STOCKHOLDERS' EQUITY

9 Months Ended

May 31, 2014

Equity [Abstract]

STOCKHOLDERS' EQUITY

NOTE 7 – STOCKHOLDERS' EQUITY

Preferred Stock

The Company is authorized to issue 6,666,667 shares of preferred stock with a par value of $0.001 per share as of May 31, 2014 and August 31, 2013.  The Company's preferred stock may be divided into such series as may be established by the Board of Directors. The Board of Directors may fix and determine the relative rights and preferences of the shares of any series established. On July 18, 2013, CTV declared a 15-for-1 reverse split for all of its common and preferred stock.  All references in the accompanying consolidated financial statements and notes thereto to the number of shares outstanding and per-share amounts have been retroactively restated to reflect this stock split.

Series A Cumulative Convertible Preferred Stock ("Series A")

In August, 2011, the Company designated 266,427 shares of authorized preferred stock as Series A Redeemable Convertible Preferred stock ("Series A").

Voting rights

a)	The Company shall not, without the affirmative consent of the holders of seventy-five percent of the Series A Preferred Stock, in any manner alter or change the designations, or the powers, preferences, rights, qualifications, limitations, or restrictions or increase the number of authorized shares of the Series A Preferred Stock in any manner.
b)	Except as provided below, the holders of the Series A Preferred Stock shall not have any right to vote their Series A Preferred Stock in any manner.
c)	Notwithstanding the provisions above, on all matters coming before the holders of preferred stock of the Company, as a class, or coming before the holders of the Series A Preferred Stock of the Company, as a class, the holders of the Series A Preferred Stock shall have the right to vote their Series A Preferred Stock with each such share of stock being entitled to one (1) vote on any or all such matters.

Dividends

In each year, beginning six months from issuance, the holders of the Series A Preferred Stock shall be entitled to receive when and as declared by the Board of Directors of the Corporation, out of funds legally available for that purpose, quarterly dividends payable January 1, April 1, July 1 and October 1 in each year, commencing on July 1, 2012 in an amount equal to twenty percent (20%) of "Adjusted Gross Revenue" earned during that quarter.  Adjusted Gross Revenue is defined as gross revenue less licensing fees, royalties, third party payments, mineral extraction, mining expenses, crushing and shipping.  Said dividends shall continue until such time as the holder had received dividends in the amount that equals one hundred and eight percent (108%) of their original investment, after which time, the investor shall receive five percent (5%) of the Adjusted Gross Income for a period of twelve months.

In the case of the original issuance of shares of the Series A Preferred Stock, dividends shall begin to accrue and be cumulative from October 1, 2011. In the case of share of Series A Preferred Stock issued after October 1, 2011, but prior to any Dividend Payment Date, dividends shall begin to accrue and be cumulative from the date of issue to the next Dividend Payment Date; provided, however, that if dividends are not paid on any such Dividend Payment Date, then dividends shall accrue and be cumulative from the Dividend Payment Date to the date such dividends have been paid. Dividends paid on shares of Series A Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated on a pro-rata on a share-by-share basis among all such Series A Preferred shares outstanding at the time. The Board of Directors may fix a record date for the determination of holders of the Series A Preferred Stock entitled to receive payment of a dividend declared thereon, which record date shall be no more than sixty days prior to the date fixed for the payment thereof.

Whenever dividends payable on the Series A Preferred Stock as provided above are in arrears, thereafter and until dividends, including all accrued dividends, on shares of the Series A Preferred Stock outstanding shall have been paid in full or declared and set apart for payment, the Corporation shall not (i) pay dividends on any common stock of the Corporation, or (ii) purchase or otherwise acquire for consideration any share of Series A Preferred Stock, unless required or as otherwise provided.

Redemption rights

The Company may, at any time and from time to time, after total dividends paid per share equal at least $2.00, redeem all or a portion of the then outstanding shares of the Series A Preferred Stock at the stated value thereof (namely $2.00 per share) plus accrued and unpaid dividends thereon (cumulatively the “Redemption Amount”) by either (i) a check to the Redemption Amount or (ii) such number of shares of common stock of the Corporation as determined by dividing the “market value” as calculated of such common stock as of the date set by the Company for such redemption, into the Redemption Amount.

Liquidation rights

Upon any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, then the holders of the Series A Preferred Stock shall not be entitled to receive any amounts with respect to their shares of Series A Preferred Stock until payment in full has been made to the holders of the Corporation’s Series B Preferred Stock and Senior Convertible Preferred Stock of amounts which such holders may be entitled to receive upon liquidation. After such payments have been made in full to the Holders of the Company’s Series B Preferred Stock and Senior Convertible Preferred Stock and prior to any payments upon liquidation being made to the holders of the common stock of the Corporation, the holders of the Series A Preferred Stock shall be entitled to receive an amount per share equal to $1,000.00 (the “Series A Liquidation Amount”). The Series A Liquidation Amount shall be paid pari-passu with any payments upon liquidation to holders of any other class preferred stock of the Corporation. If the assets of the Corporation are insufficient to pay to the holders of the Series A Preferred Stock the full amount of the Series A Liquidation Amount to which they shall be entitled, then any amounts to be distributed to the holders of the Series A Preferred Stock shall be distributed pro rata to such holders.

Conversion rights

Subsequent to July 1, 2012, each share of Series A Preferred Stock shall be convertible at the option of the holder thereof (except as prohibited by law), in full or in part, based on the number of shares of Series A preferred stock to be converted, multiplied by the Series A issue price ($2.00 per share), plus any cumulative and unpaid dividends divided by the Series A conversion price in effect at the time of the conversion.

As per the subscription agreement for 5,000 preferred stock Series A issued, each Series A shares will be converted into one share of the Company’s common stock and one share of Raptor Technology Group, Inc.

As of May 31, 2014 and August 31, 2013, there were 5,000 Series A Cumulative Convertible Preferred Stock issued and outstanding.

Series B Cumulative Convertible Preferred Stock ("Series B")

In September 2011, the Company designated 407,686 shares as Series B Cumulative Convertible Preferred stock.

Voting rights

a)	The Company shall not, without the affirmative consent of the holders of seventy-five percent of the Series B Preferred Stock, in any manner alter or change the designations, or the powers, preferences, rights, qualifications, limitations, or restrictions or increase the number of authorized shares of the Series B Preferred Stock in any manner.
b)	Except as provided below, the holders of the Series B Preferred Stock shall not have any right to vote their Series B Preferred Stock in any manner.
c)	Notwithstanding the provisions above, on all matters coming before the holders of preferred stock of the Company, as a class, or coming before the holders of the Series B Preferred Stock of the Company, as a class, the holders of the Series B Preferred Stock shall have the right to vote their Series B Preferred Stock with each such share of stock being entitled to one (1) vote on any or all such matters.

Dividends

In each year the holders of the Series B Preferred Stock shall be entitled to receive when and as declared by the Board of Directors of the Corporation, out of funds legally available for that purpose, an annual dividend in an amount equal to Eight percent (8%) per annum (that is, $0.20 per share on an annual basis) payable monthly (the “Dividend Payment Date”), plus a pro-rated Bonus Dividend equal to the amount of the Bonus Dividend Pool on each Dividend Payment Date divided by the number of Shares of Series B Preferred Stock issued and outstanding on each Dividend Payment Date.  The Bonus Dividend

Pool shall consist of Twenty percent (20%) of the Company’s adjusted gross revenue for each fiscal year preceding the Dividend Payment Date until such time as the Company has paid a total of $2.50 in dividends per share, after which time the Bonus Dividend Pool shall consist of Five percent (20%) of the Company’s adjusted gross revenue for one (1) additional fiscal year.  Adjusted gross revenue is defined as gross revenue less license fees, royalties, and mining expenses, and which are attributable to business operations financed by the proceeds of the sales of Series B Preferred Stock.

In the case of the original issuance of shares of the Series B Preferred Stock, dividends shall begin to accrue and be cumulative from October 1, 2011. In the case of share of Series B Preferred Stock issued after October 1, 2011, but prior to any Dividend Payment Date, dividends shall begin to accrue and be cumulative from the date of issue to the next Dividend Payment Date; provided, however, that if dividends are not paid on any such Dividend Payment Date, then dividends shall accrue and be cumulative from the Dividend Payment Date to the date such dividends have been paid. Dividends paid on shares of Series B Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated on a pro-rata on a share-by-share basis among all such Series B Preferred shares outstanding at the time. The Board of Directors may fix a record date for the determination of holders of the Series B Preferred Stock entitled to receive payment of a dividend declared thereon, which record date shall be no more than sixty days prior to the date fixed for the payment thereof.

Whenever dividends payable on the Series B Preferred Stock as provided above are in arrears, thereafter and until dividends, including all accrued dividends, on shares of the Series B Preferred Stock outstanding shall have been paid in full or declared and set apart for payment, the Corporation shall not (i) pay dividends on any common stock of the Corporation, or (ii) purchase or otherwise acquire for consideration any share of Series B Preferred Stock, unless required or as otherwise provided.

Redemption rights

The Company may, at any time and from time to time, after total dividends paid per share equal at least $2.50, redeem all or a portion of the then outstanding shares of the Series B Preferred Stock at the stated value thereof (namely $2.50 per share) plus accrued and unpaid dividends thereon (cumulatively the “Redemption Amount”) by either (i) a check to the Redemption Amount or (ii) such number of shares of common stock of the Corporation as determined by dividing the “market value” as calculated of such common stock as of the date set by the Company for such redemption, into the Redemption Amount.

Liquidation rights

Upon any liquidation, dissolution, or winding up of the Company, whether voluntary or involuntary, then the holders of the Series A Preferred Stock shall not be entitled to receive any amounts with respect to their shares of Series A Preferred Stock until payment in full has been made to the holders of the Corporation’s Series B Preferred Stock of amounts which such holders may be entitled to receive upon liquidation. After such payments have been made in full to the Holders of the Company’s Series B Preferred Stock and prior to any payments upon liquidation being made to the holders of the common stock of the Corporation, the holders of the Series B Preferred Stock shall be entitled to receive an amount per share equal to $2.50 (the “Series B Liquidation Amount”). The Series B Liquidation Amount shall be paid pari-passu with any payments upon liquidation to holders of any other class preferred stock of the Corporation. If the assets of the Corporation are insufficient to pay to the holders of the Series B Preferred Stock the full amount of the Series B Liquidation Amount to which they shall be entitled, then any amounts to be distributed to the holders of the Series B Preferred Stock shall be distributed pro rata to such holders.

Conversion rights

Subsequent to one (1) year from the date of issuance, each share of Series B Preferred Stock shall be convertible at the option of the holder thereof (except as prohibited by law), in full or in part,  into one point nine two (1.92) shares of fully paid and non-assessable shares of common stock of the Company provided.

During the year ended August 31, 2012, the Company issued 1,333 shares of its Series B Redeemable Convertible Preferred stock in exchange for proceeds of $50,000, valued at $37.51 per share.

As of May 31, 2014 and August 31, 2013, there were 1,333 Series B Cumulative Preferred Stock issued and outstanding.

Common stock

The Company is authorized to issue 50,000,000 shares of $0.001 par value common stock as of May 31, 2014 and August 31, 2013.  As of May 31, 2014 and August 31, 2013, 2,636,170 shares of the Company's common stock were issued and 563,170 shares of the Company's common stock were outstanding.

On May 25, 2012 the shareholders and the board of directors of the Company approved a one (1) share for every forty (40) share reverse stock split.  The reverse stock split had a record date of May 29, 2012 and an effective date of July 11, 2012.  On July 18, 2013, EVG declared a 15-for-1 reverse split for all of its common and preferred stock.  All per share amounts in these consolidated financial statements and accompanying notes have been retroactively adjusted to the earliest period presented for the effect of this reverse stock split.

On November 1, 2012 and November 21, 2012 the Company issued a total of 2,857 shares of its authorized but unissued capital in restricted common stock. This was in consideration for Mr. Schneider purchasing the shares at a price of $5.25 per share through a subscription agreement.

On November 1, 2012 and November 21, 2012 the Company issued a total of 2,857 shares of its authorized but unissued capital in restricted common stock. This was in consideration for Mr. Bhatia purchasing the shares at a price of $5.25 per share through a subscription agreement.

On November 21, 2012, the Company issued 16,667 shares of its authorized but unissued capital in restricted common stock.  This was in consideration for services rendered and was valued at $3.45, closing market price on November 21, 2012.

As discussed in Note 5, the Company issued 26,666 shares of its common stock to an unrelated third party as additional consideration for a $100,000 loan. The shares were valued at $2.40, the closing market price on December 12, 2012. Furthermore, under the terms of the loan, the Company issued 100,000 shares of its common stock in escrow as collateral against the loan.  The loan was not  repaid by its March 12, 2013 due date, and the 100,000 common shares were released from escrow and valued at $60,000 ($0.60 per share) in full settlement of the $100,000 loan and related $25,000 accrued interest (See Note 5). Accordingly, the Company recorded a gain on settlement of debt of $65,000 during the nine months ended May 31, 2013.

In addition, as per employment agreement with Mark Cox, upon completion of 60 days review period, the Company will subsequently issue 8,333 shares of its common stock and charged to operation as stock based compensation of $37,500 valued at $4.50 per share during the nine months ended May 31, 2013. As of the date of filing of this report, the shares are not issued.

Under Mr. Cox’ employment agreement, the Company is required to issue him 3,333 shares per month commencing in December 2012. The Company charged $6,995 and $25,862 to operations as compensation for during the nine months ended May 31, 2013, respectively. Compensation is valued based upon the average monthly closing price of the underlying shares earned. The Company will issue 20,000 shares and offset the compensation expense against additional paid-in capital. As of the date of filing of this report, the shares are not issued.

As a condition to Mutual Release Agreement with Paul Smith, ex-President and Chief Financial Officer of the Company, dated September 10, 2012 the Company will subsequently issue 20,000 restricted shares and charged to operation as stock based compensation of $165,000 valued at $8.25 per share during the quarter ended November 30, 2012. Also, the remaining 2,111 restricted stock were vested immediately on the date of agreement which will be issued subsequently and charged to operation as stock based compensation of $17,422 valued at $8.25 per share during the nine months ended May 31, 2013. As of the date of filing of this report, the shares are not issued.

As per employment agreement, the Company charged to operation as a stock based compensation of $2,274 fair value of 1,055 of shares of its restricted stock to Randall Lanham, the Chief Executive Officer of the Company, for the year ended August 31, 2013. As of the date of filing of this report, the shares are not issued. During the nine months ended May 31, 2014, Mr. Lanham cancelled his option grant.