Red Giant Entertainment, Inc. (fka REDG)

[Magik007]

Today’s 8K may be a sensitive issue. The same way I DD the positives and many of the upcoming events and projections we know are coming, is the same way I’ll approach this – all IMHO and gladly open for discussion. We might as well get it out of the way now since many are talking about it and possibly misrepresenting it in other forums (my arguments below). Please share your thoughts....

From today’s 8K:

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. b. 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. c. Our Board of Directors participated in and approved the decision to change our registered independent public accountants. 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 them 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. d. We have authorized M&CO to respond fully to the inquiries of the successor accountant e. 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. f. The Company provided a copy of the foregoing disclosures to M&CO prior to the date of the filing of this Report 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 this Form 8-K. (2) NEW INDEPENDENT ACCOUNTANTS: On July 9, 2014, the Company engaged D'Arelli Pruzansky, P.A. ("DP") of Boca Raton FL, as its new registered independent public accountant.

This happened last year too (May 2013) – with the same general verbiage: http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=9284699

b.
The report on the financial statements for the years ended August 31, 2012 and December 31, 2011 were audited by another firm (please refer to Form 8-K/A filed with the Securities and Exchange Commission on April 15, 2013), MMPLLC, whose report 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 the Company’s ability to continue as a going concern.

But REDG still stands right? SO IF WE TOOK LAST YEAR’S WORD ON IT – WE WOULD HAVE NEVER SEEN FCBD (WHICH WAS A SIGN WE CAN CONTINUE IN 2014 YTD). So we still had FCBD w/advertisers, we know of the link and additions to Red Giant Media, Upcoming Movies, Links to China's Largest Mobile Development, etc.. Yes, we are awaiting official PR's (but it'll come) and when it does - those words can be eaten.

On another note, per SEC outlines: http://www.sec.gov/investor/pubs/readan8k.pdf

Item 4.01 – Changes in Registrant’s Certifying Accountant
Companies must disclose if they dismiss their independent auditor, if the auditor resigns or declines to stand for re-appointment, and if the company hires a new auditor.
A change of auditors is sometimes, but not always, a cause for concern. It depends on the reasons for the change. The following circumstances are widely seen as red flags, and companies must disclose them if they occurred over the previous two fiscal years.
First, companies must disclose whether the departing auditor gave an adverse or qualified opinion on the company’s financial statements. These indicate that the financial statements are not prepared in conformity with generally accepted accounting principles.
Second, the company must report certain disagreements it had with its departing auditor over accounting principles or practices, financial statements, or the scope or procedure of the audit.
Third, whether or not it led to a disagreement between the company and its auditor, companies must disclose whether its former auditor advised it that:
• the necessary internal controls to prepare reliable financial statements do not exist,
• the auditor can no longer rely on management’s representations or is unwilling to be associated with the financial statements prepared by management,
• the auditor believed it should further investigate a matter or significantly expand the scope of its audit, and the auditor did not do so,or
• the auditor has found new information that materially impacts the fairness or reliability of current or prior financial statements, and the issue has not been resolved to the auditor’s satisfaction.

I'm unsure where the term "substantial doubt about the Company’s ability to continue as a going concern" - falls in the SEC category. They are required to list any other adverse reasons - which they didn't (other than this).

Other Info:

New auditing firm: http://www.darellipruzansky.com/firmprofile.php
and http://www.wysk.com/index/florida/boca-raton/3glcx73/d-arelli-pruzansky-p-a/profile

Old Auditing firm: (no website that I can find).

This is what I could dig up based on today’s 8K. The key is, another auditing firm was willing to provide these services to $REDG. If we were in complete dire straights – we would not have had the ability to obtain another auditing firm.

My view on this is that this comment was made last year, the same way it is made this year. But we've made great strides since last year, IMO. I know, I know revs is what matters - but we have to be willing to stick it out and know that Kris Longo and team will bring us all the ads filled (like they did on FCBD - which we would not have seen since they were "unable to continue" in 2013). I believe there is a strategy for these PR's - with this announced today....it is time to launch the remaining PR's from July into August. It's best we got this out as listed today. Perhaps not the most comforting of circumstances – but for those whom have DD’d here and understand the persistence of REDG and what's to come – it is those whom get past this that will be rewarded, IMHO.

GLTA

$REDG