SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of the
Securities Exchange Act of 1934
(Amendment No. )
Check the appropriate box:
[ ] Preliminary Information Statement
[ ] Confidential, for Use of the Commission Only (as permitted by Rule
14c-5(d)(2))
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RED GIANT ENTERTAINMENT, INC.
(Name of Registrant As Specified In Its Charter)
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
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(4) Date Filed:
RED GIANT ENTERTAINMENT, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
HELD BY MAJORITY WRITTEN CONSENT
TO ALL STOCKHOLDERS OF RED GIANT ENTERTAINMENT, INC.:
NOTICE IS HEREBY GIVEN to you as a stockholder of record of Red Giant
Entertainment, Inc., a Nevada corporation, that a Majority Written Consent in
Lieu of an Annual Meeting of Stockholders (the "Written Consent") has been
executed and will be effective 20 calendar days from the date of mailing this
Information Statement to you. The Written Consent authorizes the following
corporate actions:
1) To approve the election of one member and the re-election of five
members of the Board of Directors (the "Board"), each to hold office
until the election and qualification of his or her successor, or until
his or her earlier death, removal or resignation;
2) To approve and ratify the selection of D'Arelli Pruzansky, P.A. as our
independent auditors for the fiscal year ending August 31, 2014; and
3) To approve the filing of a Certificate of Amendment to our Articles of
Incorporation to increase the number of authorized shares of our
common stock, par value $0.0001 per share (our "Common Stock") from
3,000,000,000 to 6,000,000,000.
The required consent of at least a majority of the votes allocated to our voting
shares was given for each of the actions listed above.
The Board believes it would not be in the best interests of our company and our
stockholders to incur the costs of holding an annual meeting or of soliciting
proxies or consents from additional stockholders in connection with these
actions. Based on the foregoing, the Board has determined not to call an Annual
Meeting of Stockholders, and none will be held this year. A copy of our Annual
Report on Form 10-K filed with the Securities and Exchange Commission (the
"SEC") on April 6, 2015 for the fiscal year ended August 31, 2014 (our "Annual
Report"), accompanies this Notice.
The Board has fixed the close of business on January 8, 2015 as the record date
(the "Record Date") for the determination of stockholders who are entitled to
receive this Information Statement, which is expected to be first mailed on or
about April 6, 2015. Stockholders are not entitled to dissenter's rights of
appraisal with respect to any of the matters being authorized under the Nevada
Revised Statutes, our Articles of Incorporation or our Bylaws with respect to
any matters being authorized.
WE ARE NOT ASKING YOU FOR A PROXY
AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
INFORMATION STATEMENT
RED GIANT ENTERTAINMENT, INC.
614 E. HWY 50, SUITE 235
CLERMONT, FLORIDA 34711
This information statement is being furnished on or about January 6, 2014 by the
Board of Directors (the "Board") of Red Giant Entertainment, Inc., a Nevada
corporation ("we," "us," and "our" generally refers to Red Giant Entertainment,
Inc., and our wholly owned subsidiaries) to the holders of record of our issued
and outstanding common stock, par value $0.0001, ("Common Stock" or "Voting
Shares") as of the close of business on January 8, 2015 (the "Record Date"),
pursuant to Rule 14c-2 promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"). On January 8, 2015, the Board deemed it in our
best interests to take the actions listed below and pursuant to Nevada Revised
Statutes Section 78.390 approved the filing of a Certificate of Amendment to our
Articles of Incorporation to increase the number of authorized shares of our
common stock, par value $0.0001 per share (our "Common Stock") from
3,000,000,000 to 6,000,000,000 (the "Amendment"):
1) To approve the election of one member and the re-election of five
members of the Board of Directors (the "Board"), each to hold office
until the election and qualification of his or her successor, or until
his or her earlier death, removal or resignation;
2) To approve and ratify the selection of D'Arelli Pruzansky, P.A. as our
independent auditors for the fiscal year ending August 31, 2014; and
3) To approve the filing of a Certificate of Amendment to our Articles of
Incorporation to increase the number of authorized shares of our
common stock, par value $0.0001 per share (our "Common Stock") from
3,000,000,000 to 6,000,000,000.
We are also providing notice to our stockholders that certain of our
stockholders took action as described below by Majority Written Consent in Lieu
of an Annual Meeting of Stockholders, a copy of which is attached hereto as
Exhibit A (the "Written Consent"). The purpose of this Information Statement is
to inform holders of Voting Shares that the Board considers the following
actions to be in the best interests of us and our stockholders and that a
majority of the votes allocated to the Voting Shares has taken the following
actions by the Written Consent to be effective 20 calendar days from the date of
mailing this Information Statement to you:
As of the Record Date, there were 2,675,721,877 shares of Common Stock
outstanding, with one vote per share.
Under Section 78.320 of the Nevada Revised Statutes, the written consent of
stockholders holding a majority of the voting power allocated to our Voting
Shares may be substituted for an annual meeting of the stockholders. Based on
the foregoing and in order to eliminate the costs involved in holding an annual
meeting, the Board has determined not to call an Annual Meeting of Stockholders
and none will be held this year. A copy of our Annual Report on Form 10-K filed
on April 6, 2015 for the fiscal year ended August 31, 2014, including audited
consolidated financial statements (our "Annual Report"), accompanies this
Information Statement.
We will only deliver one copy of this Information Statement and our Annual
Report to multiple security holders sharing an address unless we have received
contrary instructions from one or more of the security holders. Upon written or
oral request, we will promptly deliver a separate copy of this Information
Statement and our Annual Report and any future Annual Reports and Information
Statements to any security holder at a shared address to which a single copy of
this Information Statement and our Annual Report was delivered, or deliver a
single copy of this Information Statement, our Annual Report, and any future
Annual Reports and Information Statements to any security holder or holders
sharing an address to which multiple copies are now delivered. You should direct
any such requests to the following address: 614 E. Hwy 50, Suite 235, Clermont,
Florida 34711; telephone number: (866) 926-6427.
INFORMATION ON CONSENTING STOCKHOLDERS
Pursuant to our Amended and Restated Bylaws (our "Bylaws") and the Nevada
Revised Statutes, a vote by the holders of at least a majority of the votes
allocated to the Voting Shares is required to effect the action described
herein. As of the Record Date, there were 2,675,721,877 Voting Shares issued and
outstanding with one vote each, of which 1,337,860,940 votes (50% plus one vote)
were required to pass any stockholder resolutions. The consenting stockholders,
who consisted of our officers and directors (the "Consenting Stockholders"), are
collectively the record owners of Voting Shares outstanding as of January 8,
2015 with 1,386,341,600 votes, which represented 51.8% of the votes allocated to
the issued and outstanding Voting Shares as of that date, including the voting
rights of holders of Series Z Preferred Shares. Pursuant to the Nevada Revised
Statutes, the Consenting Stockholders voted in favor of the actions described
herein by the Written Consent. There are no cumulative voting rights. No
consideration was paid for the consent. The Consenting Stockholders'
affiliations with us and beneficial holdings are set forth below under "Security
Ownership of Certain Beneficial Owners and Management."
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth, as of the Record Date, the number of shares of
Common Stock owned of record and beneficially by (i) each of our named executive
officers and directors; and (ii) all directors and officers as a group.
Beneficial ownership is determined in accordance with the rules of the SEC and
generally includes voting or investment power with respect to securities. Shares
of common stock are deemed to be outstanding and to be beneficially owned by the
person listed below for the purpose of computing the percentage ownership of the
person, but are not treated as outstanding for the purpose of computing the
percentage ownership of any other person, if that person has the right to
acquire beneficial ownership of such shares within 60 calendar days of the date
of this Information Statement.
Unless otherwise indicated below, the address of each beneficial owner is c/o
Red Giant Entertainment, Inc., 614 Hwy. 50, Suite 235, Clermont, Florida 34711.
Unless otherwise indicated below, we believe that each of the persons listed in
the table (subject to applicable community property laws) has the sole power to
vote and to dispose of the shares listed opposite the stockholder's name. All
calculations are based on 2,675,721,877 shares of common stock outstanding as of
the Record Date.
Number of Percent of
Shares Shares
Name and Address of Title Beneficially Beneficially
Beneficial Owner of Class Owned Owned
---------------- -------- ----- -----
Benny R. Powell Common 146,801,600 5.5%
Preferred 5,000,000 (1) 50.0%
David Campiti Common 43,300,000 1.6%
Chris Crosby Common 34,640,000 1.3%
Isen Robbins Common 43,300,000 1.6%
Aimee Schoof Common 43,300,000 1.6%
Mark Fischbach Common 75,000,000 2.8%
Preferred 5,000,000 (1) 50.00%
All Directors and officers Common 386,341,600 14.4%
as a group Preferred 10,000,000 100.00%
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1. Series Z Preferred shares have voting rights on all issues that common
stock shareholders are entitled to vote. Series Z preferred shares have 100
votes for every preferred share owned.
2
ITEM 1 - ELECTION OF DIRECTORS
GENERAL
Pursuant to our Articles of Incorporation, the holders of our Voting Shares may
elect our directors. All nominees have advised us that they are able and willing
to serve as directors until the 2015 Annual Meeting or until their respective
successors are elected and qualified. No arrangement or understanding exists
between any nominee and any other person or persons pursuant to which any
nominee was or is to be selected as a director, an officer, or a nominee.
There are no family relationships among our directors and officers. All
directors are elected to hold office until the next annual meeting of
stockholders following election and until their successors are duly elected and
qualified.
The Board has no standing committees and acts as its own nominating,
compensation and internal audit committee as it believes that the functions of
such committees can be adequately performed by the Board. All members of the
Board participate in the consideration of director nominees and of executive
officer and director compensation. We have no qualified financial expert at this
time because we have not been able to identify or retain a qualified candidate.
The Board does not have a policy on whether the roles of Chief Executive Officer
and Chairman of the Board should be separate and, if they are to be separate,
whether the Chairman of the Board should be selected from the non-employee
directors or be an employee. The Board believes that we and our stockholders
benefit when the Board is free to determine the most appropriate leadership
structure in light of the experience, skills and availability of directors and
the Chief Executive Officer as well as other circumstances. We currently have no
independent directors. We apply the definition of "independent director"
provided under the Listing Rules of The NASDAQ Stock Market LLC ("NASDAQ").
Under NASDAQ rules, the Board has considered all relevant facts and
circumstances regarding our directors and has affirmatively determined that none
of the directors serving on the Board are independent of us under NASDAQ rules,
as each director also serves as an officer of us. The Board is also responsible
for oversight of our risk management practices, while management is responsible
for the day-to-day risk management processes.
The Board has not formally established any criteria for Board membership.
Candidates for director nominees are reviewed in the context of the current
composition of the Board, our operating requirements, and the long-term
interests of our stockholders. In conducting this assessment, the Board
considers skills, knowledge, diversity, experience, and such other factors as it
deems appropriate given the current needs of the Board and us, to maintain a
balance of knowledge, experience and capability.
The Board does not have a formal process for stockholders to send communications
to the Board, including recommendations of director candidates. The names of all
of our directors, five of whom are also our executive officers, are available in
this Information Statement. Given the infrequency of stockholder communications
to the Board, and given that the majority of the Voting Shares is held by our
directors, the Board does not believe a formal process is necessary. The Board
will consider, from time to time, whether adoption of a formal process for such
stockholder communications has become necessary or appropriate. Director
nominations and other communications may be submitted by a stockholder by
sending such communications to any member of Board care of us at 614 E. Hwy 50,
Suite 235, Clermont, Florida 34711, marked to the attention of an individual
director's name or to the Chairman of the Board.
The Board reviews the qualities of the Board members as a group, including the
diversity of the Board's career experiences, viewpoints, company affiliations,
expertise with respect to the various facets of our business operations and
business experiences. The Board has not adopted a formal policy and did not
employ any particular benchmarks with respect to these qualities, but was
mindful of achieving an appropriate balance of these qualities with respect to
the Board as a whole. Moreover, the Board considered each nominee's overall
service to us during the previous term, each nominee's personal integrity and
willingness to apply sound and independent business judgment with respect to our
matters, as well as the individual experience of each director noted within
their biographies below.
3
DIRECTORS
The following table sets forth the name, age, and current position of the
directors elected by the Written Consent:
Name Age Position
---- --- --------
Benny R. Powell 40 Chief Executive Officer, President, Chief Financial
Officer, Secretary, Director
David Campiti 56 Chief Operating Officer, Director
Chris Crosby 37 Chief Technology Officer, Director
Isen Robbins 46 Chief Intellectual Property Officer, Director
Aimee Schoof 43 Chief Business Development Officer, Director
Mark Fischbach 25 Director.
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MEETINGS OF THE BOARD
The Board held twenty-one meetings by teleconference from September 2013 through
August 2014. All directors attended 100% of such meetings of the Board. Although
the Board has not adopted a formal policy, all directors are expected to attend
each annual meeting of stockholders.
DIRECTORS AND EXECUTIVE OFFICERS
BENNY R. POWELL, CHIEF EXECUTIVE OFFICER, PRESIDENT, CHIEF FINANCIAL OFFICER,
SECRETARY, AND DIRECTOR. Mr. Powell has served as our Chief Executive Officer,
President, Chief Financial Officer, and Secretary, and as a member of the Board,
since June 11, 2012. Mr. Powell was the founder of RGE (acquired by us in June
2012) and served as its Chief Executive Officer from formation in January 2011.
He also founded and has served as Chief Executive Officer of Active Media
Publishing, LLC ("Active Media") from May 2003 to present. From November 2002 to
June 2007, Mr. Powell also served as CEO for Total Solutions Marketing, LLC, a
full service marketing company. From January 1995 to February 1999, Mr. Powell
worked as a writer at Marvel Comics Group. Mr. Powell is a co-owner of several
of properties, including without limitation Duel Identity(TM), Katrina(TM),
Wayward Sons(TM), and Wayward Sons: Legends(TM).
DAVID CAMPITI, CHIEF OPERATIONS OFFICER AND DIRECTOR. Mr. Campiti has served as
our Chief Operations Officer and a member of the Board since March 5, 2013. He
has also served as CEO and Global Talent Supervisor for Glass House Graphics, a
sole proprietorship professional services firm dba Studio Sakka Graphics &
Animation, Art & Comics Store, and The Academy of Comic Book Arts that provides
development and organizational services as well as illustrators, writers,
painters and designers, since 1993. Mr. Campiti oversees two Glass House
Graphics offices in Brazil; one in Manila, Philippines; one in New Delhi, India;
two locations in Indonesia, and one in Europe--coordinating creative services
from a roster of more than 120 talents worldwide to produce animation, art, and
digital graphics for scores of clients.
Mr. Campiti has over 30 years of experience in the comic book industry,
including writing for DC Comics, and helped launch Amazing Comics, Wonder Color
Comics, Pied Piper Press, Eternity Comics, New Sirius Productions (both Sirius
Comics and Prelude Graphics), and other companies. Mr. Campiti is a co-owner of
several properties featured on our website, including without limitation Banzai
Girl(TM), Exposure(TM), Jade Warriors(TM), Pandora's Blog(TM), The Shadow
Children(TM), and Journey to Magika(TM), which he also produced as an animated
film. Journey to Magika previewed at Tribeca Film Festival and is due for
release in 2014 (Trailer: http://nikothemovie.com/trailer.html).
4
CHRIS CROSBY, CHIEF TECHNOLOGY OFFICER AND DIRECTOR. Mr. Crosby has served as
our Chief Technology Officer and a member of the Board since March 1, 2013. He
has also co-founded Keenspot, our strategic partner, in March 2000 and Blatant
Comics, an independent comic book publisher, in July 1997. Mr. Crosby has served
as CEO of Keenspot and as Vice President and Editor-in-Chief of Blatant Comics
since such companies' respective founding dates. Mr. Crosby has over 20 years
experience in the comic book industry, and in 1994 he became one of the first
creators to step into the new world of online comics. In 1999, he launched one
of the first daily online-exclusive comic strips, Superosity(TM). Mr. Crosby is
the creator or co-creator of several properties featured on our website and
owned by Keenspot and its affiliates, including without limitation Crow
Scare(TM), The First Daughter(TM), Godmode(TM), Last Blood(TM), Sore Thumbs(TM),
and Wicked Powered(TM).
ISEN ROBBINS, CHIEF INTELLECTUAL PROPERTY OFFICER AND DIRECTOR. Mr. Robbins has
served as our Chief Intellectual Property Officer and a member of the Board
since March 5, 2013. Mr. Robbins also co-founded Intrinsic in 1998 and has
served as a Co-CEO of Intrinsic since that time. He has produced more than 30
feature films, including seven that premiered at the Sundance Film Festival,
four at the Tribeca Film Festival, three at SXSW, and one at each of the
Toronto, Venice, New Directors/ New Films, and Berlin Film Festivals.
Intrinsic's films have been distributed worldwide and have won many awards and
been honored with numerous accolades, including winning the Sundance Special
Grand Jury prize, and being nominated for two Gotham and four Independent Spirit
awards.
Mr. Robbins has received a producer credit on the following films: Blue Caprice
(Isaiah Washington, Tim Blake Nelson, Joey Lauren Adams), Run (William Moseley,
Kelsey Chow, Adrian Pasdar, Eric Roberts), Alphabet Killer (Eliza Dushku, Cary
Elwes, Timothy Hutton), XX/XY (Mark Ruffalo, Kathlean Robertson), Skeptic (Zoe
Saldana, Tom Arnold, Timothy Daly), Anything but Love (Andrew McCarthy, Eartha
Kitt), Hebrew Hammer (Judy Greer, Adam Goldberg, Andy Dick, Mario Van Peebles),
Brother to Brother (Anthony Mackie, Daniel Sunjata, Aunjanue Ellis) and M.I.A
(Danny Glover, Ron Perlman, Linda Hamilton and David Strathairn).
AIMEE SCHOOF, CHIEF BUSINESS DEVELOPMENT OFFICER AND DIRECTOR. Ms. Schoof has
served as our Chief Business Development Officer and a member of the Board since
March 5, 2013. Ms. Schoof also co-founded Intrinsic in 1998 and has served as a
Co-CEO of Intrinsic since that time. She has produced more than 30 feature
films, including seven that premiered at the Sundance Film Festival, four at the
Tribeca Film Festival, three at SXSW, and one at each of the Toronto, Venice,
New Directors/ New Films, and Berlin Film Festivals. Intrinsic's films have been
distributed worldwide and have won many awards and been honored with numerous
accolades, including winning the Sundance Special Grand Jury prize, and being
nominated for two Gotham and four Independent Spirit awards.
Ms. Schoof has received a producer credit on the following films: Blue Caprice
(Isiaiah Washington, Tim Blake Nelson, Joey Lauren Adams), Run (William Moseley,
Kelsey Chow, Adrian Pasdar, Eric Roberts) Alphabet Killer (Eliza Dushku, Cary
Elwes, Timothy Huton), XX/XY (Mark Ruffalo, Kathlean Robertson), Skeptic (Zoe
Saldana, Tom Arnold, Timothy Daly), Anything but Love (Andrew McCarthy, Eartha
Kitt), Hebrew Hammer (Judy Greer, Adam Goldberg, Andy Dick, Mario Van Peebles),
Brother to Brother (Anthony Mackie, Daniel Sunjata, Aunjanue Ellis) and M.I.A
(Danny Glover, Ron Perlman, Linda Hamilton and David Strathairn).
Ms. Schoof founded a nonprofit called AmaYoga in 2010 which creates yoga
programs in homeless shelters and transitional housing around Los Angeles,
California. Aimee has also mentored film students through The Film and Radio
Recording Connection Mentoring program since 2009.
MARK FISCHBACH, DIRECTOR. Mr. Fischbach, 25, widely known under the alias
"Markiplier," has built a YouTube subscriber base of more than 4.2 million
subscribers and has generated over 1 billion views. Since July 2012, he has held
monthly livestreams for charities, in which he sets a fundraising goal and plays
continually until that goal is met. To date, he has raised $482,479 for charity.
Mr. Fischbach has also served as the President and CEO and a director of 1 Shirt
Inc., a California corporation, since its formation in June 2014.
5
EXECUTIVE COMPENSATION
Set forth below is a summary of compensation for our officers for all services
rendered in all capacities to us. There have been no annuity, pension or
retirement benefits ever paid to our officers, directors or employees.
With the exception of reimbursement of expenses incurred by our principal
executive officer during the scope of his employment or service as a director,
and unless expressly stated otherwise in a footnote below, our executive
officers did not receive any other compensation.
SUMMARY OFFICER'S COMPENSATION TABLE
Set forth below is a summary of compensation for our officers for all services
rendered in all capacities to us. There have been no annuity, pension or
retirement benefits ever paid to our officers, directors or employees.
With the exception of reimbursement of expenses incurred by our principal
executive officer during the scope of his employment or service as a director,
and unless expressly stated otherwise in a footnote below, our executive
officers did not receive any other compensation.
Stock Option All Other
Name and Principal Position Year Salary($) Awards($) Awards($)# Compensation($) Total($)
--------------------------- ---- --------- --------- ---------- --------------- --------
Benny R. Powell, Chief Executive Officer, 2014 $51,694 -0- $23,989 -0- $75,683
President, Chief Financial Officer, 2013 $48,781 -0- -0- -0- (1) $48,781
Secretary, Director
David Campiti, Chief Operations Officer, 2014 $18,000 -0- $23,990 -0- $41,990
Director (2) 2013 -0- (3) -0- (4) -0- -0- (1) -0- (4)
Chris Crosby, Chief Technology Officer, 2014 $18,000 -0- $23,990 -0- $41,990
Director (5) 2013 -0- (3) -0- (6) -0- -0- -0- (6)
Isen Robbins, Chief Intellectual Property 2014 $18,000 -0- $23,990 -0- $41,990
Officer, Director (2) 2013 -0- (3) -0- (4) -0- -0- -0- (4)
Aimee Schoof, Chief Business Development 2014 $18,000 -0- $23,990 -0- $41,990
Officer, Director (2) 2013 -0- (3) -0- (4) -0- -0- -0- (4)
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# The amounts reported in this column equal the grant date fair value of each
award as computed in accordance with The Stock Compensation Topic of the
Financial Accounting Standards Board Accounting Standards Codification. A
discussion of the assumptions used in calculating the grant date fair value
of these stock options can be found under Note 2 to the Consolidated
Financial Statements.
1. We have also transacted business with sole proprietorships run by, or
entities controlled by, our officers as set forth under "Item 13. Certain
Relationship and Related Transactions, and Director Independence."
2. Appointed as an officer and director on March 5, 2013.
3. We have entered into independent contractor agreements with each of Ms.
Schoof and Messrs. Campiti, Crosby and Robbins, each dated October 25,
2013, under which each such officer has accrued $18,000 per year in salary
for services provided.
4. Each of Mr. Campiti, Mr. Isen and Ms. Schoof received 43,300,000 shares of
our common stock directly from Mr. Powell for services to be rendered as a
director.
5. Appointed as an officer and director on March 1, 2013.
6. Mr. Crosby received 34,140,000 shares of our common stock directly from Mr.
Powell for services to be rendered as a director.
6
INDEPENDENT CONTRACTOR AGREEMENTS
On October 25, 2013, we entered into an Independent Contractor Agreement with
each of our officers other than Benny R. Powell. Under such Independent
Contractor Agreements, we have agreed to pay each of Ms. Schoof and Messrs.
Campiti, Crosby and Isen $18,000 per year in monthly increments of $1,500. The
Independent Contractor Agreements have an initial term of one year and renews
automatically for subsequent one year terms unless terminated. The Independent
Contractor Agreements provide that our officers may perform services for other
companies.
We have no written agreement with Benny R. Powell, but we have paid $51,694 in
salary compensation to Mr. Powell for services provided in the fiscal year ended
August 31, 2014. We contemplate paying Benny R. Powell a monthly salary of
$5,000 per month in the future.
We reserve the right to engage our officers and directors, or their affiliates,
to perform services to us and compensate them for such services, other than as
required to be performed under any employment or independent contractor
agreement with them, or as generally required of persons in their offices, at
rates no greater than we expect to pay an unrelated third party with comparable
experience and quality.
Furthermore, none of our officers or directors is required to spend all of their
time and resources on us and each are involved in other companies. See our
officers' and directors' biographies above.
OTHER COMPENSATION
We do not have any retirement, pension, profit-sharing, stock options or
insurance programs for the benefit of our employees other than the 2013 Stock
Option Plan described in our Annual Report on Form 10-K.
As of the date of this Information Statement, we have granted stock options as
follows:
Equity
Incentive
Plan Awards;
Number of Number of Number of
Securities Securities Securities
Underlying Underlying Underlying
Unexercised Unexercised Unexercised Option Option
Options (#) Options (#) Unearned Exercise Expiration
Name Exercisable Unexercisable Options (#) Price($) Date
---- ----------- ------------- ----------- ----- ----
Benny R. Powell 5,000,000 -0- -0- $0.0053 03/27/2019
David Campiti 5,000,000 -0- -0- $0.0048 03/27/2024
Chris Crosby 5,000,000 -0- -0- $0.0048 03/27/2024
Isen Robbins 5,000,000 -0- -0- $0.0048 03/27/2024
Aimee Schoof 5,000,000 -0- -0- $0.0048 03/27/2024
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DIRECTOR COMPENSATION
Our directors are not compensated for their services, but are entitled for
reimbursement of expenses incurred in attending Board meetings.
TRANSACTIONS WITH RELATED PERSONS
We have not entered into any material transactions with any director, executive
officer, promoter, security holder who is a beneficial owner of 5% or more of
our common stock, or any immediate family member of such persons other than as
set forth below. In the future, we intend to enter into agreements with our
officers and directors and their affiliates to obtain co-ownership or other
rights to properties that our officers and their affiliates have allowed us to
7
showcase on our website and will disclose any material agreements at the time we
enter into any such agreements as required under the Exchange Act.
PRINTING AGREEMENT WITH ACTIVE MEDIA
On March 13, 2013, we entered into a Printing Agreement with Active Media, an
entity controlled by our Chief Executive Officer, President, Chief Financial
Officer, Secretary, and a member of the Board, Benny R. Powell. This Printing
Agreement reduces to writing the oral understanding between us and Active Media
under which Active Media agreed to provide printing services to us at near cost
prices on a non-exclusive basis. We paid an aggregate of $33,360 to Active Media
in the fiscal year ended August 31, 2014.
EXCLUSIVE WEB PUBLISHING CONTRACT WITH KEENSPOT
We have published properties online through websites hosted by Keenspot under an
Exclusive Web Publishing Contract dated June 30, 2010 between Benny R. Powell
and Keenspot, a general partnership co-founded by Chris Crosby, our Chief
Technology Officer and a member of the Board, co-founded, in which Mr. Crosby
serves as Chief Executive Officer. Under this Agreement, Keenspot sells
advertising on websites featuring our properties at an agreed upon cost per
thousand verified impressions (CPM) to our Keenspot sites whereby advertisers
pay based on the number of times the target audience is exposed to the
advertisement. The particular CPM rate varies based upon bids by advertisers and
other customary factors. In exchange for providing advertising, hosting, IT, and
sales management services, Keenspot receives a 50% commission on advertising
revenue. In the fiscal years ended August 31, 2014 and 2013, Keenspot received
$4,042 and $6,785, respectively from this agreement.
STOCK EXCHANGE AGREEMENT WITH COMICGENESIS, LLC ("COMICGENESIS")
In March 2013, we entered into a Stock Exchange Agreement with ComicGenesis, a
limited liability company owned at that time by Chris Crosby, our Chief
Technology Officer and member of the Board, under which we acquired 5,000,000
shares of ComicGenesis from Mr. Crosby in exchange for 500,000 shares of our
common stock from shares held by our President, Benny R. Powell. ComicGenesis
was not valued, as it was essentially an inactive entity.
Shares exchanged for ComicGenesis were valued at a fair market value of $45,000,
the fair market value of our stock at the date of exchange. The shares exchanged
were contributed by Mr. Powell and the related indebtedness was forgiven to us
as a contribution of capital. The related investment in ComicGenesis is
eliminated in consolidation.
OTHER ARRANGEMENTS WITH OFFICERS
During the fiscal year ending August 31, 2014, Benny R. Powell, our President
and Chief Executive Officer, has advanced assets in the amount of $42,101 to us.
As of August 31, 2014 and 2013, we were indebted to Mr. Powell in the amount of
$42,101 and $39,187, respectively.
Our officers provide office and storage space to us at no charge through their
other ventures.
We also from time to time have retained Glass House Graphics, a sole
proprietorship owned by David Campiti, our Chief Operating Officer and a member
of the Board, to provide creative services for us. We paid an aggregate of
$2,035 to Glass House Graphics in the fiscal year ended August 31, 2013.
As of December 2013, we have retained Chris Crosby, one of our officers and
directors, to also serve as our web editor for our webcomics. Mr. Crosby will be
compensated $1,500 per month for his web editing services, which we believe to
be substantially less than what we would pay for an independent third party to
provide such services.
We have not adopted formal written policies and procedures specifically for
related party transactions. The Board is responsible to approve all related
party transactions.
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ITEM 2 - APPOINTMENT OF AUDITORS
On July 9, 2014, we were informed that our registered independent public
accountant, Messineo & Co., CPAs, LLC, of Clearwater Florida ("M&CO") declined
to stand for re-appointment. Also on July 9, 2014, the Company engaged D'Arelli
Pruzansky, P.A. ("DP") of Boca Raton, Florida, as its new registered independent
public accountant. Our Board of Directors participated in and approved the
decision to appoint DP. During the years ended August 31, 2013 and prior to July
9, 2014 (the date of the new engagement), we did not consult with DP regarding
(i) the application of accounting principles to a specified transaction, (ii)
the type of audit opinion that might be rendered on the Company's financial
statements by DP, in either case where written or oral advice provided by DP
would be an important factor considered by us in reaching a decision as to any
accounting, auditing or financial reporting issues or (iii) any other matter
that was the subject of a disagreement between us and our former auditor or was
a reportable event (as described in Items 304(a)(1)(iv) or Item 304(a)(1)(v) of
Regulation S-K, respectively).
We appointed M&CO on May 10, 2013, an action approved by a majority of our
shareholders on December 23, 2013. M&CO audited our consolidated financial
statements for the fiscal year ended August 31, 2013, and performed procedures
relating to the financial statements included in our quarterly reports on Form
10-Q, beginning with the quarter ended May 31, 2013. M&CO's report on the
financial statements for the year ended August 31, 2013 contained no adverse
opinion or disclaimer of opinion and was not qualified or modified as to audit
scope or accounting, except that the report contained an explanatory paragraph
stating that there was substantial doubt about our ability to continue as a
going concern. Through the period covered by the financial audit for the years
ended August 31, 2013 and including the review of financial statements of the
quarterly periods through February 28, 2014 there have been no disagreements
with M&CO on any matter of accounting principles or practices, financial
statement disclosure, or auditing scope or procedure, which disagreements if not
resolved to the satisfaction of M&CO would have caused it to make reference
thereto in their report on the financial statements. Through the interim period
July 9, 2014 (the date M&CO declined to stand for re-appointment), there have
been no disagreements with M&CO on any matter of accounting principles or
practices, financial statement disclosure, or auditing scope or procedure, which
disagreements if not resolved to the satisfaction of M&CO would have caused them
to make reference thereto in their report on the financial statements.
We have authorized M&CO to respond fully to the inquiries of the successor
accountant. During the year ended August 31, 2013 and the interim period through
July 9, 2014, there have been no reportable events with us as set forth in Item
304(a)(1)(v) of Regulation S-K.
The Company provided a copy of the foregoing disclosures to M&CO prior to the
date of the filing of the Current Report to the SEC on Form 8-K and requested
that M&CO furnish it with a letter addressed to the Securities & Exchange
Commission stating whether or not it agrees with the statements in this Report.
A copy of such letter is filed as Exhibit 16.1 to our Form 8-K filed on July 9,
2014.
On April 5, 2013, we appointed Drake Klein Messineo, CPAs, PA ("DKM") as our
independent registered public accounting firm. DKM did not issued any reports on
our financial statements, but reviewed our Quarterly Report on Form 10-Q for the
quarter ended February 28, 2013. On May 10, 2013, we notified DKM that DKM was
dismissed as our independent registered public accounting firm.
AUDIT FEES
DP was paid aggregate fees of approximately $25,000 for the year ended August
31, 2014. M&CO was paid aggregate fees of approximately $12,000 for the year
ended August 31, 2013 for professional services rendered for the audit of our
annual financial statements and for the reviews of the financial statements
included in one of our quarterly reports on Form 10-Q during such fiscal year.
AUDIT RELATED FEES
Neither of our independent registered public accounting firms was paid
additional fees for the fiscal years ended August 31, 2014 and August 31, 2013
for assurance and related services reasonably related to the performance of the
audit or review of our financial statements.
9
TAX FEES
Neither of our independent registered public accounting firms was paid
additional fees for the fiscal years ended August 31, 2014 and August 31, 2013
for professional services rendered for tax compliance, tax advice, and tax
planning during this fiscal year.
ALL OTHER FEES
Neither of our independent registered public accounting firms was paid any other
fees for professional services during the fiscal years ended August 31, 2014 and
August 31, 2013.
ITEM 3 - AMENDMENT OF OUR ARTICLES OF INCORPORATION
On January 8, 2015, the Board approved by unanimous written consent the form of
Amendment attached hereto as Exhibit B, subject to stockholder approval,
amending our Articles of Incorporation to increase the authorized number of
shares of Common Stock from 3,000,000,000 to 6,000,000,000. Approval for the
Amendment was obtained through the Written Consent.
EFFECT OF THE AMENDMENT
The Amendment increases the authorized number of shares of Common Stock. This
increase could have a number of effects on our stockholders depending upon the
exact nature and circumstances of any actual issuances of authorized but
unissued shares. The increase could have an anti-takeover effect, in that
additional shares could be issued (within the limits imposed by applicable law)
in one or more transactions that could make a change in control or takeover of
us more difficult.
PURPOSE OF THE AMENDMENT
The Amendment to increase the authorized number of shares of Common Stock is
being made, in part, to enable us to satisfy (i) the reserved but unissued
requirements of our currently outstanding convertible notes; and (ii) our
obligations under the 2013 Stock Option Plan. The Amendment will also provide us
with more flexibility and opportunities to conduct equity financings and
acquisitions, and to satisfy reserved but unissued requirements of warrants,
options and convertible notes that may be issued in future financing activities.
It is necessary to satisfy the reserve requirements of our currently outstanding
convertible notes to issue authorized shares of Common Stock upon the exercise
of conversion on such securities and under the Iconic SPA to issue authorized
shares of Common Stock upon the sale of Common Stock to Iconic. We believe that
having such additional authorized shares available for issuance in the future
will give us greater flexibility and may allow such shares to be issued without
the expense and delay of a special stockholders' meeting or obtaining written
consents to amend the articles of incorporation to increase authorized capital
at such later date. Although such issuance of additional shares with respect to
future financings and acquisitions would dilute existing stockholders, we
believe that such transactions would ultimately increase stockholder value. The
increase in authorized Common Stock will not have any immediate effect on the
rights of existing stockholders.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Section 16(a) of the Exchange Act requires that our officers and directors and
persons who own more than 10% of our common stock, file reports of ownership and
changes in ownership with the SEC. Based solely on our review of the SEC's EDGAR
database, copies of such forms received by us, or written representations from
certain reporting persons, we believe that during the fiscal year ended August
31, 2014, the following delinquencies have occurred:
10
No. of Transactions
No. of Late Not Filed on Known Failures
Name and Affiliation Reports Timely Basis to File
-------------------- ------- ------------ -------
Benny R. Powell, Chief Executive 5 78 None
Officer, President, Chief Financial
Officer, Secretary, Director
David Campiti, Chief Operations Officer, 0 0 0
Director
Chris Crosby, Chief Technology Officer, 0 0 0
Director
Isen Robbins, Chief Intellectual Property 0 0 0
Officer, Director
Aimee Schoof, Chief Business Development 0 0 0
Officer, Director
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STOCKHOLDER PROPOSALS
Our Annual Meeting of Stockholders for the fiscal year ended August 31, 2015
(the "2015 Annual Meeting"), if held, is expected to be held on or about January
15, 2016, and stockholders having proposals that they desire to present at our
2015 Annual Meeting of Stockholders should, if they desire that such proposals
be included in our proxy statement and proxy relating to such meeting, submit
such proposals in time to be received by us not later than September 15, 2015.
To be included, all submissions must comply with the requirements of Rule 14a-8
promulgated under the Exchange Act, and the Board directs the close attention of
interested stockholders to that rule. Proposals should be mailed to Benny R.
Powell, President and CEO, Red Giant Entertainment, Inc., 614 E. Hwy 50, Suite
235, Clermont, Florida 34711.
Dated: April 6, 2015
By Order of the Board of Directors
/s/ Benny R. Powell
-----------------------------------
Benny R. Powell
President and CEO
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11
EXHIBIT A
MAJORITY WRITTEN CONSENT
IN LIEU OF AN ANNUAL MEETING OF STOCKHOLDERS
RED GIANT ENTERTAINMENT, INC.,
A NEVADA CORPORATION
IN LIEU OF ANNUAL MEETING
The undersigned stockholders, constituting the majority stockholders of Red
Giant Entertainment, Inc., a Nevada corporation (the "Corporation"), acting
pursuant to the authority of Section 78.320 of the Nevada Revised Statutes and
the Bylaws of the Corporation, and with the understanding that the execution of
this consent is in lieu of holding an annual stockholders' meeting, do hereby
adopt the following resolutions:
APPROVAL OF MINUTES
RESOLVED, that the minutes of the prior meetings and written consents of
the stockholders of this Corporation, there being no objections, corrections, or
modifications thereto offered, are hereby approved and adopted.
ELECTION OF DIRECTOR
WHEREAS, there are seven authorized seats of the Board of Directors of the
Corporation (the "Board"); and
WHEREAS, the majority stockholders deem it to be in the best interests of
the Corporation to elect the following individuals to the Board who have been
nominated by the Board:
Benny R. Powell
David Campiti
Chris Crosby
Isen Robbins
Aimee Schoof
Mark Fischbach.
NOW, THEREFORE, IT IS HEREBY RESOLVED, that the following individual is
hereby elected to serve as a member of the Board until the next Annual Meeting
of Stockholders and until their successors shall be elected and shall qualify:
Benny R. Powell
David Campiti
Chris Crosby
Isen Robbins
Aimee Schoof
Mark Fischbach.
RATIFICATION OF AUDITOR
WHEREAS, the Board has approved the appointment of D'Arelli Pruzansky, P.A.
LLC ("DP") as the Corporation's independent auditors for the fiscal year ending
August 31, 2014; and
WHEREAS, the majority stockholders deem it in the best interests of the
Corporation to approve and ratify the Board's appointment of DP as the
Corporation's independent auditors for the fiscal year ending August 31, 2014.
12
NOW, THEREFORE, IT IS HEREBY RESOLVED, that the majority stockholders of
the Corporation hereby approve and ratify the appointment of DP as the
Corporation's independent auditors for the fiscal year ending August 31, 2014,
to make an audit of the books and accounts of the Corporation for such fiscal
year and to make a report as of the last day of such fiscal year, at a
remuneration to be fixed by the Board; the scope of such audit to be fixed and
determined by the Board of Directors.
INCREASE IN AUTHORIZED STOCK
WHEREAS, the majority stockholders have been presented with a proposed
Certificate of Amendment to the Articles of Incorporation of Red Giant
Entertainment, Inc. (the "Certificate") in substantially the form attached
hereto as Exhibit 1;
WHEREAS, the Certificate increases the authorized shares of our Common
Stock, par value $0.0001 per share (our "Common Stock") to 6,000,000,000 shares
of Common Stock; and
WHEREAS, the majority stockholders deem it to be in the best interest of
the Corporation to approve the filing of the Certificate with the Nevada
Secretary of State.
NOW, THEREFORE, IT IS HEREBY RESOLVED, that the majority stockholders of
the Corporation hereby approve the filing of the Certificate with the Nevada
Secretary of State.
RESOLVED FURTHER, that the officers and directors of the Corporation, and
each of them, are authorized to perform any actions and execute any and all
documents required to carry out this resolution.
RATIFICATION OF ACTIONS
RESOLVED, that all actions taken by the officer and directors of the
Corporation since the last meeting of the stockholders be, and they hereby are,
ratified, approved and confirmed in all respects; except those acts which are
violations of law, public policy or the fiduciary duty existing between said
persons and the Corporation.
IN WITNESS WHEREOF, the undersigned stockholders, constituting the majority
stockholders of the Corporation, has executed this Majority Written Consent as
of January 8, 2015.
Number of Percent of
Shares Shares
Name and Address of Title Beneficially Beneficially
Beneficial Owner of Class Owned Owned
---------------- -------- ----- -----
Benny R. Powell Common 146,801,600 5.5%
Preferred 5,000,000 (1) 50.0%
David Campiti Common 43,300,000 1.6%
Chris Crosby Common 34,640,000 1.3%
Isen Robbins Common 43,300,000 1.6%
Aimee Schoof Common 43,300,000 1.6%
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13
Mark Fischbach Common 75,000,000 2.8%
Preferred 5,000,000 (1) 50.00%
All Directors and officers Common 386,341,600 14.4% (2)
as a group Preferred 10,000,000 100.00% (2)
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1. Series Z Preferred shares have voting rights on all issues that common
stock shareholders are entitled to vote. Series Z preferred shares have 100
votes for every preferred share owned.
2. Effective Voting Control equals 51.8%.
Members of the Board:
s/ Benny R. Powell s/ David Campiti
--------------------------------- ---------------------------------
Benny R. Powell, Director David Campiti, Director
and Shareholder and Shareholder
s/ Chris Crosby s/ Isen Robbins
--------------------------------- ---------------------------------
Chris Crosby, Director Isen Robbins, Director
and Shareholder and Shareholder
s/ Aimee Schoof s/ Mark Fischbach
--------------------------------- ---------------------------------
Aimee Schoof, Director Mark Fischbach, Director
and Shareholder and Shareholder
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EXHIBIT B
FORM OF CERTIFICATE OF AMENDMENT TO ARTICLES OF INCORPORATION
BARBARA K. CEGAVSKE
Secretary of State
206 North Carson Street, Suite 1 Filed in the office of
Carson City, Nevada 89701-4520
(775) 684-5708 Website: www.nvsos.gov /s/ Barbara K. Cegavske
BARBARA K. CEGAVSKE
Secretary of State
State of Nevada
Certificate of Amendment
(PURSUANT TO NRS 78.385 AND 78.390)
ABOVE SPACE IS FOR OFFICE USE ONLY
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Certificate of Amendment to Articles of Incorporation
For Nevada Profit Corporations
(Pursuant to NRS 78.385 and 78.390 - After Issuance of Stock)
1. Name of Corporation:
Red Giant Entertainment, Inc.
2. The articles have been amended as follows (provide article numbers, if
available):
Article 4, Section 4.1 is hereby deleted and replaced with the following:
The aggregate number of shares that the Corporation shall have authority to
issue is SIX BILLION ONE HUNDRED MILLION (6,100,000,000) shares, consisting of
(i) SIX BILLION (6,000,000,000) shares of Common Stock, par value $0.0001 per
share (the "Common Stock"); and ONE HUNDRED MILLION (100,000,000) shares of
preferred stock, par value $0.0001 per share (the "preferred stock").
3. The vote by which the stockholders holding shares in the corporation
entitling them to exercise at least a majority of the voting power, or such
greater proportion of the voting power as may be required in the case of a
vote by classes or series, or as may be required by the provisions of the
articles of incorporation have voted in favor of the amendment is:
1,386,341,600.
4. Effective date of filing (optional): Date: Time: (must be no later than 90
days after the certificate is filed)
5. Signature (Required)
s/ Benny R. Powell
------------------------------
Officer of Officer
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* If any proposed amendment would alter or change any preferences or any
relative or other right given to any class or series of outstanding shares, then
the amendment must be approved by the vote. In addition to the affirmative vote
otherwise required of the holders of shares representing a majority of the
voting power of each class or series affected by the amendment regardless of
limitations or restrictions on the voting power thereof.
IMPORTANT: Failure to include any of the above information and submit the proper
fees may cause this filing to be rejected.
This form must be accompanied by appropriate fees.
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