessary to ensure that such loss, liability, claim, damage or expense does not reduce the amount of funds held in RLJ’s trust account.

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Image’s executive officers’ and directors’ interests in the business combination include, among other things:

The members of the RLJ board and the members of the special committee and the Image board were aware of and considered the interests summarized above, among other matters, in evaluating and negotiating the Image merger agreement and the transactions contemplated thereby and in recommending to RLJ and Image stockholders, respectively, that the Image merger agreement be approved and adopted. These interests are described in more detail in the sections of this document entitled “The Business Combination — Interests of RLJ Directors and Officers in the Business Combination” and “The Business Combination — Interests of Image Directors and Officers in the Business Combination” beginning on page 178 .

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Officers and Directors of New RLJ

Upon completion of the business combination, the following individuals will serve as directors and management of New RLJ:

Name		Position
Robert L. Johnson			Executive Chairman of the Board
Theodore S. Green			Chief Executive Officer, Director
Peter Edwards			Non-Executive Vice-Chairman, Independent Director
Miguel Penella			President and Chief Operating Officer, Director
H. Van Sinclair			Independent Director
John W. Hyde			President, Global and Strategic Development, Director
John P. Avagliano			Chief Financial Officer
Director Nominee			Independent Director
Director Nominee			Independent Director
Director Nominee			Independent Director

For more information on the new directors and management of New RLJ, see “New RLJ Executive Officers and Directors” beginning on page 219 .

Listing of New RLJ Common Stock

New RLJ has applied to list the shares of New RLJ common stock and the warrants to purchase New RLJ common stock received by RLJ stockholders, Image stockholders and Acorn shareholders, as applicable, in the business combination on The NASDAQ Stock Market under the symbols “RLJE” and “RLJEW,” respectively.

Comparison of Stockholder Rights

As a result of the mergers, the holders of RLJ common stock and Image common stock will become holders of New RLJ common stock. Following the mergers, RLJ stockholders and Image stockholders will have different rights as stockholders of New RLJ than they had as stockholders of RLJ and Image due to the different provisions of the governing documents of RLJ, Image and New RLJ. For a summary of the material differences among the rights of RLJ stockholders, Image stockholders and New RLJ stockholders, see “Comparison of Stockholder Rights” beginning on page 253 .

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SELECTED HISTORICAL FINANCIAL DATA OF RLJ

New RLJ is providing the information set forth below to assist you in your analysis of the financial aspects of the business combination. The following selected historical financial information for RLJ as of December 31, 2011 and 2010 and for the year ended December 31, 2011 and the periods from November 12, 2010 (date of inception) to December 31, 2010 and November 12, 2010 (date of inception) to December 31, 2011 are derived from RLJ’s audited financial statements, which are included elsewhere in this joint proxy statement/prospectus.

The selected consolidated financial data of RLJ as of and for the three months ended March 31, 2012 and March 31, 2011 are derived from RLJ’s unaudited condensed consolidated financial statements and related notes for the quarterly period ended March 31, 2012, which are included elsewhere in this joint proxy statement/prospectus. In the opinion of management, all adjustments necessary for a fair presentation of the interim three months financial information have been included. The following information is only a summary and should be read in conjunction with the audited financial statements of RLJ for the year ended December 31, 2011 and the periods from November 12, 2010 (date of inception) to December 31, 2010 and November 12, 2010 (date of inception) to December 31, 2011 and the notes thereto and the section entitled “Information About RLJ — Management’s Discussion and Analysis of Financial Condition and Results of Operations,” all of which appear elsewhere in this joint proxy statement/prospectus.

		As of and for the Three Months Ended								As of and for the Years Ended December 31,
		March 31, 2012				March 31, 2011				2011				2010				2009				2008				2007
		(Unaudited)								($ in thousands, except per share amounts)
Revenues		$	—			$	—			$	—			$	—			$	—			$	—			$	—
General and administrative expenses		$	374			$	(83	)		$	506			$	25			$	—			$	—			$	—
Loss from operations		$	(374	)		$	(83	)		$	(506	)		$	(25	)		$	—			$	—			$	—
Net Loss		$	(361	)		$	(61	)		$	(422	)		$	(25	)
Basic and diluted earnings per share:
Net Loss per Common Share		$	(0.02	)		$	(0.01	)		$	(0.03	)		$	(0.01	)		$	—			$	—			$	—
Total assets		$	143,902			$	144,722			$	144,295			$	353			$	—			$	—			$	—
Total long-term liabilities		$	3,594			$	3,594			$	3,594			$	—			$	—			$	—			$	—
Common stock subject to possible redemption		$	135,185			$	135,906			$	135,546			$	—			$	—			$	—			$	—
Total stockholders' equity		$	140,185			$	140,906			$	140,546			$	(199	)		$	—			$	—			$	—

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SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF IMAGE

Image is providing the information set forth below to assist you in your analysis of the financial aspects of the business combination. The following selected consolidated financial information of Image as of and for the fiscal years ended March 31, 2012 and 2011, has been derived from Image’s audited financial statements for those years, which are included in this joint proxy statement/prospectus. The consolidated financial information of Image as of and for the fiscal years ended March 31, 2010, 2009 and 2008, has been derived from Image’s audited financial statements for those years, which are not included in this proxy statement.

The information set forth below is only a summary and is not necessarily indicative of the results of future operations of Image or the combined company, and you should read the following information together with Image’s audited consolidated financial statements, the notes related thereto and the section entitled “Information About Image — Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this joint proxy statement/prospectus.

		As of and for the Years Ended March 31,
		2012				2011				2010				2009				2008
		($ in thousands, except per share amounts)
Net Revenues		$	100,086			$	88,959			$	93,070			$	130,691			$	95,818
Income (Loss) from Operations		$	(1,076	)		$	671			$	(11,153	)		$	(3,650	)		$	(19,670	)
Net Loss Applicable to Common Shareholders		$	(3,184	)		$	(1,575	)		$	(6,950	)		$	(1,804	)		$	(23,053	)
Basic and diluted earnings per share:
Net Loss per Common Share		$	(0.01	)		$	(0.01	)		$	(0.31	)		$	(0.08	)		$	(1.06	)
Total Assets		$	75,742			$	73,712			$	67,397			$	84,713			$	84,813
Long-term debt, less current portion, less debt discount		$	349			$	1,443			$	—			$	5,663			$	16,309
Other long-term liabilities		$	7,318			$	6,149			$	1,520			$	2,105			$	2,560
Series B Cumulative preferred stock		$	5,839			$	5,839			$	6,019			$	—			$	—
Series C Junior participating preferred stock		$	—			$	—			$	10,895			$	—			$	—
Stockholders' equity (deficit)		$	7,443			$	9,303			$	(861	)		$	5,497			$	7,226

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SELECTED CONSOLIDATED HISTORICAL FINANCIAL DATA OF ACORN

Acorn is providing the information set forth below to assist you in your analysis of the financial aspects of the business combination. The following selected consolidated financial information of Acorn as of December 31, 2011, 2010 and 2009, and for the years ended December 31, 2011, 2010 and 2009, has been derived from Acorn’s consolidated financial statements, which are included in this joint proxy statement/prospectus. The consolidated financial information of Acorn as of and for the years ended December 31, 2008 and 2007, are derived from Acorn’s audited consolidated financial statements, which are not included in this joint proxy statement/prospectus.

The selected consolidated financial data of Acorn as of and for the three months ended March 31, 2012 and March 31, 2011 are derived from Acorn’s unaudited condensed consolidated financial statements and related notes for the quarterly period ended March 31, 2012, which are included elsewhere in this joint proxy statement/prospectus. In the opinion of management, all adjustments necessary for a fair presentation of the interim three months financial information have been included. The information set forth below is only a summary and is not necessarily indicative of the results of future operations of Acorn or the combined company, and you should read the following information together with Acorn’s historical consolidated audited financial statements, the notes related thereto and the section entitled “Information About Acorn —  Management’s Discussion and Analysis of Financial Condition and Results of Operations” appearing elsewhere in this joint proxy statement/prospectus.

As an S-Corporation, Acorn pays minimal income taxes on U.S. sourced taxable income. All federal income taxes are paid by Acorn’s shareholders.

		As of and for the Three Months Ended								As of and for the Years Ended December 31,
		March 31, 2012				March 31, 2011				2011				2010				2009				2008				2007
		(Unaudited)								($ in thousands, except per share amounts)
Net Sales		$	19,345			$	17,452			$	83,712			$	82,556			$	78,649			$	90,975			$	77,669
Operating Income		$	2,632			$	4,386			$	9,036			$	11,505			$	8,282			$	7,663			$	10,441
Net Income attributable to Acorn Media Group, Inc.		$	2,750			$	4,258			$	7,842			$	10,406			$	7,866			$	6,909			$	9,865
Basic earnings per share:
Net Income per Common Share		$	2.69			$	4.16			$	7.66			$	10.17			$	7.69			$	6.75			$	9.64
Diluted earnings per share:
Net Income per Common Share		$	2.61			$	4.11			$	7.59			$	10.05			$	7.46			$	6.42			$	9.29
Total Assets		$	69,854			$	51,819			$	52,703			$	52,458			$	40,298			$	38,851			$	33,185
Total long-term liabilities		$	19,192			$	1,284			$	242			$	2,218			$	—			$	—			$	—
Total stockholders' equity		$	32,490			$	30,868			$	29,827			$	27,809			$	21,285			$	18,788			$	18,625

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SELECTED UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following table shows summary unaudited pro forma condensed combined financial information regarding the financial condition and results of operations of the combined company after giving effect to the proposed business combination. The summary unaudited pro forma condensed combined financial statements have been prepared using the acquisition method of accounting under GAAP standards, under which the assets and liabilities of RLJ, Image and Acorn (which includes ACL) are presented at their estimated fair value as of the date the proposed business combination is completed. The summary unaudited pro forma condensed combined balance sheet assumes that the business combination took place on March 31, 2012. The summary unaudited pro forma condensed combined income statements for the three months ended March 31, 2012 and the year ended December 31, 2011 assumes that the business combination took place on January 1, 2011, the first day of New RLJ’s fiscal year 2011.

The Summary unaudited pro forma condensed combined financial information has been derived from and should be read in conjunction with the more detailed unaudited pro forma condensed combined financial statements of the combined company in this joint proxy statement/prospectus and the accompanying notes to those unaudited pro forma condensed combined financial statements. In addition, the summary unaudited pro forma condensed combined financial statements were based on and should be read in conjunction with the historical consolidated financial statements and related notes of RLJ, Image, Acorn and ACL for the applicable periods, which have been included in this joint proxy statement/prospectus.

The summary unaudited pro forma condensed combined financial information has been presented for informational purposes only and is not necessarily indicative of what the combined company’s financial position or results of operations actually would have been had the business combination been completed as of the dates indicated. In addition, the summary unaudited pro forma condensed combined financial information does not purport to project the future financial position or operating results of the combined company. Also, as explained in more detail in the accompanying notes to the unaudited pro forma condensed combined financial statements, the preliminary allocation of the pro forma purchase price reflected in the unaudited pro forma condensed combined financial information is subject to adjustment and may vary significantly from the actual purchase price allocation that will be recorded upon completion of the business combination.

		Twelve Months Ended December 31, 2011
		Historical
		For the twelve months ended Dec 31, 2011 RLJ				For the twelve months ended Mar 31, 2011 Image				For the twelve months ended Dec 31, 2011 Acorn				Adjustments				Pro forma assuming no redemptions				Additional adjustments				Pro forma assuming redemptions of $51.1 million
		($ in thousands, except per share amounts)
Summary Statement of Pro Forma Combined Income Data:
Net revenues		$	—			$	100,086			$	83,712			$	—			$	183,798			$	—			$	183,798
Depreciation and amortization expense		$	—			$	998			$	524			$	25,409			$	26,931			$	—			$	26,931
Income (Loss) from Operations		$	(506	)		$	(1,076	)		$	9,036			$	(25,265	)		$	(17,811	)		$	—			$	(17,811	)
Net income (loss)		$	(422	)		$	88			$	8,107			$	(17,116	)		$	(9,343	)		$	(1,337	)		$	(10,680	)
Net loss to Common		$	(422	)		$	(3,184	)		$	7,842			$	(13,579	)		$	(9,343	)		$	(1,337	)		$	(10,680	)
Basic and diluted earnings per share:
Net Loss to Common per Common Share			n/a				n/a				n/a				n/a			$	(0.51	)		$	n/a			$	(0.81	)

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		Three Months Ended March 31, 2012
		Historical
		For the three months ended Mar 31, 2012 RLJ				For the three months ended Mar 31, 2012 Image				For the three months ended Mar 31, 2012 Acorn				Adjustments				Pro forma assuming no redemptions				Additional adjustments				Pro forma assuming redemptions of $51.1 million
		($ in thousands, except per share amounts)
Summary Statement of Pro Forma Combined Income Data:
Net revenues		$	—			$	21,861			$	19,345			$	—			$	41,206			$	—			$	41,206
Depreciation and amortization expense		$	—			$	249			$	123			$	6,230			$	6,602			$	—			$	6,602
Income (Loss) from Operations		$	(374	)		$	(905	)		$	2,632			$	(6,194	)		$	(4,841	)		$	—			$	(4,841	)
Net income (loss)		$	(361	)		$	1,412			$	2,884			$	(4,388	)		$	(453	)		$	(334	)		$	(787	)
Net loss to Common		$	(361	)		$	558			$	2,750			$	(3,400	)		$	(453	)		$	(334	)		$	(787	)
Basic and diluted earnings per share:
Net Loss to Common per Common Share			n/a				n/a				n/a				n/a			$	(0.02	)			n/a			$	(0.05	)

		As of March 31, 2012
		Historical RLJ				Historical Image				Historical Acorn				Adjustments				Pro forma assuming no redemptions				Additional adjustments				Pro forma assuming redemptions of $51.1 million
Summary Pro Forma Combined Balance Sheet Data:
Total Assets		$	143,902			$	75,742			$	69,854			$	(33,889	)		$	255,609			$	(26,989	)		$	228,620
Long-term debt, less current portion, less debt discount		$	—			$	—			$	18,891			$	3,109				22,000			$	15,000				37,000
Other long-term liabilities		$	—			$	7,667			$	301			$	(3,018	)		$	4,950			$	—			$	4,950
Total Shareowners' equity		$	140,185			$	13,282			$	32,490			$	(13,932	)		$	172,025			$	(51,129	)		$	120,896
Basic Shares			n/a				n/a				n/a				n/a				20,315,750				(5,138,593	)			15,177,157

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COMPARATIVE PER SHARE DATA

The following table sets forth selected historical per share data for RLJ, Image and Acorn, and unaudited pro forma combined per share ownership information after giving effect to the proposed business combination, assuming (i) that no RLJ public stockholders exercise their redemption rights, and (ii) that RLJ common stock in the aggregate amount of $51.1 million is redeemed. RLJ is providing this information to assist you in your analysis of the financial aspects of the proposed business combination. The historical information should be read in conjunction with “Selected Consolidated Historical Financial Data of RLJ,” “Selected Consolidated Historical Financial Data of Image” and “Selected Consolidated Historical Financial Data of Acorn” included elsewhere in this joint proxy statement/prospectus and the historical consolidated and combined financial statements of RLJ, Image and Acorn and the related notes thereto included elsewhere in this joint proxy statement/prospectus. The unaudited pro forma per share information is derived from, and should be read in conjunction with, the unaudited condensed combined pro forma financial data and related notes included elsewhere in this joint proxy statement/prospectus.

The unaudited pro forma consolidated per share information does not purport to represent what the actual results of operations of RLJ, Image and Acorn would have been had the business combination been completed or to project New RLJ’s results of operations that may be achieved after the proposed business combination. The unaudited pro forma book value per share information below does not purport to represent what the value of RLJ, Image and Acorn would have been had the business combination been completed nor the book value per share for any future date or period.

		Year ended December 31, 2011				Three months ended March 31, 2012
RLJ Acquisition, Inc. – Historical
Loss per share from continuing operations:
Basic and diluted		$	(0.03	)		$	(0.02	)
Cash dividends declared per share of common stock		$	—			$	—
Book value per share of common stock:
Carrying value of stockholders' equity		$	5,000,008			$	5,000,006
Shares of common stock oustanding			17,968,750				17,968,750
Book value per share of common stock		$	0.28			$	0.28

		Year ended March 31, 2012
Image Entertainment, Inc. – Historical
Loss per share from continuing operations:
Basic and diluted		$	(0.01	)
Cash dividends declared per share of common stock		$	—
Book value per share of common stock:
Carrying value of stockholders' equity		$	7,443,000
Shares of common stock oustanding			256,402,000
Book value per share of common stock		$	0.03

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		Year ended December 31, 2011				Three months ended March 31, 2012
Acorn Media Group, Inc. – Historical
Income per share from continuing operations:
Basic		$	7.66			$	2.69
Diluted		$	7.34			$	2.61
Cash distributions per share of common stock		$	5.78			$	5.78
Book value per share of common stock:
Carrying value of shareholders' equity		$	29,827,070			$	32,489,988
Shares of common stock oustanding			1,023,466				1,023,466
Book value per share of common stock		$	29.14			$	31.75

		Assuming no redemptions				Assuming redemptions of $51.1 million
Pro forma combined amounts –
Loss per share from continuing operations:
Basic and diluted – year ended December 31, 2011		$	(0.43	)		$	(0.70	)
Basic and diluted – three months ended March 31, 2012		$	(0.01	)		$	(0.04	)
Cash distributions per share of common stock (1)		$	—			$	—
Book value per share of common stock as of March 31, 2012:
Carrying value of stockholders' equity		$	172,025,000			$	120,896,000
Shares of common stock oustanding (2),(3)			20,315,750				15,177,157
Book value per share of common stock		$	8.47			$	7.97

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MARKET PRICE AND DIVIDEND INFORMATION

RLJ common stock is quoted on the OTCBB under the symbol “RLJA.OB.” RLJ warrants are quoted on the OTCBB under the symbol “RLJAW.OB.” Image common stock is quoted on the OTCQB under the symbol “DISK.PK.” The following table sets forth, for the periods indicated, the high and low sales prices per share of RLJ common stock and Image common stock on the OTCBB and the OTCQB, respectively.

		RLJ Common Stock								RLJ Warrants
		High				Low				High				Low
Fiscal Year 2012
First Quarter		$	9.76			$	9.54			$	0.46			$	0.40
Second Quarter		$	10.00			$	9.85			$	0.45			$	0.20
Third Quarter (through August 9, 2012)		$	9.95			$	9.89			$	0.35			$	0.20
Fiscal Year 2011
First Quarter		$	9.50			$	9.45			$	0.45			$	0.43
Second Quarter		$	9.55			$	9.50			$	0.55			$	0.45
Third Quarter		$	9.55			$	9.48			$	0.54			$	0.40
Fourth Quarter		$	9.56			$	9.50			$	0.45			$	0.35

		Image Common Stock
		High				Low
Fiscal Year 2013
First Quarter		$	0.12			$	0.06
Second Quarter (through August 9, 2012)		$	0.07			$	0.01
Fiscal Year 2012
First Quarter		$	0.19			$	0.15
Second Quarter		$	0.18			$	0.07
Third Quarter		$	0.13			$	0.03
Fourth Quarter		$	0.13			$	0.04
Fiscal Year 2011
First Quarter		$	0.24			$	0.17
Second Quarter		$	0.25			$	0.15
Third Quarter		$	0.20			$	0.13
Fourth Quarter		$	0.22			$	0.13

Neither RLJ nor Image has paid dividends on common stock during 2012 or 2011, and neither company has any current intention of doing so.

Acorn is a privately held company and there is no established public trading market for shares of its common stock.

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As a consequence of such purchases:

Subsequent to RLJ’s consummation of the business combination, RLJ may be required to subsequently take write-downs or write-offs, restructuring and impairment or other charges that could have a significant negative effect on New RLJ’s financial condition, results of operations and New RLJ’s stock price, which could cause you to lose some or all of your investment.

Although RLJ has conducted extensive due diligence on Image and Acorn, RLJ cannot assure you that this diligence revealed all material issues that may be present in Image’s and Acorn’s respective businesses, that it would be possible to uncover all material issues through a customary amount of due diligence, or that factors outside of Image’s, Acorn’s and RLJ’s control will not later arise. As a result, New RLJ may be forced to later write-down or write-off assets, restructure its operations, or incur impairment or other charges that could result in losses. Even if RLJ’s due diligence successfully identifies certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with RLJ’s preliminary risk analysis. Even though these charges may be non-cash items and not have an immediate impact on New RLJ’s liquidity, the fact that New RLJ reports charges of this nature could contribute to negative market perceptions about New RLJ or its securities. In addition, charges of this nature may cause New RLJ to violate net worth or other covenants to which it may be subject as a result of New RLJ’s post-combination working capital facility.

There may be tax consequences of the Image merger that may adversely affect RLJ stockholders.

RLJ expects that the business combination can be effected as tax free to RLJ stockholders pursuant to Section 351 of the Code. To the extent the business combination does not so qualify, it could result in the imposition of substantial taxes on RLJ stockholders. See “Material U.S. Federal Income Tax Consequences” on page 187 .

Unlike many other blank check companies, RLJ does not have a specified maximum redemption threshold. The absence of such a redemption threshold will make it easier for RLJ to consummate the business combination even if a substantial majority of RLJ’s stockholders do not agree.

Since RLJ has no specified maximum redemption threshold, RLJ’s structure is different in this respect from the structure that has been used by most blank check companies. Traditionally, blank check companies would not be able to consummate a business combination if the holders of the company’s public shares voted against a proposed business combination and elected to redeem or convert more than a specified percentage of

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the shares sold in such company’s initial public offering, which percentage threshold is typically between 19.99% and 39.99%. As a result, RLJ may be able to consummate the business combination even though a substantial majority of RLJ’s public stockholders do not agree with the transaction and have redeemed their shares. In no event, however, will RLJ redeem RLJ’s public shares in an amount that would cause RLJ’s stockholders’ equity to be less than $5,000,001. RLJ will not close the business combination unless it has at least $92.0 million of cash held either in or outside the trust account. RLJ’s amended and restated articles of incorporation require RLJ to provide all of RLJ’s stockholders with an opportunity to redeem all of their shares in connection with the consummation of any initial business combination. Consequently, if accepting all properly submitted redemption requests would cause RLJ’s stockholders’ equity to be less than $5,000,001, RLJ would not proceed with such redemption and the business combination and may instead search for an alternate business combination.

If RLJ is unable to complete an initial business combination within the prescribed time frame, its public stockholders will receive less than $10.00 per share on RLJ’s redemption, and RLJ’s warrants will expire worthless.

If RLJ is unable to complete its initial business combination by November 22, 2012 and is forced to cease operations and ultimately liquidate, the per-share redemption amount received by RLJ stockholders will be less than $10.00 because of the expenses of RLJ’s initial public offering, RLJ’s general and administrative expenses and the costs of seeking an initial business combination. Without taking into account interest, if any, earned on the trust account, net of franchise and income taxes payable and net of up to $2.0 million, subject to adjustment, in interest income on the trust account balance previously released to RLJ to fund working capital requirements, the per-share redemption amount received by RLJ stockholders would be $9.95, or $0.05 less than the per-unit offering price of $10.00. Furthermore, RLJ’s outstanding warrants are not entitled to participate in a liquidating distribution and will expire worthless.

RLJ may have insufficient time or funds to complete an alternative business combination if the RLJ merger proposal is not approved and adopted by RLJ’s stockholders or the Image merger is otherwise not completed.

RLJ must complete its initial business combination by November 22, 2012. If the RLJ merger proposal is not approved and adopted by RLJ’s stockholders, RLJ will not complete the business combination and may not be able to consummate an alternative business combination within the required time frame, either due to insufficient time or insufficient operating funds. In addition, RLJ’s negotiating position and RLJ’s ability to conduct adequate due diligence on any potential target may be reduced as the deadline for the consummation of a business combination approaches.

If third parties bring claims against RLJ, the proceeds held in the trust account could be reduced and the per-share liquidation amount received by stockholders may be less than approximately $9.95 per share.

RLJ’s placing of funds in the trust account may not protect those funds from third party claims against RLJ. Although RLJ will seek to have all vendors, service providers (other than RLJ’s independent accountants), prospective target businesses or other entities with which it does business execute agreements with RLJ waiving any right, title, interest or claim of any kind in or to any monies held in the trust account for the benefit of RLJ’s public stockholders, such parties may not execute such agreements, or even if they execute such agreements they may not be prevented from bringing claims against the trust account, including, but not limited to, fraudulent inducement, breach of fiduciary responsibility or other similar claims, as well as other claims challenging the enforceability of the waiver, in each case in order to gain advantage with respect to a claim against RLJ’s assets, including the funds held in the trust account. If any third party refuses to execute an agreement waiving such claims to the monies held in the trust account, RLJ’s management will perform an analysis of the alternatives available to it and will only enter into an agreement with a third party that has not executed a waiver if management believes that such third party’s engagement would be significantly more beneficial to RLJ than any alternative.

Examples of possible instances where RLJ may engage a third party that refuses to execute a waiver include the engagement of a third party consultant whose particular expertise or skills are believed by

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management to be significantly superior to those of other consultants that would agree to execute a waiver or in cases where management is unable to find a service provider willing to execute a waiver. In addition, there is no guarantee that such entities will agree to waive any claims they may have in the future as a result of, or arising out of, any negotiations, contracts or agreements with RLJ and will not seek recourse against the trust account for any reason. Upon the liquidation of RLJ’s trust account if it is unable to complete a business combination within the required time frame, or upon the exercise of a redemption right in connection with a business combination, RLJ will be required to provide for payment of claims of creditors that were not waived that may be brought against RLJ within the six years following liquidation or redemption. Accordingly, the per share liquidation or redemption amount received by stockholders could be less than the $9.95 per share held in the trust account, including interest but net of any franchise and income taxes payable and less up to $100,000 of such net interest that may be released to RLJ from the trust account to pay expenses associated with liquidating the trust account, due to claims of such creditors. Mr. Johnson, RLJ’s founder and chairman of the board, has agreed that upon the liquidation of RLJ or the trust account, he will be liable to RLJ if and to the extent any claims by a vendor for services rendered or products sold to RLJ, or a prospective target business with which RLJ has discussed entering into a transaction agreement, reduce the amounts in the trust account to below $9.95 per share except as to any claims by a third party who executed a waiver of any and all rights to seek access to the trust account and except as to any claims under RLJ’s indemnity of the underwriters of this offering against certain liabilities, including liabilities under the Securities Act of 1933, as amended, or the Securities Act. Moreover, in the event that an executed waiver is deemed to be unenforceable against a third party, Mr. Johnson will not be responsible to the extent of any liability for such third party claims. However, RLJ has not asked Mr. Johnson to reserve for such indemnification obligations and RLJ cannot assure you that Mr. Johnson would be able to satisfy those obligations.

If the proceeds of the trust account become subject to a bankruptcy proceeding, the claims of creditors in such proceeding may have priority over the claims of RLJ’s stockholders and the per-share amount that would otherwise be received by RLJ’s stockholders in connection with the liquidation of the trust account may be reduced.

If RLJ files a bankruptcy petition or an involuntary bankruptcy petition is filed against RLJ that is not dismissed, the proceeds held in the trust account could be subject to applicable bankruptcy law, and may be included in RLJ’s bankruptcy estate and subject to the claims of third parties with priority over the claims of RLJ’s stockholders. To the extent any bankruptcy claims deplete the trust account, the per-share amount that would otherwise be received by RLJ’s stockholders in connection with the liquidation of the trust account may be reduced.

The RLJ board did not obtain a fairness opinion in determining whether or not to proceed with the business combination and, as a result, the terms may not be fair from a financial point of view to RLJ’s stockholders.

In analyzing the business combination, the RLJ board conducted significant due diligence on Image and Acorn, including, among other things, researching the industries in which Image and Acorn operate, reviewing comparisons of comparable companies and performing a discounted cash flow analysis. The RLJ board believes because of the financial skills and background of its directors, it was qualified to conclude that the business combination was fair from a financial perspective to its stockholders. Notwithstanding the foregoing, the RLJ board did not obtain a fairness opinion to assist it in its determination. Accordingly, the RLJ board may be incorrect in its assessment of the transaction.

Risks Factors Relating to Image’s Business

Image has a history of (and may continue to incur) losses, limited working capital and limited access to financing.

Image had a net loss applicable to common shareholders and sustained operating and net losses in the fiscal year ended March 31, 2012, which we refer to as fiscal 2012, and in prior years. Image had an accumulated deficit of $58.9 million and a working capital deficit of $6.4 million at March 31, 2012. Image’s cash requirements continue to exceed the level of cash generated by operations. Accordingly, Image has limited working capital. Image may need to raise additional funds to acquire the rights to content it finds

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desirable, particularly with respect to its competition for home entertainment rights to feature films. Therefore, maximizing available working capital is critical to Image’s business operations.

Because of Image’s history of losses and negative cash flows, Image’s ability to obtain adequate additional financing on satisfactory terms may be limited. Image’s ability to raise financing through sales of equity securities depends on general market conditions, including the demand for Image’s common stock. Image may be unable to raise adequate capital through the sale of equity securities, and if Image is able to sell equity, its existing stockholders could experience substantial dilution. If adequate financing is not available or unavailable on acceptable terms, Image may find it is unable to fund expansion, continue offering products and services, take advantage of acquisition opportunities, develop or enhance services or products, or respond to competitive pressures in the industry.

Image generates significant amounts of net revenue for programming from one content supplier, the loss of which would adversely affect Image’s business.

Image depends on the exclusive distribution of programming from The Criterion Collection, which contributed approximately 23% and 26% of Image’s net revenues from programming in fiscal 2012 and fiscal 2011 respectively. Should liquidity issues cause Image to default on its payment obligations under its exclusive distribution agreement, The Criterion Collection may terminate Image’s distribution rights, which would adversely affect its business, results of operations and financial condition.

Economic weakness may continue to adversely affect Image’s business, results of operations and financial condition.

The global economic downturn has had a significant negative effect on Image’s revenues and may continue to do so. As consumers reduced spending and scaled back purchases of Image’s programming, its retail customers returned product and reduced purchases of its programming, which adversely affected its revenues and results of operations during fiscal 2012, as well as in fiscal 2011. Although improved in fiscal 2012, weak consumer demand for Image’s product may continue in the future and may adversely affect its business, results of operations and financial condition.

Image has a high concentration of sales to relatively few customers, the loss of which may adversely affect its liquidity, business, results of operations and financial condition.

In fiscal 2012, Walmart and Alliance Entertainment Corp., or AEC, each accounted for approximately 11% of Image’s net revenues, respectively. In fiscal 2011, Amazon.com and AEC each accounted for approximately 16% of Image’s net revenues. Image’s top five customers accounted for over 45% of its fiscal 2012 net revenues.

Image may be unable to maintain favorable relationships with its retailers and distributors, including Sony Pictures Home Entertainment, or SPHE. Further, Image’s retailers and distributors may be adversely affected by economic conditions. If Image loses any of Image’s top customers or if any of these customers reduces or cancels a significant order, it could have an adverse effect on Image’s liquidity, business, results of operations and financial condition.

Image’s high concentration of sales to relatively few customers (and use of a third-party to manage collection of substantially all packaged goods receivables) may result in significant uncollectible accounts receivable exposure, which may adversely affect Image’s liquidity, business, results of operations and financial condition.

At March 31, 2012, Walmart and AEC accounted for 8.1% and 7.9%, respectively, of Image’s gross accounts receivable. At March 31, 2011, Amazon.com and AEC accounted for 15% and 11%, respectively, of Image’s gross accounts receivable.

Image faces credit exposure from its retail customers and may experience uncollectible receivables from these customers should they face financial difficulties. If these customers fail to pay their accounts receivable, file for bankruptcy or significantly reduce their purchases of Image’s programming, it would have an adverse

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effect on Image’s business, financial condition, results of operations, and liquidity. For example, Image reserved approximately $408,000 for Borders Group, Inc. bankruptcy filing in fiscal 2011. There were no similar events in fiscal 2012.

A high concentration of Image’s gross accounts receivables is attributable to SPHE, as they are Image’s vendor of record for shipments of physical product to North American retailers and wholesalers. As part of Image’s arrangement with SPHE, SPHE collects the receivables from Image’s end customers, provides Image with monthly advance payments on such receivables (less a reserve), then trues up the accounts receivables accounting quarterly. While Image remains responsible for the credit risk from the end customer, if SPHE should fail to adequately collect and pay Image the accounts receivable they collect on Image’s behalf, whether due to inadequate processes and procedures, inability to pay, bankruptcy or otherwise, Image’s business financial condition, results of operations and liquidity would be adversely affected.

Image is highly dependent on SPHE. Image entered into the agreement with SPHE in 2011 and realized significant cost savings compared with its prior replicator agreements, and also enhanced distribution of its content. SPHE provides distribution and replicator services under a contract that expires in August 2013, and Image may not be able to renew that contract on favorable terms. SPHE provides Image with access to significant customers that might not otherwise do business with Image.

Image has a high concentration of sales from relatively few titles, which may affect future net revenues if it does not acquire additional titles.

Image’s top five fiscal 2012 new release exclusive titles accounted for approximately 12.8% of its fiscal 2012 net revenues. Image’s top ten fiscal 2012 new release exclusive titles accounted for approximately 16.5% of its fiscal 2012 net revenues. Generally, new releases become part of Image’s catalogue six months after the release date. Sales for catalogue titles have historically decreased over time and will probably continue to do so until Image’s rights expire. If Image is unable to acquire titles of equal or greater strength and popularity to replace the revenue provided by its existing titles, Image’s future net revenues will be negatively affected.

Image’s strategy to acquire cast-driven finished feature film content may not be successful, which could adversely affect its business, results of operations and financial condition.

Image is primarily known as an aggregator of exclusive distribution rights for eclectic, non-feature film entertainment programming. In its effort to acquire more cast-driven finished feature films, Image faces competition from other distribution entities that are well known for acquiring and distributing this genre of programming. Image faces competition from better-capitalized entities, including the major motion picture and independent studios, and may be unable to offer the same upfront money required to secure the rights for certain available programming. While it has key members of management and staff with feature film acquisition, sales and marketing talent and experience, Image may not be ultimately successful in acquiring or selling feature film content competitively or to the extent of its current plans which could adversely affect Image’s business, results of operations and financial condition.

Image is subject to risks associated with its strategy of pursuing acquisitions, joint ventures and partnering arrangements.

A key element of Image’s business strategy is acquiring accretive businesses and entering into joint ventures and other creative partnering arrangements, which pose unique risks. For example, regardless of whether Image completes any such transaction, its negotiation as well as the integration of any acquired business could require it to incur significant costs and cause diversion of management’s time and resources. Image may not realize the anticipated benefit from any of the transactions Image pursues. Further, any such transaction could also potentially result in the future impairment of goodwill and other intangibles, development write-offs and other related expenses. Any of the foregoing could have a material adverse effect on Image’s business, results of operations and financial condition.

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Image’s inability to gauge and predict the commercial success of its programming could adversely affect its business, results of operations and financial condition.

Operating in the entertainment industry involves a substantial degree of risk. Each music performance, feature film or other programming title is an individual artistic work, and unpredictable audience reactions primarily determine commercial success. The commercial success of a title also depends upon the quality and acceptance of other competing programs or titles released into the marketplace, critical reviews, the availability of alternative forms of entertainment and leisure activities, general economic conditions and other tangible and intangible factors, all of which are subject to change and cannot be predicted. Timing is also sometimes relevant to a program’s success, especially when the program concerns a recent event or historically relevant material (e.g., an anniversary of a historical event which focuses media attention on the event and accordingly spurs interest in related content). Image’s success depends in part on the popularity of its content which, in turn, depends on its ability to gauge and predict expected popularity. Even if a film achieves success during its theatrical release, the popularity of a particular program and its ratings may diminish over time. Image’s inability to gauge and predict the commercial success of its programming could adversely affect its business, results of operations and financial condition.

Image’s current genre revenue concentrations may become unpopular with its retail customers and end-consumers, which may adversely affect its business.

During fiscal 2012 and 2011, the majority of Image’s revenues were from its DVD sales, which were heavily weighted toward comedy, music and television-related programming and feature film programming. Image may not be able to successfully continue producing or acquiring content in the same genres, or achieve the same strength within these genres. If Image is unable to compete successfully in the home entertainment market for higher-profile content, its business may be adversely affected.

There may be tax consequences to the Image merger that may adversely affect holders of Image common stock.

Image expects that the business combination can be effected as tax free to holders of Image common stock pursuant to Section 351 of the Code. To the extent the business combination does not so qualify, it could result in the imposition of substantial taxes on holders of Image common stock. See “Material U.S. Federal Income Tax Consequences” on page 187 .

Failure to satisfy terms and conditions of the transaction agreements for the purchase of Madacy Home Video may adversely affect Image’s business, results of operations and financial condition.

Image may be unable to satisfy all of the terms and conditions related to the purchase of Madacy Home Video including, without limitation, the future repurchase of Madacy’s 30% interest in Image’s subsidiary, Image/Madacy Home Entertainment, LLC. If it is unable to satisfy the terms and conditions of the Madacy transaction and Madacy declares a material default that Image is unable to timely rectify, Image may lose the right to distribute content obtained under the Madacy transaction, which could adversely affect Image’s business, results of operations and financial condition. For more information regarding the Madacy transaction, please see “Purchase of Madacy Home Video” in “Information About Image — Management’s Discussion and Analysis of Financial Condition and Results of Operations” below.

As a result of the business combination, Image could be required to repurchase Madacy’s 30% interest in Image/Madacy Home Entertainment, LLC

Under the terms of the Image/Madacy Home Entertainment, LLC, or IMHE, Operating Agreement, if Image undergoes a change of control prior to August 31, 2013, Madacy could require Image to repurchase Madacy’s 30% interest in IMHE. If, as a result of the business combination, Madacy exercises its right to have Image repurchase its 30% interest in IMHE, Image would be required to purchase such interest. At March 31, 2012, this interest was valued at approximately $500,000.

Image may be unable to recoup advances paid to secure exclusive distribution rights.

Image’s most significant costs and cash expenditures relate to acquiring content for exclusive distribution. Most agreements to acquire content require upfront advances against royalties or net profits expected to be

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earned from future distribution. The advance amounts are derived from Image’s estimate of net revenues that will be realized from Image’s distribution of the title. Although these estimates are based on management’s knowledge of current events and actions management may undertake in the future, actual results will differ from those estimates. If sales do not meet its original estimates, Image may (i) not recognize the expected revenue, gross margin or net profit, (ii) not recoup its advances or (iii) record accelerated amortization and/or fair value write-downs of advances paid. Image recorded accelerated amortization and fair value write-downs of film costs in the amounts of $1.1 million and $4.1 million in fiscal 2012 and fiscal 2011, respectively. Any of these events may adversely affect Image’s business, results of operations and financial condition.

Inability to maintain relationships with its program suppliers and vendors may adversely affect Image’s business.

Image receives a significant amount of its revenue from the distribution of content for which it already has exclusive agreements with program suppliers. However, those titles in production that have been financed by Image may not be timely delivered as agreed or be of expected quality. Delays or inadequacies in delivery of titles, including rights clearances, could negatively affect the performance of any given quarter or fiscal year. In addition, Image’s business, results of operations and financial condition may be adversely affected if:

Image may not be able to keep pace with technological advances, which may adversely affect its business, results of operations and financial condition.

The entertainment industry in general, and the music and motion picture industries in particular, are continuing to undergo significant changes, primarily due to technological developments, including Blu-ray and digital delivery. Because of the rapid growth of technology, shifting consumer tastes and the popularity and availability of other forms of entertainment, it is impossible to predict the overall effect these factors could have on potential revenue from, and profitability of, distributing entertainment programming. If Image is unable to keep pace with accepted technological advances in delivering entertainment programming, its business, results of operations and financial condition may be adversely affected.

Image relies on its information technology infrastructure, which includes third party and internally developed software, and purchased or leased hardware that support Image’s information technology and various business processes. Image’s business, reputation and brand image could suffer if its infrastructure fails to perform as intended.

Image relies on purchased or leased hardware and software licensed from third parties or internally developed in order to manage its business. Image’s ability to maintain and upgrade its information technology infrastructure is critical to the success of its business. This hardware and software may not continue to be available on commercially reasonable terms or at all. Any disruptions to Image’s infrastructure or loss of the right to use any of this hardware or software could affect Image’s operations, which could negatively affect Image’s business until corrected or until equivalent technology is either developed by Image or, if available, is identified, obtained and integrated. In addition, the software underlying Image’s operations can contain undetected errors. Image may be forced to modify its operations until such problems are corrected and, in some cases, may need to implement enhancements to correct errors that it does not detect. Problems with the software underlying Image’s operations could result in loss of revenue, unexpected expenses and capital costs, diversion of resources, loss of market share and damage to Image’s reputation which could adversely affect Image’s business, financial condition and results of operations.

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Image and third parties that manage portions of Image’s secure data are subject to cybersecurity risks and incidents. Image’s business involves the storage and transmission of customers’ personal information, shopping preferences and credit card information, in addition to employee information and Image’s financial and strategic data. The protection of Image’s customer, employee and company data is vitally important to Image. While Image has implemented measures to prevent security breaches and cyber incidents, any failure of these measures and any failure of third parties that assist Image in managing its secure data could adversely affect Image’s business, financial condition and results of operations.

Failure by third parties to promote its programming may adversely affect Image’s business.

Decisions regarding the timing of release and promotional support of the programming Image licenses and distributes are important in determining the success of a particular feature film, stand-up comedy performance, music concert or other product. Image may not control the manner in which a particular product is marketed and promoted, and it may not be able to fully control its corresponding releases. Although actors, producers, artists, record companies and studios have a financial interest in the success of any films, concerts or other product Image distributes, any marketing or promotional decision or restriction by such persons may negatively affect the success of its titles.

A continued high rate of product returns may adversely affect Image’s business, results of operations and financial condition.

As with the major studios and other independent companies in this industry, Image experiences a relatively high level of product returns as a percentage of its revenues. Image’s allowances for sales returns may not be adequate to cover potential returns in the future, particularly in the case of consolidation within the home video retail marketplace which, when it occurs, tends to result in inventory consolidation and increased returns. Image has experienced a high rate of product returns over the past three years. Image expects a relatively high rate of product returns to continue, which may adversely affect its business, results of operations and financial condition.

Image depends on key and highly skilled personnel to operate its business, and if it is unable to retain its current personnel or hire additional personnel, Image’s ability to develop and successfully market its business could be harmed.

Image’s success continues to depend to a significant extent on its ability to identify, attract, hire, train and retain qualified professional, creative, technical and managerial personnel. Moreover, Image believes that its success greatly depends on the contributions of its executive officers, including Chief Executive Officer, Theodore S. Green, Chief Operating Officer and Chief Financial Officer, John P. Avagliano, and Vice Chairman, John W. Hyde. Although Image has employment agreements with certain of its executive management, any of Image’s employees may terminate their employment relationship with Image at any time, and their knowledge of Image’s business and industry would be extremely difficult to replace. The loss of any key employees or the inability to attract or retain qualified personnel could delay the acquisition of content and harm the market’s perception of Image. Competition for the caliber of talent required to acquire and distribute content continues to increase. If Image is unable to attract and retain the qualified personnel it needs to succeed, Image’s business, results of operations and financial condition will suffer.

Image depends on third-party shipping and fulfillment companies for the delivery of its products. If these companies experience operational difficulties or disruptions, Image’s business could be adversely affected.

Image relies on SPHE, Image’s distribution and manufacturing partner, to determine the best delivery method for its products. SPHE relies entirely on arrangements with third-party shipping companies, principally Federal Express, for small package deliveries and less-than-truckload service carriers for larger deliveries, for the delivery of Image’s products. The termination of arrangements between SPHE and one or more of these third-party shipping companies, or the failure or inability of one or more of these third-party shipping companies to deliver products on a timely or cost-efficient basis from SPHE to Image’s customers, could disrupt Image’s business, reduce net sales and harm its reputation. Furthermore, an increase in the amount charged by these shipping companies could negatively affect Image’s gross margins and earnings.

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Image incurs costs and demands upon management as a result of complying with the laws and regulations affecting public companies, which could affect its operating results.

Image has incurred, and will continue to incur, significant legal, accounting and other expenses associated with corporate governance and public company reporting requirements, including requirements under the Sarbanes-Oxley Act of 2002, as well as rules implemented by the SEC. As long as the SEC requires the current level of compliance for public companies, Image expects these rules and regulations to require significant legal and financial compliance costs and to make some activities time-consuming and costly. These rules and regulations may make it more expensive for Image to obtain director and officer liability insurance, and Image may be required to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage than was previously available. As a result, it may be more difficult for Image to attract and retain qualified individuals to serve on its Board of Directors or as its executive officers.

Revenues from the standard DVD format are declining.

During calendar 2011, the DVD marketplace experienced the fourth straight year-over-year decline for the category since the format debuted in 1997. The Digital Entertainment Group reported a slight decline in sales of packaged media units (including DVD and Blu-ray) in the fourth quarter of Image’s fiscal 2012. Image estimates approximately 53% and 65% of its net revenue in fiscal 2012 and 2011, respectively, was generated from the sale of standard DVDs. The continued maturation of the standard DVD format may adversely affect Image’s business, results of operations and financial condition. For more information regarding the trend of the DVD format maturation, see “Information About Image — Industry Trends” below.

Decreasing retail prices for DVDs may negatively affect Image’s revenues and gross profit margins.

The home entertainment programming market in which Image competes is rapidly evolving and intensely competitive. Many of Image’s competitors, including major studios, are increasingly offering programming, particularly DVD programming, at lower prices. They may be able to produce or secure content on more favorable terms and may be able to adopt more aggressive pricing policies than Image can. While Image strives to improve its operating efficiencies and leverage its fixed costs so that it can afford to pass along these savings to its customers in the form of lower prices, the industry trend of lowering prices may, over time, lead to higher levels of competition and, therefore, lost sales, decreased profit margins or decreased overall revenues.

Decreasing retail shelf space for Image’s industry may limit sales of its programming, which may adversely affect its business, results of operations and financial condition.

Image faces increasing competition from major motion picture studios, music labels and other independent content suppliers for limited retail shelf space, which space has been shrinking in absolute terms as “brick and mortar” retailers have fewer stores, and for retailer open-to-buy dollars. Image’s exclusive content competes for a finite amount of shelf space against a large and diverse supply of entertainment content from other suppliers. New releases generally exceed several hundred titles a week. Image believes this competition can be especially challenging for independent labels like Image, because the new releases of major studios often have extremely high visibility and sales rates in the millions of units, and typically require much more shelf space to support.

Shelf space limitations at Image’s “brick and mortar” retail customers are exacerbated by the increasing popularity of the high-definition DVD format, Blu-ray. The combination of standard discs, premium discs and special-edition boxed sets across up to two formats means that a release can come in as many as six different configurations. With the possible exception of Image’s most popular new release titles and top-selling catalogue titles, it can be a challenge to obtain the product placement necessary to maximize sales, particularly among the limited number of major retailers who comprise Image’s core “brick and mortar” customers. The continued retailer trend toward greater visibility for titles at the expense of quantity (i.e., “face out” rather than “spine out” placement) has the effect of reducing the total number of titles actually carried by a retailer.

For retailers, reconciling the expanding catalog with limited shelf space is becoming increasingly urgent. Meanwhile, rights holders like Image and other non-studio content providers have a growing concern that

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many titles are simply not strong enough to secure shelf space. If Image is unable to secure sufficient shelf space for its programming, its business, results of operations and financial condition may be adversely affected.

Piracy may reduce Image’s revenues and adversely affect its results of operation.

The music industry has faced a major challenge in the form of piracy resulting from Internet downloading and recording devices. This piracy has negatively affected industry revenues and profits. As digital video recorders, or DVRs and high-speed Internet connections become more popular and the storage capacity of personal computers increases, Image may face greater piracy concerns with respect to its core business. Motion picture piracy is already extensive in many parts of the world and is made easier because of technological advances and the conversion of motion pictures into digital formats. The proliferation of unauthorized copies of these products may reduce the revenue Image receives from its products, which may cause an adverse material effect on its business. In order to contain this problem, Image requires its retail distribution partners to implement elaborate and costly security and anti-piracy measures such as geo-filtering, which could result in significant expenses and loss of revenue. Even with such security and anti-piracy measures, Image may be unable to prevent piracy.

The entertainment and motion picture industries are rapidly evolving, and recent trends have shown that audience response to both traditional and emerging distribution channels is volatile and difficult to predict.

The entertainment industry in general and the motion picture industry in particular continue to undergo significant changes, due both to shifting consumer tastes and to technological developments. For example, new technologies, such as video-on-demand and Internet distribution of films, have provided motion picture companies with new channels through which to distribute their films. Accurately forecasting both the changing expectations of movie audiences and market demand within these new channels has proven challenging.

Image cannot accurately predict the overall effect shifting audience tastes, technological change or the availability of alternative forms of entertainment may have on the distributor. In addition to uncertainty regarding the DVD market, there is uncertainty as to whether other developing distribution channels and formats, including video-on-demand, Internet distribution of films and high-definition, will attain expected levels of public acceptance or, if such channels or formats are accepted by the public, whether Image will be successful in exploiting the business opportunities they provide. Moreover, to the extent that these emerging distribution channels and formats gain popular acceptance, the demand for delivery through DVDs may decrease.

Risks Related to Acorn’s Business

Acorn generates a significant amount of net revenue from one program supplier, the loss of which may adversely affect its business.

Acorn’s largest supplier of exclusive program content is ITV, the United Kingdom’s oldest and largest public service commercial broadcaster. In 2011, programming licensed from ITV accounted for 25% of Acorn’s net revenue from North American sales and 19% of net revenue for Acorn as a whole. In 2010, these figures were 19% and 10%, respectively. If the level of program production of ITV were to materially decrease due to insufficient revenue or other unforeseen changes in its business operation, or should ITV terminate business with Acorn, this could reduce the supply of programming available to Acorn, which could have an adverse impact on Acorn’s business, results of operations, and financial condition.

Acorn’s sales are concentrated in relatively few customers, the loss of which could adversely affect Acorn’s revenue and liquidity.

In 2011, Acorn’s top two customers, Amazon and Alliance Entertainment Corp., or AEC, the primary distributor to Barnes & Noble, collectively accounted for 21% and 11%, respectively, of Acorn’s net revenues. In 2010, these two customers accounted for 18% and 10%, respectively, of Acorn’s net revenues. In addition, Acorn’s top 10 customers in 2011 accounted for 48% of net revenue. The loss of or decrease in any of these

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major accounts or the cancellation of any significant order, including the risks associated with their current accounts receivable should they become uncollectible due to, for instance, a bankruptcy filing, could reduce Acorn’s revenue and liquidity.

Acorn depends on a relatively small number of key “franchise” titles for its net revenue which may negatively affect future net revenues if Acorn does not acquire new titles or sustain existing titles.

A substantial portion of Acorn’s net revenue is generated by long-running television series that are regarded as “franchises.” Three of these series have been generating significant net revenue for nine years or more: Midsomer Murders, Foyle’s War, and Agatha Christie’s Poirot . In 2011 and 2010, these franchises collectively accounted for 14% and 20%, respectively, of Acorn’s net revenues. While all television series come to an eventual end, a precipitous end to any of these particular franchises, or the failure of new franchises to be developed and acquired by Acorn to replace the revenue Acorn generates from these current leaders, could reduce net revenue and have an adverse effect on Acorn’s business, results of operations, and financial condition.

Acorn’s program offerings are concentrated in one genre which could adversely affect its business if customer preferences change or if Acorn is unable to secure future programming in the same genre.

The mystery-detective genre is the current focus of the Acorn line of programming. In the past two years, 2011 and 2010, this genre has accounted for 27% and 34% of Acorn’s net revenue. If audience tastes moved away from this genre, or if Acorn were unable to secure desirable future programming in this genre, this could have an adverse effect on Acorn’s business, results of operations, and financial condition.

Acorn may not realize the anticipated benefits of the acquisition of programming assets, which could adversely affect its business, results of operations and financial condition.

In April 2011, Acorn acquired a 100% interest in the original television series Foyle’s War , and in March 2012, Acorn acquired a 64% interest in ACL, a company that owns most of the literary and media estate of Agatha Christie. These and any future such acquisitions demand executive and operational time and focus, diverting Acorn from ongoing business operations. Additionally, Acorn may not realize the benefit from any of the transactions it pursues, which, in the case of acquisitions funded by debt, could adversely affect cash flows and credit-worthiness. Any programs acquired by Acorn may not enjoy audience popularity similar to the programming currently offered by Acorn, and Acorn may not have the experience or skills necessary to fully exploit the ownership of any such programs. In addition, an acquisition could result in Acorn assuming liabilities related to acquired intellectual property rights. Acorn’s failure to realize the anticipated benefits of programming acquisitions could have an adverse impact on Acorn’s business, results of operations and financial condition.

Acorn does not control the timing of dividends paid by ACL, which could negatively impact Acorn’s revenues.

Although Acorn holds a 64% interest in ACL, Acorn does not control the board of directors of ACL. The members of the Agatha Christie family who hold the remaining 36% interest in ACL have the right to appoint the same number of directors as Acorn and, in the event of deadlock on any decision of the board, also have a second or casting vote exercised by their appointee as chairman of ACL, which allows them to exercise control of ACL’s board of directors.

Under English law, the amount, timing and form of payment of any dividends or other distributions is a matter for ACL’s board of directors to determine, and, as a result, Acorn cannot control when these distributions are made. If ACL’s board of directors decides not to authorize distributions, Acorn’s revenue and cash flow may decrease, adversely affecting its business, results of operations, and financial condition.

Acorn may not be able to predict and gauge audience reaction to its programming, which may adversely affect its business, results of operations and financial condition.

Predicting the commercial success of products in the entertainment industry is inherently risky. Each media product is an individual creative work, and the commercial success of any product is determined by audience demand. This demand is subject to factors such as quality of the original production, similar

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products competing for the attention of customers, critical reviews, and trends in viewing habits that may shift over time. The timing of product releases also impacts the commercial success of a product if, for example, a competitor’s release of a different version of the Acorn title draws demand away from Acorn. Acorn’s success in part depends on its ability to predict and satisfy audience demand. Acorn’s inability to successfully gauge the commercial success of its programming could adversely affect its business, results of operations and financial condition.

Acorn may be unable to recoup advances paid to secure exclusive distribution rights, which may adversely affect its business, results of operations and financial condition.

Acorn advances royalties to its programming suppliers to acquire exclusive content. Over the projected sales lives of the acquired programs, these advances are expected to be substantially amortized. However, if sales are not accurately projected, or if Acorn is unable to collect receipts from customers, Acorn may not be able to recover the amounts advanced, which, if substantial, could have an adverse effect on Acorn’s business, results of operations, and financial condition.

Maintaining relationships with program suppliers is critical to generation of sales and net revenues, and Acorn’s failure to maintain such relations may adversely affect its business.

With a significant portion of Acorn net revenues dependent on a handful of key program suppliers that produce content suited to Acorn’s primary genre, British mystery and drama, if Acorn’s relationships with these entities were damaged in any way, or altered by shifts in business priorities, Acorn could be unable to extend its current licenses. Acorn may also be unable to find suitable suppliers of replacement programming. These events could reduce consumer demand and net revenue, which could have an adverse effect on Acorn’s business, results of operations, and financial condition.

Acorn may not be able to keep pace with technological advances, which could adversely affect sales and profit margins.

The pre-recorded entertainment industry is undergoing significant changes in the way media products are consumed by end users. The DVD market is experiencing a shift to Blu-ray, and various forms of digital delivery are emerging as alternatives to traditional television and home media viewing. It is impossible to predict the overall effect these factors could have on potential revenue from, and profitability of, distributing entertainment programming. If Acorn is unable to keep pace with accepted technological advances in delivering entertainment programming, sales could decline and its business, results of operations, and financial condition may be adversely affected.

An adverse change in the rate of returns could have an adverse effect on Acorn’s results of operation, business and financial condition.

Acorn’s packaged media products are subject to return from retailers, as is customary in the industry. Acorn reserves for these returns in the normal course of business based on prior rates of return on a category of trade or customer-specific level. If returns from any or all of Acorn’s retailers were to increase significantly and unexpectedly, this could decrease Acorn’s net revenue, which could have an adverse effect on its business, results of operations, and financial condition.

Changes in audience preferences for the types and sources of entertainment that form the core of Acorn’s home entertainment offerings could have an adverse effect on Acorn’s business, results of operation and financial condition.

Audience tastes and interests in home entertainment evolve and shift over time, in part due to the way entertainment content is packaged and consumed. Younger consumers spend increasing amounts of time on the computer and smaller viewing devices, such as tablets and phones. A popular source of audio-visual entertainment is viewing short format pieces on YouTube and similar sites. Acorn has focused its business on what it believes is the least volatile segment of the home entertainment industry: classic mystery and detective programming that appeals to mature audiences. Nevertheless, Acorn cannot predict how audience tastes may shift over time, and how their preferences may change in the way they consume audio-visual programming.

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These changes, if precipitous or of Acorn fails to shift its business practices to account for such changes, could lead to lower sales, increased returns or lower profit margins, which could have an adverse effect on Acorn’s business.

Acorn is dependent on the work of a core of highly skilled personnel, whose absence (or Acorn’s failure to find a comparable replacement) could adversely affect its ability to maintain and develop its business.

Acorn’s continued success depends on its ability to retain and attract qualified managerial, creative, and technical personnel. In particular, Acorn feels that the contributions of its executives are of critical importance. Any Acorn employee is free to terminate his or her employment at will, and their knowledge of Acorn’s business and operations would be difficult to replace. If Acorn were unable to retain its executives, its business, results of operations, and financial condition could suffer. Additionally, if Acorn were unable to attract qualified employees, its business, results of operation and financial condition would be negatively affected.

Acorn’s reliance on third parties for replication and fulfillment poses a risk to Acorn’s business if such replication and/or fulfillment duties are not performed in a timely or cost efficient manner.

Acorn’s DVD replication and wholesale fulfillment operations in North America are outsourced to Sony DADC in Terre Haute, Indiana. Acorn’s fulfillment operations for merchandise sold through its Acorn and Acacia catalogs and websites are contracted to NETRADA North America (d.b.a. Fulfillment Technologies or FillTek) in the Cincinnati area. In the United Kingdom, DVD distribution and billing are outsourced to Arvato SCM Ltd. The failure or inability of these companies to deliver quality products on a timely or cost-efficient basis to Acorn’s customers could disrupt Acorn’s business, reduce net sales, and harm its reputation with its customer base. In addition, if these companies were to significantly increase the amount they charge for their services, or if these companies were to fail to collect and pay Acorn the accounts receivable they collect on Acorn’s behalf, this could adversely affect Acorn’s gross margins and net revenues. If Acorn is unable to renew its existing relationship with current suppliers, its business may be adversely affected if it is unable to establish new relationships with desirable suppliers in an efficient and timely manner.

Acorn faces increased competition from third parties and program suppliers, which could materially diminish Acorn’s revenues and have an adverse effect on Acorn’s business, results of operation and financial condition.

Acorn licenses most of its content from third-party suppliers who, apart from some “first-look” arrangements, are free to license this content to Acorn’s competitors or to take their distribution in-house. If competitors were to target Acorn’s business niches with significant financial resources, or if major program suppliers competed with Acorn to distribute their product in North America, Acorn’s ability to secure high quality program content would suffer, which could lead to reduced sales and negatively affect Acorn’s business, results of operation and financial condition.

Disputes over intellectual property rights could adversely affect Acorn’s business, results of operations and financial condition.

Acorn’s sales and net revenues depend heavily on the exploitation of intellectual property owned by Acorn or third parties from whom Acorn has licensed intellectual property. Should a dispute arise over, or a defect be found in, the chain of title in any of Acorn’s key franchises, this could result in either a temporary suspension of distribution or an early termination of Acorn’s distribution license. This could have an adverse impact on Acorn’s business, results of operations and financial condition.

There may be liabilities associated with the acquisition of Foyle’s War assets.

In 2010, Acorn acquired the copyrights to Foyle’s War from financially distressed companies, and Acorn has no recourse against its sellers in the event that Acorn did not acquire clear title to the intellectual property assets acquired or the intellectual property assets infringe on the rights of third parties. Net revenue attributable to Foyle’s War assets in 2011 and 2010 was 1.3% and 1.7%, respectively. If it were to be determined that Acorn’s rights in these intellectual property assets are not sufficient to allow Acorn to continue to distribute Foyle’s War , or if it is determined that Acorn’s or Acorn’s licensees’ use of the Foyle’s War assets infringes on the rights of third parties, Acorn could suffer loss of revenue from the distribution of Foyle’s War

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or additional liabilities for infringement of third party intellectual property rights, which could have an adverse effect on Acorn’s business, results of operations and financial condition.

Disruptions to information systems due to upgrades or technology failures could harm Acorn’s business.

Acorn relies on management information systems for the smooth operation of its business. These systems are continually reviewed and updated to assist in processing orders, managing inventory, providing timely customer service, and analyzing financial and operational data across all of Acorn’s product and business segments. In addition, business acquisitions such as the ACL acquisition require careful integration of legacy systems into Acorn’s management systems. Acorn must maintain and steadily improve the functionality of these information systems to prevent operational disruptions and to provide a satisfying customer experience for end-users. Failure to maintain these systems and to keep pace with improvements in these systems could result in (i) the inability to fulfill customer orders and the defection of customers to Acorn’s competitors and/or (ii) ineffective or inefficient management of Acorn’s business, resulting in the loss of sales, which could adversely affect Acorn’s business.

Acorn has pledged its intellectual property assets to secure its credit facilities, which poses a risk to Acorn’s business, results of operations and financial condition.

In order to secure the financing necessary to complete the acquisition of ACL, as well as credit for ongoing operational expenses, Acorn pledged all of its intellectual property rights as collateral to its senior lender. If Acorn were to default on its obligations to its senior lender under the existing credit facilities, Acorn could forfeit its intellectual property and, thereby, its primary source of revenue. This could have an adverse effect on Acorn’s business, results of operations and financial condition.

Continued economic weakness may adversely affect Acorn’s sales.

Consumer confidence has experienced historic lows since the worldwide economic downturn in 2008. Acorn’s business depends on discretionary consumer spending, and recent economic conditions have negatively affected demand for Acorn products, especially higher-priced merchandise in the Acorn and Acacia catalogs. If the current economic recovery stalls, or if there is a so-called “double-dip” recession, Acorn’s sales and net revenues could be adversely affected.

Government regulation of the Internet and of customer privacy issues could adversely affect Acorn and its business initiatives.

Approximately half of Acorn’s sales to end-consumers are transacted on the Internet. In addition, the successful operation of Acorn’s catalog and web business, including the recently launched streaming service, Acorn TV, depend on maintaining and acquiring customers using a range of direct marketing techniques that rely on lawful access to customer information. Government regulations in matters of taxation, user privacy, online transactions, copyright protection, and the like, both in the United States and abroad, are in a generally unsettled state due to the rapidly developing technological changes in the Internet and media marketing industries. If any of these regulations are expanded or new regulations are imposed in a manner that restricts or increases the cost of Acorn’s direct-to-consumer business, this could have an adverse effect on Acorn’s business.

The cost of postage, shipping, and paper could increase, which could have a negative impact on Acorn’s gross margins.

Acorn’s business depends heavily on the mailing of print catalogs and the fulfillment of physical orders of DVD and other merchandise. The key cost components of these business activities are postage, printing, and shipping. While competitive sourcing and pre-payment terms help to lower and stabilize the costs of these activities, Acorn cannot over time control the cost of commodities such as fuel and paper, which are subject to global economic forces. Significant increases in these costs would negatively affect Acorn’s profit margins and net revenue, which could have an impact on Acorn’s business, results of operations, and financial condition.

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Acorn or its third party direct marketing service providers could suffer a security breach, particularly regarding customer information, which could adversely affects its business, results of operation and financial condition.

Acorn, through its catalog supply chain partners, FillTek, Cognitive Data LLC, Donnelly Marketing, and Multi Resource Marketing (MRM), maintains extensive databases of information about its customers. While Acorn believes that this data is protected using industry best practices, no computer-based information is completely immune to a security breach, which, if one occurred, could harm Acorn’s consumer brands and adversely affect business, results of operations, and financial condition and expose Acorn to liability.

The standard DVD format has matured, and the DVD marketplace has experienced declining sales, which could negatively affect Acorn’s business.

The DVD marketplace in the United States has experienced declines since 2007. While that decline slowed markedly in 2011 as the U.S. economy and consumer spending showed signs of improvement, the standard DVD format has clearly matured, with only Blu-ray and digital distribution accounting for growth within the home media sector. While Acorn’s net income generated from the sale of standard DVDs in 2011 increased over the prior year, the continued maturation of the DVD market, and Acorn’s inability to meet the challenges posed by such changes, may adversely affect Acorn’s business, results of operations, and financial condition.

Decreases in DVD retail pricing may negatively affect Acorn’s revenues and gross margins.

The home entertainment industry is undergoing rapid technological changes and is intensely competitive. As the cost of digital storage and delivery decreases and competition for retail shelf space increases, retail pricing of DVDs has declined. While Acorn has been able to hold its suggested retail prices at relatively high levels given the quality and exclusivity of its product offers, as well as offsetting price reductions with increased operating efficiencies, the industry trend of lowering prices may, over time, lead to a reduction in Acorn’s gross revenue and gross profit margins.

Increasingly limited shelf space at brick and mortar retailers has resulted in decreased retail opportunities for home entertainment products and could negatively affect Acorn’s revenues.

Acorn’s DVD products have historically been distributed at stores that specialize in books and home entertainment products. These include national chains such as Barnes & Noble, Borders, and Best Buy in North America, and HMV in the United Kingdom. These retailers have all experienced contraction through a combination of general economic conditions, the increase of Internet retailing, and the shift to digital delivery in varying degrees for music, books, film, and television. Borders Books declared bankruptcy in 2011, shuttering many of its stores. All of these chains have reduced floor space devoted to home entertainment, which means that fewer offerings are being stocked. The result of this contraction is that stores tend to limit offerings to best-selling titles, which limits catalog titles and some new release titles offered by smaller studios such as Acorn. Increased competition for shelf space also raises the cost of securing that space and supporting it through in-store marketing programs. If Acorn is unable to maintain its share of shelf space in retail stores for its DVD products at reasonable costs, sales revenue and profit margins may decrease, adversely affecting its business, results of operations, and financial condition.

Piracy may reduce demand for Acorn’s programming and adversely affect revenues.

The increasing storage capacity of computers and other devices, along with increasing broad-band speeds, have made it easier for illicitly obtained recordings of audio-visual material to be created and shared. While Acorn’s product offerings of collectible box sets targeted to niche audiences do not appear to be subject to the same piracy concerns as feature films with worldwide commercial appeal, there is still a risk that a proliferation of pirated programs could increase costs related to anti-piracy measures and result in lost revenue.

An aging customer base may erode demand for Acorn’s products, adversely affecting its revenues.

Acorn targets its video products and merchandise to a customer base that is over 35 years old, with a substantial portion being near or at retirement age. If this audience declines through natural attrition and is

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not replaced by new consumers moving into this age bracket due to, for example, shifting tastes in entertainment genres, Acorn’s sales could decline, adversely affecting its business, results of operations, and financial condition.

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Obtaining required regulatory approvals may prevent or delay completion of the business combination or reduce the anticipated benefits of the business combination or may require changes to the structure or terms of the business combination.

Consummation of the business combination is conditioned upon, among other things, the expiration or termination of the waiting period (and any extensions thereof) applicable to the business combination under the HSR Act. At any time before or after the business combination is consummated, any of the U.S. Department of Justice, which we refer to as the DOJ, the Federal Trade Commission, which we refer to as the FTC, or U.S. state attorneys general could take action under the antitrust laws in opposition to the business combination, including seeking to enjoin completion of the business combination, condition completion of the business combination upon the divestiture of assets of RLJ, Image, Acorn or their subsidiaries or impose restrictions on New RLJ’s post-consummation operations. These could negatively affect the results of operations and financial condition of the combined company following completion of the business combination. Any such requirements or restrictions may prevent or delay completion of the business combination or may reduce the anticipated benefits of the business combination, which could also have a material adverse effect on the combined company’s business and cash flows, financial condition and results of operations. Additionally, RLJ has agreed to take certain actions, conditioned on the closing, to the extent necessary to ensure satisfaction, on or prior to the outside date (as it may be extended), of certain conditions to the closing of the business combination relating to regulatory approvals. Certain of these actions may be taken after receipt of the RLJ business combination approval.

The loss of Image’s or Acorn’s key personnel could negatively affect the operations and profitability of New RLJ.

Although RLJ contemplates that certain members of Image’s and Acorn’s respective management teams will transition to positions in New RLJ following the business combination, it is possible that members of the management of Image or Acorn will not wish to make such a transition. In addition, while it is anticipated that New RLJ and certain members of Image’s and Acorn’s senior management will enter into employment agreements, RLJ currently anticipates that such agreements with New RLJ would be finalized after the consummation of the business combination. There can be no assurance that such agreements will be entered into. The loss of Image’s or Acorn’s key personnel could negatively affect the operations and profitability of New RLJ.

Failure to successfully combine and integrate the businesses of RLJ, Image and Acorn in the expected time frame may adversely affect New RLJ’s future results.

The success of the business combination will depend, in part, on New RLJ’s ability to realize the anticipated benefits from combining the businesses of RLJ, Image and Acorn as further described in the section titled “The Business Combination — Recommendation of the RLJ Board; RLJ’s Reasons for the Business Combination” beginning on page 159 and “The Business Combination — Recommendation of the Image Board; Image’s Reasons for the Business Combination” beginning on page 162 . To realize these anticipated benefits, the businesses of RLJ, Image and Acorn must be successfully integrated and combined. RLJ, Image and Acorn have been independent companies, and they will continue to be operated as such until the completion of the business combination. The management of New RLJ may face significant challenges in consolidating the functions of Image, Acorn and RLJ, integrating the technologies, organizations, procedures, policies and operations, as well as addressing the different business cultures at the three companies, and retaining key personnel. If the combined company is not successfully integrated, the anticipated benefits of the business combination may not be realized fully or at all or may take longer to realize than expected. The integration may also be complex and time consuming, and require substantial resources and effort. The integration process and other disruptions resulting from the business combination may also disrupt each company’s ongoing businesses and/or adversely affect their relationships with employees, customary regulators and others with whom they have business or other dealings.

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Since Acorn is a private company, New RLJ may be required to expend substantial sums in order to bring it into compliance with the various reporting requirements applicable to public companies and/or to prepare required financial statements, and such efforts may harm New RLJ operating results or be unsuccessful altogether.

Acorn is not subject to many of the requirements applicable to public companies, including Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, which requires that Acorn evaluate and report on its system of internal controls. In addition, New RLJ will need to evaluate the system of internal controls for Image and integrate the systems of internal control for RLJ, Image and Acorn. Furthermore, RLJ may not have the ability to conduct a formal evaluation of Image’s and Acorn’s internal controls over financial reporting prior to the consummation of the business combination. If New RLJ’s finance and accounting staff or internal controls over financial reporting are inadequate, it may be required to hire additional staff and incur substantial legal and accounting costs to address such inadequacies. Moreover, New RLJ cannot be certain that its remedial measures will be effective. Any failure to implement required or improved controls, or difficulties encountered in their implementation, could harm New RLJ’s operating results or increase its risk of material weaknesses in internal controls.

RLJ, Image and Acorn will be subject to business uncertainties and contractual restrictions while the business combination is pending.

Uncertainty about the effect of the business combination on employees and customers may have an adverse effect on RLJ, Image or Acorn and consequently on the combined company. These uncertainties may impair Image’s or Acorn’s ability to retain and motivate key personnel and could cause customers and others that deal with Image or Acorn to defer entering into contracts with Image or Acorn or making other decisions concerning Image or Acorn or seek to change existing business relationships with Image or Acorn. Certain of Image’s and Acorn’s agreements with their customers have provisions that may allow such customers to terminate the agreements if the business combination is completed. If key employees depart because of uncertainty about their future roles and the potential complexities of the business combination, RLJ’s, Image’s and Acorn’s business could be harmed. In addition, the Image merger agreement and the Acorn stock purchase agreement restrict RLJ, Image and Acorn from making certain acquisitions and taking other specified actions until the business combination occurs without the consent of the other party. These restrictions may prevent RLJ and Image from pursuing attractive business opportunities that may arise prior to the completion of the business combination. See the section entitled “The Agreements — Description of the Image Merger Agreement — Additional Agreements” beginning on page 199 for a description of the restrictive covenants applicable to RLJ and Image.

The Image merger agreement limits Image’s ability to pursue alternatives to the business combination.

Image has agreed that it will not solicit, initiate, knowingly encourage or facilitate inquiries or proposals or engage in discussions or negotiations regarding takeover proposals, subject to limited exceptions, including that Image may take certain actions in the event it receives an unsolicited takeover proposal that constitutes a superior proposal or is reasonably expected to lead to a superior proposal, and the Image board determines in good faith, after consultation with its outside legal counsel, that a failure to take action with respect to such takeover proposal would be inconsistent with its fiduciary duties. Image has also agreed that the Image board will not change its recommendation to its stockholders or approve any alternative agreement, subject to limited exceptions, including that, at any time prior to the Image business combination approval, the Image board may make a change in recommendation in response to a superior proposal, if the Image board concludes in good faith that a failure to change its recommendation would be inconsistent with the exercise of its fiduciary duties to its stockholders under applicable laws and, if RLJ shall not have, within five (5) business days of its receipt of notice of such superior proposal, made an offer that the Image board shall determine, in good faith, to be at least as favorable to Image’s stockholders as such superior proposal. The Image merger agreement also requires each party to call, give notice of and hold a meeting of its stockholders for the purposes of obtaining the applicable stockholder approval. This special meeting requirement does not apply to a party in the event that the Image merger agreement is terminated in accordance with its terms. In addition, under specified circumstances, Image may be required to pay an amount equal to RLJ’s aggregate expenses and a $1.62 million termination fee (depending on the specific circumstances) if the merger is not

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consummated. These expenses would likely aggregate substantially more than the termination fee. See the section entitled “The Agreements — Description of the Image Merger Agreement — Expenses and Termination Fees” beginning on page 202 for a description of the circumstances under which such termination fees and expense reimbursements are payable. These provisions might discourage a potential competing acquiror that might have an interest in acquiring all or a significant part of Image from considering or proposing an acquisition, even if it were prepared to pay consideration with a higher price per share than that proposed in the business combination, or might result in a potential competing acquiror proposing to pay a lower price per share to acquire Image than it might otherwise have been willing to pay.

Certain directors and executive officers of RLJ and Image may have interests in the business combination that are different from, or in addition to or in conflict with, yours.

Executive officers of RLJ and Image negotiated the terms of the business combination and the RLJ board and the Image board approved the Image merger agreement and the transactions contemplated thereby and unanimously recommend that you vote in favor of the proposal to approve and adopt the Image merger agreement. These directors and executive officers may have interests in the business combination that are different from, or in addition to or in conflict with, yours. These interests include the continued employment of certain executive officers of RLJ and Image by New RLJ, the continued positions of certain directors of RLJ and Image as directors of New RLJ, and the indemnification of former RLJ and Image directors and RLJ and Image officers by New RLJ and the surviving corporations. With respect to Image directors and executive officers, these interests also include the treatment in the Image merger of employment agreements, severance agreements, restricted stock, options and other rights held by these directors and executive officers. You should be aware of these interests when you consider your board of directors’ recommendation that you vote in favor of the approval and adoption of the Image merger agreement and the consummation of the transactions contemplated thereby. For a discussion of the interests of directors and executive officers in the business combination, see “The Business Combination — Interests of Image Directors and Officers in the Business Combination” and “The Business Combination — Interests of the Current RLJ Directors and Officers in the Business Combination” beginning on page 178 .

Certain current directors and executive officers of RLJ own shares of RLJ common stock and warrants that may be worthless if the business combination is not approved. Such interests may have influenced their decision to approve the business combination.

Following the consummation of the business combination, the current directors and executive officers of RLJ will beneficially own approximately 3,101,011 shares of New RLJ common stock (after giving effect to the forfeiture of 792,739 founder’s shares by RLJ’s sponsor) and will have the right to acquire an additional 5,666,667 shares of New RLJ common stock through the exercise of warrants (after giving effect to the forfeiture of 1,000,000 sponsor warrants by RLJ’s sponsor), subject to certain limitations. Such persons are not entitled to receive any of the cash proceeds that may be distributed upon RLJ’s liquidation with respect to shares they acquired prior to RLJ’s initial public offering. Therefore, if the business combination is not approved and RLJ does not consummate another business combination by November 22, 2012 and is forced to liquidate, such founder’s shares and sponsor warrants held by such persons will be worthless. As of August 9, 2012, the RLJ record date, RLJ’s current directors and executive officers beneficially held approximately $38.7 million in RLJ’s common stock (based on a market price of $9.95) and approximately $2.1 million in warrants (based on a market price of $0.31). These financial interests of RLJ’s current directors and executive officers may have influenced their decision to approve the business combination and to continue to pursue the business combination. See “The Business Combination — Interests of the Current RLJ Directors and Officers in the Business Combination” beginning on page 178 .

Certain current directors and executive officers of Image and the JH Entities have interests that may have influenced their decision to approve the business combination.

Certain current directors and executive officers of Image, as well as the JH entities, have economic relationships with Image that the public stockholders do not have. For example, the JH entities are entitled to receive management fees, guaranty fees and credit enhancement fees from Image. The guaranty fees and credit enhancement fees are owed to the JH Entities as a result of the JH entities having guaranteed Image’s line of credit with PNC. Certain management stockholders are severally liable with respect to such guaranty in

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amounts related to their preferred stock ownership. A proposed business combination will result in cash proceeds to the preferred stockholders and relief from the guaranty obligation. If the business combination is not approved, the preferred stockholders and guarantors will not receive any cash proceeds from the sale of preferred stock and will continue to be liable on the PNC credit facility. Such interest may have influenced their decision to approve the business combination and to continue to pursue the business combination. See “The Business Combination — Interests of Image Directors and Officers in the Business Combination” beginning on page 179 .

The shares of New RLJ common stock to be received by Image stockholders and RLJ stockholders as a result of the business combination will have different rights from shares of Image common stock and RLJ common stock.

Following completion of the business combination, Image stockholders and RLJ stockholders will no longer be stockholders of RLJ and Image but will instead be stockholders of New RLJ. There will be important differences between your current rights as an Image stockholder or RLJ stockholder and your rights as a New RLJ stockholder. See “Comparison of Stockholder Rights” beginning on page 253 for a discussion of the different rights associated with New RLJ common stock.

Both RLJ stockholders and Image stockholders will have a reduced ownership and voting interest after consummation of the business combination and will exercise less influence over management.

After the completion of the mergers, the RLJ stockholders and Image stockholders will own a smaller percentage of New RLJ than they currently own of RLJ and Image, respectively. Upon completion of the business combination, it is anticipated that RLJ stockholders (including RLJ’s founders), Image stockholders and Acorn shareholders will hold approximately 84%, 11% and 5%, respectively, of the shares of common stock of New RLJ issued and outstanding immediately after the consummation of the business combination, assuming that no RLJ public stockholders exercise their redemption rights. Consequently, RLJ stockholders, as a group, and Image stockholders, as a group, will each have reduced ownership and voting power in the combined company compared to their ownership and voting power in RLJ and Image, respectively. In particular, Image stockholders, as a group, will have less than a majority of the ownership and voting power of New RLJ and, therefore, will be able to exercise less collective influence over the management and policies of New RLJ than they currently exercise over the management and policies of Image.

Failure to complete the business combination could negatively affect the stock prices, businesses and financial results of RLJ and Image.

If the business combination is not completed, the ongoing businesses of RLJ and Image may be adversely affected and RLJ and Image will be subject to several risks and consequences, including the following:

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In addition, if the business combination is not completed, RLJ and/or Image may experience negative reactions from the financial markets and from Image’s customers and employees. RLJ and Image also could be subject to litigation related to a failure to complete the mergers or to enforce their respective obligations under the Image merger agreement. If the mergers are not consummated, RLJ and Image cannot assure their respective stockholders that the risks described will not materially affect the business, financial results and stock prices of RLJ and/or Image.

RLJ, Image and New RLJ will incur significant transaction and merger-related transition costs in connection with the business combination.

RLJ and Image expect that they and New RLJ will incur significant, non-recurring costs in connection with consummating the business combination and integrating the operations of RLJ, Image and Acorn. New RLJ may incur additional costs to maintain employee morale and to retain key employees. RLJ and Image will also incur significant fees and expenses relating to financing arrangements and legal, accounting and other transaction fees and costs associated with the business combination. Some of these costs are payable regardless of whether the business combination is completed. Moreover, under specified circumstances, Image may be required to pay to RLJ a termination fee of $1.62 million (depending on the specific circumstances) if the Image merger is not consummated. Image may also be required, under certain circumstances, to pay the out of pocket expenses of RLJ under the Image merger agreement. These expenses would likely aggregate substantially more than the termination fee. See “The Agreements — Description of the Image Merger Agreement — Termination” beginning on page 201 .

The unaudited pro forma financial information included in this document may not be indicative of what New RLJ’s actual financial position or results of operations would have been.

The unaudited pro forma financial information in this joint proxy statement/prospectus is presented for illustrative purposes only and is not necessarily indicative of what New RLJ’s actual financial position or results of operations would have been had the business combination been completed on the dates indicated. The unaudited pro forma financial information reflects adjustments, which are based upon preliminary estimates, to allocate the purchase price to Image’s and Acorn’s net assets. The purchase price allocation reflected in this joint proxy statement/prospectus is preliminary, and final allocation of the purchase price will be based upon the actual purchase price and the fair value of the assets and liabilities of Image and Acorn as of the date of the completion of the business combination. In addition, subsequent to the closing date, there may be further refinements of the purchase price allocation as additional information becomes available. Accordingly, the final purchase accounting adjustments may differ materially from the pro forma adjustments reflected in this document. See “RLJ, Image and Acorn Unaudited Condensed Combined Pro Forma Financial Information” beginning on page 31 for more information.

An investor will only be able to exercise a warrant if the issuance of New RLJ common stock upon such exercise has been registered or qualified or is deemed exempt under the securities laws of the state of residence of the holder of the warrants.

No warrants will be exercisable by a warrantholder and New RLJ will not be obligated to issue shares of common stock unless the shares of common stock issuable upon such exercise have been registered or qualified or deemed to be exempt under the securities laws of the state of residence of the holder of the

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warrants. At the time that the warrants become exercisable (following completion of the business combination), New RLJ has applied to list them on The NASDAQ Stock Market, which would provide an exemption from registration in every state. Accordingly, New RLJ believes holders in every state will be able to exercise their warrants as long as its prospectus relating to the shares of common stock issuable upon exercise of the warrants is current. However, there can be no assurance that this will be the case. If a warrantholder is unable to exercise his warrants in a particular state, he may be forced to sell his warrant and therefore lose the benefit of purchasing New RLJ stock. Furthermore, the price he receives for his warrant may not equal the difference between the exercise price and the stock price.

RLJ’s working capital will be reduced if RLJ stockholders exercise their right to redeem their shares for cash, which reduced working capital may adversely affect New RLJ’s business and future operations.

Pursuant to RLJ’s amended and restated articles, RLJ stockholders may demand that RLJ redeem their shares, calculated as of two business days prior to the anticipated consummation of the business combination, into a pro rata share of the trust account. Funds from the trust account will be used to pay approximately $3.6 million to the underwriters in RLJ’s initial public offering for deferred underwriting discounts and commissions and to pay approximately $5.1 million for transaction expenses. If the amount remaining in the trust account after these expenses are paid is insufficient to fund New RLJ’s working capital requirements, New RLJ would need to seek to borrow funds necessary to satisfy such requirements. RLJ cannot assure you that such funds would be available to New RLJ on terms favorable to it or at all. If such funds were not available to New RLJ, it may adversely affect New RLJ’s operations and profitability.

New RLJ’s warrants may be exercised in the future, which would increase the number of shares eligible for future resale in the public market and result in dilution to New RLJ’s stockholders.

Outstanding warrants to purchase an aggregate of 20,041,667 shares of New RLJ common stock (issued in exchange for RLJ warrants issued in RLJ’s initial public offering and concurrent private placement) and warrants to purchase an aggregate of 1,000,000 shares of New RLJ common stock (issued as consideration in the Acorn stock purchase agreement) will become exercisable after the consummation of the business combination. These warrants likely will be exercised only if the $12.00 per share exercise price is below the market price of the shares of RLJ common stock. To the extent such warrants are exercised, additional shares of New RLJ common stock will be issued, which will result in dilution to the holders of common stock of New RLJ and increase the number of shares eligible for resale in the public market. Sales of substantial numbers of such shares in the public market could adversely affect the market price of New RLJ’s common stock.

If RLJ stockholders fail to deliver their shares in accordance with the redemption requirements specified in this joint proxy statement/prospectus, they will not be entitled to redeem their shares of common stock of RLJ for a pro rata portion of the trust account.

RLJ stockholders may demand that RLJ convert their shares into a pro rata portion of the trust account, calculated as of two business days prior to the anticipated consummation of the merger. RLJ stockholders who seek to exercise this redemption right must deliver their stock (either physically or electronically) to Continental Stock Transfer & Trust Company, RLJ’s transfer agent, prior to the RLJ special meeting. Any RLJ stockholder who fails to deliver his or her stock in accordance with the procedures described in this joint proxy statement/prospectus will not be entitled to redeem his or her shares into a pro rata portion of the trust account. See the section entitled “The Business Combination — Redemption Rights of RLJ Stockholders” for the procedures to be followed if you wish to redeem your shares to cash.

The NASDAQ Stock Market may not list New RLJ’s securities on its exchange, which could limit investors’ ability to make transactions in New RLJ’s securities and subject New RLJ to additional trading restrictions.

New RLJ has applied to list its securities on The NASDAQ Stock Market as soon as practicable in connection with the business combination. New RLJ will be required to meet The NASDAQ Stock Market initial listing requirements to be listed. New RLJ may not be able to meet those initial listing requirements, especially in the event NASDAQ stock market staff deem the business combination to be a “reverse merger”

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and therefore impose more stringent listing standards. Even if such application is accepted and New RLJ’s securities are so listed, New RLJ may be unable to maintain the listing of its securities in the future.

If The NASDAQ Stock Market does not list New RLJ’s securities for trading on its exchange, New RLJ could face significant material adverse consequences, including:

The exercise of discretion by RLJ’s and Images’ respective directors’ and officers’ in agreeing to changes or waivers in the terms of the business combination may result in a conflict of interest when determining whether such changes to the terms of the merger or waivers of conditions are appropriate and in stockholders’ best interests.

In the period leading up to the closing of the business combination, events may occur that, pursuant to the Image merger agreement, Image preferred stock purchase agreement or Acorn stock purchase agreement, would require RLJ or Image to agree to amend one or more of those agreements, as applicable, to consent to certain actions taken by the other parties to such agreements or to waive rights that they are entitled to under such agreements. Such events could arise because of changes in the course of the respective business of another party to the business combination, a request by another party to undertake actions that would otherwise be prohibited by the terms of the Image merger agreement, the Image preferred stock purchase agreement or the Acorn stock purchase agreement, or the occurrence of other events that would have a material adverse effect on RLJ’s or Image’s respective businesses and would entitle RLJ or Image to terminate one or more of such agreements. In any of such circumstances, it would be discretionary on each of RLJ or Image, acting through its respective board of directors, to grant its consent or waive its rights. The existence of the financial and personal interests of the directors described in preceding risk factors may result in a conflict of interest on the part of one or more of the directors between what he or she may believe is best for RLJ or Image, as applicable, and what he may believe is best for himself in determining whether or not to take the requested action. As of the date of this joint proxy statement/prospectus, each of RLJ and Image does not believe there will be any changes or waivers that its respective directors and officers would be likely to make after stockholder approvals of the RLJ merger proposal and the Image merger proposal have been obtained. While certain changes could be made without further stockholder approval, RLJ and Image will circulate a new or amended joint proxy statement/prospectus and resolicit RLJ’s and Image’s stockholders if changes to the terms of the transaction that would have a material adverse impact on RLJ or Image stockholders are required prior to the stockholder vote on the RLJ merger proposal and the Image merger proposal.

If the business combination is completed, a large portion of the funds in the trust account may be used for the purchase, directly or indirectly, of RLJ common stock. As a consequence, if the business combination is completed, such funds will not be available to New RLJ for working capital and general corporate purposes and the number of beneficial holders of New RLJ’s securities may be reduced to a number that may preclude the quotation, trading or listing of New RLJ’s securities other than on the OTCBB.

After the payment of expenses associated with the transaction, including investment banking and finder’s fees and deferred underwriting commissions, the balance of funds in the trust account will be available to New RLJ for working capital and general corporate purposes. However, a portion of the funds in the trust account may be used to acquire RLJ common stock from holders thereof who elect to redeem their shares into cash. As a consequence of such purchases:

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There are significant limitations on RLJ’s right to make contractual indemnification claims against Image for the breach of any representations and warranties or covenants made by Image in the Image merger agreement.

RLJ does not have a right under the terms of the Image merger agreement to make contractual indemnification claims after the closing of the business combination against Image under any circumstances including for a breach by Image of the representations and warranties made to Image or for a violation by Image of certain covenants and agreements in the Image merger agreement and related documents. This limitation does not affect any other entitlement, remedy or recourse permitted by law that RLJ may have against Image.

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INFORMATION ABOUT RLJ

Overview

RLJ is a Nevada company formed on November 12, 2010. RLJ’s business plan is to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. RLJ’s business plan is not limited to a particular industry, geographic region or minimum transaction value for purposes of consummating an initial business combination, except that RLJ will not, under its amended and restated articles of incorporation, be permitted to effect a business combination with a blank check company or a similar type of company with nominal operations. RLJ is not prohibited from entering into a business combination with a target business that is an affiliate of RLJ’s sponsor, directors or officers, although RLJ has no present intention to do so.

On February 22, 2011 (i) RLJ sold 12,500,000 units in RLJ’s initial public offering, and (ii) the underwriters for RLJ’s initial public offering purchased an additional 1,875,000 units pursuant to an over-allotment option. Each units consists of one share of RLJ’s common stock and one warrant. Each warrant entitles the holder to purchase one share of RLJ’s common stock at a price of $12.00, subject to certain adjustments, commencing 30 days after the completion of RLJ’s initial business combination, provided that a registration statement relating to the common stock issuable upon exercise of the warrants is effective and a prospectus relating to the common stock issuable upon exercise of the warrants is current. The warrants expire five years after the completion of RLJ’s initial business combination, at 5:00 p.m., New York time, or earlier upon redemption or liquidation. Simultaneously with the consummation of RLJ’s initial public offering, RLJ’s sponsor purchased 6,666,667 sponsor warrants, each exercisable to purchase one share of RLJ’s common stock at $12.00 per share, at a price of $0.75 per warrant ($5,000,000 in the aggregate) in a private placement that occurred simultaneously with the closing of RLJ’s initial public offering.

RLJ received net proceeds of approximately $144.0 million from RLJ’s initial public offering (including proceeds from the exercise by the underwriters of their over-allotment option) and sale of the sponsors warrants. Of those net proceeds, $3.6 million is attributable to the portion of the underwriters’ discount which has been deferred until the consummation of RLJ’s initial business combination. The net proceeds were deposited in a trust account and will be part of the funds distributed to RLJ’s public stockholders in the event RLJ is unable to complete a business combination. Except for a portion of the interest income that may be released to RLJ to pay any income and franchise taxes and to fund RLJ’s working capital requirements, none of the funds held in the trust account will be released until the earlier of the completion of RLJ’s initial business combination and the redemption of 100% of RLJ’s public shares if RLJ is unable to consummate a business combination within 21 months from the closing of RLJ’s initial public offering (subject to the requirements of law).

Trust Account

A total of approximately $143.0 million of the net proceeds from RLJ’s initial public offering and the sale of the sponsor warrants described herein, including approximately $3.6 million of deferred underwriting commissions has been placed in a trust account at J.P. Morgan Chase Bank, maintained by Continental Stock Transfer & Trust Company, as trustee, to be invested only in U.S. government treasury bills with a maturity of 180 days or less or in money market funds meeting certain conditions under Rule 2a-7 under the Investment Company Act. Except for a portion of the interest income that may be released to RLJ to pay any income and franchise taxes and to fund RLJ’s working capital requirements, as discussed below, none of the funds held in the trust account will be released until the earlier of the completion of RLJ’s initial business combination and the redemption of 100% of RLJ’s public shares if RLJ are unable to consummate a business combination within 21 months from the closing of this offering (subject to the requirements of law).

Fair Market Value of Target Business

Unlike many other blank check companies, RLJ does not have the limitation that a target business have a minimum fair market enterprise value of the net assets held in the trust account at the time of it signing a definitive agreement in connection with its initial business combination. Additionally, unless RLJ consummates its initial business combination with an affiliated entity, RLJ is not required to obtain an opinion from an independent investment banking firm that the price RLJ is paying is fair to RLJ from a financial point of

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view. If no opinion is obtained, RLJ’s stockholders will be relying on the judgment of the RLJ board, who will determine fair market value and fairness based on standards generally accepted by the financial community. The application of such standards would involve a comparison, from a valuation standpoint, of RLJ’s business combination target to comparable public companies, as applicable, and a comparison of RLJ’s contemplated transaction with such business combination target to other then-recently announced comparable private and public company transactions, as applicable. The application of such standards and the basis of the RLJ board of directors’ determination will be discussed and disclosed in RLJ’s tender offer or proxy solicitation materials, as applicable, related to RLJ’s initial business combination.

Opportunity for Stockholder Approval of Business Combination

Because RLJ is engaging in the RLJ merger, RLJ is submitting the RLJ merger proposal pursuant to the NRS. The quorum required to constitute this meeting, as for all meetings of RLJ stockholders in accordance with the RLJ bylaws, is a majority of RLJ’s issued and outstanding common stock (whether or not held by RLJ public stockholders). RLJ will consummate the merger only if the required number of shares are voted in favor of the merger, and the other conditions to the merger are satisfied. If a majority of the outstanding shares of common stock are not voted in favor of the merger, RLJ may continue to seek other target businesses with which to effect its initial business combination until November 22, 2012.

Unlike many other blank check companies in which the founders agree to vote their founder shares in accordance with the majority of the votes cast by the public stockholders in connection with an initial business combination, RLJ’s initial stockholders have agreed to vote their founder shares, as well as any public shares purchased during or after the offering, in favor of RLJ’s initial business combination. RLJ’s initial stockholders own approximately 21.7% of RLJ’s outstanding shares of common stock.Accordingly, it is more likely that the necessary stockholder approval will be received than would be the case if RLJ’s initial stockholders agreed to vote their founder shares in accordance with the majority of the votes cast by RLJ’s public stockholders.

Liquidation If No Business Combination

RLJ’s sponsor, officers and directors have agreed that RLJ will have until November 22, 2012 to consummate RLJ’s initial business combination. If RLJ is unable to consummate a business combination by such date, RLJ will be required to:

subject to the requirements of Nevada law to provide for claims of creditors and that a corporation not make a distribution to stockholders if, after giving effect to the distribution, either (i) the corporation would not be able to pay its debts as they become due in the usual course of business or (ii) the corporation’s total assets would be less than the sum of its total liabilities plus the amount that would be needed, if the corporation were to be dissolved at the time of distribution, to satisfy the preferential rights upon dissolution of stockholders whose preferential rights are superior to those receiving the distribution. There will be no redemption rights or liquidating distributions with respect to RLJ’s warrants, which will expire worthless.

RLJ may seek stockholder approval to extend the deadline if RLJ has not consummated a business combination within that period. Under RLJ’s amended and restated articles of incorporation, the approval of holders of at least 65% of RLJ’s outstanding common stock would be required to extend that time period, and in no event may RLJ extend that time period on more than one occasion, or by more than three months.

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RLJ’s initial stockholders have waived their redemption rights with respect to their founder shares if RLJ fails to consummate an initial business combination by the deadline. However, if RLJ’s initial stockholders, or any of RLJ’s officers, directors or affiliates acquire public shares in or after the initial public offering, they will be entitled to redemption rights with respect to such public shares if RLJ fails to consummate a business combination within the required time period.

The underwriters have agreed to waive their rights to their deferred underwriting commission held in the trust account in the event RLJ does not consummate its initial business combination within 21 months from the closing of the initial public offering, and in such event such amounts will be included with the funds held in the trust account that will be available for distribution to RLJ’s public stockholders.

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Management’s Discussion and Analysis of Financial Condition and Results of Operations

Results of Operations

RLJ has neither engaged in any operations nor generated any revenues from operations to date. RLJ’s entire activity since inception has been to prepare for and consummate RLJ’s initial public offering and to identify and investigate targets for a business combination. RLJ will not generate any operating revenues until consummation of a business combination. RLJ will generate non-operating income in the form of interest income on cash and cash equivalents.

Net loss for the year ended December 31, 2011 was $421,512, which consisted of $84,008 in interest income offset by $505,520 in formation and operating expenses. Net loss for the period November 12, 2010 (date of inception) to December 31, 2010 was $25,199, which consisted of $25,199 in formation expenses. Net loss for the period from November 12, 2010 (date of inception) to December 31, 2011 was $446,711, which consisted of $84,008 in interest income offset by $530,719 in formation and operating expenses. The trustee of the trust account will pay any taxes resulting from interest accrued on the funds held in the trust account out of the funds held in the trust account.

Net loss for the three months ended March 31, 2012 was $360,839, which consisted of $13,279 in interest income offset by $374,118 in operating expenses. Net loss for the three months ended March 31, 2011 was $60,893, which consisted of $22,177 in interest income offset by $83,070 in formation and operating expenses. Net loss for the period from November 12, 2010 (date of inception) to March 31, 2012 was $807,550, which consisted of $97,287 in interest income offset by $904,837 in formation and operating expenses.

Off-Balance Sheet Arrangements

RLJ has never entered into any off-balance sheet financing arrangements and has never established any special purpose entities. RLJ has not guaranteed any debt or commitments of other entities or entered into any options on non-financial assets.

Contractual Obligations

RLJ does not have any long term debt, capital lease obligations, operating lease obligations or purchase obligations.

Upon consummation of the proposed business combination, and based on those assumptions discussed in the section titled “Unaudited Pro Forma Condensed Combined Financial Information,” the following table provides a summary of obligations for the next five years of New RLJ, on a pro forma basis (amounts are in thousands). There are no contractual obligations that require payment beyond March 31, 2017.

		March 31, 2013 Year 1				March 31, 2014 Year 2				March 31, 2015 Year 3				March 31, 2016 Year 4				March 31, 2017 Year 5
		(in thousands)
Operating Leases
Acorn		$	672			$	469			$	92			$	71			$	16
Image		$	552			$	552			$	138			$	—			$	—
Debt
Existing Vendor Advance		$	664			$	349			$	—			$	—			$	—
New Vendor Advance ($3.8 million)		$	1,267			$	1,267			$	1,267			$	—			$	—
SunTrust Term Loan ($22.0 million)		$	1,650			$	1,650			$	2,200			$	2,200			$	14,300
Subordinated Debt – JH Partners		$	—			$	—			$	—			$	—			$	—
Total Commitments		$	4,805			$	4,286			$	3,696			$	2,271			$	14,316

The table above includes the future minimum annual rental payments by year under operating leases and future debt payments excluding debt discount based on the pro forma balance sheet at March 31, 2012,

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assuming no redemptions of RLJ common stock. The pro forma financial statements present two scenarios; the first assumes no redemptions of RLJ common stock and the second assumes redemptions of $51.1 million resulting in Image's Series B stockholders receiving subordinated, unsecured notes payable of approximately $15 million, and $9.14 million of borrowing under a new revolving credit facility. The subordinated notes are payable after six years and the revolving credit facility expires and is payable after five years. If the table had been presented with assumed redemptions of $51.1 million, (i) the obligation due in the fifth year would have increased by $9.14 million related to the expiration of the revolving credit facility and (ii) the subordinated notes in the aggregate principal amount of $15 million would be due in year six.

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$50,000 for printing; $250,000 for consulting and travel for the search for a business combination target; and approximately $180,000 for general working capital that will be used for miscellaneous expenses and reserves.

These amounts are estimates and may differ materially from RLJ’s actual expenses. In addition, RLJ could use a portion of the funds not being placed in the trust account to pay commitment fees for financing, fees to consultants to assist RLJ with RLJ’s search for a target business or as a down payment or to fund a “no-shop” provision (a provision designed to keep target businesses from “shopping” around for transactions with other companies on terms more favorable to such target businesses) with respect to a particular proposed business combination, although RLJ does not have any current intention to do so. If RLJ entered into an agreement where RLJ paid for the right to receive exclusivity from a target business, the amount that would be used as a down payment or to fund a “no-shop” provision would be determined based on the terms of the specific business combination and the amount of RLJ’s available funds at the time. RLJ’s forfeiture of such funds (whether as a result of RLJ’s breach or otherwise) could result in RLJ’s not having sufficient funds to continue searching for, or conducting due diligence with respect to, prospective target businesses.

RLJ does not believe it will need to raise additional funds following RLJ’s initial public offering in order to meet the expenditures required for operating RLJ’s business. However, RLJ will rely on the funds available to RLJ outside of the trust account and interest earned of up to $2.0 million, subject to adjustment, on the trust account (net of franchise and income taxes payable) that may be available to RLJ to fund such expenditures along with any loans from RLJ’s sponsor, affiliates of RLJ’s sponsor, RLJ’s directors or RLJ’s officers, as discussed above. If RLJ’s estimates of the costs of undertaking in-depth due diligence and negotiating an initial business combination is less than the actual amount necessary to do so, or the amount of interest available to RLJ from the trust account is less than $2.0 million as a result of the current interest rate environment, RLJ may have insufficient funds available to operate RLJ’s business prior to RLJ’s initial business combination. Moreover, RLJ may need to obtain additional financing either to consummate RLJ’s initial business combination or because RLJ becomes obligated to redeem a significant number of RLJ’s public shares upon consummation of RLJ’s initial business combination, in which case RLJ may issue additional securities or incur debt in connection with such business combination. Subject to compliance with applicable securities laws, RLJ would only consummate such financing simultaneously with the consummation of RLJ’s initial business combination. Following RLJ’s initial business combination, if cash on hand is insufficient, RLJ may need to obtain additional financing in order to meet RLJ’s obligations.

Proposed New RLJ Senior Credit Facility

To finance a portion of the purchase price and related costs of the business combination, New RLJ anticipates entering into the SunTrust senior credit facility, which we refer to as the SunTrust senior credit facility, with a group of lenders headed by SunTrust Bank as Administrative Agent. The SunTrust senior credit facility will initially include a $20.0 million revolving credit facility and a $22.0 million term loan, with the right of New RLJ to increase such facilities (in the form of an increased revolver and/or an additional term loan, as determined by New RLJ prior to the closing) subject to certain conditions. The SunTrust senior credit facility will be guaranteed by Image, Acorn and their subsidiaries (other than ACL and its subsidiaries), and will be secured by substantially all of the assets of New RLJ and the guarantors (other than Acorn Australia).

The revolving credit facility will mature and be repayable on the fifth anniversary of the closing. The principal of the initial term loan and any additional term loans will amortize in quarterly installments, with final installments equal to the respective remaining principal balances on the fifth anniversary of the closing. All of the loans may be prepaid in whole or in part without premium or penalty, except for any breakage costs related to prepayment of LIBOR-based borrowings. Mandatory prepayments (to be applied first to the term loans and then to the revolver) will be required under certain circumstances. In addition, any and all distributions made by ACL or any of its subsidiaries (other than payments pursuant to permitted service contracts with ACL) to New RLJ or any of the guarantors are also required to be applied to the prepayment of the loans.

All of the loans will bear interest (at New RLJ’s option) at either LIBOR plus 4.50% per annum or the Base Rate plus 3.50% per annum when the senior leverage ratio is greater than or equal to 1.00 to 1.00, or LIBOR plus 4.00% per annum or the Base Rate plus 3.00% per annum when the senior leverage ratio is less than 1.00 to 1.00. These interest rates are subject to increase in the event of certain pricing discrepancies

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between the initial revolving credit facilities and any subsequent increase of those facilities. For these purposes, the Base Rate is defined to be the greatest of the SunTrust prime rate, the Federal Funds rate plus 0.50%, or LIBOR plus 1.00%. During the continuance of any event of default under the SunTrust senior credit facility, the interest rates will increase by 2.00% per annum.

In addition to interest, New RLJ will be required to pay certain fees.

The definitive agreements for the SunTrust senior credit facility will include customary representations, warranties, affirmative covenants (including financial reporting requirements), negative covenants (including restrictions on other indebtedness, limitations on the payment of dividends, and limitations on acquisitions and new investments), financial covenants (including leverage ratios) and events of default.

The closing of the SunTrust senior credit facility is subject to a number of customary conditions and there can be no assurance that New RLJ will enter into the SunTrust senior credit facility. Please see “The Business Combination — Proposed Senior Credit Facility” for additional details regarding the SunTrust senior credit facility.

Quantitative and Qualitative Disclosures about Market Risk

Market risk is a broad term for the risk of economic loss due to adverse changes in the fair value of a financial instrument. These changes may be the result of various factors, including interest rates, foreign exchange rates, commodity prices and/or equity prices. Approximately $143.0 million of the net offering proceeds (which includes $3.6 million of the proceeds attributable to the underwriters’ discount) has been placed into a trust account maintained by Continental Stock Transfer & Trust Company, acting as trustee. As of December 31, 2011, the balance of the trust account was approximately $143.0 million. The proceeds held in trust will only be invested in U.S. “government securities” defined as any Treasury Bill issued by the United States having a maturity of 180 days or less and/or in any open ended money market(s) selected by RLJ meeting the conditions of Sections (c)(2), (c)(3) and (c)(4) of Rule 2a-7 under the Investment Company Act of 1970. Thus, RLJ is subject to market risk primarily through the effect of changes in interest rates on government securities. The effect of other changes, such as foreign exchange rates, commodity prices and/or equity prices, does not pose significant market risk to RLJ.

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Directors and Executive Officers

RLJ’s current directors and executive officers are as follows:

Name		Age		Position
Robert L. Johnson		66		Chairman of the Board
H. Van Sinclair		59		President, Chief Executive Officer and Director
Lisa W. Pickrum		42		Chief Financial Officer
William S. Cohen		71		Director
Mario J. Gabelli		69		Director
Morris Goldfarb		61		Director

Robert L. Johnson has served as RLJ’s chairman of the board since November 2010. Mr. Johnson founded and has served as chairman of The RLJ Companies, an innovative business network that owns or holds interests in a diverse portfolio of companies in the banking, private equity, real estate, hospitality, professional sports, film production, gaming, and automobile dealership industries, since February 2003. Prior to forming The RLJ Companies, Mr. Johnson was founder and chief executive officer of Black Entertainment Television (BET), which was acquired by Viacom Inc. in 2001. He continued to serve as chief executive officer of BET until February 2006. In July 2007, Mr. Johnson was named by USA Today as one of the 25 most influential business leaders of the past 25 years. Mr. Johnson currently serves on the boards of directors of RLJ Lodging Trust, KB Homes, Lowe’s Companies, Inc., Rollover Systems, Inc. and Strayer Education, Inc. He previously served as a director of Hilton Hotels Corporation, US Airways Group, Inc., General Mills, Inc. and IMG Worldwide, Inc. RLJ believes that Mr. Johnson’s professional background, his prior senior leadership positions at various companies, and current and past board positions, make him well qualified as a member of the RLJ board.

H. Van Sinclair has served as RLJ’s president, chief executive officer and general counsel and as a member of the RLJ board since November 2010. Since February 2003, Mr. Sinclair has served as president and chief executive officer of The RLJ Companies. Mr. Sinclair also served as Vice President of Legal and Business Affairs for the RLJ Urban Lodging Funds, a private equity fund concentrating on limited and focused service hotels in the United States and for RLJ Development, RLJ Companies’ hotel and hospitality company, from January 2006 to May 2011. Prior to joining The RLJ Companies, Mr. Sinclair spent 28 years, from October 1978 to February 2003, with the law firm of Arent Fox, PLLC. Mr. Sinclair remains of counsel to Arent Fox. RLJ believes that Mr. Sinclair’s professional background, his prior senior leadership positions at various companies, and extensive legal experience, make him well qualified as a member of the RLJ board.

Lisa W. Pickrum has served as RLJ’s chief financial officer since December 2010. Ms. Pickrum has served as executive vice president and chief operating officer of The RLJ Companies since August 2004. Prior to that, Ms. Pickrum was a senior associate at Katalyst Venture Partners, a private equity firm, from September 2000 to January 2003. She has served as a member of the board of directors of DeVry, Inc., a provider of educational services (NYSE:DV) since November 2008 and a member of the Christopher & Banks board (NYSE:CBK) since 2011. Ms. Pickrum currently serves on the board of directors of Rollover Systems, Inc., and the RLJ McLarty Landers Automotive Group.

William S. Cohen has served as a director of RLJ since February 2011. He has been Chairman and Chief Executive Officer of The Cohen Group, a business consulting firm, since January 2001. Prior to founding The Cohen Group, Mr. Cohen served as the United States Secretary of Defense from January 1997 to 2001. He also served as a United States Senator from 1979 to 1997, and as a member of the United States House of Representatives from 1973 to 1979. Mr. Cohen has served on the board of directors of CBS Corporation since 2003. He has also served as a director of Viacom Inc. (2003 – 2006), American International Group, Inc. (2004 – 2006) and Head N.V. (2001 – 2007). RLJ believes that Mr. Cohen’s professional background, his prior senior leadership positions both at The Cohen Group and in politics, and current and past board positions, make him well qualified as a member of the RLJ board.

Mario J. Gabelli has served as a director of RLJ since February 2011. He has served as Chairman and Chief Executive Officer of GAMCO Investors, Inc. (NYSE: GBL) since February 1999, and as a director since November 1976. Mr. Gabelli has also served as Chief Investment Officer — Value Portfolios of

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GAMCO Asset Management Inc. since August 1978. In connection with those responsibilities, he serves as director or trustee of registered investment companies managed by GAMCO and its affiliates, or Gabelli Funds. Mr. Gabelli has been a portfolio manager for Teton Advisors, Inc., an asset management company which was spun-off from GAMCO in March 2009, since 1998. Mr. Gabelli has served as Chairman of LICT Corporation, a public company engaged in multimedia and other services, since 2004, director of CIBL, Inc., a holding company with operations in broadcasting and wireless telecommunications, since 2007 and Chairman and Chief Executive Officer of The Morgan Group Holding Co., a public holding company, since 2001. In addition, Mr. Gabelli is the Chief Executive Officer, a director and the controlling shareholder of GGCP, Inc., a private company which owns a majority of GAMCO’s Class B Stock, and the Chairman of MJG Associates, Inc., which acts as a investment manager of various investment funds and other accounts. Mr. Gabelli serves as Overseer of Columbia University Graduate School of Business and Trustee of Boston College and Roger Williams University. He also serves as Trustee of The Winston Churchill Foundation and The E. L. Wiegand Foundation, and as a member of the board of directors of The National Italian American Foundation, The American-Italian Cancer Foundation, The Foundation for Italian Art & Culture and The Mentor/National Mentoring Partnership. He is also Chairman of the Gabelli Foundation, Inc., a Nevada private charitable trust. RLJ believes that Mr. Gabelli’s professional background, his prior senior leadership positions at various companies, and current and past board positions, make him well qualified as a member of the RLJ board.

Morris Goldfarb has served as a director of RLJ since February 2011. He serves as Chairman of the Board and Chief Executive Officer of G-III Apparel Group, Ltd. (NASDAQ: GIII), a designer, manufacturer, importer and marketer of apparel, handbags and luggage. Mr. Goldfarb has served as an executive officer and director of G-III and its predecessors since its formation in 1974. Mr. Goldfarb served as a director of Lakes Entertainment, Inc. from June 1998 until March 2010. RLJ believes that Mr. Goldfarb’s professional background, his senior leadership position at G-III Apparel Group, Ltd., and current and past board positions, make him well qualified as a member of the RLJ board.

Number and Terms of Office of Directors and Officers

The RLJ board is divided into three classes with only one class of directors being elected at each annual meeting of stockholders and each class (except for those directors appointed prior to RLJ’s first annual meeting of stockholders) serving a three-year term. The term of office of the first class of directors, consisting of Mr. Cohen, will expire at RLJ’s first annual meeting of stockholders. The term of office of the second class of directors, consisting of Messrs. Sinclair and Gabelli, will expire at the second annual meeting of stockholders. The term of office of the third class of directors, consisting of Messrs. Johnson and Goldfarb, will expire at the third annual meeting of stockholders. RLJ does not currently intend to hold an annual meeting of stockholders until after RLJ consummates a business combination, and thus may not be in compliance with NRS 78.330, which requires an annual meeting of stockholders be held for the purposes of electing directors unless such election is made by written consent in lieu of such a meeting. Therefore, if RLJ’s stockholders want RLJ to hold an annual meeting prior to RLJ’s consummation of a business combination, they may attempt to force RLJ to hold one by submitting an application to the district court in accordance with NRS 78.345.

RLJ’s officers are appointed by the RLJ board and serve at the discretion of the RLJ board, rather than for specific terms of office. The RLJ board is authorized to appoint persons to the offices set forth in RLJ’s amended and restated bylaws as it deems appropriate. RLJ’s amended and restated bylaws provide that RLJ’s officers may consist of a chairman of the board, chief executive officer, president, chief financial officer, vice presidents, secretary, treasurer and such other offices as may be determined by the RLJ board.

Collectively, through their positions described above, RLJ’s officers and directors have extensive experience in the private equity business, which RLJ believes will help RLJ in identifying and evaluating prospective acquisition candidates, selecting the target businesses, and structuring, negotiating and consummating their acquisition.

Committees of the RLJ Board

The RLJ board intends to establish an audit committee, a nominating and corporate governance committee and a compensation committee upon consummation of the business combination. At that time, the

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RLJ board intends to adopt charters for these committees. In conjunction with the formation of the compensation committee, RLJ will retain an expert to assist the company in establishing an appropriate plan for short term and long term incentive compensation, which may include cash bonuses, and equity based compensation, as is customary and reasonable in the industry in which the combined companies will operate. Prior to the consummation of the business combination, RLJ does not intend to establish any committees. Accordingly, there will not be a separate committee comprised of some members of the RLJ board with specialized accounting and financial knowledge to meet, analyze and discuss solely financial matters concerning prospective target businesses. RLJ does not believe a compensation committee is necessary prior to RLJ’s initial business combination as there will be no salary, fees or other compensation being paid to RLJ’s officers or directors prior to RLJ’s initial business combination other than as disclosed in this joint proxy statement/prospectus.

Code of Ethics

RLJ has adopted a code of conduct and ethics applicable to RLJ’s directors, officers and employees in accordance with applicable federal securities laws. RLJ filed a copy of RLJ’s code of ethics as an exhibit to RLJ’s registration statement in connection with RLJ’s initial public offering. You may review this document by accessing RLJ’s public filings at the SEC’s web site at www.sec.gov . In addition, a copy of the code of ethics will be provided without charge upon request to RLJ in writing at 3 Bethesda Metro Center, Suite 1000, Bethesda, MD 20814 or by telephone at (301) 280-7737. RLJ intends to disclose any amendments to or waivers of certain provisions of RLJ’s code of ethics in a Current Report on Form 8-K.

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commercial mortgage-backed securities. Mr. Johnson is also Executive Chairman of RLJ Lodging Trust, which restricts him and his affiliates from investing in hotels, or otherwise acquiring focused-service hotels located in the United States or Canada that meet certain investment criteria. Mr. Johnson currently serves on the boards of directors of KB Homes, Lowe’s Companies, Inc. and Strayer Education, Inc.

RLJ’s other directors also have pre-existing fiduciary duties to businesses they serve as officers and/or directors of. Mr. Cohen is Chairman and Chief Executive Officer of The Cohen Group and currently serves on the board of directors of CBS Corporation. Mr. Gabelli is Chairman and Chief Executive Officer of GAMCO Investors, Inc., and serves as an officer or trustee of numerous affiliated investment companies, as well as Chairman of LICT Corporation, a director of CIBL, Inc. and Chairman and Chief Executive Officer of The Morgan Group Holding Co. Mr. Goldfarb is Chairman of the Board and Chief Executive Officer of G-III Apparel Group, Ltd.

RLJ does not believe that any of the foregoing pre-existing fiduciary duties or contractual obligations will materially undermine RLJ’s ability to consummate a business combination because the foregoing entities have specific industry focuses and even, within those industries, may have constraints on the size of acquisitions they would consider.

RLJ’s officers may become involved with subsequent blank check companies similar to RLJ, although they have agreed not to participate in the formation of, or become an officer or director of, any blank check company until RLJ has entered into a definitive agreement regarding RLJ’s initial business combination or RLJ has failed to complete RLJ’s initial business combination within 21 months from the closing of RLJ’s initial public offering. Prior to RLJ’s initial public offering, none of RLJ’s executive officers, directors or control persons are or have been involved in any blank check offerings.

Potential investors should also be aware of the following other potential conflicts of interest:

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While RLJ does not currently intend to pursue an initial business combination with a company that is affiliated with RLJ’s sponsor, officers or directors, RLJ is not prohibited from pursuing such a transaction. In the event RLJ seeks to complete an initial business combination with such a company, RLJ, or a committee of RLJ’s independent directors, would obtain an opinion from an independent investment banking firm that is a member of FINRA, that such an initial business combination is fair to RLJ’s stockholders from a financial point of view. Furthermore, in no event will RLJ’s sponsor or any of RLJ’s existing officers or directors, or any of their respective affiliates, be paid any finder’s fee, consulting fee or other compensation prior to, or for any services they render in order to effectuate, the consummation of RLJ’s initial business combination, other than $10,000 per month for office space and administrative services payable to RLJ’s sponsor.

In general, officers and directors of a corporation incorporated under the laws of the State of Nevada are required to present business opportunities to that corporation under certain circumstances.

As a result of multiple business affiliations, RLJ’s officers and directors may have similar legal obligations relating to presenting business opportunities to multiple entities. Each of Mr. Johnson, Mr. Sinclair and Ms. Pickrum is an officer, member or partner of RLJ’s sponsor. In addition, conflicts of interest may arise when the RLJ board evaluates a particular business opportunity. RLJ cannot assure you that any of the above mentioned conflicts will be resolved in RLJ’s favor.

In the event that RLJ submits RLJ’s initial business combination to RLJ’s public stockholders for a vote, RLJ’s initial stockholders have agreed to vote their founder shares as well as any shares purchased during or after the offering in favor of RLJ’s initial business combination.

Section 16(a) Beneficial Ownership Reporting Compliance

Section 16(a) of the Exchange Act requires RLJ’s officer, directors and persons who own more than ten percent of a registered class of RLJ’s equity securities to file reports of ownership and changes in ownership with the SEC. Officers, directors and ten percent stockholders are required by regulation to furnish RLJ with copies of all Section 16(a) forms they file. Based solely on copies of such forms received, RLJ believes that, during the year ended December 31, 2011, all filing requirements applicable to RLJ’s officers, directors and greater than ten percent beneficial owners were complied with.

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Unless otherwise indicated, RLJ believes that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. The following table does not reflect record or beneficial ownership of the sponsor warrants as these warrants are not exercisable within 60 days of the date of this joint proxy statement/prospectus.

RLJ has based its calculation of the percentage of beneficial ownership on 17,968,750 shares of common stock outstanding on August 9, 2012.

Name and Address of Beneficial Owner (1)		Number of Shares of Common Stock Beneficially Owned				Approximate Percentage of Outstanding Common Stock Beneficially Owned
RLJ SPAC Acquisition, LLC (RLJ’s sponsor) (1) 3 Bethesda Metro Center, Suite 1000 Bethesda, MD 20814			3,678,750				20.5	%
Robert L. Johnson (1) c/o The RLJ Companies 3 Bethesda Metro Center, Suite 1000 Bethesda, MD 20814			3,678,750				20.5	%
AQR Capital Management, LLC (2) Two Greenwich Plaza, 3rd floor Greenwich, CT 06830			1,167,230				6.5	%
Bulldog Investors (3) Park 80 West, 250 Pehle Ave. Suite 708 Saddle Brook, NJ 07663			1,268,000				7.1	%
Polar Securities Inc. (4) 401 Bay Street, Suite 1900, PO Box 19, Toronto, Ontario M5H 2Y4, Canada			1,363,520				7.6	%
Fir Tree Value Master Fund, L.P. (5) c/o Citco Fund Services (Cayman Islands) Limited 89 Nexus Way, Camana Bay Box 31106 Grand Cayman KY1-1205, Cayman Islands			1,862,500				10.4	%
Senator Investment Group LP (6) 1330 Avenue of the Americas 26th Floor New York, NY 10019			1,237,500				6.9	%
Wexford Spectrum Investors LLC (7) 411 West Putnam Avenue, Suite 125 Greenwich, Connecticut 06830			1,174,363				6.54	%
H. Van Sinclair c/o The RLJ Companies 3 Bethesda Metro Center, Suite 1000 Bethesda, MD 20814			—				—
Lisa W. Pickrum c/o The RLJ Companies 3 Bethesda Metro Center, Suite 1000 Bethesda, MD 20814			—				—
William S. Cohen 51 West 52nd Street New York, NY 10019			57,500				*
Mario J. Gabelli c/o GAMCO Investments, Inc. One Corporate Center Rye, NY 10580-1435			—				—
Morris Goldfarb c/o G-III Apparel Group, Ltd. 512 Seventh Avenue New York, NY 10018			157,500				*
All directors and executive officer as a group (6 individuals) (1)			3,893,750				21.7	%