If you want to bring stuff up from filings. Basically, the below is stating that all of the 3rd party firms that REDG users as vendors are companies owned by their officers. So they can claim that they are taking no salary while making money on their side business while taking stock from REDG.
Also, they have a lot of related parties and zero control environment stating that they have no policies or review of anything.
these items, combined with a lack of reporting the the last year plus give anyone justification to not trust anything that Benny states without a filing to back it up.
People may make money here, but people really need to look at all aspects and not just the recent developments.
NOTE 7 - RELATED PARTIES
Benny Powell is an officer and director of Red Giant Entertainment, Inc., a Florida corporation, which is a subsidiary and operating company of Red Giant Entertainment, Inc., a Nevada corporation.
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The Company purchases print materials through Active Media Publishing, Inc. ("AMPI"), an entity wholly owned by Mr. Powell. AMPI has certain arrangements with overseas printing companies, whereby the printing is provided to the Company. The agreement with AMPI provides for printing at cost prices on a non-exclusive basis. During the nine month periods ended May 31, 2015 and 2014, the Company purchased print media in the amount of $13,008 and $109,614, respectively.
Keenspot Entertainment, LLC, a company owned by our director Chris Crosby, has been paid or accrued commissions in the amount of approximately $1,872 and $1,409 during the nine month periods ended May 31, 2015 and 2014, respectively.
The Company also from time to time has 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. The Company paid an aggregate of $68,500 and $14,435 to Glass House Graphics during the nine month periods ended May 31, 2015 and 2014, respectively.
The Company does not have employment contracts with its controlling shareholder who also is the Company’s president and chief executive officer, although it has independent contractor agreements with its other officers.
The amounts and terms of the above transactions may not necessarily be indicative of the amounts and terms that would have been incurred had comparable transactions been entered into with independent third parties.
MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rule 13a-15(f) and Rule 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, and effected by our Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Our internal control over financial reporting includes those policies and procedures that:
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Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect our transactions and dispositions of our assets;
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Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and
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Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements.
Our management assessed the effectiveness of our internal control over financial reporting as of May 31, 2015. In making this assessment, it used the criteria set forth in the Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). While this assessment is not formally documented, management concluded that, as of May 31, 2015, our internal control over financial reporting is not effective based on those criteria.
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Because of its inherent limitations, however, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
A material weakness is a control deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weaknesses identified are disclosed below.
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We do not have an audit committee or any other governing body to oversee management.
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Documentation of proper accounting procedures is not present and fundamental elements of an effective control environment were not present as of May 31, 2015, including formalized monitoring procedures.
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While we now have five officers, there is still no segregation of duties with respect to internal controls, no management oversight, and no additional persons reviewing control documentation, and no control documentation is being produced at this time.
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