Red Giant Entertainment 10-K 6 Apr 15 2014 FY Annual report Financial data

Document_and_Entity_Informatio

Document and Entity Information (USD $)	12 Months Ended
	Aug. 31, 2014	Apr. 02, 2015	Feb. 28, 2014
Document And Entity Information
Entity Registrant Name	Red Giant Entertainment, Inc.,
Entity Central Index Key	1411179
Document Type	10-K
Document Period End Date	31-Aug-14
Amendment Flag	FALSE
Current Fiscal Year End Date	-23
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	No
Entity Filer Category	Smaller Reporting Company
Entity Public Float			$624,867
Entity Common Stock, Shares Outstanding		2,887,564,631
Document Fiscal Period Focus	FY
Document Fiscal Year Focus	2014

Consolidated_Balance_Sheets

Consolidated Balance Sheets (USD $)	Aug. 31, 2014	Aug. 31, 2013
Current Assets
Cash	$5,953	$14,937
Accounts receivable, net of allowance for doubtful accounts of $1,253 and $0, respectively
Inventory	6,990	52,107
Prepaid and other current assets		82,000
Total Current Assets	12,943	149,044
Property and equipment, net of accumulated depreciation of $5,103 and $996, respectively	25,902	10,548
Intangible assets, net of accumulated amortization and impairments of $74,250 and $23,100, respectively		51,150
TOTAL ASSETS	38,845	210,742
Current Liabilities
Accounts payable and accrued expenses	230,281	88,000
Shareholder loans	58,839	39,187
Convertible notes payable, net of discounts	447,032	81,397
Derivative liability from embedded conversion option of notes	3,518,650	1,339,599
Derivative liability, warrants	35,000	355,800
Total Current Liabilities	4,289,802	1,903,983
Note payable		24,314
TOTAL LIABILITIES	4,289,802	1,928,297
Commitments and Contingencies (Note 12)
Stockholders' Deficit
Preferred stock: 100,000,000 authorized; $0.0001 par value 0 shares issued and outstanding
Common stock: 3,000,000,000 authorized; $0.0001 par value 2,540,260,752 and 434,922,000 shares issued and outstanding	254,026	43,492
Additional paid in capital	6,863,020	43,053
Treasury stock, at cost, 1,785,900 shares	-55,000	-55,000
Accumulated deficit	-11,313,003	-1,749,100
Total Stockholders' Deficit	-4,250,957	-1,717,555
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT	$38,845	$210,742

Consolidated_Balance_Sheets_Pa

Consolidated Balance Sheets (Parenthetical) (USD $)	Aug. 31, 2014	Aug. 31, 2013
Current Assets
Accounts receivable, net of allowance for doubtful accounts	$1,253	$0
Property and equipment, net of accumulated depreciation	5,103	996
Intangible assets, net of accumulated amortization and impairments	$74,250	$23,100
Stockholders' (Deficit) Equity
Preferred stock, par value	$0.00	$0.00
Preferred stock, shares authorized	100,000,000	100,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$0.00	$0.00
Common stock, shares authorized	3,000,000,000	3,000,000,000
Common stock, shares issued	2,540,260,752	434,922,000
Common stock, shares outstanding	2,540,260,752	434,922,000
Treasury stock	1,785,900	1,785,900

Consolidated_Statements_of_Ope

Consolidated Statements of Operations (USD $)	12 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Statements Of Operations
Sales		$497,486
Cost of sales	80,629	275,690
Gross Profit	-80,629	221,796
Selling and marketing	347,723	194,648
Compensation	325,759	52,781
Professional fees	198,298	151,732
General & administrative	324,243	226,439
Impairments of intangible assets	30,300
Depreciation and amortization	24,957	14,290
Total operating expenses	1,251,280	639,890
Loss from operations	-1,331,909	-418,094
Other expense
Interest expense	-1,472,364	-479,559
Change in fair value of derivative liabilities	-6,734,630	-844,099
Other expense	-25,000
Loss before income taxes	-9,563,903	-1,741,752
Income taxes
Net loss	($9,563,903)	($1,741,752)
Basic and dilutive loss per share	($0.01)	$0
Weighted average number of shares outstanding	1,129,699,920	434,922,000

Consolidated_Statements_of_Cha

Consolidated Statements of Changes in Stockholders' Equity (USD $)	Preferred Stock	Common Stock	Additional Paid-In Capital	Treasury	Accumulated Deficit	Total
Beginning Balance, Amount at Aug. 31, 2012		$43,492	($1,947)		($7,348)	$34,197
Beginning Balance, Shares at Aug. 31, 2012		434,922,000
Stock issued for acquisition			45,000			45,000
Stock buy back program, Amount				-55,000		-55,000
Stock buy back program, Shares				1,785,900
Net Loss					-1,741,752	-1,741,752
Ending Balance, Amount at Aug. 31, 2013		43,492	43,053	-55,000	-1,749,100	-1,717,555
Ending Balance, Shares at Aug. 31, 2013		434,922,000		1,785,900
Stock issued for services, Amount		1,454	146,870			148,324
Stock issued for services, Shares		14,541,570				14,541,570
Conversions of debt to equity, Amount		182,727	6,129,866			6,312,593
Conversions of debt to equity, Shares		1,827,266,132				1,827,266,132
Settlements in stock, Amount		3,820	42,017			45,837
Settlements in stock, Shares		38,197,717				38,197,717
Warrants exercised for stock issuance, Amount		22,533	381,267			403,800
Warrants exercised for stock issuance, Shares		225,333,333
Options issued for services			119,947			119,947
Net Loss					-9,563,903	-9,563,903
Ending Balance, Amount at Aug. 31, 2014		$254,026	$6,863,020	($55,000)	($11,313,003)	($4,250,957)
Ending Balance, Shares at Aug. 31, 2014		2,540,260,752		1,785,900

Consolidated_Statements_of_Cas

Consolidated Statements of Cash Flows (USD $)	12 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	($9,563,903)	($1,741,752)
Adjustment to reconcile net loss to net cash used in operating activities:
Depreciation & amortization	24,957	14,290
Stock-based compensation	268,271	355,800
Amortization of debt discounts	1,472,364	110,711
Change in fair value of derivative liabilities	6,734,630	844,099
Inventory write-down to lower of cost or market	80,629
Impairment of intangible assets	30,300
(Increase) decrease in operating assets:
Inventory	-35,512	-41,179
Prepaid expenses and other assets	82,000	-62,000
Accounts payable and accrued expenses	-113,264	68,223
Total adjustments	8,544,375	1,289,944
Net Cash Used in Operating Activities	-1,019,528	-451,808
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property and equipment	-19,461	-8,211
Net Cash Used in Investing Activities	-19,461	-8,211
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from shareholder loans, net	19,652	39,187
Proceeds from convertible notes payable	1,010,353	490,500
Purchase of treasury stock		-55,000
Net Cash Provided by Financing Activities	1,030,005	474,687
Net increase (decrease) in cash	-8,984	14,668
Cash, beginning of period	14,937	269
Cash, end of period	5,953	14,937
Supplemental cash flow information
Cash paid for interest
Cash paid for income taxes
Non-cash transactions:
Expenses paid from proceeds of convertible notes payable	24,000
Notes payable converted to common stock	6,312,593
Warrants exercised for stock issuance	$403,800

Organization_and_Description_o

Organization and Description of Business	12 Months Ended
	Aug. 31, 2014
Notes to Financial Statements
Note 1. Organization and Description of Business	Red Giant Entertainment LLC (the “LLC”) was formed in the State of Florida, U.S.A., on January 1, 2011. On May 9, 2012, the LLC 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 LLC was originally a publishing company, but has expanded its operations to include mass media and graphic novel artwork development.
	On March 4, 2013, the Company acquired ComicGenesis, LLC (“ComicGenesis”), a Nevada limited liability company that operates a user-generated comic site that hosts over 10,000 independent webcomics.

Summary_of_Significant_Account

Summary of Significant Accounting Policies

12 Months Ended

Aug. 31, 2014

Notes to Financial Statements

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The Company prepares its financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which require 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 reported amounts of revenues and expenses during the reporting period. Significant estimates include the allowance for doubtful accounts, inventory valuation, useful lives and valuation of property and equipment and intangible assets, stock based compensation, derivative liabilities, and the deferred tax assets valuation allowance. Actual results could differ from those estimates.

Principles of Consolidation

The Company operates under the name of Red Giant Entertainment, Inc. and its wholly owned subsidiaries RGE and ComicGenesis. The companies were incorporated for the intentions of developing brand names. Any activities of these subsidiaries or holdings have been included in the consolidated financial statements, with elimination of any intercompany accounts and transactions.

Fair Value Measurements

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

·

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

·

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

·

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

Level 1

Level 2

Level 3

Total

Derivative Liabilities

$

$

$

3,553,650

$

3,553,650

Total Derivative Liabilities

$

$

$

3,553,650

$

3,553,650

The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the twelve months of fiscal year 2014:

Fair Value Measurements using inputs

Balance, September 1, 2013

$

1,695,399

Total (gains) losses realized and included in net loss

6,734,630

Purchases, issuances and settlements

(4,876,379

)

Transfers in (out)

--

Balance, August 31, 2014

$

3,553,650

Assumptions used in the calculation of the derivative liability are as follows:

August 31,

2014

2013

Weighted Average:

Dividend rate

0

%

0

%

Risk-free interest rate

0.05

%

0.08

%

Expected lives (years)

0.375

1.05

Expected price volatility

426.8

%

288.2

%

Forfeiture Rate

0

%

0

%

Cash Flow Reporting

The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less to be cash equivalents. As of August 31, 2014 and August 31, 2013, we had $5,953 and $14,937, respectively in cash. We had no cash equivalents during the years then ended.

Accounts Receivable

The Company recognizes accounts receivable for its credit sales and does not require any collateral. The Company regularly reviews outstanding receivables and provides for estimated losses through an allowance for doubtful accounts. In evaluating the allowance, the Company makes judgments regarding its customers’ ability to make required payments, economic events, and other factors. As the financial condition of these parties change, circumstances develop, or additional information becomes available, adjustments to the allowance for doubtful accounts may be required. As of August 31, 2014 and 2013, the Company estimated the allowance for doubtful accounts to be $1,253, and $0, respectively.

Inventory

As of August 31, 2014, inventory consists of physical copies of published books, as well as artwork that is used for digitally distributed works for advertising revenue and future publications. The inventory is valued at the lower of the cost to produce, on a first-in-first-out (FIFO) basis, or market value. In August 2014, the Company charged $80,629 to cost of sales as a write-down of inventory held to its estimated market value.

Property and Equipment

Property and equipment are recorded at historical cost. 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.

Intangible Assets

Intangible assets, including intellectual property and a web site, have been recorded at their fair historical cost. Amortization is calculated on a straight line basis over the estimated useful life of three years. The Company periodically tests the carrying value for impairment as noted below.

Long-lived Assets Impairment

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

Revenue Recognition

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

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

o

Keenspot: Revenue is earned on a net 90-day 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.

o

Project Wonderful: Revenue is recorded upon delivery of services and priced based upon bids by advertisers for a set amount of time at the prevailing highest winning rate. Project Wonderful takes a 25% commission of ad revenue for their services.

Publishing Revenue comes from the following sources:

o

Kickstarter Campaigns: These are presales for books, and revenue is recognized when the books are shipped to the buyers.

o

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 upon shipment.

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

Shipping and Handling for purchases are paid directly by the consumer through PayPal.

Cost of Sales

Cost of sales includes the cost of creating services or artwork, advertising and books. During the year ended August 31, 2014, the Company recognized a charge of $80,629 as a lower of cost or market adjustment to inventory, which is also included in cost of sales.

Advertising

Advertising costs are expensed as incurred. The Company expensed advertising costs of $130,258 and $88,001 for the years ending August 31, 2014 and 2013, respectively.

Stock Based Compensation

The Company issues restricted stock to consultants for various services. The costs for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty’s performance is complete. The Company recognized consulting expenses and a corresponding increase to additional paid-in-capital related to stock issued for services. For agreements requiring future services, the consulting expense is to be recognized ratably over the requisite service period.

Income Taxes

The Company accounts for income taxes pursuant to the provisions of ASC 740-10,”Accounting for Income Taxes,” which requires, among other things, an asset and a liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

The Company follows the provisions of ASC 740-10 related to accounting for uncertain income tax positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the positions that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable tax authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.

The Company has adopted ASC 740-10-25, Definition of Settlement, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. As of August 31, 2014, the Company is delinquent in several of its tax filings. Therefore, tax years ended August 31, 2014, 2013, and 2012, along with any other tax years with delinquent filings are subject to audit.

Earnings (Loss) Per Share

The Company follows ASC 260, Earnings Per Share, 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 stockholders 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 approximately 2,693,271,000 common stock equivalents outstanding at August 31, 2014, related to the convertible debt arrangements and an additional 25,000,000 options (with exercise price greater than market value as of August 31, 2014). Due to losses, dilutive earnings per share is not presented, as the effect would be anti-dilutive.

Recent Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. The revenue recognition standard affects all entities that have contracts with customers, except for certain items. The new revenue recognition standard eliminates the transaction-and industry-specific revenue recognition guidance under current GAAP and replaces it with a principle-based approach for determining revenue recognition. Public entities are required to adopt the revenue recognition standard for reporting periods beginning after December 15, 2016, and interim and annual reporting periods thereafter. Early adoption is not permitted for public entities. The Company has reviewed the applicable ASU and has not, at the current time, quantified the effects of this pronouncement; however, it believes that there will be no material effect on the consolidated financial statements.

In June 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-12 Compensation — Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition under Accounting Standards Codification (ASC) 718, Compensation — Stock Compensation. As a result, the target is not reflected in the estimation of the award’s grant date fair value. Compensation cost would be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods. Early adoption is permitted. Management has reviewed the ASU and believes that they currently account for these awards in a manner consistent with the new guidance, therefore there is no anticipation of any effect to the consolidated financial statements.

In August 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-15 Preparation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Under generally accepted accounting principles (GAAP), continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity’s liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity’s liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements—Liquidation Basis of Accounting. Even when an entity’s liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. In those situations, financial statements should continue to be prepared under the going concern basis of accounting, but the amendments in this Update should be followed to determine whether to disclose information about the relevant conditions and events. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company will evaluate the going concern considerations in this ASU and future reports will include any additional disclosures required.

We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

Management_Statement_Regarding

Management Statement Regarding Going Concern	12 Months Ended
	Aug. 31, 2014
Notes to Financial Statements
Note 3. Management Statement Regarding Going Concern	The Company’s revenues are insufficient to meet its operating expenses. The Company has incurred net losses of $9,563,903 and $1,741,752 for the years ending August 31, 2014 and 2013, respectively. Accumulated losses resulted in an accumulated deficit of $11,313,003. The Company has a net working capital deficit of $4,276,859 and cash used in operations of $1,019,528 as of and for the year ending August 31, 2014. Due to the financial position, and given the current economic environment and the continuing need to strengthen our cash position, management believes that there is substantial 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 strategic other transactions, 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 would be unable to continue as a going concern.
	The Company believes that its ability to execute its business plan, and therefore continue as a going concern, is dependent upon its ability to do the following:
	●	Obtain adequate sources of funding to fund long-term business operations;
	●	Enter into a licensing or other relationship that allows the Company to commercialize its products;
	●	Manage or control working capital requirements; and
	●	Develop new and enhance existing relationships with product distributors and other points of distribution for the Company’s products.
	There can be no assurance that the Company will be successful in achieving its short- or long-term plans as set forth above, or that such plans, if consummated, will enable the Company to obtain profitable operations or continue in the long-term as a going concern. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Inventory

Inventory	12 Months Ended
	Aug. 31, 2014
Notes to Financial Statements
Note 4. Inventory	As of August 31, 2014, inventory consisted of physical copies of published books, as well as artwork used for digitally distributed works for advertising revenue and future publications. The inventory is valued at the lower of the cost to produce, on a first-in-first-out (FIFO) basis, or market value..
	The Company recorded a charge for inventory, in the amount of $80,629, related to inventory items with short shelf lives and in consideration of marginal operating margins (lower of cost or market) of its existing inventory at August 31, 2014. Total inventory was $6,990 and $52,107, as of August 31, 2014 and 2013, respectively.

Property_And_Equipment

Property And Equipment	12 Months Ended
	Aug. 31, 2014
Notes to Financial Statements
Note 5. Property And Equipment	Property and equipment consists of:
		August 31,
		2014			2013
	Computers and equipment	$	20,103		$	3,333
	Trade booth and equipment		8,211			8,211
	Office furniture		2,691			-
	Total property and equipment	$	31,005		$	11,544
	Less accumulated depreciation		(5,103	)		(996	)
	Property and equipment, net	$	25,902		$	10,548
	Depreciation for the years ended August 31, 2014 and 2013 was $4,107 and $640, respectively.

Intangible_Assets

Intangible Assets	12 Months Ended
	Aug. 31, 2014
Notes to Financial Statements
Note 6. Intangible Assets	The Company’s intangible assets consists of graphic novel artwork and was contributed by a shareholder to the Company in 2011 and valued at $29,250, which was determined based on the historical costs for artists and printing. The intangible was being amortized over its estimated life of five years. The Company acquired website and other intangible assets in the acquisition of a subsidiary in March 2013, valued at the fair market value of stock exchanged by a shareholder, valued in the amount of $45,000. The intangible was being amortized over its estimated life of three years.
		August 31,
		2014			2013
	Intellectual property	$	29,250		$	29,250
	Website development		45,000			45,000
			74,250			74,250
	Less accumulated amortization		43,950			23,100
		$	30,300		$	51,150
	Less impairment valuation		(30,300	)		-
	Intangible assets, net		-		$	51,150
	Amortization cost for the periods ended August 31, 2013 and 2012 was $20,850 and $13,350, respectively. Due to considerations regarding recoverability, the Company recorded an impairment loss for the carrying value of the assets as of August 31, 2014, in the amount of $30,300.

Convertible_Notes_Payable

Convertible Notes Payable	12 Months Ended
	Aug. 31, 2014
Notes to Financial Statements
Note 7. Convertible Notes Payable	The Company entered into several lending arrangements with lenders, each with convertible features. The Company evaluated the terms of the convertible notes in accordance with ASC Topic No. 815 - 40, Derivative and Hedging Contracts – Contracts in Entities’ Own Stock and the underlying conversion features that are indexed to the Company’s common stock. The Company determined that the conversion features meet the definition of a liability and therefore bifurcated the conversion feature and accounted for it as a separate derivative liability. The Company evaluated the embedded conversion features and determined that the embedded option should be accounted for as a derivative liability. Therefore, the Company recorded a derivative liability and recognized a debt discount on the notes on the origination date. The debt discount was recorded as reduction (contra-liability) to the Convertible Notes Payable. The debt discount is being amortized over the life of the notes. Additionally, the notes called for an immediate withholding for service charges, which has been treated as an original issue discount or deferred financing costs, a contra-liability charge, which is amortized as finance cost over the life of the loan. Interest expense, in the amount of $1,472,364 and $479,559 was recognized for the derivative debt discounts and deferred financing costs for the period ended August 31, 2014 and 2013, respectively.
	A derivative liability, in the amount of $3,518,650 and $1,339,599 has been recorded, as of August 31, 2014 and 2013, respectively, related to the notes. The derivative value was calculated using the Black-Scholes method. Assumptions used in the derivative valuation were as follows:
		August 31,
		2014			2013
	Weighted Average:
	Dividend rate		0	%		0	%
	Risk-free interest rate		0.05	%		0.08	%
	Expected lives (years)		0.375			1.05
	Expected price volatility		426.8	%		288.2	%
	Forfeiture Rate		0	%		0	%
	The convertible notes have the following terms and conversion features:
	Maturity dates	Six months to one year
	Interest rate	6% to 12%, default rates to 22%
	Conversion discounts	30-49%
	Basis of conversion
	Trading price (lowest during period)	10-20 trading days
	The convertible notes outstanding as of August 31 are summarized below:
		2014			2013
	Total debt outstanding	$	677,000		$	621,000
	Add: accrual for penalty clauses in instruments		34,500			-
	Less: unexpired derivative debt discounts and deferred finance costs discounts		264,468			539,603
	Total	$	447,032		$	81,397
	In accordance with terms of agreements, the Company has accrued an additional liability in the amount of $34,500 for defaults associated with provisions within the contracts. In association with these defaults, the Company has accrued $27,000 of additional interest and recorded an additional derivative, included in the above, of $293,022.
	Unexpired debt discounts, as of August 31, 2014, in the amount of $264,468, will be recognized as interest expense in for the year ending August 31, 2015. If notes and accrued interest were converted as of August 31, 2014, there would be approximately 2,693,271,000 additional shares to be issued.

Income_Taxes

Income Taxes	12 Months Ended
	Aug. 31, 2014
Notes to Financial Statements
Note 8. Income Taxes	Income taxes are provided based upon the liability method. Under this approach, deferred income taxes are recorded to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts at each year-end. A valuation allowance is recorded against deferred tax assets if management does not believe the Company has met the “more likely than not” standard imposed by accounting standards to allow recognition of such an asset.
	At August 31, 2014 and 2013, the Company expected no net deferred tax assets to be recognized, resulting from net operating losses. Deferred tax assets were offset by a corresponding allowance of 100%.
	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 prior to December 31, 2011, nor does management believe that any tax modifications would have a material effect on the financials. The Company has accrued approximately $3,000 in penalties associated with delinquent filings.
	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.
	The income tax provision consists of the following:
		August 31,
		2014			2013
	Federal
	Current	$	-		$	-
	Deferred		-			-
		$	-		$	-
	State and local
	Current	$	-		$	-
	Deferred
	Income tax provision	$	-		$	-
	Prior to May 9, 2012, our primary operating company was a limited liability company not subject to tax. At August 31, 2014, the Company had a net operating loss (“NOL”) carry forward in the amount of approximately $1.4 million, available to offset future taxable income through 2034. The Company established valuation allowances equal to the full amount of the deferred tax assets due to the uncertainty of the utilization of the operating losses in future periods. The Company has not filed its federal tax returns since inception and therefore, the NOL’s will not be available to offset future taxable income until the tax returns are filed with the respective federal tax authorities.
	Deferred tax assets/liabilities were as follows:
		August 31,			August 31,
		2014			2013
	Net operating loss carryforward	$	534,000		$	166,000
	Valuation allowance		(534,000	)		(166,000	)
	Total	$	-		$	-
	The valuation allowance was increased by $368,000 during fiscal year ended August 31, 2014.
	A reconciliation of the Company’s effective tax rate as a percentage of income before taxes and federal statutory rate for the periods ended August 31, 2014 and 2013 is summarized below.
		2014			2013
	Federal statutory rate		(34.0	)%		(34.0	)%
	State income taxes, net of federal benefits		(3.7	)%		(3.7	)%
	Derivatives, and other permanent differences		33.8	%		28.4	%
	Valuation allowance		3.9	%		9.3	%
	Effective tax rate		-	%		-	%
	The Company may be assessed penalties and interest related to the non-filing of income tax returns. Such assessments would be treated as a provision of income tax expense on the financial statements. At August 31, 2014, the tax returns for 2011 through 2013 have not been filed and are therefore subject to future audit. 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.

Capital_Stock

Capital Stock	12 Months Ended
	Aug. 31, 2014
Notes to Financial Statements
Note 9. Capital Stock	The Company has 100,000,000 shares of preferred stock authorized and none have been issued or designated as of August 31, 2014 and 2013. Subsequent to the year ended August 31, 2014, the Company designated a class of preferred stock. For a disclosure of the rights, liquidation preferences, and privileges of the preferred stock, see Note 13.
	The Company has 3,000,000,000 shares of common stock authorized. All shares of common stock are non-assessable and non-cumulative, with no preemptive rights.
	During the year ending August 31, 2013 the Company entered into a stock buy-back plan, whereby 1,785,900 shares were repurchased for $55,000 cost. The shares remain in the name of the Company until such time as they are cancelled.
	During year ending August 31, 2013 the Company issued warrants to purchase approximately 371,667,000 shares of common stock, at a strike price of $.0015 per share, in association with a financing arrangement. Warrants may be exercised in a cashless option. The company valued these warrants using the Black-Scholes method, resulting in an interest expense of $355,800 and a corresponding derivative liability. During the year ending August 31, 2014, the cashless option was exercised and 225,333,333 shares were issued, and $403,800 of derivative liability was reclassified to stockholders’ deficit.
	For the year ended August 31, 2014, the Company issued 14,541,570 shares of its common stock to employees and consultants, at the fair market value at the date of the grant based on the quoted market price. Compensation expenses were recognized in the amount of $148,324.
	Stock compensation for the periods presented were issued for past services provided; accordingly, all shares issued are fully vested, and there is no unrecognized compensation associated with these transactions. The Company has issued shares and warrants to individuals for the purpose of compensation during the years ending August 31, 2014 and 2013, in the amounts of $268,271 and $355,800, respectively.
	On March 27, 2014, the Company issued 25,000,000 options for services to its officers and directors under its 2013 Option Plan. The Company valued the options using the Black Scholes Model, which resulted in the recognition of $119,947 of compensation expense. Assumptions used in the calculation of the option value are as follows:
	Weighted Average:
	Stock Price	$	0.0048
	Strike Price	$	0.0048-$0.0053
	Dividend rate		0	%
	Risk-free interest rate		1.7	%
	Expected lives (years)		5
	Expected price volatility		313.78	%
	Forfeiture Rate		0	%
	During the year ended August 31, 2014, the Company exchanged 1,827,266,132 shares of its common stock for $1,065,630 of convertible notes payable and accrued interest at contractual rates, and $5,246,963 of derivative liability was reclassified to stockholders’ deficit.
	During the year ended August 31, 2014, the company settled accrued interest expense in the amount of $22,919 in exchange of 38,197,717 shares of common stock and recognized a loss of $22,918.

Related_Parties

Related Parties	12 Months Ended
	Aug. 31, 2014
Notes to Financial Statements
Note 10. Related Parties	Benny R. Powell was an officer and director of both parties to the merger. (See Note 1). Mr. Powell continues as the Company’s president, chief executive officer, and director post-merger. Mr. Powell also provides rent and other services to the Company through his other ventures.
	The Company purchases print materials through a wholly owned entity, Active Media Publishing, Inc., (“AMPI”) of Mr. Powell. AMPI has certain arrangements with overseas printing companies, whereby the printing is facilitated to the Company. Agreement with AMPI states processing is at near cost prices on a non-exclusive basis. During the years ended August 31, 2014 and 2013, the Company purchased print media in the amount of $33,360 and $165,540.
	Keenspot Entertainment, LLC, a company owned by our director Chris Crosby, has been paid or accrued commissions in the amount of approximately $4,042 and $6,785 for the years ended August 31, 2014 and 2013.
	As of August 31, 2014 and 2013, the Company was indebted to Mr. Powell for advances and payments made on behalf of the Company in support of operations, in the amount of $58,839 and $39,187, 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.
	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 $56,660 and $2,035 to Glass House Graphics in the fiscal years ended August 31, 2014 and 2013, respectively.
	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.

Business_Segments

Business Segments	12 Months Ended
	Aug. 31, 2014
Notes to Financial Statements
Note 11. Business Segments	The Company generates revenues from three service offerings: Advertising, Book Publishing, and Creative. The Company’s management measures its performance by revenue lines and does not allocate its selling, general and administrative expenses to each revenue offering. A summary of the lines of revenue are as follows:
		August 31,
		2014			2013
	Revenues:
	Advertising	$	--		$	6,842
	Book publishing		--			253,146
	Creative		--			237,498
			--			497,486
	Cost of Sales :
	Advertising	$	--		$	5,843
	Book publishing		--			195,651
	Creative		--			74,196
	Inventory write-down to lower of cost or market		80,629			--
		$	80,629		$	275,690
		August 31,
		2014			2013
	Gross Profit:
	Advertising	$	--		$	999
	Book publishing		--			57,495
	Creative		--			163,302
	Inventory write-down to lower of cost or market		(80,629	)		221,796
		$	(80,629	)		221,796

Commitments_And_Contingencies

Commitments And Contingencies	12 Months Ended
	Aug. 31, 2014
Notes to Financial Statements
Note 12. Commitments And Contingencies	In the normal course of business, the Company may become a party to litigation matters involving claims against the Company.
	On May 13, 2013, George Sharp (“Plaintiff”) filed a Complaint in San Diego Superior Court, Central District, Case No. 37-2013-00048310-CU-MC-CTL, against 14 companies, including us (collectively, “Defendants”). We were served with the Complaint on May 23, 2013. The Complaint alleges that the Plaintiff received unsolicited promotional emails being sent by Defendant, Victory Mark Corp. Ltd., discussing the other 13 corporate Defendants, including us. The Plaintiff is seeking liquidated damages in the amount of $1,000 for each email he received for a total of $1,204,000 collectively for all Defendants. The Company is defending this action vigorously and believes that the matter is without legal merit. The Company cannot determine the ultimate outcome of this matter at this time.
	We are required to pay a $25,000 civil money penalty to the SEC based upon a finding that during the reporting period we violated Section 13(a) of the Securities Exchange Act of 1934 and Rule 13a-11 thereunder. The Order is available at www.sec.gov. In the Matter of Red Giant Entertainment, Inc., SEC Admin. Proc. File No. 3-16249 (Nov. 5, 2014).

Subsequent_Events

Subsequent Events	12 Months Ended
	Aug. 31, 2014
Notes to Financial Statements
Note 13. Subsequent Events	Issuances of Preferred Stock
	As of November 6, 2014, the Company designated Series Z Preferred Stock and entered into a Securities Purchase Agreement (the "SPA") with Mark Fischbach under which we agreed to issue to Mr. Fischbach (i) 30,000,000 shares of our common stock (the "Common Shares"); and (ii) 5,000,000 shares of our proposed Series Z Preferred Stock, with rights, privileges and preferences as set forth below (the "Series Z Preferred Shares") (collectively with the Common Shares, the "Shares") for an aggregate price of $200,000 (the "Purchase Price"). We closed on this transaction on November 12, 2014. Mr. Fischbach is entitled appoint one member of our Board. Mr. Fischbach has been appointed to our Board contingent on the Closing pursuant to this right.
	As of December 23, 2014, we entered into a Securities Purchase Agreement (the "SPA") with our director and officer Benny R. Powell under which we agreed to issue to Mr. Powell 5,000,000 shares of our Series Z Preferred Stock, with rights, privileges and preferences as set forth below (the "Shares") in exchange for payment of $150,000.00 (the "Purchase Price"). We closed on this transaction on December 22, 2014.
	Each Series Z Preferred Share is entitled to a liquidation preference equal to the original purchase price of the Series Z Preferred Shares ($0.03 per share). In addition, subject to the applicable rules and published guidance of a national securities exchange or automated inter-dealer quotation system on which our common stock may in the future be listed or quoted (the "Listing Rules"), and for so long as investor continues to hold Series Z Preferred Shares, the holder will be entitled to 100:1 super-voting rights on all matters submitted to a vote of our stockholders, subject to adjustment. The Company retains the option of redeeming the Series Z Shares to the extent that we reasonably determine that the above rights would impede our ability to be listed or quoted under the Listing Rules.
	Conversion of Debt, Share Issuances
	Since the year end, we converted notes and accrued interest of approximately $154,000 into 317,303,879 shares of our common stock at contractual rates.
	In accordance with convertible note agreements, delinquent filings of our annual and quarterly reports are subject to default provisions. During the period from August 31, 2014 through the date of filing we estimate these costs to be approximately $152,000, which satisfaction will require additional issuance of common stock, in accordance with conversion terms of those agreements. We estimate that an additional 315,000,000 shares of common stock will be required to be issued in satisfaction of these terms.

Summary_of_Significant_Account1

Summary of Significant Accounting Policies (Policies)

12 Months Ended

Aug. 31, 2014

Summary Of Significant Accounting Policies Policies

Basis of Presentation

The Company prepares its financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”), which require 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 reported amounts of revenues and expenses during the reporting period. Significant estimates include the allowance for doubtful accounts, inventory valuation, useful lives and valuation of property and equipment and intangible assets, stock based compensation, derivative liabilities, and the deferred tax assets valuation allowance. Actual results could differ from those estimates.

Principles of Consolidation

The Company operates under the name of Red Giant Entertainment, Inc. and its wholly owned subsidiaries RGE and ComicGenesis. The companies were incorporated for the intentions of developing brand names. Any activities of these subsidiaries or holdings have been included in the consolidated financial statements, with elimination of any intercompany accounts and transactions.

Fair Value Measurements

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

·

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

·

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

·

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

Level 1

Level 2

Level 3

Total

Derivative Liabilities

$

$

$

3,553,650

$

3,553,650

Total Derivative Liabilities

$

$

$

3,553,650

$

3,553,650

The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the twelve months of fiscal year 2014:

Fair Value Measurements using inputs

Balance, September 1, 2013

$

1,695,399

Total (gains) losses realized and included in net loss

6,734,630

Purchases, issuances and settlements

(4,876,379

)

Transfers in (out)

--

Balance, August 31, 2014

$

3,553,650

Assumptions used in the calculation of the derivative liability are as follows:

August 31,

2014

2013

Weighted Average:

Dividend rate

0

%

0

%

Risk-free interest rate

0.05

%

0.08

%

Expected lives (years)

0.375

1.05

Expected price volatility

426.8

%

288.2

%

Forfeiture Rate

0

%

0

%

Cash Flow Reporting

The Company follows ASC 230, Statement of Cash Flows, for cash flows reporting, classifies cash receipts and payments according to whether they stem from operating, investing, or financing activities and provides definitions of each category, and uses the indirect or reconciliation method (“Indirect method”) as defined by ASC 230, Statement of Cash Flows, to report net cash flow from operating activities by adjusting net income to reconcile it to net cash flow from operating activities by removing the effects of (a) all deferrals of past operating cash receipts and payments and all accruals of expected future operating cash receipts and payments and (b) all items that are included in net income that do not affect operating cash receipts and payments.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all highly liquid investments and short-term debt instruments with original maturities of three months or less to be cash equivalents. As of August 31, 2014 and August 31, 2013, we had $5,953 and $14,937, respectively in cash. We had no cash equivalents during the years then ended.

Accounts Receivable

The Company recognizes accounts receivable for its credit sales and does not require any collateral. The Company regularly reviews outstanding receivables and provides for estimated losses through an allowance for doubtful accounts. In evaluating the allowance, the Company makes judgments regarding its customers’ ability to make required payments, economic events, and other factors. As the financial condition of these parties change, circumstances develop, or additional information becomes available, adjustments to the allowance for doubtful accounts may be required. As of August 31, 2014 and 2013, the Company estimated the allowance for doubtful accounts to be $1,253, and $0, respectively.

Inventory

As of August 31, 2014, inventory consists of physical copies of published books, as well as artwork that is used for digitally distributed works for advertising revenue and future publications. The inventory is valued at the lower of the cost to produce, on a first-in-first-out (FIFO) basis, or market value. In August 2014, the Company charged $80,629 to cost of sales as a write-down of inventory held to its estimated market value.

Property and Equipment

Property and equipment are recorded at historical cost. 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.

Intangible Assets

Intangible assets, including intellectual property and a web site, have been recorded at their fair historical cost. Amortization is calculated on a straight line basis over the estimated useful life of three years. The Company periodically tests the carrying value for impairment as noted below.

Long-lived Assets Impairment

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

Revenue Recognition

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

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

o

Keenspot: Revenue is earned on a net 90-day 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.

o

Project Wonderful: Revenue is recorded upon delivery of services and priced based upon bids by advertisers for a set amount of time at the prevailing highest winning rate. Project Wonderful takes a 25% commission of ad revenue for their services.

Publishing Revenue comes from the following sources:

o

Kickstarter Campaigns: These are presales for books, and revenue is recognized when the books are shipped to the buyers.

o

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 upon shipment.

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

Shipping and Handling for purchases are paid directly by the consumer through PayPal.

Cost of Sales

Cost of sales includes the cost of creating services or artwork, advertising and books. During the year ended August 31, 2014, the Company recognized a charge of $80,629 as a lower of cost or market adjustment to inventory, which is also included in cost of sales.

Advertising

Advertising costs are expensed as incurred. The Company expensed advertising costs of $130,258 and $88,001 for the years ending August 31, 2014 and 2013, respectively.

Share-based Compensation

The Company issues restricted stock to consultants for various services. The costs for these transactions are measured at the fair value of the consideration received or the fair value of the equity instruments issued, whichever is more reliably measurable. The value of the common stock is measured at the earlier of (i) the date at which a firm commitment for performance by the counterparty to earn the equity instruments is reached or (ii) the date at which the counterparty’s performance is complete. The Company recognized consulting expenses and a corresponding increase to additional paid-in-capital related to stock issued for services. For agreements requiring future services, the consulting expense is to be recognized ratably over the requisite service period.

Income Taxes

The Company accounts for income taxes pursuant to the provisions of ASC 740-10,”Accounting for Income Taxes,” which requires, among other things, an asset and a liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred asset will not be realized.

The Company follows the provisions of ASC 740-10 related to accounting for uncertain income tax positions. When tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities, while others are subject to uncertainty about the merits of the position taken or the amount of the positions that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable tax authority. The portion of the benefits associated with tax positions taken that exceeds the amount measured as described above should be reflected as a liability for uncertain tax benefits in the accompanying balance sheet along with any associated interest and penalties that would be payable to the taxing authorities upon examination. The Company believes its tax positions are all highly certain of being upheld upon examination. As such, the Company has not recorded a liability for uncertain tax benefits.

The Company has adopted ASC 740-10-25, Definition of Settlement, which provides guidance on how an entity should determine whether a tax position is effectively settled for the purpose of recognizing previously unrecognized tax benefits and provides that a tax position can be effectively settled upon the completion of an examination by a taxing authority without being legally extinguished. For tax positions considered effectively settled, an entity would recognize the full amount of tax benefit, even if the tax position is not considered more likely than not to be sustained based solely on the basis of its technical merits and the statute of limitations remains open. As of August 31, 2014, the Company is delinquent in several of its tax filings. Therefore, tax years ended August 31, 2014, 2013, and 2012, along with any other tax years with delinquent filings are subject to audit.

Earnings (Loss) Per Share

The Company follows ASC 260, Earnings Per Share, 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 stockholders 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 approximately 2,693,271,000 common stock equivalents outstanding at August 31, 2014, related to the convertible debt arrangements and an additional 25,000,000 options (with exercise price greater than market value as of August 31, 2014). Due to losses, dilutive earnings per share is not presented, as the effect would be anti-dilutive.

Recent Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-09, Revenue from Contracts with Customers. The revenue recognition standard affects all entities that have contracts with customers, except for certain items. The new revenue recognition standard eliminates the transaction-and industry-specific revenue recognition guidance under current GAAP and replaces it with a principle-based approach for determining revenue recognition. Public entities are required to adopt the revenue recognition standard for reporting periods beginning after December 15, 2016, and interim and annual reporting periods thereafter. Early adoption is not permitted for public entities. The Company has reviewed the applicable ASU and has not, at the current time, quantified the effects of this pronouncement; however, it believes that there will be no material effect on the consolidated financial statements.

In June 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-12 Compensation — Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period. A performance target in a share-based payment that affects vesting and that could be achieved after the requisite service period should be accounted for as a performance condition under Accounting Standards Codification (ASC) 718, Compensation — Stock Compensation. As a result, the target is not reflected in the estimation of the award’s grant date fair value. Compensation cost would be recognized over the required service period, if it is probable that the performance condition will be achieved. The guidance is effective for annual periods beginning after December 15, 2015 and interim periods within those annual periods. Early adoption is permitted. Management has reviewed the ASU and believes that they currently account for these awards in a manner consistent with the new guidance, therefore there is no anticipation of any effect to the consolidated financial statements.

In August 2014, the FASB issued Accounting Standards Update (ASU) No. 2014-15 Preparation of Financial Statements – Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Under generally accepted accounting principles (GAAP), continuation of a reporting entity as a going concern is presumed as the basis for preparing financial statements unless and until the entity’s liquidation becomes imminent. Preparation of financial statements under this presumption is commonly referred to as the going concern basis of accounting. If and when an entity’s liquidation becomes imminent, financial statements should be prepared under the liquidation basis of accounting in accordance with Subtopic 205-30, Presentation of Financial Statements—Liquidation Basis of Accounting. Even when an entity’s liquidation is not imminent, there may be conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern. In those situations, financial statements should continue to be prepared under the going concern basis of accounting, but the amendments in this Update should be followed to determine whether to disclose information about the relevant conditions and events. The amendments in this Update are effective for the annual period ending after December 15, 2016, and for annual periods and interim periods thereafter. Early application is permitted. The Company will evaluate the going concern considerations in this ASU and future reports will include any additional disclosures required.

We have reviewed the FASB issued Accounting Standards Update (“ASU”) accounting pronouncements and interpretations thereof that have effectiveness dates during the periods reported and in future periods. The Company has carefully considered the new pronouncements that alter previous generally accepted accounting principles and does not believe that any new or modified principles will have a material impact on the corporation’s reported financial position or operations in the near term. The applicability of any standard is subject to the formal review of our financial management and certain standards are under consideration.

Summary_of_Significant_Account2

Summary of Significant Accounting Policies (Tables)	12 Months Ended
	Aug. 31, 2014
Summary Of Significant Accounting Policies Tables
Fair value of assets or liabilities		Level 1			Level 2			Level 3		Total
	Derivative Liabilities	$			$			$	3,553,650	$	3,553,650
	Total Derivative Liabilities	$			$			$	3,553,650	$	3,553,650
Fair Value Measurement Using Significant Unobservable Inputs (Level 3)	The table below provides a summary of the changes in fair value, including net transfers in and/or out, of all financial assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the twelve months of fiscal year 2014:
		Fair Value Measurements using inputs
	Balance, September 1, 2013	$	1,695,399
	Total (gains) losses realized and included in net loss		6,734,630
	Purchases, issuances and settlements		(4,876,379	)
	Transfers in (out)		--
	Balance, August 31, 2014	$	3,553,650
Fair Value Measurements, Valuation	Assumptions used in the calculation of the derivative liability are as follows:
		August 31,
		2014			2013
	Weighted Average:
	Dividend rate		0	%		0	%
	Risk-free interest rate		0.05	%		0.08	%
	Expected lives (years)		0.375			1.05
	Expected price volatility		426.8	%		288.2	%
	Forfeiture Rate		0	%		0	%

Property_And_Equipment_Tables

Property And Equipment (Tables)	12 Months Ended
	Aug. 31, 2014
Property And Equipment Tables
Property And Equipment	Property and equipment consists of:
		August 31,
		2014			2013
	Computers and equipment	$	20,103		$	3,333
	Trade booth and equipment		8,211			8,211
	Office furniture		2,691			-
	Total property and equipment	$	31,005		$	11,544
	Less accumulated depreciation		(5,103	)		(996	)
	Property and equipment, net	$	25,902		$	10,548

Intangible_Assets_Tables

Intangible Assets (Tables)	12 Months Ended
	Aug. 31, 2014
Intangible Assets Tables
Intangible Assets	The intangible was being amortized over its estimated life of three years.
		August 31,
		2014			2013
	Intellectual property	$	29,250		$	29,250
	Website development		45,000			45,000
			74,250			74,250
	Less accumulated amortization		43,950			23,100
		$	30,300		$	51,150
	Less impairment valuation		(30,300	)		-
	Intangible assets, net		-		$	51,150

Convertible_Notes_Payable_Tabl

Convertible Notes Payable (Tables)	12 Months Ended
	Aug. 31, 2014
Convertible Notes Payable Tables
Assumptions of derivative valuation	Assumptions used in the derivative valuation were as follows:
		August 31,
		2014			2013
	Weighted Average:
	Dividend rate		0	%		0	%
	Risk-free interest rate		0.05	%		0.08	%
	Expected lives (years)		0.375			1.05
	Expected price volatility		426.8	%		288.2	%
	Forfeiture Rate		0	%		0	%
Convertible notes and conversion features	The convertible notes have the following terms and conversion features:
	Maturity dates	Six months to one year
	Interest rate	6% to 12%, default rates to 22%
	Conversion discounts	30-49%
	Basis of conversion
	Trading price (lowest during period)	10-20 trading days
Convertible notes	The convertible notes outstanding as of August 31 are summarized below:
		2014			2013
	Total debt outstanding	$	677,000		$	621,000
	Add: accrual for penalty clauses in instruments		34,500			-
	Less: unexpired derivative debt discounts and deferred finance costs discounts		264,468			539,603
	Total	$	447,032		$	81,397

Income_Taxes_Tables

Income Taxes (Tables)	12 Months Ended
	Aug. 31, 2014
Income Taxes Tables
Summary of income tax provision	The income tax provision consists of the following:
		August 31,
		2014			2013
	Federal
	Current	$	-		$	-
	Deferred		-			-
		$	-		$	-
	State and local
	Current	$	-		$	-
	Deferred
	Income tax provision	$	-		$	-
Summary of Deferred tax assets/liabilities	Deferred tax assets/liabilities were as follows:
		August 31,			August 31,
		2014			2013
	Net operating loss carryforward	$	534,000		$	166,000
	Valuation allowance		(534,000	)		(166,000	)
	Total	$	-		$	-
Company's effective tax rate before taxes and federal statutory rate	A reconciliation of the Company’s effective tax rate as a percentage of income before taxes and federal statutory rate for the periods ended August 31, 2014 and 2013 is summarized below.
		2014			2013
	Federal statutory rate		(34.0	)%		(34.0	)%
	State income taxes, net of federal benefits		(3.7	)%		(3.7	)%
	Derivatives, and other permanent differences		33.8	%		28.4	%
	Valuation allowance		3.9	%		9.3	%
	Effective tax rate		-	%		-	%

Capital_Stock_Tables

Capital Stock (Tables)	12 Months Ended
	Aug. 31, 2014
Capital Stock Tables
Assumptions of the option value	Assumptions used in the calculation of the option value are as follows:
	Weighted Average:
	Stock Price	$	0.0048
	Strike Price	$	0.0048-$0.0053
	Dividend rate		0	%
	Risk-free interest rate		1.7	%
	Expected lives (years)		5
	Expected price volatility		313.78	%
	Forfeiture Rate		0	%

Business_Segments_Tables

Business Segments (Tables)	12 Months Ended
	Aug. 31, 2014
Business Segments Tables
Lines of revenue	A summary of the lines of revenue are as follows:
		August 31,
		2014			2013
	Revenues:
	Advertising	$	--		$	6,842
	Book publishing		--			253,146
	Creative		--			237,498
			--			497,486
	Cost of Sales :
	Advertising	$	--		$	5,843
	Book publishing		--			195,651
	Creative		--			74,196
	Inventory write-down to lower of cost or market		80,629			--
		$	80,629		$	275,690
		August 31,
		2014			2013
	Gross Profit:
	Advertising	$	--		$	999
	Book publishing		--			57,495
	Creative		--			163,302
	Inventory write-down to lower of cost or market		(80,629	)		221,796
		$	(80,629	)		221,796

Organization_and_Description_o1

Organization and Description of Business (Details Narrative)	12 Months Ended
	Aug. 31, 2014
Organization And Description Of Business Details Narrative
Company incorporated date	1-Jan-11
Company incorporated state	State of Florida

Summary_of_Significant_Account3

Summary of Significant Accounting Policies (Details) (USD $)	Aug. 31, 2014
Derivative Liabilities	$3,553,650
Total Derivative Liabilities	3,553,650
Fair Value, Inputs, Level 1 [Member]
Derivative Liabilities
Total Derivative Liabilities
Fair Value, Inputs, Level 2 [Member]
Derivative Liabilities
Total Derivative Liabilities
Fair Value, Inputs, Level 3 [Member]
Derivative Liabilities	3,553,650
Total Derivative Liabilities	$3,553,650

Summary_of_Significant_Account4

Summary of Significant Accounting Policies (Details 1) (Fair Value, Inputs, Level 3 [Member], USD $)	12 Months Ended
	Aug. 31, 2014
Fair Value, Inputs, Level 3 [Member]
Balance, September 1, 2013	$1,695,399
Total (gains) losses realized and included in net loss	6,734,630
Purchases, issuances and settlements	-4,876,379
Transfers in (out)
Balance, August 31, 2014	$3,553,650

Summary_of_Significant_Account5

Summary of Significant Accounting Policies (Details 2)	12 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Weighted Average:
Dividend rate	0.00%	0.00%
Risk-free interest rate	0.05%	0.08%
Expected lives (years)	4 months 15 days	1 year 18 days
Expected price volatility	426.80%	288.20%
Forfeiture Rate	0.00%	0.00%

Summary_of_Significant_Account6

Summary of Significant Accounting Policies (Details Narrative) (USD $)	12 Months Ended
	Aug. 31, 2014	Aug. 31, 2013	Aug. 31, 2012
Cash equivalents	$5,953	$14,937	$269
Allowance for doubtful accounts	1,253	0
Cost or market adjustment to inventory	80,629
Advertising costs	$130,258	$88,001
Common stock equivalents outstanding	2,693,271,000
Minimum [Member]
Property, Plant and Equipment estimated useful life	3 Years
Maximum [Member]
Property, Plant and Equipment estimated useful life	5 Years

Management_Statement_Regarding1

Management Statement Regarding Going Concern (Details Narrative) (USD $)	12 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Management Statement Regarding Going Concern Details Narrative
Net loss	($9,563,903)	($1,741,752)
Accumulated deficit	-11,313,003	-1,749,100
Working capital deficit	4,276,859
Cash used in operations	($1,019,528)	($451,808)

Inventory_Details_Narrative

Inventory (Details Narrative) (USD $)	Aug. 31, 2014	Aug. 31, 2013
Inventory Details Narrative
Inventory	$6,990	$52,107

Property_And_Equipment_Details

Property And Equipment (Details) (USD $)	Aug. 31, 2014	Aug. 31, 2013
Property And Equipment Details
Computers and equipment	$20,103	$3,333
Trade booth and equipment	8,211	8,211
Office furniture	2,691
Total property and equipment	31,005	11,544
Less accumulated depreciation	-5,103	-996
Property and equipment, net	$25,902	$10,548

Property_And_Equipment_Details1

Property And Equipment (Details Narrative) (USD $)	12 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Property And Equipment Details Narrative
Depreciation	$4,107	$640

Intangible_Assets_Details

Intangible Assets (Details) (USD $)	Aug. 31, 2014	Aug. 31, 2013
Intellectual property, gross	$74,250	$74,250
Less accumulated amortization	43,950	23,100
Total	30,300	51,150
Less impairment valuation	-30,300
Intangible assets, net		51,150
Intellectual Property [Member]
Intellectual property, gross	29,250	29,250
Website development [Member]
Intellectual property, gross	$45,000	$45,000

Intangible_Assets_Details_Narr

Intangible Assets (Details Narrative) (USD $)	12 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Intangible Assets Details Narrative
Amortization cost	$20,850	$13,350
Impairment loss for the carrying value	($30,300)

Convertible_Notes_Payable_Deta

Convertible Notes Payable (Details)	12 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Weighted Average
Dividend rate	0.00%	0.00%
Risk-free interest rate	0.05%	0.08%
Expected lives (years)	4 months 15 days	1 year 18 days
Expected price volatility	426.80%	288.20%
Forfeiture Rate	0.00%	0.00%

Convertible_Notes_Payable_Deta1

Convertible Notes Payable (Details 1)	12 Months Ended
	Aug. 31, 2014
Interest rate	22.00%
Minimum [Member]
Maturity dates	6 months
Interest rate	6.00%
Conversion discounts	30.00%
Basis of conversion
Trading price (lowest during period)	10 days
Maximum [Member]
Maturity dates	1 year
Interest rate	12.00%
Conversion discounts	49.00%
Basis of conversion
Trading price (lowest during period)	20 days

Convertible_Notes_Payable_Deta2

Convertible Notes Payable (Details 2) (USD $)	Aug. 31, 2014	Aug. 31, 2013
Convertible Notes Payable Details 2
Total debt outstanding	$677,000	$621,000
Add: accrual for penalty clauses in instruments	34,500
Less: unexpired debt discounts and deferred finance costs	264,468	539,603
Total	$447,032	$81,397

Convertible_Notes_Payable_Deta3

Convertible Notes Payable (Details Narrative) (USD $)	12 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Convertible Notes Payable Details Narrative
Interest expense	($1,472,364)	($479,559)
Derivative liability from embedded conversion option of notes	3,518,650	1,339,599
Unexpired debt discounts	$264,468	$539,603
Common stock equivalents outstanding	2,693,271,000

Income_Taxes_Details

Income Taxes (Details) (USD $)	12 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Federal
Current
Deferred
Federal Income Tax Expense (Benefit)
State and local
Current
Income tax provision

Income_Taxes_Details_1

Income Taxes (Details 1) (USD $)	Aug. 31, 2014	Aug. 31, 2013
Income Taxes Details 1
Net operating loss carryforward	$534,000	$166,000
Valuation allowance	-534,000	-166,000
Total

Income_Taxes_Details_2

Income Taxes (Details 2)	12 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Income Taxes Details 2
Federal statutory rate	-34.00%	-34.00%
State income taxes, net of federal benefits	-3.70%	-3.70%
Derivatives, and other permanent differences	33.80%	28.40%
Valuation allowance	3.90%	9.30%
Effective tax rate

Income_Taxes_Details_Narrative

Income Taxes (Details Narrative) (USD $)	12 Months Ended
	Aug. 31, 2014
Income Taxes Details Narrative
Net operating loss carry forward	$1,400,000
Net operating loss carry forward expired	2034
Valuation allowance increase	$368,000

Capital_Stock_Details

Capital Stock (Details) (USD $)	12 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Weighted Average:
Dividend rate	0.00%	0.00%
Risk-free interest rate	0.05%	0.08%
Expected lives (years)	4 months 15 days	1 year 18 days
Expected price volatility	426.80%	288.20%
Forfeiture Rate	0.00%	0.00%
Minimum [Member]
Weighted Average:
Strike Price	0.0048
Maximum [Member]
Weighted Average:
Strike Price	0.0053
Option [Member]
Weighted Average:
Stock Price	0.0048
Dividend rate	0.00%
Risk-free interest rate	1.70%
Expected lives (years)	5 years
Expected price volatility	313.78%
Forfeiture Rate	0.00%

Capital_Stock_Details_Narrativ

Capital Stock (Details Narrative) (USD $)	12 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Capital Stock Details Narrative
Preferred stock, shares authorized	100,000,000	100,000,000
Common stock, shares authorized	3,000,000,000	3,000,000,000
Stock buy-back plan, shares		1,785,900
Stock buy-back plan, repurchase value		$55,000
Warrants issued to purchase common stock		371,667,000
Strike price of common stock		$0.00
Warrants exercised for stock issuance, Amount	403,800
Stock issued for services, Amount	148,324
Stock issued for services, Shares	14,541,570
Stock-based compensation	268,271	355,800
Conversions of debt to equity, Shares	1,827,266,132
convertible notes payable and accrued interest	1,065,630
Derivative liability reclassified to stockholders' deficit	5,246,963
Settlements in stock, Shares	38,197,717
Accrued interest expense	22,919
Recognized loss	$22,918

Related_Parties_Details_Narrat

Related Parties (Details Narrative) (USD $)	12 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Purchased print media	$33,360	$165,540
Paid to Glass House Graphics	56,660	2,035
Mr. Powell [Member]
Advanced assets, amount	58,839	39,187
Keenspot Entertainment, LLC [Member]
Accrued commissions	$4,042	$6,785

Business_Segments_Details

Business Segments (Details) (USD $)	12 Months Ended
	Aug. 31, 2014	Aug. 31, 2013
Revenues		$497,486
Cost of sales	80,629	275,690
Gross Profit	-80,629	221,796
Advertising [Member]
Revenues		6,842
Cost of sales		5,843
Gross Profit		999
Book Publishing [Member]
Revenues		253,146
Cost of sales		195,651
Gross Profit		57,495
Creative [Member]
Revenues		237,498
Cost of sales		74,196
Gross Profit		163,302
Inventory write-down [Member]
Cost of sales	80,629
Gross Profit	($80,629)	$221,796