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2012-11-30
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2012-11-30
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2012-09-01
2012-11-30
0001411179
CASL:BookSalesMember
2012-09-01
2012-11-30
0001411179
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2011-09-01
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CASL:BookSalesMember
2011-09-01
2011-11-30
iso4217:USD
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RED GIANT ENTERTAINMENT, INC.
0001411179
10-Q
2012-11-30
false
--08-31
No
No
Yes
Smaller Reporting Company
2013
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<p style="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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.</font></p>
<p style="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">On
June 6, 2012, Castmor Resources Ltd., a Nevada corporation entered into and completed a transaction contemplated by a Share Exchange
Agreement (the "Share Exchange Agreement") with Red Giant Entertainment Inc., a Florida corporation ("RGE") and
Benny Powell, who owned 100% of the issued and outstanding shares in RGE. Pursuant to the terms and conditions of the Share Exchange
Agreement, Castmor issued forty million (240,000,000 post split) newly-issued restricted shares of the Company's common stock,
par value $0.001 per share in exchange for all of the issued and outstanding shares of stock in RGE owned by Mr. Powell.</font></p>
<p style="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif"> </font></p>
<p style="font: 10pt Arial, Helvetica, Sans-Serif; margin: 0; text-align: justify"><font style="font: 10pt Times New Roman, Times, Serif">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.</font></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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. In the opinion of management, all adjustments consisting of normal
recurring adjustments, necessary for the fair presentation of the financial position and the results of operations for the interim
periods presented have been reflected herein.  The results of operations for interim periods are not necessarily indicative
of the results to be expected for the full year. Notes to the financial statements, which would substantially duplicate the disclosure
required in the annual statements have been omitted.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Accounting Method</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Advertising</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Advertising costs are expensed as incurred. The Company expensed
advertising costs of $771 and $628 for the periods ending November 30, 2012 and 2011, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Cash and Cash Equivalents</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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 of November 30, 2012 and August 31, 2012, the Company has $2,441 and $269 of cash equivalents, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Cost of Goods Sold</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Cost of goods sold includes the cost of creating services or artwork,
advertising and books.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Earnings Per Share</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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 November 30, 2012 or 2011.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Income Taxes</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has adopted ASC 740, <i>Income Taxes</i>, 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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Property, Plant and Equipment</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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 three months ended November 30,
2012 and 2011 was $166 and zero, respectively.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><b><i>Revenue Recognition</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Advertising Revenue comes from the following sources and is stated
at net after commissions:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 48px; font: 10pt Times New Roman, Times, Serif; text-align: center">o</td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">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.</td></tr>
<tr style="vertical-align: top">
<td style="font: 10pt Times New Roman, Times, Serif; text-align: center">o</td>
<td style="font: 10pt Times New Roman, Times, Serif; text-align: justify">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.</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Publishing Revenue comes from the following sources:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 48px; text-align: center">o</td>
<td style="text-align: justify">Kickstarter Campaigns:  These are presales for books and revenue is recognized only once the books arrive and are shipped to the buyers.</td></tr>
<tr style="vertical-align: top">
<td style="text-align: center">o</td>
<td style="text-align: justify">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.</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company’s Revenue and costs are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: justify">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>November 30,</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2012</b></p></td>
<td nowrap="nowrap"><b> </b></td>
<td><b> </b></td>
<td colspan="2" style="border-bottom: black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>November 30,</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2011</b></p></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom">
<td>Revenues:</td>
<td> </td>
<td colspan="2"> </td>
<td nowrap="nowrap"> </td>
<td> </td>
<td colspan="2"> </td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom">
<td>Creative services &</td>
<td> </td>
<td colspan="2"> </td>
<td nowrap="nowrap"> </td>
<td> </td>
<td colspan="2"> </td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%">   advertising</td>
<td style="width: 1%"> </td>
<td style="width: 1%">$</td>
<td style="width: 9%; text-align: right">9,389</td>
<td nowrap="nowrap" style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%">$</td>
<td style="width: 9%; text-align: right">9,415</td>
<td nowrap="nowrap" style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td>Book sales</td>
<td> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">96,548</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">3,762</td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td>Total Revenues</td>
<td> </td>
<td style="border-bottom: black 2.25pt double">$</td>
<td style="border-bottom: black 2.25pt double; text-align: right">105,937</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="border-bottom: black 2.25pt double">$</td>
<td style="border-bottom: black 2.25pt double; text-align: right">13,177</td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap"> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td>Cost of revenues:</td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap"> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td>Creative services &</td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap"> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td>   advertising</td>
<td> </td>
<td>$</td>
<td style="text-align: right">5,339</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td>$</td>
<td style="text-align: right">4,499</td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td>Book sales</td>
<td> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">42,135</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">2,639</td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td> </td>
<td> </td>
<td style="border-bottom: black 2.25pt double">$</td>
<td style="border-bottom: black 2.25pt double; text-align: right">47,474</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="border-bottom: black 2.25pt double">$</td>
<td style="border-bottom: black 2.25pt double; text-align: right">7,138</td>
<td nowrap="nowrap"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"><b><i>Use of Estimates</i></b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 3%; text-align: justify"> </td>
<td style="width: 3%; text-align: justify">·</td>
<td style="width: 94%; text-align: justify">obtain adequate sources of funding to fund long-term business operations;</td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td></tr>
<tr style="vertical-align: top">
<td style="text-align: justify"> </td>
<td style="text-align: justify">·</td>
<td style="text-align: justify">enter into a licensing or other relationship that allows the Company to commercialize its products;</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 3%; text-align: justify"> </td>
<td style="width: 3%; text-align: justify">·</td>
<td style="width: 94%; text-align: justify">manage or control working capital requirements; and</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 3%; text-align: justify"> </td>
<td style="width: 3%; text-align: justify">·</td>
<td style="width: 94%; text-align: justify">develop new and enhance existing relationships with product distributors and other points of distribution for the Company’s products.</td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">As of November 30, 2012, 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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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 identified life of five years. Amortization
cost for the three months ended November 30, 2012 and 2011 was $1,463. The Company expects to amortize the remaining $18,037 over
the remaining life of approximately three years at $5,850 per year<b>.</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">At November 30, 2012, the Company expected
no net deferred tax assets calculated at an expected rate of 34%. An estimated tax liability of $5,700, based upon an estimated
tax rate of 15%, was recorded in the period.<i> </i>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 November 30, 2011, nor does management believe that any tax modifications would
have a material effect on the financials.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"><u>Accounting for Income Tax Uncertainties
and Related Matters</u></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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. At November 30, 2012, the tax returns for 2011 have not been filed. 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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has 100,000,000 shares of preferred
stock authorized and none have been issued.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">During the eight months ended, August 31, 2012,
$10,869 of contributed capital was added to additional paid in capital. For the three months ended November 30, 2012, no additional
capital was contributed and no shares of new stock were issued.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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 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.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">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 at nominal cost.</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Management has evaluated subsequent events
through January 19, 2013. 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.</p>
771
628
166
0
1463
1463
0
5700
0.34
0.15
18037
5850
5850
5850
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Advertising costs are expensed as incurred.
The Company expensed advertising costs of $771 and $628 for the periods ending November 30, 2012 and 2011, respectively.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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 of November 30, 2012 and August 31, 2012, the Company has $2,441 and $269 of cash equivalents,
respectively.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Cost of goods sold includes the cost
of creating services or artwork, advertising and books.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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 November 30, 2012
or 2011.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company has adopted ASC 740, <i>Income
Taxes</i>, 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.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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 three months
ended November 30, 2012 and 2011 was $166 and zero, respectively.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Advertising Revenue comes from the following
sources and is stated at net after commissions:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="width: 100%">
<tr style="vertical-align: top">
<td style="width: 48px; font: 10pt/115% Times New Roman, Times, Serif; text-align: justify">o  </td>
<td style="font: 10pt/115% Times New Roman, Times, Serif; text-align: justify">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.</td></tr>
<tr style="vertical-align: top">
<td style="font: 10pt/115% Times New Roman, Times, Serif; text-align: justify">o  </td>
<td style="font: 10pt/115% Times New Roman, Times, Serif; text-align: justify">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.</td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">Publishing Revenue comes from the following
sources:</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: top">
<td style="width: 48px; line-height: 115%; text-align: justify">o  </td>
<td style="line-height: 115%; text-align: justify">Kickstarter Campaigns:  These are presales for books and revenue is recognized only once the books arrive and are shipped to the buyers.</td></tr>
<tr style="vertical-align: top">
<td style="line-height: 115%; text-align: justify">o  </td>
<td style="line-height: 115%; text-align: justify">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.</td></tr>
</table>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
<p style="font: 10pt/normal Times New Roman, Times, Serif; margin: 0; text-align: justify">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.</p>
47474
7138
5339
42135
4499
2639
434922000
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The Company’s Revenue and costs are as follows:</p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify"> </p>
<table cellspacing="0" cellpadding="0" style="font: 10pt Times New Roman, Times, Serif; width: 100%">
<tr style="vertical-align: bottom">
<td style="text-align: justify"> </td>
<td style="text-align: justify"> </td>
<td colspan="2" style="border-bottom: black 1.5pt solid; text-align: justify">
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>November 30,</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2012</b></p></td>
<td nowrap="nowrap"><b> </b></td>
<td><b> </b></td>
<td colspan="2" style="border-bottom: black 1.5pt solid"><p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>November 30,</b></p>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><b>2011</b></p></td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom">
<td>Revenues:</td>
<td> </td>
<td colspan="2"> </td>
<td nowrap="nowrap"> </td>
<td> </td>
<td colspan="2"> </td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom">
<td>Creative services &</td>
<td> </td>
<td colspan="2"> </td>
<td nowrap="nowrap"> </td>
<td> </td>
<td colspan="2"> </td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td style="width: 76%">   advertising</td>
<td style="width: 1%"> </td>
<td style="width: 1%">$</td>
<td style="width: 9%; text-align: right">9,389</td>
<td nowrap="nowrap" style="width: 1%"> </td>
<td style="width: 1%"> </td>
<td style="width: 1%">$</td>
<td style="width: 9%; text-align: right">9,415</td>
<td nowrap="nowrap" style="width: 1%"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td>Book sales</td>
<td> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">96,548</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">3,762</td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td>Total Revenues</td>
<td> </td>
<td style="border-bottom: black 2.25pt double">$</td>
<td style="border-bottom: black 2.25pt double; text-align: right">105,937</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="border-bottom: black 2.25pt double">$</td>
<td style="border-bottom: black 2.25pt double; text-align: right">13,177</td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap"> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td>Cost of revenues:</td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap"> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td>Creative services &</td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap"> </td>
<td> </td>
<td> </td>
<td style="text-align: right"> </td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td>   advertising</td>
<td> </td>
<td>$</td>
<td style="text-align: right">5,339</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td>$</td>
<td style="text-align: right">4,499</td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: white">
<td>Book sales</td>
<td> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">42,135</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="border-bottom: black 1.5pt solid"> </td>
<td style="border-bottom: black 1.5pt solid; text-align: right">2,639</td>
<td nowrap="nowrap"> </td></tr>
<tr style="vertical-align: bottom; background-color: #CCEEFF">
<td> </td>
<td> </td>
<td style="border-bottom: black 2.25pt double">$</td>
<td style="border-bottom: black 2.25pt double; text-align: right">47,474</td>
<td nowrap="nowrap"> </td>
<td> </td>
<td style="border-bottom: black 2.25pt double">$</td>
<td style="border-bottom: black 2.25pt double; text-align: right">7,138</td>
<td nowrap="nowrap"> </td></tr>
</table>
<p style="font: 10pt Times New Roman, Times, Serif; margin: 0"> </p>