The simplest is to import the image into the Alpha palette instead, and invert it.
Next, draw the model, position it for the best texture application, and drop it to the canvas.
Press Alpha>Make Stencil. Use the coin controller (by pressing the Spacebar) to position the stencil exactly how you want it. There are also additional controls in the Stencil palette that might help.
Select the Simple Brush with Alpha 00 and the DragRectangle stroke. Turn off Zadd and set the Draw palette to Rgb. Choose your black color, and with a single brush stroke you’ll be able to paint through the stencil onto the model.
IMPORTANT: Turn the stencil off (using the Stencil palette) before picking the model back up again with Projection Master.
Presto! Your model now red with the logo in black.