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0001165527-13-000086.txt : 20130122 0001165527-13-000086.hdr.sgml : 20130121 20130122154448 ACCESSION NUMBER: 0001165527-13-000086 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 7 CONFORMED PERIOD OF REPORT: 20120831 FILED AS OF DATE: 20130122 DATE AS OF CHANGE: 20130122 FILER: COMPANY DATA: COMPANY CONFORMED NAME: Red Giant Entertainment, Inc. CENTRAL INDEX KEY: 0001411179 STANDARD INDUSTRIAL CLASSIFICATION: BOOKS: PUBLISHING OR PUBLISHING AND PRINTING [2731] IRS NUMBER: 980471928 STATE OF INCORPORATION: NV FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-34039 FILM NUMBER: 13540260 BUSINESS ADDRESS: STREET 1: 614 E. HWY 50, SUITE 235 CITY: CLERMONT STATE: FL ZIP: 34711 BUSINESS PHONE: 866-926-6427 MAIL ADDRESS: STREET 1: 614 E. HWY 50, SUITE 235 CITY: CLERMONT STATE: FL ZIP: 34711 FORMER COMPANY: FORMER CONFORMED NAME: Castmor Resources Ltd DATE OF NAME CHANGE: 20101103 FORMER COMPANY: FORMER CONFORMED NAME: Castmor Resources LTD DATE OF NAME CHANGE: 20070830 10-K/A 1 g6569.txt UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form 10-K/A (Amendment No. 1) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Fiscal Year Ended August 31, 2012 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 001-34039 RED GIANT ENTERTAINMENT, INC. (Exact name of registrant as specified in its charter) Nevada 98-0471928 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 614 E. Hwy 50, Suite 235, Clermont, FL 34711 (Address, including zip code, of principal executive offices) 866-926-6427 (Registrants' telephone number, including area code) Securities Registered Under Section 12(b) of the Exchange Act: None Name of exchange on which registered: N/A Securities registered pursuant to Section 12(g) of the Act: Common Stock, $0.0001 par value per share Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ] No [X] Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. Yes [ ] No [X] Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes [ ] No [X] Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or such shorter period that the registrant was required to submit and post such files). Yes [ ] No [X] Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. Yes [ ] No [X ] 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. Large accelerated filer [ ] Accelerated filer [ ] Non-accelerated filer [ ] Smaller reporting company [X] Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).Yes [ ] No [X] The aggregate market value of the common stock held by non-affiliates of the registrant as of February 29, 2012, the last business day of the registrant's most recently completed second fiscal quarter, was $49,284, based on the a private sale of the registrant's Common Stock on or about that date at a price of $0.0022 per share. For purposes of determining this number, all officers and directors and holders of more than 5% of the total outstanding shares of the registrant are considered to be affiliates of the registrant. This number is provided only for the purpose of this report on Form 10-K and does not represent an admission by either the registrant or any such person as to the status of such person. The number of outstanding shares of the registrant's Common Stock on December 31, 2012 was 434,922,000. EXPLANATORY NOTE The sole purpose of this Amendment No. 1 to Red Giant Entertainment, Inc.'s Annual Report on Form 10-K (the "Form 10-K") for the fiscal year ended August 31, 2012, as filed with the Securities and Exchange Commission on January 3, 2013, is to furnish Exhibit 101 to the Form 10-K in accordance with Rule 405 of Regulation S-T. Exhibit 101 provides the financial statements and related notes form the Form 10-K formatted in (eXtensible Business Reporting Language). In addition, the Form 10-K contained a misnumbering of the notes to Financial Statements. The Financial Statements and Notes thereto, as revised, are included herein. No other changes have been made to the Form 10-K. This Amendment No. 1 does not reflect events that may have occurred subsequent to the original filing date, and does not modify or update in any way the disclosures made in the original Form 10-K. ITEM 15. EXHIBITS Exhibit No. Description ----------- ----------- 31.1* Certification by Principal Executive Officer pursuant to Rule 13a-14(a)/ 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 31.2* Certification by Principal Financial and Accounting Officer pursuant to Rule 13a-14(a)/ 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 32.1* Certification by Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 32.2* Certification by Principal Financial and Principal Accounting Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 101** The following materials from the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2012 formatted in Extensible Business Reporting Language (XBRL): (i) the Condensed Consolidated Balance Sheets, (ii) the Condensed Consolidated Statements of Operations, (iii) the Condensed Consolidated Statements of Cash Flows and (iv) related notes. ---------- * Filed as an exhibit to the original Form 10-K for the fiscal year ended August 31, 2012, filed with the SEC on January 3, 2013. ** Attached hereto. 2 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Date: January 22, 2013 By: /s/ Benny Powell --------------------------------------- Benny Powell Chief Executive Officer 3 [LETTERHEAD OF MARTINELLIMICK PLLC] To the Board of Directors and Stockholders Red Giant Entertainment, Inc. REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM We have audited the accompanying balance sheets of Red Giant Entertainment, Inc. as of August 31, 2012 and December 31, 2011, and the related statements of operations, stockholders' equity, and cash flows for each of the periods then ending. Red Giant Entertainment, Inc.'s management is responsible for these financial statements. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Red Giant Entertainment, Inc. as of August 31, 2012 and December 31, 2011, and the results of its operations and its cash flows for each of the periods then ending in conformity with accounting principles generally accepted in the United States of America. The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 3 to the financial statements, the Company's accumulated deficit and net loss raise substantial doubt about its ability to continue as a going concern. Management's plans regarding the resolution of this issue are also discussed in Note 3. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. /s/ MartinelliMick PLLC ------------------------------------- Spokane, Washington January 2, 2013 F-1 RED GIANT ENTERTAINMENT INC. (formerly known as Castmor Resources Ltd.) Balance Sheets

The accompanying notes are an integral part of these financial statements. F-2 RED GIANT ENTERTAINMENT INC. (formerly known as Castmor Resources, Ltd.) Statements of Operations

The accompanying notes are an integral part of these financial statements. F-3 RED GIANT ENTERTAINMENT INC (formerly known as Castmor Resources, Ltd.) Statement of Stockholders' Equity

The accompanying notes are an integral part of these financial statements. F-4 RED GIANT ENTERTAINMENT (formerly known as Castmor Resources, Ltd.) Statements of Cash Flow

The accompanying notes are an integral part of these financial statements. F-5 RED GIANT ENTERTAINMENT, INC. (formerly known as Castmor Resources, Inc.) Notes to the Financial Statements August 31, 2012 NOTE 1 - ORGANIZATION AND DESCRIPTION OF BUSINESS Red Giant Entertainment LLC, (hereinafter "the Company") was formed in the State of Florida, U.S.A., on January 1, 2011. The Company's fiscal year end is December 31. On May 9, 2012, the Company incorporated and changed its name to Red Giant Entertainment, Inc. ("RGE") All income and expenses in these financial statements have been recharacterized for reporting purposes to be all inclusive for the corporate entity. The Company was originally a publishing company, but has expanded its operations to include mass media and graphic novel artwork development. On June 11, 2012, Castmor Resources Ltd., a Nevada corporation entered into a Share Exchange Agreement (the "Share Exchange Agreement") with Red Giant Entertainment Inc., and Benny Powell, who had owned 100% of the issued and outstanding shares in RGE. Pursuant to the terms and conditions of the Share Exchange Agreement, RGE exchanged 100% of the outstanding shares in RGE for forty million (40,000,000; 240,000,000 post split) newly-issued restricted shares of the Company's common stock. Due to the recapitalization and reverse merger with Castmor Resources Ltd, 32,487,000 shares (194,922,000 post split) were issued in the entity. The Company subsequently approved a 6 to 1 forward stock split of all shares of record in June, 2012. The exchange resulted in RGE becoming a wholly-owned subsidiary of the Company. As a result of the Share Exchange Agreement, the Company will now conduct all current operations through Red Giant Entertainment, and our principal business became the business of RGE. All share information has been restated for both the reverse merger and the forward stock split for all periods presented. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in the United States of America. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates that have been made using careful judgment. The financial statements have, in management's opinion been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below: ACCOUNTING METHOD The Company's financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements. ADVERTISING Advertising costs are expensed as incurred. The Company expensed advertising costs of $962 and $109 for the periods ending August 31, 2012 and December 31, 2011, respectively. ASSET RETIREMENT OBLIGATIONS The Company has adopted ASC 410, ASSET RETIREMENT AND ENVIRONMENTAL OBLIGATIONS, which requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred. ASC 410 requires the Company to record a liability for the present value of the estimated site restoration costs with corresponding increase to the carrying amount of the related long-lived assets. The liability will be accreted and the asset will be depreciated over the life of the related assets. Adjustments for changes resulting from the passage of time and changes to either the timing or amount of the original present value estimate underlying the obligation will be made. As at August 31, 2012 and December 31, 2011, the Company does not have any asset retirement obligations. F-6 RED GIANT ENTERTAINMENT, INC. (formerly known as Castmor Resources, Inc.) Notes to the Financial Statements August 31, 2012 CASH AND CASH EQUIVALENTS For purposes of the statement of cash flows, the Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less to be cash equivalents. As at August 31, 2012 and December 31, 2011, there were $269 and $97 of cash equivalents, respectively. COST OF GOODS SOLD Cost of goods sold includes the cost of creating services or artwork, advertising and books. EARNINGS (LOSS) PER SHARE The Company follows financial accounting standards, which provides for calculation of "basic" and "diluted" earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings per share. There were no common stock equivalents outstanding at August 31, 2012 and December 31, 2011. FAIR VALUE MEASUREMENTS Topic 820 in the Accounting Standards Codification (ASC 820) defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. ASC 820 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. In this standard, the FASB clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability. In support of this principle, ASC 820 establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy is as follows: * Level 1 inputs -- Unadjusted quoted process in active markets for identical assets or liabilities that the entity has the ability to access at the measurement date. * Level 2 inputs -- Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. * Level 3 inputs -- Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity's own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. The Company currently does not have any assets that are measured at fair value on a recurring or non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at August 31, 2012 and December 31, 2011, nor gains or losses reported in the statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the periods ended August 31, 2012 and December 31, 2011. INCOME TAXES The Company was a limited liability company until May 9, 2012. As an LLC, no income tax provision was made at the Company level and all taxable income and deductions were passed directly to the equity owner. The Company will be evaluating the tax ramifications of the change in entity status and the organizational changes to determine future tax issues. Currently the Company expects to recognize losses in 2012. The Company further expects the losses to be reserved against for deferred tax purposes. F-7 RED GIANT ENTERTAINMENT, INC. (formerly known as Castmor Resources, Inc.) Notes to the Financial Statements August 31, 2012 The Company has adopted ASC 740, INCOME TAXES, which requires the Company to recognize deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Company's financial statements or tax returns using the liability method. Under this method, deferred tax liabilities and assets are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. LONG-LIVED ASSETS IMPAIRMENT Long-lived assets of the Company are reviewed for impairment whenever events or circumstances indicate that the carrying amount of assets may not be recoverable, pursuant to guidance established in ASC 360, PROPERTY, PLANT AND EQUIPMENT. Management considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations (undiscounted and without interest charges). If impairment is deemed to exist, the assets will be written down to fair value. Fair value is generally determined using a discounted cash flow analysis. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment are recorded at historical cost and capitalized. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset. The Company currently has equipment being depreciated for estimated lives of three to five years. Depreciation for the periods ended August 31, 2012 and December 31, 2011 was $56 and zero, respectively. RECENT ACCOUNTING PRONOUNCEMENTS In July 2012, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") No. 2012-02, "INTANGIBLES--GOODWILL AND OTHER (TOPIC 350): TESTING INDEFINITE-LIVED INTANGIBLE ASSETS FOR IMPAIRMENT" (the "Update"). The Update simplifies the guidance for testing the decline in the realizable value (impairment) of indefinite-lived intangible assets other than goodwill. Examples of intangible assets subject to the guidance include indefinite-lived trademarks, licenses and distribution rights. The new standard is effective for fiscal years beginning after September 15, 2012. As of August 31, 2012, none of the Company's intangible assets are amortized as indefinite-lived intangible assets. Therefore, the adoption of this amendment is not expected to have a material impact on the Company's financial position or results of operations. In September 2011, the FASB issued ASU No. 2011-08, "Intangibles--Goodwill and Other (Topic 350): TESTING GOODWILL FOR IMPAIRMENT." This amendment permits, but does not require, an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The amendment is required to be adopted by the Company beginning October 1, 2012, although early adoption is permitted. The Company will consider assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test in future periods. The adoption of this amendment is not expected to have a material impact on the Company's financial position or results of operations. In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): AMENDMENTS TO ACHIEVE COMMON FAIR VALUE MEASUREMENTS AND DISCLOSURE REQUIREMENTS IN U.S. GAAP AND INTERNATIONAL FINANCIAL REPORTING STANDARDS (IFRS). Among other things, the guidance expands the disclosure requirements around fair value measurements categorized in Level 3 of the fair value hierarchy and requires disclosure of the level in the fair value hierarchy of items that are not measured at fair value in the statement of financial position but whose fair value must be disclosed. It also clarifies and expands upon existing requirements for measurement of the fair value of financial assets and liabilities as well as instruments classified in shareholders' equity. The F-8 guidance is effective for interim and annual periods beginning after December 15, 2011. We are currently evaluating the impact this update will have on our financial statements. REVENUE RECOGNITION Revenue for the Company is recognized from three primary sources: Advertising Revenue, Publishing Sales and Creative Services. Revenue was processed through our Paypal Account and Project Wonderful accounts where applicable. Advertising Revenue comes from the following sources and is stated at net after commissions: * Keenspot: Revenue is earned on a net 90 basis and is based upon traffic to Red Giant property Web sites. It is calculated on a Cost Per Thousand (CPM) of verified impressions and varies based upon bids by advertisers and other customary factors. In exchange for advertising, hosting, IT, and sales management, Keenspot takes 50% commission of ad revenue for their services. * Project Wonderful: Revenue is paid immediately and based upon bids by advertisers for a set amount of time at the prevailing highest winning rate. Project Wonderful takes a 25% commission of ad revenue for their services. Publishing Revenue comes from the following sources: * Kickstarter Campaigns: These are presales for books and revenue is recognized only once the books arrive and are shipped to the buyers. * Direct Sales: Through our online store, we sell directly to clients and the transactions process through our Paypal account. All orders are shipped immediately and revenue is recognized immediately. Creative Services are artwork, writing, advertising, and other creative endeavors we handle for outside clients. Revenue is recognized upon completion of the services and payment has been tendered. Shipping and Handling for purchases are paid directly by the consumer through Paypal. The Company has not established an allowance for doubtful accounts, as all transactions are handled through Paypal directly by the consumer. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses for the reporting period. The Company reviews its estimates on an ongoing basis. The estimates were based on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from these estimates. The Company believes the judgments and estimates required in its accounting policies to be critical in the preparation of the Company's financial statements. NOTE 3 - MANAGEMENT STATEMENT REGARDING GOING CONCERN The Company is currently generating revenues from operations sufficient to meet its operating expenses. However, as the Company completed the first year of operation in 2011, management believes that given the current economic environment and the continuing need to strengthen our cash position, there is still doubt about the Company's ability to continue as a going concern. Management is currently pursuing various funding options, including seeking debt or equity financing, licensing opportunities, as well as a strategic or other transaction, to obtain additional funding to continue the development of, and successfully commercialize, its products. There can be no assurance that the F-9 RED GIANT ENTERTAINMENT, INC. (formerly known as Castmor Resources, Inc.) Notes to the Financial Statements August 31, 2012 Company will be successful in its efforts and this raises substantial doubt about the Company's future. Should the Company be unable to obtain adequate financing or generate sufficient revenue in the future, the Company's business, results of operations, liquidity and financial condition would be materially and adversely harmed, and the Company will be unable to continue as a going concern. The Company believes that its ability to execute its business plan, and therefore continue as a going concern, is dependent upon its ability to do the following: * obtain adequate sources of funding to fund long-term business operations; * enter into a licensing or other relationship that allows the Company to commercialize its products; * manage or control working capital requirements; and * develop new and enhance existing relationships with product distributors and other points of distribution for the Company's products. There can be no assurance that the Company will be successful in achieving its short- or long-term plans as set forth above, or that such plans, if consummated, will enable the Company to obtain profitable operations or continue in the long-term as a going concern. NOTE 4 - INVENTORY As of August 31, 2012 and December 31, 2011, inventory consisted of physical copies of published books, as well as artwork that's used for digitally distributed works for advertising revenue and future publications. The inventory is valued at the cost to produce. NOTE 5 - INTELLECTUAL PROPERTY The Company's intellectual property consists of graphic novel artwork and was contributed by a shareholder to the Company and valued at $29,250, which was determined based on the historical costs for artists and printing. The intangible is being amortized over its life of five years. Amortization cost for the year periods ended August 31, 2012 and December 31 2011 $3,900 and $5,850, respectively. The Company expects to amortize the remaining $19,500 over the remaining life of approximately four years at $5,850 per year. NOTE 6 - PROVISION FOR INCOME TAXES Income taxes are provided based upon the liability method. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the "more likely than not" standard imposed by accounting standards to allow recognition of such an asset. At August 31, 2012, the Company had net deferred tax assets calculated at an expected rate of 34%, noted in the table below, of approximately $2,400. As management of the Company cannot determine that it is more likely than not that the Company will realize the benefit of the net deferred tax asset, a valuation allowance equal to the net deferred tax asset was recorded at August 31, 2012. The significant components of the net deferred tax asset calculated with the estimated effective income tax rate at August 31, 2012 and December 31, 2011 were as follows: F-10 RED GIANT ENTERTAINMENT, INC. (formerly known as Castmor Resources, Inc.) Notes to the Financial Statements August 31, 2012 2012 -------- Deferred tax assets Net operating loss carry forward $ 7,300 -------- Net deferred income tax asset 2,400 Deferred tax asset valuation allowance (2,400) -------- Net deferred tax asset $ -- ======== At August 31, 2012, the Company had net income tax operating loss carry forwards of approximately $7,300, which expire in the years 2022 through 2032. The change in the allowance account from December 31, 2011 August 31, 2012 to was $2,400. For the tax year ended December 31, 2011, the predecessor entity to Red Giant Entertainment, Inc. was a limited liability company, and as such, all tax benefits and obligations passed through the entity to its members. No provisions have been made at December 31, 2011, nor does management believe that any tax modifications would have a material effect on the financials. Although Management believes that its estimates are reasonable, no assurance can be given that the final tax outcome of these matters will not be different than that which is reflected in our tax provisions. Ultimately, the actual tax benefits to be realized will be based upon future taxable earnings levels, which are very difficult to predict. ACCOUNTING FOR INCOME TAX UNCERTAINTIES AND RELATED MATTERS The Company may be assessed penalties and interest related to the underpayment of income taxes. Such assessments would be treated as a provision of income tax expense on the financial statements. For the years ended August 31, 2012 and December 31, 2011, no income tax expense has been realized as a result of operations and no income tax penalties and interest have been accrued related to uncertain tax positions. The Company has not filed a tax return for the new entity. These filings will be subject to a three year statute of limitations. No adjustments have been made to reduce the estimated income tax benefit at fiscal year end. Any valuations relating to these income tax provisions will comply with U.S. generally accepted accounting principles. NOTE 7 - CAPITAL STOCK The Company has 100,000,000 shares of preferred stock authorized and none have been issued. The Company has 900,000,000 shares of common stock authorized, of which 434,922,000 shares are issued and outstanding. All shares of common stock are non-assessable and non-cumulative, with no preemptive rights. During the eight months ended, August 31, 2012, $10,869 of contributed capital was added to additional paid in capital. In June, 2012, Castmor Resources Ltd., entered into Share Exchange Agreement (the "Share Exchange Agreement") with Red Giant Entertainment Inc., ("RGE"), and Benny Powell, who had owned 100% of the issued and outstanding shares in RGE. Pursuant to the terms and conditions of the Share Exchange Agreement, RGE F-11 RED GIANT ENTERTAINMENT, INC. (formerly known as Castmor Resources, Inc.) Notes to the Financial Statements August 31, 2012 exchanged 100% of the outstanding shares in RGE for forty million (240,000,000 post split) newly-issued restricted shares of the Company's common stock. Due to the recapitalization and reverse merger of Castmor Resources Ltd, an additional 32,487,000 (194,922,000 post split) shares were issued. The Company approved a 6 to 1 stock split of all shares issued in June of 2012. All share information has been restated for both the reverse merger and the forward stock split for all periods presented. NOTE 8 - RELATED PARTIES Benny Powell was an officer and director of both parties to the merger. See Note 1. Mr. Powell continues as the Company's sole officer and director post merger. Mr. Powell also provides rent and other services to the Company through his other ventures. NOTE 9 - SUBSEQUENT EVENTS Management has evaluated subsequent events through December 27, 2012. There was no event of which management was aware that occurred after the balance sheet date that would require any adjustment to, or disclosure in, the accompanying consolidated financial statements. 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Entity Filer Category Entity Public Float Entity Common Stock, Shares Outstanding Document Fiscal Period Focus Document Fiscal Year Focus Statement of Financial Position [Abstract] ASSETS Current Assets Cash in Banks Inventory Prepaid Expenses Total Current Assets Computer Equipment - net of depreciation Intellectual Property - net of amortization TOTAL ASSETS LIABILITIES & STOCKHOLDER'S EQUITY Accounts Payable & Accrued Expenses Commitments & Contingencies STOCKHOLDER'S EQUITY Preferred stock,$0.0001 par value; 100,000,000 shares authorized; no shares issued Common Stock, $0.0001 par value; 900,000,000 shares authorized; 434,922,000 & 240,000,000 shares issued and outstanding, respectively Additional paid in capital Discount on Common Stock Accumulated earning (deficit) TOTAL LIABILITIES & STOCKHOLDER'S EQUITY Preferred stock, par value Preferred stock, shares authorized Preferred stock, shares issued Preferred stock, shares outstanding Common stock, par value Common stock, shares authorized Common stock, shares issued Common stock, shares outstanding Income Statement [Abstract] Sales Cost of Sales Gross Profit Expenses Advertising & marketing Depreciation & amortization General & administrative Travel & entertainment Professional fees Payroll & related expenses Meeting & conventions Total Expense Net Income before taxes Income taxes Net Income Net income per share, basic and diluted Weighted average number of commonshares outstanding Statement [Table] Statement [Line Items] Beginning Balance, Amount Beginning Balance, Shares Contributed capital Recapitalization from reverse merger, Amount Recapitalization from reverse merger, Shares Net Loss Ending Balance, Amount Ending Balance, Shares Statement of Cash Flows [Abstract] OPERATING ACTIVITIES Net Income Adjustments to reconcile net income (loss) to net cash provided by operating activities: Inventory Prepaid expenses Accounts payable & accrued expenses Net Cash Used by Operating Activities INVESTING ACTIVITIES Computer equipment purchased Net Cash Used by Investing Activities FINANCING ACTIVITIES Capital contributed Net Cash Provided by Financing Activities Net Cash Increase for Period Cash at Beginning of Period Cash at End of Period Supplemental cash flow information: Interest paid Income taxes paid Non-cash Investing and Financing Activities Shareholder contribution of intellectual property Accounting Policies [Abstract] Note 1. ORGANIZATION AND DESCRIPTION OF BUSINESS Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Notes to Financial Statements Note 3. MANAGEMENT STATEMENT REGARDING GOING CONCERN Inventory Disclosure [Abstract] Note 4. INVENTORY Goodwill and Intangible Assets Disclosure [Abstract] Note 5. INTELLECTUAL PROPERTY Note 6. PROVISION FOR INCOME TAXES Note 7. CAPITAL STOCK Debt Disclosure [Abstract] Note 8. RELATED PARTIES Subsequent Events [Abstract] Note 9. SUBSEQUENT EVENTS Accounting Method Advertising Asset Retirement Obligations Cash and Cash Equivalents Cost of Goods Sold Earnings (Loss) Per Share Fair Value Measurements Income Taxes Long-lived Assets Impairment Property, Plant and Equipment Recent Accounting Pronouncements Revenue Recognition Use of Estimates Significant components of the net deferred tax asset Advertising costs Cash equivalents Depreciation Amortization cost Deferred tax assets Net operating loss carry forward Net deferred income tax asset Deferred tax asset valuation allowance Net deferred tax asset Net deferred tax assets Expiration year of net operating loss carryforwards Change in the allowance account Assets, Current Assets Common Stock, Including Additional Paid in Capital, Net of Discount Liabilities and Equity Gross Profit Operating Expenses Income (Loss) from Continuing Operations, Including Portion Attributable to Noncontrolling Interest Stockholders' Equity Attributable to Parent Shares, Issued Increase (Decrease) in Inventories Net Cash Provided by (Used in) Operating Activities ComputerEquipmentPurchased Net Cash Provided by (Used in) Investing Activities Net Cash Provided by (Used in) Financing Activities Cash, Period Increase (Decrease) Custom Element. 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Management has evaluated subsequent events through December 27, 2012. There was no event of which management was aware that occurred after the balance sheet date that would require any adjustment to, or disclosure in, the accompanying consolidated financial statements.

Benny Powell was an officer and director of both parties to the merger. See Note 1. Mr. Powell continues as the Companys sole officer and director post merger. Mr. Powell also provides rent and other services to the Company through his other ventures.

The Company has 100,000,000 shares of preferred stock authorized and none have been issued.   The Company has 900,000,000 shares of common stock authorized, of which 434,922,000 shares are issued and outstanding. All shares of common stock are non-assessable and non-cumulative, with no preemptive rights.   During the eight months ended, August 31, 2012, $10,869 of contributed capital was added to additional paid in capital.   In June, 2012, Castmor Resources Ltd., entered into Share Exchange Agreement (the Share Exchange Agreement) with Red Giant Entertainment Inc., (RGE), and Benny Powell, who had owned 100% of the issued and outstanding shares in RGE. Pursuant to the terms and conditions of the Share Exchange Agreement, RGE exchanged 100% of the outstanding shares in RGE for forty million (240,000,000 post split) newly-issued restricted shares of the Companys common stock. Due to the recapitalization and reverse merger of Castmor Resources Ltd, an additional 32,487,000 (194,922,000 post split) shares were issued. The Company approved a 6 to 1 stock split of all shares issued in June of 2012. All share information has been restated for both the reverse merger and the forward stock split for all periods presented. Income taxes are provided based upon the liability method. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the more likely than not standard imposed by accounting standards to allow recognition of such an asset.   At August 31, 2012, the Company had net deferred tax assets calculated at an expected rate of 34%, noted in the table below, of approximately $2,400. As management of the Company cannot determine that it is more likely than not that the Company will realize the benefit of the net deferred tax asset, a valuation allowance equal to the net deferred tax asset was recorded at August 31, 2012.   The significant components of the net deferred tax asset calculated with the estimated effective income tax rate at August 31, 2012 and December 31, 2011 were as follows: <table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse"> <tr> <td style="vertical-align: top"> </td> <td style="vertical-align: top; font: italic 10pt Times New Roman, Times, Serif"> </td> <td style="vertical-align: top"> </td> <td style="vertical-align: top"> </td> <td colspan="2" style="font: 12pt Calibri, Helvetica, Sans-Serif"> </td></tr> <tr style="vertical-align: top"> <td> </td> <td style="font: 10pt Arial, Helvetica, Sans-Serif"> </td> <td style="border-bottom: black 1pt solid"> </td> <td colspan="2" style="border-bottom: black 1pt solid; font: 10pt Arial, Helvetica, Sans-Serif; text-align: center">2012</td> <td> </td></tr> <tr style="vertical-align: top"> <td> </td> <td style="font: 10pt Arial, Helvetica, Sans-Serif">Deferred tax assets</td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: top"> <td> </td> <td style="background-color: #E6EFFF; font: 10pt Arial, Helvetica, Sans-Serif">Net operating loss carry forward</td> <td style="font: italic 10pt Times New Roman, Times, Serif; background-color: #E6EFFF">$</td> <td colspan="2" style="font: 10pt Arial, Helvetica, Sans-Serif; background-color: #E6EFFF; text-align: right">7,300</td> <td style="font: italic 10pt Times New Roman, Times, Serif; background-color: #E6EFFF"> </td></tr> <tr style="vertical-align: top"> <td> </td> <td style="font: 10pt Arial, Helvetica, Sans-Serif">Net deferred income tax asset</td> <td> </td> <td colspan="2" style="font: 10pt Arial, Helvetica, Sans-Serif; text-align: right">2,400</td> <td> </td></tr> <tr style="vertical-align: top"> <td> </td> <td style="background-color: #E6EFFF; font: 10pt Arial, Helvetica, Sans-Serif">Deferred tax asset valuation allowance</td> <td style="border-bottom: black 1pt solid; background-color: #E6EFFF"> </td> <td colspan="2" style="border-bottom: black 1pt solid; font: 10pt Arial, Helvetica, Sans-Serif; background-color: #E6EFFF; text-align: right">(2,400</td> <td style="font: italic 10pt Times New Roman, Times, Serif; background-color: #E6EFFF">)</td></tr> <tr> <td> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: top"> <td> </td> <td style="background-color: #E6EFFF; font: 10pt Arial, Helvetica, Sans-Serif">Net deferred tax asset</td> <td style="border-bottom: black 1.5pt double; font: italic 10pt Times New Roman, Times, Serif; background-color: #E6EFFF">$</td> <td colspan="2" style="border-bottom: black 1.5pt double; font: 10pt Arial, Helvetica, Sans-Serif; background-color: #E6EFFF; text-align: center">                    -</td> <td style="background-color: #E6EFFF"> </td></tr> <tr> <td> </td> <td style="width: 411px"> </td> <td> </td> <td> </td> <td style="width: 112px"> </td> <td> </td></tr> </table>   At August 31, 2012, the Company had net income tax operating loss carry forwards of approximately $7,300, which expire in the years 2022 through 2032. The change in the allowance account from December 31, 2011 August 31, 2012 to was $2,400.   For the tax year ended December 31, 2011, the predecessor entity to Red Giant Entertainment, Inc. was a limited liability company, and as such, all tax benefits and obligations passed through the entity to its members. No provisions have been made at December 31, 2011, nor does management believe that any tax modifications would have a material effect on the financials.   Although Management believes that its estimates are reasonable, no assurance can be given that the final tax outcome of these matters will not be different than that which is reflected in our tax provisions. Ultimately, the actual tax benefits to be realized will be based upon future taxable earnings levels, which are very difficult to predict.   Accounting for Income Tax Uncertainties and Related Matters The Company may be assessed penalties and interest related to the underpayment of income taxes. Such assessments would be treated as a provision of income tax expense on the financial statements. For the years ended August 31, 2012 and December 31, 2011, no income tax expense has been realized as a result of operations and no income tax penalties and interest have been accrued related to uncertain tax positions. The Company has not filed a tax return for the new entity. These filings will be subject to a three year statute of limitations. No adjustments have been made to reduce the estimated income tax benefit at fiscal year end. Any valuations relating to these income tax provisions will comply with U.S. generally accepted accounting principles.

The Company's intellectual property consists of graphic novel artwork and was contributed by a shareholder to the Company and valued at $29,250, which was determined based on the historical costs for artists and printing. The intangible is being amortized over its life of five years. Amortization cost for the year periods ended August 31, 2012 and December 31 2011 $3,900 and $5,850, respectively. The Company expects to amortize the remaining $19,500 over the remaining life of approximately four years at $5,850 per year.

As of August 31, 2012 and December 31, 2011, inventory consisted of physical copies of published books, as well as artwork thats used for digitally distributed works for advertising revenue and future publications. The inventory is valued at the cost to produce.

The Company is currently generating revenues from operations sufficient to meet its operating expenses. However as the Company completed the first year of operation in 2011, management believes that given the current economic environment and the continuing need to strengthen our cash position, there is still doubt about the Company's ability to continue as a going concern. Management is currently pursuing various funding options, including seeking debt or equity financing, licensing opportunities, as well as a strategic or other transaction, to obtain additional funding to continue the development of, and successfully commercialize, its products. There can be no assurance that the Company will be successful in its efforts and this raises substantial doubt about the Companys future. Should the Company be unable to obtain adequate financing or generate sufficient revenue in the future, the Companys business, results of operations, liquidity and financial condition would be materially and adversely harmed, and the Company will be unable to continue as a going concern.   The Company believes that its ability to execute its business plan, and therefore continue as a going concern, is dependent upon its ability to do the following:   <table cellspacing="0" cellpadding="0" style="font: 10pt Arial, Helvetica, Sans-Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%"> </td> <td style="width: 3%">·</td> <td style="width: 94%">obtain adequate sources of funding to fund long-term business operations;</td></tr> <tr style="vertical-align: top"> <td> </td> <td> </td> <td> </td></tr> <tr style="vertical-align: top"> <td> </td> <td>·</td> <td>enter into a licensing or other relationship that allows the Company to commercialize its products;</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="font: 10pt Arial, Helvetica, Sans-Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%"> </td> <td style="width: 3%">·</td> <td style="width: 94%">manage or control working capital requirements; and</td></tr> </table>   <table cellspacing="0" cellpadding="0" style="font: 10pt Arial, Helvetica, Sans-Serif; width: 100%"> <tr style="vertical-align: top"> <td style="width: 3%"> </td> <td style="width: 3%">·</td> <td style="width: 94%">develop new and enhance existing relationships with product distributors and other points of distribution for the Companys products.</td></tr> </table>   There can be no assurance that the Company will be successful in achieving its short- or long-term plans as set forth above, or that such plans, if consummated, will enable the Company to obtain profitable operations or continue in the long-term as a going concern.

The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in the United States of America. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates that have been made using careful judgment. The financial statements have, in managements opinion been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:   Accounting Method The Companys financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.   Advertising Advertising costs are expensed as incurred. The Company expensed advertising costs of $962 and $109 for the periods ending August 31, 2012 and December 31, 2011, respectively.   Asset Retirement Obligations The Company has adopted ASC 410, Asset Retirement and Environmental Obligations, which requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred. ASC 410 requires the Company to record a liability for the present value of the estimated site restoration costs with corresponding increase to the carrying amount of the related long-lived assets. The liability will be accreted and the asset will be depreciated over the life of the related assets. Adjustments for changes resulting from the passage of time and changes to either the timing or amount of the original present value estimate underlying the obligation will be made. As at August 31, 2012 and December 31, 2011, the Company does not have any asset retirement obligations.   Cash and Cash Equivalents For purposes of the statement of cash flows, the Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less to be cash equivalents. As at August 31, 2012 and December 31, 2011, there were $269 and $97 of cash equivalents, respectively.   Cost of Goods Sold Cost of goods sold includes the cost of creating services or artwork, advertising and books.   Earnings (Loss) Per Share The Company follows financial accounting standards, which provides for calculation of "basic" and "diluted" earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings per share. There were no common stock equivalents outstanding at August 31, 2012 and December 31, 2011.   Fair Value Measurements Topic 820 in the Accounting Standards Codification (ASC 820) defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. ASC 820 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. In this standard, the FASB clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability. In support of this principle, ASC 820 establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy is as follows:   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top"> <td style="width: 0.5in"></td><td style="width: 0.25in">·</td><td style="text-align: justify">Level 1 inputs Unadjusted quoted process in active markets for identical assets or liabilities that the entity has the ability to access at the measurement date. </td></tr></table>   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top"> <td style="width: 0.5in"></td><td style="width: 0.25in">·</td><td style="text-align: justify">Level 2 inputs Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. </td></tr></table>   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top"> <td style="width: 0.5in"></td><td style="width: 0.25in">·</td><td style="text-align: justify">Level 3 inputs Unobservable inputs for determining the fair values of assets or liabilities that reflect an entitys own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. </td></tr></table>   The Company currently does not have any assets that are measured at fair value on a recurring or non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at August 31, 2012 and December 31, 2011, nor gains or losses reported in the statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the periods ended August 31, 2012 and December 31, 2011.   Income Taxes The Company was a limited liability company until May 9, 2012. As an LLC, no income tax provision was made at the Company level and all taxable income and deductions were passed directly to the equity owner. The Company will be evaluating the tax ramifications of the change in entity status and the organizational changes to determine future tax issues. Currently the Company expects to recognize losses in 2012. The Company further expects the losses to be reserved against for deferred tax purposes.   The Company has adopted ASC 740, Income Taxes, which requires the Company to recognize deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Companys financial statements or tax returns using the liability method. Under this method, deferred tax liabilities and assets are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.   Long-lived Assets Impairment Long-lived assets of the Company are reviewed for impairment whenever events or circumstances indicate that the carrying amount of assets may not be recoverable, pursuant to guidance established in ASC 360, Property, Plant and Equipment. Management considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations (undiscounted and without interest charges). If impairment is deemed to exist, the assets will be written down to fair value. Fair value is generally determined using a discounted cash flow analysis.   Property, Plant and Equipment Property, plant and equipment are recorded at historical cost and capitalized. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset. The Company currently has equipment being depreciated for estimated lives of three to five years. Depreciation for the periods ended August 31, 2012 and December 31, 2011 was $56 and zero, respectively.   Recent Accounting Pronouncements In July 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2012-02, IntangiblesGoodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment (the Update). The Update simplifies the guidance for testing the decline in the realizable value (impairment) of indefinite-lived intangible assets other than goodwill. Examples of intangible assets subject to the guidance include indefinite-lived trademarks, licenses and distribution rights. The new standard is effective for fiscal years beginning after September 15, 2012. As of August 31, 2012, none of the Companys intangible assets are amortized as indefinite-lived intangible assets. Therefore, the adoption of this amendment is not expected to have a material impact on the Companys financial position or results of operations.   In September 2011, the FASB issued ASU No. 2011-08, IntangiblesGoodwill and Other (Topic 350): Testing Goodwill for Impairment. This amendment permits, but does not require, an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The amendment is required to be adopted by the Company beginning October 1, 2012, although early adoption is permitted. The Company will consider assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test in future periods. The adoption of this amendment is not expected to have a material impact on the Companys financial position or results of operations.   In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (IFRS). Among other things, the guidance expands the disclosure requirements around fair value measurements categorized in Level 3 of the fair value hierarchy and requires disclosure of the level in the fair value hierarchy of items that are not measured at fair value in the statement of financial position but whose fair value must be disclosed. It also clarifies and expands upon existing requirements for measurement of the fair value of financial assets and liabilities as well as instruments classified in shareholders equity. The guidance is effective for interim and annual periods beginning after December 15, 2011. We are currently evaluating the impact this update will have on our financial statements.   Revenue Recognition Revenue for the Company is recognized from three primary sources: Advertising Revenue, Publishing Sales and Creative Services. Revenue was processed through our Paypal Account and Project Wonderful accounts where applicable.   Advertising Revenue comes from the following sources and is stated at net after commissions: <ul style="list-style-type: circle; margin-top: 0in"> <li style="text-align: justify; margin: 0; font: 10pt Arial, Helvetica, Sans-Serif">Keenspot: Revenue is earned on a net 90 basis and is based upon traffic to Red Giant property Web sites. It is calculated on a Cost Per Thousand (CPM) of verified impressions and varies based upon bids by advertisers and other customary factors. In exchange for advertising, hosting, IT, and sales management, Keenspot takes 50% commission of ad revenue for their services.</li> <li style="text-align: justify; margin: 0; font: 10pt Arial, Helvetica, Sans-Serif">Project Wonderful: Revenue is paid immediately and based upon bids by advertisers for a set amount of time at the prevailing highest winning rate. Project Wonderful takes a 25% commission of ad revenue for their services.</li> </ul> Publishing Revenue comes from the following sources: <ul style="list-style-type: circle; margin-top: 0in"> <li style="text-align: justify; margin: 0; font: 10pt Arial, Helvetica, Sans-Serif">Kickstarter Campaigns: These are presales for books and revenue is recognized only once the books arrive and are shipped to the buyers.</li> <li style="text-align: justify; margin: 0; font: 10pt Arial, Helvetica, Sans-Serif">Direct Sales: Through our online store, we sell directly to clients and the transactions process through our Paypal account. All orders are shipped immediately and revenue is recognized immediately.</li> </ul> Creative Services are artwork, writing, advertising, and other creative endeavors we handle for outside clients. Revenue is recognized upon completion of the services and payment has been tendered.   Shipping and Handling for purchases are paid directly by the consumer through Paypal. The Company has not established an allowance for doubtful accounts, as all transactions are handled through Paypal directly by the consumer.   Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses for the reporting period. The Company reviews its estimates on an ongoing basis. The estimates were based on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from these estimates. The Company believes the judgments and estimates required in its accounting policies to be critical in the preparation of the Companys financial statements.

Red Giant Entertainment LLC, (hereinafter the Company) was formed in the State of Florida, U.S.A., on January 1, 2011. The Companys fiscal year end is December 31. On May 9, 2012, the Company incorporated and changed its name to Red Giant Entertainment, Inc. (RGE) All income and expenses in these financial statements have been recharacterized for reporting purposes to be all inclusive for the corporate entity. The Company was originally a publishing company, but has expanded its operations to include mass media and graphic novel artwork development.   On June 11, 2012, Castmor Resources Ltd., a Nevada corporation  entered into a Share Exchange Agreement (the Share Exchange Agreement) with Red Giant Entertainment Inc., and Benny Powell, who had owned 100% of the issued and outstanding shares in RGE. Pursuant to the terms and conditions of the Share Exchange Agreement, RGE exchanged 100% of the outstanding shares in RGE for forty million (40,000,000; 240,000,000 post split) newly-issued restricted shares of the Companys common stock. Due to the recapitalization and reverse merger with Castmor Resources Ltd, 32,487,000 shares (194,922,000 post split) were issued in the entity. The Company subsequently approved a 6 to 1 forward stock split of all shares of record in June, 2012.   The exchange resulted in RGE becoming a wholly-owned subsidiary of the Company.   As a result of the Share Exchange Agreement, the Company will now conduct all current operations through Red Giant Entertainment, and our principal business became the business of RGE. All share information has been restated for both the reverse merger and the forward stock split for all periods presented.

962

109

3900

5850

The Companys financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

Advertising costs are expensed as incurred. The Company expensed advertising costs of $962 and $109 for the periods ending August 31, 2012 and December 31, 2011, respectively.

The Company has adopted ASC 410, Asset Retirement and Environmental Obligations, which requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred. ASC 410 requires the Company to record a liability for the present value of the estimated site restoration costs with corresponding increase to the carrying amount of the related long-lived assets. The liability will be accreted and the asset will be depreciated over the life of the related assets. Adjustments for changes resulting from the passage of time and changes to either the timing or amount of the original present value estimate underlying the obligation will be made. As at August 31, 2012 and December 31, 2011, the Company does not have any asset retirement obligations.

For purposes of the statement of cash flows, the Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less to be cash equivalents. As at August 31, 2012 and December 31, 2011, there were $269 and $97 of cash equivalents, respectively.

Cost of goods sold includes the cost of creating services or artwork, advertising and books.

The Company follows financial accounting standards, which provides for calculation of "basic" and "diluted" earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings per share. There were no common stock equivalents outstanding at August 31, 2012 and December 31, 2011.

Topic 820 in the Accounting Standards Codification (ASC 820) defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. ASC 820 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. In this standard, the FASB clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability. In support of this principle, ASC 820 establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy is as follows:   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top"> <td style="width: 36pt"></td><td style="width: 18pt">·</td><td style="text-align: justify">Level 1 inputs Unadjusted quoted process in active markets for identical assets or liabilities that the entity has the ability to access at the measurement date. </td></tr></table>   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top"> <td style="width: 36pt"></td><td style="width: 18pt">·</td><td style="text-align: justify">Level 2 inputs Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals. </td></tr></table>   <table cellpadding="0" cellspacing="0" style="width: 100%; font: 12pt Arial, Helvetica, Sans-Serif; margin-top: 0; margin-bottom: 0"><tr style="vertical-align: top"> <td style="width: 36pt"></td><td style="width: 18pt">·</td><td style="text-align: justify">Level 3 inputs Unobservable inputs for determining the fair values of assets or liabilities that reflect an entitys own assumptions about the assumptions that market participants would use in pricing the assets or liabilities. </td></tr></table>   The Company currently does not have any assets that are measured at fair value on a recurring or non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at August 31, 2012 and December 31, 2011, nor gains or losses reported in the statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the periods ended August 31, 2012 and December 31, 2011.

The Company was a limited liability company until May 9, 2012. As an LLC, no income tax provision was made at the Company level and all taxable income and deductions were passed directly to the equity owner. The Company will be evaluating the tax ramifications of the change in entity status and the organizational changes to determine future tax issues. Currently the Company expects to recognize losses in 2012. The Company further expects the losses to be reserved against for deferred tax purposes.   The Company has adopted ASC 740, Income Taxes, which requires the Company to recognize deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Companys financial statements or tax returns using the liability method. Under this method, deferred tax liabilities and assets are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.

Long-lived assets of the Company are reviewed for impairment whenever events or circumstances indicate that the carrying amount of assets may not be recoverable, pursuant to guidance established in ASC 360, Property, Plant and Equipment. Management considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations (undiscounted and without interest charges). If impairment is deemed to exist, the assets will be written down to fair value. Fair value is generally determined using a discounted cash flow analysis.

Property, plant and equipment are recorded at historical cost and capitalized. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset. The Company currently has equipment being depreciated for estimated lives of three to five years. Depreciation for the periods ended August 31, 2012 and December 31, 2011 was $56 and zero, respectively.

In July 2012, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2012-02, IntangiblesGoodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment (the Update). The Update simplifies the guidance for testing the decline in the realizable value (impairment) of indefinite-lived intangible assets other than goodwill. Examples of intangible assets subject to the guidance include indefinite-lived trademarks, licenses and distribution rights. The new standard is effective for fiscal years beginning after September 15, 2012. As of August 31, 2012, none of the Companys intangible assets are amortized as indefinite-lived intangible assets. Therefore, the adoption of this amendment is not expected to have a material impact on the Companys financial position or results of operations.   In September 2011, the FASB issued ASU No. 2011-08, IntangiblesGoodwill and Other (Topic 350): Testing Goodwill for Impairment. This amendment permits, but does not require, an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The amendment is required to be adopted by the Company beginning October 1, 2012, although early adoption is permitted. The Company will consider assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test in future periods. The adoption of this amendment is not expected to have a material impact on the Companys financial position or results of operations.   In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (IFRS). Among other things, the guidance expands the disclosure requirements around fair value measurements categorized in Level 3 of the fair value hierarchy and requires disclosure of the level in the fair value hierarchy of items that are not measured at fair value in the statement of financial position but whose fair value must be disclosed. It also clarifies and expands upon existing requirements for measurement of the fair value of financial assets and liabilities as well as instruments classified in shareholders equity. The guidance is effective for interim and annual periods beginning after December 15, 2011. We are currently evaluating the impact this update will have on our financial statements.

Revenue for the Company is recognized from three primary sources: Advertising Revenue, Publishing Sales and Creative Services. Revenue was processed through our Paypal Account and Project Wonderful accounts where applicable.   Advertising Revenue comes from the following sources and is stated at net after commissions: <ul style="list-style-type: circle; margin-top: 0cm"> <li style="text-align: justify; margin: 0; font: 10pt Times New Roman, Times, Serif">Keenspot: Revenue is earned on a net 90 basis and is based upon traffic to Red Giant property Web sites. It is calculated on a Cost Per Thousand (CPM) of verified impressions and varies based upon bids by advertisers and other customary factors. In exchange for advertising, hosting, IT, and sales management, Keenspot takes 50% commission of ad revenue for their services.</li> <li style="text-align: justify; margin: 0; font: 10pt Times New Roman, Times, Serif">Project Wonderful: Revenue is paid immediately and based upon bids by advertisers for a set amount of time at the prevailing highest winning rate. Project Wonderful takes a 25% commission of ad revenue for their services.</li> </ul>   Publishing Revenue comes from the following sources: <ul style="list-style-type: circle; margin-top: 0cm"> <li style="text-align: justify; margin: 0; font: 10pt Times New Roman, Times, Serif">Kickstarter Campaigns: These are presales for books and revenue is recognized only once the books arrive and are shipped to the buyers.</li> <li style="text-align: justify; margin: 0; font: 10pt Times New Roman, Times, Serif">Direct Sales: Through our online store, we sell directly to clients and the transactions process through our Paypal account. All orders are shipped immediately and revenue is recognized immediately.</li> </ul>   Creative Services are artwork, writing, advertising, and other creative endeavors we handle for outside clients. Revenue is recognized upon completion of the services and payment has been tendered.   Shipping and Handling for purchases are paid directly by the consumer through Paypal. The Company has not established an allowance for doubtful accounts, as all transactions are handled through Paypal directly by the consumer.

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses for the reporting period. The Company reviews its estimates on an ongoing basis. The estimates were based on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from these estimates. The Company believes the judgments and estimates required in its accounting policies to be critical in the preparation of the Companys financial statements.

The significant components of the net deferred tax asset calculated with the estimated effective income tax rate at August 31, 2012 and December 31, 2011 were as follows: <table cellspacing="0" cellpadding="0" style="width: 100%; border-collapse: collapse"> <tr> <td style="vertical-align: top"> </td> <td style="vertical-align: top; font: italic 10pt Times New Roman, Times, Serif; text-align: justify"> </td> <td style="vertical-align: top"> </td> <td style="vertical-align: top"> </td> <td colspan="2" style="font: 12pt Calibri, Helvetica, Sans-Serif"> </td></tr> <tr style="vertical-align: top"> <td> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify"> </td> <td style="border-bottom: black 1pt solid"> </td> <td colspan="2" style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; text-align: center">2012</td> <td> </td></tr> <tr style="vertical-align: top"> <td> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Deferred tax assets</td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: top"> <td> </td> <td style="font: 10pt Times New Roman, Times, Serif; background-color: #E6EFFF; text-align: justify">Net operating loss carry forward</td> <td style="font: italic 10pt Times New Roman, Times, Serif; background-color: #E6EFFF; text-align: justify">$</td> <td colspan="2" style="font: 10pt Times New Roman, Times, Serif; background-color: #E6EFFF; text-align: right">7,300</td> <td style="font: italic 10pt Times New Roman, Times, Serif; background-color: #E6EFFF; text-align: justify"> </td></tr> <tr style="vertical-align: top"> <td> </td> <td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">Net deferred income tax asset</td> <td> </td> <td colspan="2" style="font: 10pt Times New Roman, Times, Serif; text-align: right">2,400</td> <td> </td></tr> <tr style="vertical-align: top"> <td> </td> <td style="font: 10pt Times New Roman, Times, Serif; background-color: #E6EFFF; text-align: justify">Deferred tax asset valuation allowance</td> <td style="border-bottom: black 1pt solid; background-color: #E6EFFF"> </td> <td colspan="2" style="border-bottom: black 1pt solid; font: 10pt Times New Roman, Times, Serif; background-color: #E6EFFF; text-align: right">(2,400</td> <td style="font: italic 10pt Times New Roman, Times, Serif; background-color: #E6EFFF; text-align: justify">)</td></tr> <tr> <td> </td> <td> </td> <td> </td> <td colspan="2"> </td> <td> </td></tr> <tr style="vertical-align: top"> <td> </td> <td style="font: 10pt Times New Roman, Times, Serif; background-color: #E6EFFF; text-align: justify">Net deferred tax asset</td> <td style="border-bottom: black 1.5pt double; font: italic 10pt Times New Roman, Times, Serif; background-color: #E6EFFF; text-align: justify">$</td> <td colspan="2" style="border-bottom: black 1.5pt double; font: 10pt Times New Roman, Times, Serif; background-color: #E6EFFF; text-align: justify">                    -</td> <td style="background-color: #E6EFFF"> </td></tr> <tr> <td> </td> <td> </td> <td> </td> <td> </td> <td style="width: 112px"> </td> <td> </td></tr> </table>

7300

2400

-2400

Expire in the years 2022 through 2032.

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MANAGEMENT STATEMENT REGARDING GOING CONCERN

8 Months Ended

Aug. 31, 2012

Notes to Financial Statements

Note 3. MANAGEMENT STATEMENT REGARDING GOING CONCERN

The Company is currently generating revenues from operations sufficient to meet its operating expenses. However as the Company completed the first year of operation in 2011, management believes that given the current economic environment and the continuing need to strengthen our cash position, there is still doubt about the Company's ability to continue as a going concern. Management is currently pursuing various funding options, including seeking debt or equity financing, licensing opportunities, as well as a strategic or other transaction, to obtain additional funding to continue the development of, and successfully commercialize, its products. There can be no assurance that the Company will be successful in its efforts and this raises substantial doubt about the Company’s future. Should the Company be unable to obtain adequate financing or generate sufficient revenue in the future, the Company’s business, results of operations, liquidity and financial condition would be materially and adversely harmed, and the Company will be unable to continue as a going concern.

The Company believes that its ability to execute its business plan, and therefore continue as a going concern, is dependent upon its ability to do the following:

	·	obtain adequate sources of funding to fund long-term business operations;

	·	enter into a licensing or other relationship that allows the Company to commercialize its products;

manage or control working capital requirements; and

develop new and enhance existing relationships with product distributors and other points of distribution for the Company’s products.

There can be no assurance that the Company will be successful in achieving its short- or long-term plans as set forth above, or that such plans, if consummated, will enable the Company to obtain profitable operations or continue in the long-term as a going concern.

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SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

8 Months Ended

Aug. 31, 2012

Accounting Policies [Abstract]

Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The financial statements of the Company have been prepared in accordance with the generally accepted accounting principles in the United States of America. Because a precise determination of many assets and liabilities is dependent upon future events, the preparation of financial statements for a period necessarily involves the use of estimates that have been made using careful judgment. The financial statements have, in management’s opinion been properly prepared within reasonable limits of materiality and within the framework of the significant accounting policies summarized below:

Accounting Method

The Company’s financial statements are prepared using the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America and have been consistently applied in the preparation of the financial statements.

Advertising

Advertising costs are expensed as incurred. The Company expensed advertising costs of $962 and $109 for the periods ending August 31, 2012 and December 31, 2011, respectively.

Asset Retirement Obligations

The Company has adopted ASC 410, Asset Retirement and Environmental Obligations, which requires that the fair value of a liability for an asset retirement obligation be recognized in the period in which it is incurred. ASC 410 requires the Company to record a liability for the present value of the estimated site restoration costs with corresponding increase to the carrying amount of the related long-lived assets. The liability will be accreted and the asset will be depreciated over the life of the related assets. Adjustments for changes resulting from the passage of time and changes to either the timing or amount of the original present value estimate underlying the obligation will be made. As at August 31, 2012 and December 31, 2011, the Company does not have any asset retirement obligations.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less to be cash equivalents. As at August 31, 2012 and December 31, 2011, there were $269 and $97 of cash equivalents, respectively.

Cost of Goods Sold

Cost of goods sold includes the cost of creating services or artwork, advertising and books.

Earnings (Loss) Per Share

The Company follows financial accounting standards, which provides for calculation of "basic" and "diluted" earnings per share. Basic earnings per share includes no dilution and is computed by dividing net income available to common shareholders by the weighted average common shares outstanding for the period. Diluted earnings per share reflect the potential dilution of securities that could share in the earnings of an entity similar to fully diluted earnings per share. There were no common stock equivalents outstanding at August 31, 2012 and December 31, 2011.

Fair Value Measurements

Topic 820 in the Accounting Standards Codification (ASC 820) defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. ASC 820 applies whenever other standards require (or permit) assets or liabilities to be measured at fair value but does not expand the use of fair value in any new circumstances. In this standard, the FASB clarifies the principle that fair value should be based on the assumptions market participants would use when pricing the asset or liability. In support of this principle, ASC 820 establishes a fair value hierarchy that prioritizes the information used to develop those assumptions. The fair value hierarchy is as follows:

Level 1 inputs — Unadjusted quoted process in active markets for identical assets or liabilities that the entity has the ability to access at the measurement date.

Level 2 inputs — Inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. These might include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability, such as interest rates and yield curves that are observable at commonly quoted intervals.

Level 3 inputs — Unobservable inputs for determining the fair values of assets or liabilities that reflect an entity’s own assumptions about the assumptions that market participants would use in pricing the assets or liabilities.

The Company currently does not have any assets that are measured at fair value on a recurring or non-recurring basis, consequently, the Company did not have any fair value adjustments for assets and liabilities measured at fair value at August 31, 2012 and December 31, 2011, nor gains or losses reported in the statement of operations that are attributable to the change in unrealized gains or losses relating to those assets and liabilities still held at the reporting date for the periods ended August 31, 2012 and December 31, 2011.

Income Taxes

The Company was a limited liability company until May 9, 2012. As an LLC, no income tax provision was made at the Company level and all taxable income and deductions were passed directly to the equity owner. The Company will be evaluating the tax ramifications of the change in entity status and the organizational changes to determine future tax issues. Currently the Company expects to recognize losses in 2012. The Company further expects the losses to be reserved against for deferred tax purposes.

The Company has adopted ASC 740, Income Taxes, which requires the Company to recognize deferred tax liabilities and assets for the expected future tax consequences of events that have been recognized in the Company’s financial statements or tax returns using the liability method. Under this method, deferred tax liabilities and assets are determined based on the temporary differences between the financial statement and tax bases of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse.

Long-lived Assets Impairment

Long-lived assets of the Company are reviewed for impairment whenever events or circumstances indicate that the carrying amount of assets may not be recoverable, pursuant to guidance established in ASC 360, Property, Plant and Equipment. Management considers assets to be impaired if the carrying value exceeds the future projected cash flows from related operations (undiscounted and without interest charges). If impairment is deemed to exist, the assets will be written down to fair value. Fair value is generally determined using a discounted cash flow analysis.

Property, Plant and Equipment

Property, plant and equipment are recorded at historical cost and capitalized. Depreciation is calculated on a straight-line basis over the estimated useful life of the asset. The Company currently has equipment being depreciated for estimated lives of three to five years. Depreciation for the periods ended August 31, 2012 and December 31, 2011 was $56 and zero, respectively.

Recent Accounting Pronouncements

In July 2012, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2012-02, “Intangibles—Goodwill and Other (Topic 350): Testing Indefinite-Lived Intangible Assets for Impairment” (the “Update”). The Update simplifies the guidance for testing the decline in the realizable value (impairment) of indefinite-lived intangible assets other than goodwill. Examples of intangible assets subject to the guidance include indefinite-lived trademarks, licenses and distribution rights. The new standard is effective for fiscal years beginning after September 15, 2012. As of August 31, 2012, none of the Company’s intangible assets are amortized as indefinite-lived intangible assets. Therefore, the adoption of this amendment is not expected to have a material impact on the Company’s financial position or results of operations.

In September 2011, the FASB issued ASU No. 2011-08, “Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment.” This amendment permits, but does not require, an entity to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test. The amendment is required to be adopted by the Company beginning October 1, 2012, although early adoption is permitted. The Company will consider assessing qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test in future periods. The adoption of this amendment is not expected to have a material impact on the Company’s financial position or results of operations.

In May 2011, the FASB issued ASU No. 2011-04, Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurements and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (IFRS). Among other things, the guidance expands the disclosure requirements around fair value measurements categorized in Level 3 of the fair value hierarchy and requires disclosure of the level in the fair value hierarchy of items that are not measured at fair value in the statement of financial position but whose fair value must be disclosed. It also clarifies and expands upon existing requirements for measurement of the fair value of financial assets and liabilities as well as instruments classified in shareholders’ equity. The guidance is effective for interim and annual periods beginning after December 15, 2011. We are currently evaluating the impact this update will have on our financial statements.

Revenue Recognition

Revenue for the Company is recognized from three primary sources: Advertising Revenue, Publishing Sales and Creative Services. Revenue was processed through our Paypal Account and Project Wonderful accounts where applicable.

Advertising Revenue comes from the following sources and is stated at net after commissions:

Keenspot: Revenue is earned on a net 90 basis and is based upon traffic to Red Giant property Web sites. It is calculated on a Cost Per Thousand (CPM) of verified impressions and varies based upon bids by advertisers and other customary factors. In exchange for advertising, hosting, IT, and sales management, Keenspot takes 50% commission of ad revenue for their services.
Project Wonderful: Revenue is paid immediately and based upon bids by advertisers for a set amount of time at the prevailing highest winning rate. Project Wonderful takes a 25% commission of ad revenue for their services.

Publishing Revenue comes from the following sources:

Kickstarter Campaigns: These are presales for books and revenue is recognized only once the books arrive and are shipped to the buyers.
Direct Sales: Through our online store, we sell directly to clients and the transactions process through our Paypal account. All orders are shipped immediately and revenue is recognized immediately.

Creative Services are artwork, writing, advertising, and other creative endeavors we handle for outside clients. Revenue is recognized upon completion of the services and payment has been tendered.

Shipping and Handling for purchases are paid directly by the consumer through Paypal. The Company has not established an allowance for doubtful accounts, as all transactions are handled through Paypal directly by the consumer.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses for the reporting period. The Company reviews its estimates on an ongoing basis. The estimates were based on historical experience and on various other assumptions that the Company believes to be reasonable under the circumstances. Actual results could differ from these estimates. The Company believes the judgments and estimates required in its accounting policies to be critical in the preparation of the Company’s financial statements.

Balance Sheets (USD $)	Aug. 31, 2012	Dec. 31, 2011
ASSETS
Cash in Banks	$ 269	$ 97
Inventory	10,928	16,301
Prepaid Expenses	20,000
Total Current Assets	31,197	16,398
Computer Equipment - net of depreciation	3,277
Intellectual Property - net of amortization	19,500	23,400
TOTAL ASSETS	53,974	39,798
LIABILITIES & STOCKHOLDER'S EQUITY
Accounts Payable & Accrued Expenses	19,776
Commitments & Contingencies
STOCKHOLDER'S EQUITY
Preferred stock,$0.0001 par value; 100,000,000 shares authorized; no shares issued
Common Stock, $0.0001 par value; 900,000,000 shares authorized; 434,922,000 & 240,000,000 shares issued and outstanding, respectively	43,492	24,000
Additional paid in capital		6,676
Discount on Common Stock	(1,947)
Accumulated earning (deficit)	(7,347)	9,122
TOTAL LIABILITIES & STOCKHOLDER'S EQUITY	$ 53,974	$ 39,798

Statements of Cash Flows (USD $)	8 Months Ended	12 Months Ended
Statements of Cash Flows (USD $)	Aug. 31, 2012	Dec. 31, 2011
OPERATING ACTIVITIES
Net Income	$ (16,469)	$ 9,122
Depreciation & amortization	3,956	5,850
Inventory	5,373	(16,301)
Prepaid expenses	(20,000)
Accounts payable & accrued expenses	19,776
Net Cash Used by Operating Activities	(7,364)	(1,329)
INVESTING ACTIVITIES
Computer equipment purchased	(3,333)
Net Cash Used by Investing Activities	(3,333)
FINANCING ACTIVITIES
Capital contributed	10,869	1,426
Net Cash Provided by Financing Activities	10,869	1,426
Net Cash Increase for Period	172	97
Cash at Beginning of Period	97
Cash at End of Period	269	97
Interest paid
Income taxes paid
Non-cash Investing and Financing Activities
Shareholder contribution of intellectual property		$ 29,250

CAPITAL STOCK (Details Narrative) (USD $)	8 Months Ended
CAPITAL STOCK (Details Narrative) (USD $)	Aug. 31, 2012
Notes to Financial Statements
Contributed capital	$ 10,869

Balance Sheets (Parenthetical) (USD $)	Aug. 31, 2012	Dec. 31, 2011
STOCKHOLDER'S EQUITY
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	900,000,000	900,000,000
Common stock, shares issued	434,922,000	240,000,000
Common stock, shares outstanding	434,922,000	240,000,000

Document and Entity Information (USD $)	8 Months Ended
Document and Entity Information (USD $)	Aug. 31, 2012	Jan. 10, 2013
Document And Entity Information
Entity Registrant Name	RED GIANT ENTERTAINMENT, INC.
Entity Central Index Key	0001411179
Document Type	10-K
Document Period End Date	Aug. 31, 2012
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float		$ 0
Entity Common Stock, Shares Outstanding		240,000,000
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2012

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $)	8 Months Ended	12 Months Ended
	Aug. 31, 2012	Dec. 31, 2011	Dec. 31, 2010
Accounting Policies [Abstract]
Advertising costs	$ 962	$ 109
Cash equivalents	269	97
Depreciation	$ 56	$ 0

Statements of Operations (USD $)	8 Months Ended	12 Months Ended
Statements of Operations (USD $)	Aug. 31, 2012	Dec. 31, 2011
Income Statement [Abstract]
Sales	$ 97,486	$ 53,286
Cost of Sales	69,651	27,563
Gross Profit	27,835	25,723
Advertising & marketing	962	3,902
Depreciation & amortization	3,956	5,850
General & administrative	3,362	5,269
Travel & entertainment	2,014	1,580
Professional fees	21,495
Payroll & related expenses	7,302
Meeting & conventions	5,213
Total Expense	44,304	16,601
Net Income before taxes	(16,469)	9,122
Income taxes
Net Income	$ (16,469)	$ 9,122
Net income per share, basic and diluted	$ 0.00	$ 0.00
Weighted average number of commonshares outstanding	208,730,500	240,000,000

INTELLECTUAL PROPERTY	8 Months Ended
INTELLECTUAL PROPERTY	Aug. 31, 2012
Goodwill and Intangible Assets Disclosure [Abstract]
Note 5. INTELLECTUAL PROPERTY	The Company's intellectual property consists of graphic novel artwork and was contributed by a shareholder to the Company and valued at $29,250, which was determined based on the historical costs for artists and printing. The intangible is being amortized over its life of five years. Amortization cost for the year periods ended August 31, 2012 and December 31 2011 $3,900 and $5,850, respectively. The Company expects to amortize the remaining $19,500 over the remaining life of approximately four years at $5,850 per year.

INTELLECTUAL PROPERTY (Details Narrative) (USD $)	8 Months Ended	12 Months Ended
INTELLECTUAL PROPERTY (Details Narrative) (USD $)	Aug. 31, 2012	Dec. 31, 2011
Goodwill and Intangible Assets Disclosure [Abstract]
Amortization cost	$ 3,900	$ 5,850

SUBSEQUENT EVENTS	8 Months Ended
SUBSEQUENT EVENTS	Aug. 31, 2012
Subsequent Events [Abstract]
Note 9. SUBSEQUENT EVENTS	Management has evaluated subsequent events through December 27, 2012. There was no event of which management was aware that occurred after the balance sheet date that would require any adjustment to, or disclosure in, the accompanying consolidated financial statements.

RELATED PARTIES	8 Months Ended
RELATED PARTIES	Aug. 31, 2012
Debt Disclosure [Abstract]
Note 8. RELATED PARTIES	Benny Powell was an officer and director of both parties to the merger. See Note 1. Mr. Powell continues as the Company’s sole officer and director post merger. Mr. Powell also provides rent and other services to the Company through his other ventures.

PROVISION FOR INCOME TAXES (Details Narrative) (USD $)	8 Months Ended
PROVISION FOR INCOME TAXES (Details Narrative) (USD $)	Aug. 31, 2012
Notes to Financial Statements
Net deferred tax assets	$ 2,400
Net operating loss carry forward	7,300
Expiration year of net operating loss carryforwards	Expire in the years 2022 through 2032.
Change in the allowance account	$ 2,400

Statement of Shareholder's Equity (USD $)	Common Stock	Additional Paid-In Capital	Discount on Common Stock	Accumulated Earning (Deficit)	Total
Beginning Balance, Amount at Dec. 31, 2010	$ 24,000	$ 6,676			$ 30,676
Beginning Balance, Shares at Dec. 31, 2010	240,000,000
Net Loss				9,122	9,122
Ending Balance, Amount at Dec. 31, 2011	24,000	6,676		9,122	39,798
Beginning Balance, Shares at Dec. 31, 2011	240,000,000
Contributed capital		10,869			10,869
Recapitalization from reverse merger, Amount	19,492	(17,545)	(1,947)
Recapitalization from reverse merger, Shares	194,922,000
Net Loss				(16,469)	(16,469)
Ending Balance, Amount at Aug. 31, 2012	$ 43,492		$ (1,947)	$ (7,347)	$ 34,198
Ending Balance, Shares at Aug. 31, 2012	434,922,000

INVENTORY	8 Months Ended
INVENTORY	Aug. 31, 2012
Inventory Disclosure [Abstract]
Note 4. INVENTORY	As of August 31, 2012 and December 31, 2011, inventory consisted of physical copies of published books, as well as artwork that’s used for digitally distributed works for advertising revenue and future publications. The inventory is valued at the cost to produce.

PROVISION FOR INCOME TAXES (Details) (USD $)	Aug. 31, 2012
Deferred tax assets
Net operating loss carry forward	$ 7,300
Net deferred income tax asset	2,400
Deferred tax asset valuation allowance	(2,400)
Net deferred tax asset